Third-party funding is increasingly common in investment arbitration. It can give investors access to treaty claims, but it may also raise issues of conflicts of interest, confidentiality, security for costs and adverse costs exposure.[1]
The procedural orders in Daniel W. Kappes and Kappes, Cassiday & Associates v. Republic of Guatemala are useful because they address two procedural questions: when produced documents may remain confidential and how much information must be disclosed about a third-party funder.[2]
The case concerned a gold mining project in Guatemala. The claimants brought arbitration under the Dominican Republic-Central America-United States Free Trade Agreement (“CAFTA-DR”), seeking approximately USD 500 million.[3] In its December 2025 award, the tribunal found certain treaty breaches but declined to award damages.[4] The claimants were also ordered to bear 75 per cent of the arbitration costs.[5]
Confidentiality Is Not Automatic
In Procedural Order Number 7, Guatemala sought a confidentiality order to protect personal identifying information contained in documents that it had produced. It argued that redactions were necessary under Guatemalan law and to prevent the use of the information outside the arbitration.[6]
The tribunal accepted that protected personal information could justify restrictions on public dissemination or use outside the case.[7] It also relied on Article 3(13) of the International Bar Association Rules on the Taking of Evidence in International Arbitration, which provides that documents produced in arbitration and not otherwise in the public domain should generally be kept confidential and used only for that arbitration.[8]
The tribunal nevertheless required a precise procedure. A party objecting to an unredacted document had to act within the applicable time limit and provide a proposed redacted version in accordance with Article 10.21.4(c) of the CAFTA-DR.[9] It also clarified that the confidentiality rule did not apply to documents already in a party’s possession independently of the arbitration.[10]
The legal point is that confidentiality protects the arbitral process. It does not create a broad right to control all information appearing in the record. A party seeking protection should therefore identify the protected information, state the legal basis for confidentiality and propose workable redactions.
Transparency and Confidentiality Can Coexist
The CAFTA-DR contains transparency provisions, but it also recognises protection for privileged or otherwise protected information.[11]
The tribunal’s approach reflects that balance. Investment arbitration may have a public dimension, but that does not require disclosure of all personal, protected or sensitive information. At the same time, confidentiality cannot be invoked in vague terms. It must be tied to a specific legal or procedural basis.
This is especially relevant in mining, energy and infrastructure disputes, where the record may contain personal data, environmental records, State documents, tax information and materials connected to parallel proceedings.
Funding Disclosure Has Limits
Procedural Order Number 8 concerned third-party funding. The claimants had disclosed that they were receiving financial support from an affiliate of Burford Capital. Guatemala requested disclosure of the funder’s identity and information on whether the funding arrangement covered a possible adverse costs award.[12]
The tribunal ordered disclosure of the funder’s identity.[13] This was justified by the need for conflict checks and arbitrator disclosure. The identity of a funder may affect the independence and impartiality analysis.
The tribunal did not, however, order disclosure of whether the funding agreement covered a hypothetical adverse costs award.[14] It considered that Guatemala could have applied for security for costs on an arguendo basis without first obtaining the funding agreement.[15]
This distinction is important. The existence of third-party funding may justify disclosure of the funder’s identity. It does not automatically justify disclosure of the funding agreement, budget, return structure or adverse costs provisions.
The 2022 ICSID Rules Confirm the Same Approach
Although the 2022 International Centre for Settlement of Investment Disputes (“ICSID”) Arbitration Rules did not govern the procedural orders, they confirm the same direction. Rule 14 now requires disclosure of the name and address of a non-party funder.[16]
Rule 53 also provides that third-party funding may be relevant to security for costs, but it is only one factor. The existence of funding alone is not sufficient.[17]
The result is a limited disclosure model. Funder identity may be required for conflicts and procedural integrity. Disclosure of funding terms usually requires a specific procedural justification.
Costs Risk Remains Important
The final award gives the procedural orders practical importance. As mentioned previously, the tribunal found a treaty breach by Guatemala, yet awarded no compensation to the claimants.[18] The claimants were also ordered to bear USD 379,940.76 in partial reimbursement of the expended portion of Guatemala’s advances to ICSID with respect to the costs of the proceeding.[19]
Funding may help a claimant bring a claim, but it does not eliminate costs risk. A funded claimant should consider from the beginning whether its funding arrangement addresses adverse costs and how it would respond to a security for costs application.
For respondent States, requests about funding should be targeted. A request for the funder’s identity is more likely to succeed than a request for the funding agreement itself. Broader requests should be linked to a concrete procedural need.
Conclusion
Kappes v. Guatemala shows that tribunals may balance transparency, confidentiality and procedural fairness in a narrow and practical way.
For document production, confidentiality objections should be timely, precise and supported by a legal basis. For third-party funding, the funder’s identity may be disclosable, but the funding agreement itself will usually remain protected unless there is a clear procedural need.
[1] Report of the ICCA-Queen Mary Task Force on Third-Party Funding in International Arbitration, The ICCA Reports No. 4, April 2018, p. 1.
[2] Daniel W. Kappes and Kappes, Cassiday & Associates v. Republic of Guatemala, ICSID Case No. ARB/18/43, Procedural Order No. 7 on the Respondent’s Request for a Confidentiality Order, 21 June 2021; Daniel W. Kappes and Kappes, Cassiday & Associates v. Republic of Guatemala, ICSID Case No. ARB/18/43, Procedural Order No. 8 on Disclosure of Third-Party Financing, 28 September 2021.
[3] UNCTAD, Kappes v. Guatemala, https://investmentpolicy.unctad.org/investment-dispute-settlement/cases/917/kappes-v-guatemala (last accessed 6 May 2026); US Department of State, Daniel W. Kappes and Kappes, Cassiday & Associates v. Republic of Guatemala, https://www.state.gov/daniel-w-kappes-and-kappes-cassiday-associates-v-republic-of-guatemala (last accessed 6 May 2026).
[4] Daniel W. Kappes and Kappes, Cassiday & Associates v. Republic of Guatemala, ICSID Case No. ARB/18/43, Award, 23 December 2025, para. 1302; UNCTAD, Kappes v. Guatemala, https://investmentpolicy.unctad.org/investment-dispute-settlement/cases/917/kappes-v-guatemala (last accessed 6 May 2026).
[5] E. Brouwer, ICSID releases procedural orders in Kappes v. Guatemala dealing with confidentiality of documents and disclosure of third-party funding information, Investment Arbitration Reporter, 1 May 2026, https://www.iareporter.com/articles/icsid-releases-procedural-orders-in-kappes-v-guatemala-dealing-with-confidentiality-of-documents-and-disclosure-of-third-party-funding-information/ (last accessed 6 May 2026).
[6] Daniel W. Kappes and Kappes, Cassiday & Associates v. Republic of Guatemala, ICSID Case No. ARB/18/43, Procedural Order No. 7 on the Respondent’s Request for a Confidentiality Order, 21 June 2021, paras. 10-17.
[7] Id., para. 28.
[8] Id., para. 29; IBA Rules on the Taking of Evidence in Intl. Arbitration, Art. 3(13).
[9] Kappes, Procedural Order No. 7, para. 31; Daniel W. Kappes and Kappes, Cassiday & Associates v. Republic of Guatemala, ICSID Case No. ARB/18/43, Procedural Order No. 1, 10 September 2019, para. 24.2.
[10] Kappes, Procedural Order No. 7, para. 30.
[11] Dominican Republic–Central America–United States Free Trade Agreement, opened for signature 5 August 2004, Art. 10.21.4.
[12] Daniel W. Kappes and Kappes, Cassiday & Associates v. Republic of Guatemala, ICSID Case No. ARB/18/43, Procedural Order No. 8 on Disclosure of Third-Party Financing, 28 September 2021, paras. 6-7; E. Brouwer, ICSID releases procedural orders in Kappes v. Guatemala dealing with confidentiality of documents and disclosure of third-party funding information, Investment Arbitration Reporter, 1 May 2026, https://www.iareporter.com/articles/icsid-releases-procedural-orders-in-kappes-v-guatemala-dealing-with-confidentiality-of-documents-and-disclosure-of-third-party-funding-information/ (last accessed 6 May 2026).
[13] Kappes, Procedural Order No. 8, para. 49.
[14] Id.
[15] Id., paras. 46-47.
[16] 2022 ICSID Arbitration Rules, R. 14.
[17] Id., R. 53(3)-(4).
[18] Kappes, Award, para. 1302; UNCTAD, Kappes v. Guatemala, https://investmentpolicy.unctad.org/investment-dispute-settlement/cases/917/kappes-v-guatemala (last accessed 6 May 2026).