Singapore recently introduced new proposed legislation, the
Public Consultation on the Draft Civil Law (Amendment) Bill 2016
and Civil Law (Third Party Funding) Regulations 2016, which would
allow third-party funding in disputes. If enacted, Singapore would
join popular international arbitration jurisdictions such as
England and Australia and benefit from increased arbitration
activity and investment. The Singapore Ministry of Law's
feedback period on the proposed legislation began on 30 June 2016
and closes 29 July 2016.
Key Features of the Civil Law (Amendment) Bill 2016
The Civil Law (Amendment) Bill 2016:
Abolishes the common law tort of
champerty and maintenance in Singapore.
Allows third-party funding in certain
categories of dispute resolution. These are listed in the Civil Law
(Third Party Funding) Regulations.
Allows conditions to be imposed on
third-party funders. Funders who do not comply with these
conditions will not be able to enforce their rights under their
third-party funding contracts.
Allows lawyers to recommend
third-party funders to their clients provided the lawyers do not
receive any direct financial benefit from such
Key Features of the Civil Law (Third Party Funding) Regulations
The Civil Law (Third Party Funding) Regulations 2016:
Prescribes that the categories of
dispute resolution in which third-party funding is allowed are
international arbitration proceedings, and court and mediation
proceedings related to an international arbitration.
Sets out the qualifications for
qualifying third-party funders. These are:
The third-party funder's
principal business is third party funding.
The third-party funder must have
access to funds immediately within its control, including within a
parent corporation or a subsidiary to fund dispute resolution
proceedings in Singapore.
The funds referred to in part
2 above must be invested pursuant to a third-party funding
contract to enable funded party to meet the costs of the dispute
Importance of Allowing Third-Party Funding in Singapore
This exercise marks the next step in Singapore moving toward
third-party funding in disputes following the decision by the
Singapore High Court last year in Re Vanguard Energy Pte
Ltd  SGHC 156, where the Singapore High Court approved
an arrangement where the proceeds from the claims of a company in
liquidation were assigned to certain funders in exchange for
Should the Civil Law (Amendment) Bill 2016 and Civil Law (Third
Party Funding) Regulations 2016 be made law, this will likely
encourage more investment into international arbitration
proceedings in Singapore, and make Singapore a more attractive
forum in which to conduct international arbitration.
If you have any questions about this Alert,
please contact Tham Wei Chern, any of the attorneys in the Duane
Morris & Selvam LLP Singapore office or the attorney in the
firm with whom you are regularly in contact.
Disclaimer:This Alert has been
prepared and published for informational purposes only and is not
offered, nor should be construed, as legal advice. For more
information, please see the firm's
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Singhania & Partners LLP, Solicitors and Advocates
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