The English High Court recently upheld an ICC Arbitrator’s decision to award a claimant its costs, including the commission payable to the claimant’s arbitration funder. Stephen O’Dowd, Senior Director of Litigation Funding, has been following the case of Essar Oilfield Services Limited v. Norscot Rig Management Pvt Limited closely and reviews the potential impact of the decision on funded cases in future.
He says: “The High Court’s judgment is striking in that it could represent a sea-change for funded claimants if they are able to recover a funder’s commission from their opponent. However, it is clear that the respondent’s conduct played a key part in the decision.”
The Arbitrator took a dim view of the respondent’s conduct and was moved to award costs on the indemnity basis. He seemed sympathetic to the claimant’s claim that it was effectively forced, by the respondent’s actions, into seeking external funding.
It followed that the claimant, having firmly secured the moral high ground, was then a beneficiary of broadly drafted rules. As the High Court found, the Arbitrator had a wide power to award “legal and other costs”, which could be interpreted to include the funder’s commission.
The facts and circumstances of this case are arguably exceptional, and there remains the possibility of a further appeal. However, one might argue the door is now ajar for claimants to recoup commission due to a funder from their opponent.
No transcript of the case is available at the time of writing.