The Efficiency of Third-Party Funding in the Resolution of International Disputes through Arbitration in the Southeast Asia Region

Abstract

Third-party funding (TPF) has emerged as a transformative mechanism in international arbitration, yet its impact on arbitral efficiency in Southeast Asia remains underexplored. This empirical study surveys 100 legal practitioners across the region to assess how TPF influences key efficiency metrics including time to resolution, cost-effectiveness, predictability, settlement rates, and party satisfaction. Results indicate strong practitioner consensus that TPF enhances efficiency across all measured dimensions (mean scores: 3.55-3.67 on a 4-point scale), with particularly significant impacts on cost-effectiveness and settlement likelihood. However, respondents identify critical challenges including conflicts of interest, funder control concerns, and regulatory gaps. The study contributes original empirical evidence from an under-researched jurisdiction and provides region-specific policy recommendations for developing robust TPF frameworks. Findings suggest that while TPF demonstrably improves access to justice and procedural efficiency in Southeast Asian arbitration, realizing its full potential requires comprehensive regulatory reform emphasizing transparency, disclosure mandates, and ethical standards.