THE CHANGING DYNAMICS OF THIRD-PARTY FUNDING OF CORPORATE DISPUTES IN ASIA
In recent years, a growing number of common law jurisdictions have reformed or abolished their longstanding rules of champerty and maintenance. These reforms have unlocked the door for parties involved in disputes to seek third-party funding (TPF) to support their meritorious claims.
In January, Singapore passed the Civil Law (Amendment) Act 2017. Following this reform, TPF can now be used to help fund international arbitrations (IAs) seated in Singapore. As recently as 14th June, Hong Kong became the latest jurisdiction to follow this trend by passing legislation to amend the Arbitration Ordinance (Cap. 609), enabling TPF of IAs. The amendment is likely to take effect later this year, giving time for a code of conduct for funders to be developed.
Both of these reforms effectively recognise that TPF is part of the modern commercial disputes landscape. However, in both jurisdictions, commercial pressures have also driven the reform agenda. Arbitral institutions in Singapore and Hong Kong, including for example the Singapore International Arbitration Centre (SIAC) and the Hong Kong International Arbitration Center (HKIAC), are commercial operations, which parties are free to use – or not. And, despite these venues both enjoying a growing reputation in recent times, it is clear that the prohibition on TPF of IAs was holding them back. In short, jurisdictions that do not embrace TPF risk being left behind by the competition.
Jul-Sep 2017 issue
Woodsford Litigation Funding