Supreme Court Sends 3rd Party Funder's Arbitration Case Back to Third Circuit
The U.S. Supreme Court "GVR’d" an arbitration case this morning—it granted certiorari on Burford German Funding LLC v. financialright claims GmbH, No. 25-1269, vacated a U.S. Third Circuit Court of Appeals decision in the case, and ordered the appeals court to reconsider it in light of Jules v. Andre Balazs Properties, 608 U.S. 200 (2026) (available at https://bit.ly/4eku71s).
Jules, decided on May 14, held that where a federal court has jurisdiction over a case’s original claims, it does not lose that jurisdiction while the case is pending arbitration, focusing on the federal court’s ability to confirm or vacate an arbitration case. (For full coverage, see Caroline Hillier, “Supreme Court Rules Federal Arbitration Act Litigation Stays Provide Jurisdiction to Confirm Awards, CPR Speaks (May 15) (available at https://bit.ly/4hSHW9j).)
In Burford German Funding, financialright asked a U.S. District Court to force Burford to hand over documents for a German lawsuit—a request for foreign discovery under 28 U.S.C. § 1782. Burford asked that court to stay the litigation under the Federal Arbitration Act’s 9 U.S.C. Sec. 3, and then compel arbitration under FAA Sec. 4, but the court said it lacked the jurisdictional power to decide that request despite the court's jurisdiction over the discovery request.
The Third Circuit Court of Appeals agreed. In re Application of financialright Claims GmbH, No. 24-3171 (available at https://bit.ly/4yWxrHU).
Burford is a third-party litigation finance company based in St. Peter Port, Guernsey, and operating world-wide. Financialright is a German debt collection company that helps manage mass claims and had gathered truck buyers' claims into a big case against truck makers accused of fixing prices. Burford helped pay for that case.
Burford appealed to the U.S. Supreme Court to take the case, in its petition calling the matter "essentially Jules's cousin," meaning that its cert petition provides another case on continuing jurisdiction for arbitration issues once that matter is in federal court.
Financialright says Burford hid money ties to the law firm running the case, and that those ties made a secret fee deal that German law does not allow. It says it never would have agreed to settle disputes in private arbitration if it had known. So—in an action separate but related to the Supreme Court proceedings—it filed suit in Delaware federal court in Financialright Claims GmbH v. Burford German Funding LLC, No. 1:24-cv-00929. See, generally, Corey Rothauser, “Financialright Seeks To Revive Burford Arbitration Fight,” Law360 (Oct. 13) (available here).
In August, Delaware-based U.S. District Court Judge Colm Connolly paused the suit. He found that the two sides had agreed that arbitrators should decide first whether the agreement was valid. Then a London arbitration panel ruled on Sept. 26, rejecting Burford’s arbitration request. Id. Financialright says the panel found the Delaware court "has authority to decide" the fraud claim, and on Oct. 7 it asked the judge to restart the case. Id. Burford disagreed and filed its own brief on Oct. 8.
The London ruling ties the two fights together. Financialright claimed that the arbitrator tribunal decision rejecting arbitration makes Burford's Supreme Court petition moot.
But today’s Supreme Court GVR order puts the possibility back on the docket and in the hands of the Third Circuit.
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Baker is the CPR Institute’s 2026-2027 academic year intern from the Howard University School of Law ADR Program in Washington, D.C., where she is a second-year student. Bleemer edits Alternatives to the High Cost of Litigation for the CPR Institute.
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