Arbitration & Cross-Border Funding Archives -

The Intersection of Arbitration and Litigation Funding in the GCC

winjustiice / July 29, 2026

Regulatory Evolution, Institutional Rules and the UAE’s Emerging Leadership Third-party funding is becoming an increasingly important component of commercial dispute resolution in the Gulf Cooperation Council. Under a conventional third-party funding arrangement, an external funder finances some or all of a party’s legal fees and dispute-related expenses in return for an agreed share of the proceeds if the claim succeeds. The funding is generally non-recourse: when the funded claim is unsuccessful, the funder ordinarily loses the capital it deployed, subject to the specific terms of the agreement. Although third-party funding was once approached cautiously in many jurisdictions, it is gradually becoming integrated into the region’s arbitration framework. Modern arbitral institutions increasingly recognise the existence of funding and impose rules concerning disclosure, conflicts of interest and procedural transparency. The United Arab Emirates has emerged as a particularly significant jurisdiction in this development. Its distinctive combination of onshore civil-law courts, the common-law systems of the Dubai International Financial Centre and Abu Dhabi Global Market, and internationally oriented arbitration institutions has created several possible frameworks for funded disputes. The result is not one unified funding regime, but an evolving legal environment in which the validity, disclosure requirements and contractual safeguards applicable to funding depend heavily on the jurisdiction, arbitral rules and dispute-resolution mechanism selected by the parties. Why arbitration funding is gaining relevance in the GCC Commercial arbitration can be expensive. Large disputes in construction, infrastructure, energy, real estate and cross-border trade may continue for several years. They frequently require specialist legal counsel, technical experts, forensic accountants, document-management platforms and enforcement strategies covering more than one jurisdiction. A company may possess a strong contractual or commercial claim but still be reluctant to allocate substantial working capital to a lengthy arbitration with an uncertain outcome. Third-party funding can address this challenge by transferring part of the financial risk to an external capital provider. For businesses, the attraction is not limited to financial distress. A solvent company may use funding to preserve cash, reduce the effect of legal expenditure on its operating budget and continue investing in its core business. Funding may therefore be used as: This evolution is changing the way corporate parties view legal claims. Rather than treating every dispute exclusively as a cost centre, a company may assess whether a strong claim can be financed, shared or monetised as a contingent asset. The publication of the Chartered Institute of Arbitrators’ Guideline on Third-Party Funding in September 2025 reflects the growing international acceptance of this development. The Guideline was designed to provide practitioners with a clearer understanding of the funding process and addresses issues including disclosure, conflicts, privilege, control, termination and costs.[1] The UAE’s three-part legal environment The UAE presents a distinctive legal structure for third-party funding. It includes: The treatment of funding differs significantly across these systems. This distinction matters because parties cannot assume that a funding arrangement structured for one UAE forum will automatically satisfy the requirements of another. Third-party funding in onshore UAE disputes There is no single dedicated federal statute comprehensively regulating third-party funding before the onshore UAE courts or in every onshore-seated arbitration. The absence of a specialised funding law does not necessarily mean that funding is prohibited. Funding arrangements must instead be evaluated under the UAE’s general contractual framework, applicable public-policy principles, professional obligations and the rules of the institution administering the arbitration. The UAE Federal Arbitration Law does not establish a comprehensive third-party funding regime. As a result, the parties must consider the governing law of the funding agreement, the arbitral rules selected in the underlying contract and any issues relating to confidentiality, conflicts and the independence of legal counsel. The regulation of lawyers’ fees must also be distinguished from external litigation funding. Federal Decree-Law No. 34 of 2022 regulates the legal profession, while Cabinet Resolution No. 8 of 2025 provides its Executive Regulations. Article 31 of the Executive Regulations permits a lawyer’s fees to be calculated as a percentage of the claimed right, provided that the percentage does not exceed 25% and the specified statutory conditions are satisfied.[2] A lawyer’s percentage-based fee arrangement is not identical to third-party funding. In the former, the legal representative assumes an element of fee risk. In the latter, an independent capital provider ordinarily finances legal and related expenses in return for a contingent economic return. Nevertheless, the clearer treatment of percentage-based lawyers’ fees may support the development of hybrid dispute-financing structures, provided that every component complies with applicable professional, contractual and public-policy requirements. Third-party funding in the DIFC Courts The DIFC Courts were among the first courts in the region to establish an express framework for third-party funding. Practice Direction No. 2 of 2017 applies to funded proceedings before the DIFC Courts. It requires the funded party to notify every other party and the DIFC Courts Registry that a litigation funding agreement exists and to disclose the funder’s identity.[3] The commercial terms of the funding agreement do not ordinarily have to be disclosed unless the Court orders otherwise. This framework adopts a comparatively light-touch approach. It does not create an extensive licensing regime for funders or prescribe every term that must appear in a funding agreement. Instead, it focuses on procedural transparency and the Court’s ability to manage matters such as conflicts and costs. The DIFC Courts’ Mandatory Code of Conduct for Legal Practitioners reinforces the independence of counsel. A practitioner must not allow a funder’s interests or instructions to displace the practitioner’s professional duties to the client, unless the client has provided appropriate written authorisation.[4] The DIFC framework therefore rests on several central principles: The DIFC Courts have also affirmed in recent decisions that the existence and identity of a funder must be disclosed, while the underlying agreement remains private unless disclosure is ordered.[5] The more prescriptive ADGM framework The ADGM has adopted a more detailed statutory approach. The ADGM Litigation Funding Rules 2019 regulate litigation funding agreements within the ADGM framework. The Rules were subsequently amended in 2023 and remain part of the ADGM Courts’ published

Arbitration & Cross-Border Funding, Articles, Corporate & Commercial Insights, Thought Leadership

How Litigation Funding Is Reshaping ADR Strategy in the MENA Region

winjustiice / January 30, 2026

Alternative Dispute Resolution has long been promoted as a more efficient and commercially sensible alternative to court litigation. Arbitration and mediation, in particular, have been central to this promise, offering confidentiality, procedural flexibility, and cross-border enforceability. In practice, however, modern ADR—especially international commercial arbitration—has evolved into a highly capital-intensive process. Tribunal fees, institutional costs, expert evidence, legal representation, and enforcement planning have collectively transformed arbitration into a sophisticated financial undertaking. As a result, access to ADR in high-value disputes is increasingly determined not only by legal merit, but by financial capacity. This shift has placed litigation funding at the centre of modern ADR strategy across the MENA region. Litigation funding, when applied to ADR, operates as a risk-allocation mechanism rather than a mere source of financing. Funders provide capital on a non-recourse basis, absorbing the downside risk of failure in exchange for a share of successful recoveries. This structure fundamentally alters how arbitration and mediation are approached. Claims are no longer pursued solely because they are legally sound; they are pursued because they are commercially viable when assessed through lenses of duration, enforceability, and recovery probability. As a result, litigation funding has begun to influence not only who can access ADR, but how disputes are selected, structured, and resolved. In arbitration, the influence of litigation funding is particularly pronounced. Before committing capital, funders conduct extensive due diligence that often exceeds the depth of analysis undertaken by claimants themselves. This process typically examines the applicable arbitration rules, the seat of arbitration, the enforceability of potential awards, the solvency and asset profile of the respondent, and the likely duration of proceedings. By introducing this external discipline, funding reshapes arbitration strategy from the outset. Weak or speculative claims are filtered out early, while viable disputes are structured with enforcement and settlement dynamics in mind. In many cases, the presence of funding also acts as a market signal, indicating that an independent financial actor has assessed the dispute as commercially credible, which can materially influence negotiation and settlement behaviour. Mediation, although traditionally less expensive than arbitration, is also increasingly affected by funding dynamics in the MENA region. In complex, multi-party, or high-value disputes, even mediation can impose significant costs and strategic risk. Funded mediation allows parties to engage in settlement discussions without the pressure of sunk costs or liquidity constraints. More recently, innovative funding models have emerged that support the resolution process itself rather than one adversarial position. These structures are designed to align incentives toward early settlement, reduce escalation, and preserve long-term commercial relationships—an outcome particularly relevant in construction, infrastructure, and joint-venture disputes that dominate regional caseloads. The impact of litigation funding on ADR strategy is especially visible in the Gulf region, where institutional frameworks have matured rapidly. The UAE, in particular, has positioned itself as a regional hub for arbitration funding through the regulatory clarity offered by the Dubai International Financial Centre and the Abu Dhabi Global Market. Both jurisdictions expressly recognise and regulate third-party funding arrangements, imposing disclosure obligations and safeguards designed to preserve tribunal independence and procedural integrity. This clarity has fostered confidence among funders, parties, and tribunals alike, making funded arbitration a predictable and accepted feature of dispute resolution within these frameworks. By contrast, other jurisdictions in the region have adopted a more incremental approach. In Saudi Arabia, litigation funding is not comprehensively regulated, but is increasingly assessed through principles of contract law and arbitration practice. While this has not prevented funding activity, it places greater emphasis on careful drafting, Sharia considerations, and enforcement planning. The divergence between structured and evolving regulatory environments has had a strategic effect on ADR planning, with parties increasingly selecting seats and institutional frameworks that provide certainty not only in procedure, but in the treatment of funding arrangements. Beyond access to capital, the integration of litigation funding into ADR has broader systemic implications. It encourages early realism by forcing parties to confront enforcement risk and duration uncertainty at the outset of a dispute. It shifts focus away from nominal claim value toward economically recoverable outcomes. It also contributes to efficiency by discouraging claims that lack commercial substance, thereby reducing congestion and strategic misuse of arbitration mechanisms. In this sense, funding does not distort ADR; it reinforces its original purpose by aligning dispute resolution with rational economic behaviour. At the same time, the growing role of litigation funding raises important governance and ethical considerations. Transparency, conflicts of interest, and tribunal independence remain central concerns, particularly in arbitration. The regulatory approaches adopted in jurisdictions such as the DIFC and ADGM reflect a recognition that funding must be integrated into ADR frameworks in a way that preserves fairness and legitimacy. Properly regulated, funding strengthens confidence in ADR rather than undermining it, ensuring that disputes are pursued with discipline, accountability, and strategic coherence. Looking ahead, the relationship between ADR and litigation funding in the MENA region is likely to deepen. As disputes become more complex, capital-intensive, and cross-border in nature, parties will continue to evaluate arbitration and mediation through financial and risk-management lenses. In this environment, litigation funding is no longer a peripheral consideration. It is actively reshaping how ADR is used, how disputes are priced, and how outcomes are pursued. In the MENA region, where institutional frameworks are evolving and enforcement certainty remains paramount, litigation funding is not merely supporting ADR—it is redefining its strategic role within modern dispute resolution. Selected Resources

Arbitration & Cross-Border Funding, Articles

Litigation Funding and Arbitration in 2026

winjustiice / January 14, 2026

Global and MENA Perspectives Overview Litigation funding—where a third party finances legal proceedings in exchange for a share of any recovery—has moved from the periphery of dispute resolution to a mainstream financing tool. In 2026, the combination of large infrastructure projects, regulatory reform and macro‑economic stress made the Middle East and North Africa (MENA) one of the most active regions for both litigation finance and arbitration. Elsewhere, geopolitical tensions, energy‑transition disputes and technology continue to shape the global arbitration landscape. This report summarises major trends and regulatory developments affecting litigation funding and arbitration in 2026. 1. Global arbitration themes in 2026 International arbitration remained a vital tool for resolving trans‑border disputes and protecting investments. Major themes driving disputes and arbitral practice in 2026 include: 2. The Middle East and North Africa in 2026 2.1 Drivers of growth The MENA region’s legal finance boom is grounded in several structural factors: 2.2 Regulatory landscape by jurisdiction The legal treatment of third‑party funding (TPF) varies across MENA. A summary of key jurisdictions appears below. Jurisdiction TPF status Disclosure requirements Institutional framework UAE – Onshore TPF is permitted but unregulated; it must not violate public policy or professional ethics. There are no statutory limits on funding amounts. No mandatory disclosure regime; practice is still developing. Onshore courts apply civil law; there is no specific legislative framework for TPF. Arbitrations seated onshore often rely on institutional rules (e.g., DIAC) that require disclosure. UAE – DIFC The Dubai International Financial Centre (DIFC) is a common‑law jurisdiction. Practice Direction No. 2 of 2017 requires funded parties to notify all parties and file a notice with the court. The notice must disclose the funder’s identity but not the agreement. Funders may be liable for adverse costs orders. Mandatory notice under PD 2/2017; the court considers the existence of funding when deciding security for costs. The DIFC courts and DIFC‑LCIA arbitration rules accept TPF and have issued practitioner guidelines. UAE – ADGM The Abu Dhabi Global Market (ADGM) regulates TPF through Article 225 of its Civil Evidence and Judicial Appointments Regulations and the Litigation Funding Rules 2019. Funding agreements must be in writing and parties must notify both the court and other parties of any funding arrangement. Funders must meet liquidity requirements and ensure the litigant receives independent advice. Mandatory disclosure to the ADGM court and other parties. ADGM rules provide detailed requirements for funding agreements (scope, funding amounts, liability for adverse costs) and confidentiality obligations. Saudi Arabia Third‑party funding is permitted. The Chambers guide notes there are no restrictions on the types of lawsuits that a third party may finance, and funding can be arranged for either plaintiff or defendant. There is no statutory limit on funding amounts. Institutional rules drive disclosure. The Saudi Centre for Commercial Arbitration’s 2023 rules require a party to disclose the existence of funding and the funder’s identity to the institution, other parties and the tribunal. Saudi Arabia has modernised its legal framework through the 2023 Civil Transactions Regulation, which codified core Sharia principles and confirms that agreements charging interest are void while allowing damages for lost income. A draft arbitration law (2025) aligns with global best practices and emphasises the law of the seat. Qatar The Qatar International Center for Conciliation and Arbitration (QICCA) introduced new rules effective 1 January 2025, expanding from 38 to 78 articles and allowing consolidation, joinder, bifurcation and expedited procedures. While Qatari law does not yet regulate TPF, the new rules encourage electronic submissions and greater transparency in arbitrator appointments and award publication. Institutional rules (QICCA 2025) require disclosure of TPF arrangements; this mirrors global practice. Qatar does not have a statutory TPF regime. Practice depends on institutional rules and evolving jurisprudence. Bahrain The Bahrain Chamber for Dispute Resolution (BCDR) 2022 rules require funded parties to notify the institution of any funding arrangement and the funder’s identity. The rules allow the tribunal to assess whether any relationship between funder and arbitrator threatens independence. Mandatory disclosure under BCDR rules. Bahrain has not enacted specific TPF legislation; reliance is on BCDR rules and court practice. Lebanon Lebanese law does not address third‑party litigation funding. The Chambers authors are unaware of any lawsuits in Lebanon involving TPF. Contingency fees are permitted, and lawyers may agree a fee supplemented by a success bonus. Not applicable, since TPF is unregulated and unused. Lebanon’s arbitration framework is undergoing modernisation; the Lebanese Arbitration and Mediation Center adopted new rules in July 2024 emphasising consolidation and emergency arbitrations. 2.3 Institutional reforms and disclosure MENA arbitral institutions increasingly mirror global rules requiring disclosure of funding. The Dubai International Arbitration Centre (DIAC) 2022 rules, Saudi SCCA 2023 rules and Bahrain BCDR 2022 rules all require parties to promptly inform other parties and the tribunal of any funding arrangement. DIAC even restricts parties from entering funding agreements after the tribunal is constituted if the agreement would create a conflict. These reforms aim to avoid conflicts of interest and enhance transparency, bringing GCC practice in line with institutions like the ICC and HKIAC. 2.4 Onshore vs. offshore in the UAE Onshore UAE remains a civil‑law jurisdiction with no explicit TPF regime. Local experts agree that TPF conforms to Sharia principles and is allowed, but parties must craft agreements carefully to avoid elements of excessive uncertainty or speculation. In contrast, the offshore jurisdictions (DIFC and ADGM) operate under common law and have adopted comprehensive TPF rules. The DIFC’s PD 2/2017 requires notice and confers discretion to order costs against funders, whereas ADGM’s rules prescribe liquidity standards for funders and ensure that litigants receive independent legal advice. This bifurcated system allows claimants to choose an arbitration seat with clearer funding rules and enforceability. 2.5 Saudi Arabia’s funding revolution Saudi Arabia’s legal system has undergone rapid transformation. The Civil Transactions Regulation 2023 codifies 41 Sharia principles and clarifies long‑uncertain areas of contract and damages law; it confirms that charging interest is void and permits damages for loss of anticipated income. As a result, funders can model claims with more certainty. The Chambers guide notes that there are no restrictions on third‑party funding, no limits on

Arbitration & Cross-Border Funding, UAE Litigation Funding

Why Arbitration Funding Is Booming in the UAE and the Offshore Courts

winjustiice / January 4, 2026

The arbitration funding landscape in the UAE and DIFC Courts is experiencing unprecedented growth, transforming dispute resolution into a more accessible and competitive arena. What was once a grey area now represents a thriving market driven by regulatory clarity, favourable case economics, and geopolitical positioning. The UAE’s pro arbitration stance has crystallized through explicit regulatory frameworks. Both the Dubai International Financial Centre (DIFC) and Abu Dhabi Global Market (ADGM) have issued comprehensive guidelines permitting third party funding, creating a common law environment aligned with international best practices. Critically, arbitrateAD, which replaced the Abu Dhabi Commercial Conciliation and Arbitration Centre in December 2023 through an announcement at first, incorporated third party funding provisions in its new rules effective February 2024, positioning Abu Dhabi as a competitive arbitration hub. The DIFC Courts upheld legacy arbitration agreements despite institutional disruptions, signalling judicial commitment to enforceability. Recent decisions from the Dubai Court of Cassation have further solidified investor confidence by confirming tribunals’ authority to award legal costs under the ICC Rules, addressing a major concern for funded parties. The numbers tell a compelling story of momentum. DIAC’s 2023 caseload reached 355 registered cases worth AED 5.5 billion (approximately USD 1.5 billion), an 11% increase in case volume. The DIFC Courts reported AED 7.7 billion in total claim value across 2024, with arbitration cases alone averaging AED 1.6 billion per claim in the first half of 2023. These high value disputes predominantly in construction, energy, and maritime sectors justify substantial funding commitments from institutional investors. Globally, the litigation funding market reached USD 25.1 billion in 2025 and is projected to reach USD 56.2 billion by 2034, with the UAE specifically identified as a key emerging hub due to DIFC and ADGM regulatory support. Three factors converge to explain why the UAE attracts global funders. First, capital preservation allows UAE based corporations to pursue multimillion dollar claims without depleting operating budgets, using funded claims as alternative capital sources. Second, the region’s construction, infrastructure, and energy sectors worth nearly USD 100 billion in active projects generate substantial high stakes disputes that justify funding arrangements. Third, enforcement confidence stems from the DIFC Courts’ alignment with the New York Convention, coupled with streamlined judgment enforcement mechanisms that reduce execution risk for funders. The offshore jurisdictions operate under common law principles, offering transparency and procedural predictability that onshore based courts cannot match as of now. This creates a bifurcated market where international disputes gravitate toward DIFC and ADGM, while onshore courts remain permissive but untested. The UAE’s emergence as a litigation finance hub reflects strategic positioning as an alternative to established centres like London. While London seated arbitrations remain dominant, the DIFC Courts’ 2025 reforms including streamlined jurisdictional rules and enforceability of mediated settlements reduce incentives to seat cases elsewhere. International parties increasingly view the UAE as offering equivalent legal rigor with superior geographical and enforcement logistics for Middle Eastern disputes. Innovation is also adapting to local contexts, with funders exploring Sharia compliant models, including Murabaha style deferred payments and profit sharing arrangements, broadening access beyond secular commercial entities. This cultural adaptation differentiates the UAE from purely Western funding ecosystems. While offshore jurisdictions currently offer clearer regulatory guidance on funding, onshore courts’ openness to the practice even without explicit rules suggests room for natural growth. As more cases utilize funding and the practice becomes routine, other regional centres may gradually adopt similar approaches. For international litigators, arbitration funders, and corporate counsel globally, it’s increasingly clear that the Gulf’s dispute resolution market deserves serious attention. The combination of growing case volumes, increasing institutional investment, and supportive judicial frameworks means the UAE and DIFC Courts are becoming genuine alternatives to traditional common law jurisdictions.