ABSTRACT
This chapter discusses the concept of third-party funding. A security for costs order is a special form of interim relief requiring the party bringing a claim to provide sufficient security to cover the respondent's legal costs that may be awarded against the claimant should the claim be dismissed. Under the International Centre for Settlement of Investment Disputes (ICSID) regime, no provision explicitly addresses an ICSID tribunal's power to order security for costs. Apart from the lack of express wording, an ICSID tribunal's authority to order security for costs has also been challenged with regard to the meaning 'recommend' used both in Article 47 ICSID Convention and ICSID Arbitration Rule 39. As a first step in their assessment of applications for security for costs, ICSID tribunals usually examine the financial situation of the claimant investor and evaluate if the respondent state has brought sufficient evidence showing that the claimant is impecunious and therefore unable to pay a potential adverse costs award.
