ZAMBIA Trends and Developments Contributed by: Christopher Kapambe, Kasewe Banda, Nakasamba Banda Chanda and Chamwaza Chioneni Phiri, AMW & Company Legal Practitioners
dered. That may be a manageable outlay for a listed commodity trader or well-capitalised mining com - pany. It is far less manageable for a landowner seek - ing compensation under section 40 of the Minerals Regulation Commission Act, a citizen subcontractor pursuing payment under a PPP arrangement or a sup - plier enforcing rights under section 101 of the Public Procurement Act. Yet these are precisely the coun - terparties that the sectoral reforms discussed above were intended to bring into the system. Third-party funding is one response to this asymmetry. A funder with no pre-existing interest in the dispute finances some or all of a party’s legal and arbitration costs on a non-recourse basis, in return for an agreed share of the proceeds if the claim succeeds. Before committing capital, the funder assesses the merits, likely quantum, enforceability and prospects of recov - ery. In FY2025, 7% of newly registered ICSID cases included third-party funding disclosures, a figure of particular relevance to a mining jurisdiction with its own investment treaty exposure. Zambia’s legal position remains uncertain, although it is not expressly hostile. Neither the Arbitration Act nor the Legal Practitioners Act addresses third-party funding and no reported Zambian decision has tested the enforceability of such an arrangement. The doc - trines of maintenance and champerty entered Zambi - an law through the English Law (Extent of Application) Act (Chapter 11), which fixes the reception of English common law at 17 August 1911. England abolished both doctrines in 1967, but that reform postdates Zambia’s statutory cut-off and did not automatically extend to Zambia. The doctrines therefore remain at least in principle, despite never having been tested by a Zambian court in the context of modern arbitration funding. At the same time, Statutory Instrument No 50 of 2025, the Legal Practitioners’ Practice (Amend - ment) Rules, 2025, replaced Rule 8 of the 2002 Rules and permits written contingency-fee arrangements. That points in the opposite regulatory direction by recognising that access to justice may depend on alternative ways of financing legal claims. Arbitral institutions have already moved ahead of the legislature. The CIArb Zambia Branch Rules require disclosure of any arrangement under which a non-
party has an economic interest in the outcome of the proceedings. The LIAC Rules go further by requiring disclosure of the funder’s identity at the outset and directing tribunals to consider the existence of funding when determining applications for security for costs. These provisions do not themselves settle the legality of third-party funding, but they plainly contemplate its use and establish safeguards for addressing conflicts of interest, transparency and costs. Other jurisdictions competing for the same investment have resolved the issue. Nigeria disapplied mainte - nance and champerty to arbitration funding by statute in 2023. In South Africa, the Supreme Court of Appeal held in Price Waterhouse Coopers Inc . v National Potato Co - operative Ltd that funding litigation for a share of the proceeds was not, without more, contrary to public policy. Singapore, Hong Kong and Malaysia have each enacted legislation expressly permitting and regulating third-party funding in arbitration. The draft ADR Bill provides an obvious opportunity for Zambia to resolve the uncertainty in the same manner as Nigeria: by disapplying maintenance and champerty to third-party funding while imposing clear disclosure requirements and appropriate safeguards. That would be preferable to leaving the issue to be liti - gated for the first time by a party that can least afford the additional uncertainty. Until legislative reform is enacted, the CIArb and LIAC Rules must carry much of the regulatory burden. A legal system that increasingly directs parties towards arbitration, particularly parties with limited financial resources, has a direct interest in ensuring that the funding required to pursue those proceedings is not itself placed in legal doubt. Conclusion Zambia’s arbitration framework has developed sub - stantially over the past three years. The clearest trend is the movement of arbitration into the sectors cen - tral to the country’s economic programme, particu - larly mining, energy, public procurement, construc - tion and infrastructure. Sector-specific legislation has created new dispute-resolution pathways; the courts have continued to support arbitration while policing jurisdictional limits; LIAC is building domestic institu -
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