Litigation Funding in Singapore
With effect from March 1, 2017, Singapore passed an amendment to its Civil Law Act (and associated regulations and amendments to the professional conduct rules for lawyers in Singapore) to allow for third-party funding of international arbitrations.
Under the new Singapore framework, third-party funding contracts with a qualifying third-party funder (in short, a professional funder) are not illegal or contrary to public policy as long as they relate to a permitted category of dispute resolution proceedings. For now, that category is limited to international arbitration and related court or mediation proceedings while third party funding of domestic arbitrations remains prohibited in Singapore. This position is in contrast to the position under the new Hong Kong third-party funding legislation discussed below.
As we previously reported, at the time the amendments were introduced, Senior Minister Indranee Rajah, SC indicated that there was a possibility the framework would be expanded to other categories of dispute resolution proceedings. However, to date, no further indication as to whether and when this might happen has been given, and public calls for expansion of the scope of the legislation have not been particularly widespread. That said one obvious candidate for inclusion in the list of dispute resolution categories for which third party funding is permitted in international commercial litigation in the Singapore courts and, in particular, the Singapore International Commercial Court (SICC). Similar to international arbitration, users of the SICC tend to be well advised, sophisticated parties, who might well be attracted to the jurisdiction by the availability of nonrecourse funding options. It will be interesting to see whether, as the SICC itself becomes more established, its users come to demand the availability of third-party funding.
Although Singapore’s third-party funding framework is still nascent, and we are aware of only a small number of publicly reported funded cases in Singapore to date, the legislative amendments were a welcome development for arbitration in Singapore. The new framework has received a warm reception from practitioners, funders and potential disputing parties alike, and undoubtedly reinforces Singapore’s status as a leading arbitration seat globally.
Topics: Singapore | Third-Party Funding | Singapore International Commercial Court
Work cited: Marla Decker | Lake Whillans
https://lakewhillans.com/articles/third-party-funding-in-asia-arrived-and-set-to-thrive/
