Browsing by Author "Derefalk, Susanna"

This thesis examines the availability of security for costs within international commercial arbitration seated in Finland and the exercise of authority to order security for costs. The analysis of the exercise of authority entails a review of how claimant-sided third-party funding impacts on an arbitral tribunal's assessment of a request for security for costs. The authority to order security for costs can be derived from national law or party agreement. The Finnish Arbitration Act (967/1992) is silent on arbitrator-ordered interim measures. Consequently, the jurisdiction to order security for costs cannot be derived from the Act. The absence of regulation on arbitral interim relief within the Finnish Arbitration Act does, however, not imply that the authority to order security for costs could not be derived from party agreement. The authorization of arbitrators to order security for costs through party agreement is most often the result of the choice to arbitrate under the auspices of certain institutional arbitration rules. Today, several institutional arbitral rules empower arbitrators to order security for costs either explicitly or through their provisions on the general authority of arbitral tribunals to order interim measures. The standards for the assessment of an application for security for costs have been developed by academia and through arbitral practice. Some of these requirements have recently been incorporated in both the SCC Arbitration Rules and the VIAC Rules of Arbitration and Mediation. The pivotal criteria for a decision on security for costs are the conduct of the parties, the merits of the case, the claimant's financial situation and the requirement of an occurred fundamental and commercially unforeseeable change. The claimant's nationality or domicile are irrelevant within the context of international arbitration. The location of the claimant's assets may be considered under certain conditions. An assessment of a request for security for costs generally also requires the balancing between the respondent's right to recover costs in case it prevails against the claimant's right to be heard and the existence of exceptional circumstances. A funding agreement between a claimant and a third-party funder cannot per se be deemed to imply that a claimant is impecunious. Entering into a third-party funding arrangement after consenting to arbitration should neither in itself be considered to constitute a material and commercially unpredictable change. The commendable alternative is to consider a funding arrangement between a claimant and a third-party funder as one factor among others within the context of broader fairness concerns when deciding on security for costs. This assessment should, preferably, entail a review of the relevant terms of the funding agreement. These are terms providing for the funder's right to terminate the funding agreement and terms concerning the funder's liability for adverse costs.