Third party funding of arbitration in Asia

0
3384
LinkedIn
Facebook
Twitter
Whatsapp
Telegram
Copy link

While third party funding has become a standard part of the litigation and arbitration landscape in many places, until this year it has had a very limited role in Hong Kong and Singapore, due to the prohibition on the funding of legal proceedings under the common law doctrines of maintenance and champerty.

The doctrine of maintenance forbids a third party from supporting a party in legal proceedings in which the third party has no interest, and the doctrine of champerty forbids that third party from taking a share of the damages in return for providing maintenance.

In many common law jurisdictions, such as England and Wales, Australia, New Zealand, Bermuda, some provinces of Canada and the majority of states in the US, commercial funding of litigation by third party litigation funders has been approved by the courts. The application of the doctrines of maintenance and champerty have been restricted, and in some jurisdictions, such as Australia, abolished.

Many third party funders are substantial businesses in their own right, with the first publicly listed third party funder IMF Bentham listing on the Australian Securities Exchange in 2001.

Legislation has now been passed in both Hong Kong and Singapore to allow third party funding for arbitration claims and abolish the doctrines of maintenance and champerty in relation to arbitration and related proceedings.

In the competition between cities and arbitration institutions for a share of the arbitration market, Hong Kong and Singapore were concerned that they would lose market share as arbitration seats if they did not allow third party funding, given the increasing number of funded arbitrations. The funding of litigation per se is still restricted.

Singapore won the race to legislate with its legislation to amend the Civil Law Act, introduced in January this year and in force as of 1 March 2017. The Hong Kong Legislative Council passed legislation in June 2017 to amend the Arbitration Ordinance and Mediation Ordinance. These amendments will not be in force until later this year.

You must be a subscribersubscribersubscribersubscriber to read this content, please subscribesubscribesubscribesubscribe today.

For group subscribers, please click here to access.
Interested in group subscription? Please contact us.

你需要登录去解锁本文内容。欢迎注册账号。如果想阅读月刊所有文章,欢迎成为我们的订阅会员成为我们的订阅会员

已有集团订阅,可点击此处继续浏览。
如对集团订阅感兴趣,请联络我们

Amanda Lees is an of counsel with Simmons & Simmons JWS in Singapore

LinkedIn
Facebook
Twitter
Whatsapp
Telegram
Copy link