India’s emergence as one of the top five economies in the world made it one of the most preferred destinations for foreign investment in recent years. However, disturbances and uncertainties brought by the COVID-19 pandemic could give rise to a new wave of litigation.

Due to widespread economic distress, parties to such disputes may find themselves unable to bear the high costs of litigation or arbitration. India is but a cost-effective jurisdiction for litigation and dispute resolution.

Shortage of resources triggered by the COVID-19 pandemic has already made business operations for industries extremely onerous. Businesses are combating shrinking balance sheets and sudden reduction in the available credit. These factors could increase opportunities for litigation funding and for funders to help businesses pursue their litigation claims through the Third Party Funding route.

This article discusses on the emerging trend in litigation where third parties fund the litigants to bear the expenses incurred while conducting the litigation proceedings. Then the article highlights the complexities that are created when third party funding is opted by the litigants and further concludes by discussing the way forward.

Keywords: Third Party Funding, Legal financing agreement, Doctrines of maintenance and champerty, Public policy

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