Introduction
Deminor is thrilled to share a recent success story in relation to its financing of a claim involving a Latin American company in a London-seated arbitration. One noticeable feature of this case is that the counterparty had instigated this claim against our client.
Claim Summary
Deminor’s client was a Latin American company involved in an ICC arbitration seated in London against a multinational in connection with a distribution agreement. The counterparty had instigated proceedings against the client. Not only did the client believe they could defeat this claim, but they also wanted to pursue a strong counterclaim.
Proceedings had already commenced by the time Deminor was approached for funding, but Deminor was able to diligence the case and complete the transaction to unlock funding for the remainder of the case. At the client’s request, Deminor split the costs of the proceeding on a 50:50 basis.
Partial Funding for an Expanding Corporate
The client company did not lack resources, but they had other priorities for their cash flow, including ongoing growth and the development of new business lines. This is an increasingly common rationale for corporates looking at funding. Companies have many demands on their resources, and they do not necessarily want to lock up a significant part of their available capital on one specific dispute over a period of years. Moreover, the client was not seeking full funding, but rather they wanted to share the risks of the arbitration and the upfront legal costs.
Process & Approach
Deminor was able to craft commercial terms that enabled risk sharing while still unlocking sufficient capital to pay for the legal expertise required for the counterclaim. Deminor drew on its ability to communicate and transact in English, French, and Spanish to work with the client on reaching an agreement that worked for all parties.
Case Manager’s Comment
Funding for arbitration proceedings is not “all or nothing.” We often work with corporates who only want or need partial funding for their disputes and this case is a good example of that. Deminor is also flexible and open to funding defendants/respondents where they have economically sound counterclaims.
