As corporate tussles grow, litigation funds eye India

Amid a rising number of international legal disputes involving entities and businesses in India coming to fore, a number of ‘litigation funds’ from abroad are sensing a niche business opportunity for them.

This business of funding litigation costs of companies and individuals is in embryonic stage as yet in India, but a number of entities specialising in such kind of financing have begun their groundwork to set shop here.

These include leading global litigation funds like Harbour and Fulbrook.

Some home-grown entities are also considering entering this business of providing fund-support to the entities involved in complex commercial disputes here.

The business model works like an insurance cover against the legal disputes and involves the litigation funds bearing all the costs to be incurred by their clients in their commercial disputes.

This is in return for a share in the claim proceeds after winning the case. However, the litigation funds do not get anything if the client loses the case.

These funds pay for all costs charged by the lawyers and other experts, the coverage for any adverse development and for all the expenses necessary to win the case.

‘We are seeing a real demand for litigation funding from Indian companies involved in complex commercial disputes,’ UK-based Harbour Litigation Funding CEO Brett Carron said.

‘The Indian market is incredibly dynamic from a commercial point of view... We are working currently with a number of Indian companies on their international disputes,’ he said.

Founded in 2007, Harbour is among the first litigation funders in the UK and it provides litigation funding to finance part, or all, of the costs of any type of commercial litigation in courts and tribunals besides arbitration and mediation.

US-based Fulbrook Capital Management Llc Chairman & CEO Selvyn Seidel also said his company has begun looking at the Indian market.

‘I think a few commercial litigation funds from the UK and the US are starting to look at the Indian market,’ Seidel said, while adding that Fulbrook has already got some applications from certain Indian entities for funding.

‘In my view, India is in many ways a country which will benefit greatly from funding, and funders like Fulbrook will find the market of emphatic interest,’ Seidel added.