This latest case on the topic of the award of third party funding as costs comes five years after the High Court’s noteworthy decision in Essar. Section 59 of the Act defines “ costs” to include the fees and expenses of the arbitrators, the fees and expenses of any arbitral institution, and – significantly for this decision – the legal or “ other costs” of the parties. Under English law, tribunals are empowered by section 61 of the Act to award the costs of the arbitration between the parties on any basis they see fit to do so (subject to any agreement between the parties on this point). This latest case provides clarity on the approach the court will take to an award of third party funding costs in arbitration, but leaves open the question of whether the difference in recovery between litigation and arbitration should be permitted. This topic has already been the subject of great interest and debate in the arbitration community. Similar to that case, the Commercial Court in Tenke rejected a challenge to an arbitration award brought on the basis of the tribunal’s award of the costs of third party funding to the successful party, finding that it did not constitute a serious irregularity under section 68 of the 1996 Arbitration Act (the “ Act“). The decision by Mrs Justice Moulder DBE of the Queen’s Bench Division, which was published on 7 December 2021, built on the foundation laid in the 2016 High Court decision in Essar Oilfields Services Limited v Norscot Rig Management PVT Limited EWHC 2361 (Comm). The recent English Commercial Court decision in Tenke Fungurume Mining SA v Katanga Contracting Services SAS EWHC 3301 (Comm) has provided an interesting further comment on the broad discretion available to tribunals in English-seated arbitrations to award the costs of third party funding as part of costs awards.
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