Third Party Arbitration Funding and Islamic Shari’a: Friends Not Foes

International arbitration exacts considerable monetary costs. In response, new mechanisms have emerged to eliminate the risks of these costs. One of these mechanisms is Third-Party Funding (TPF). Claimants may consider TPF where they cannot afford the costs of arbitration or to spread their risks and take the claim costs off their corporate balance sheets.

It enables the poorly funded party to pursue its claim on an equal footing with the well-funded one. Recently, TPF has acquired great attention that made it a revolutionary development in the practice of international arbitration. The practice of TPF has moved from common law jurisdictions to civil law ones, some of which are based, even partially, on Islamic Shari’a (Shari’a); a movement that requires a response from an Islamic perspective. This Article accordingly responds to this movement, considers the legitimacy of TPF arrangements from an Islamic perspective, and advocates for an Islamic TPF funding model.