Singapore Moves to Allow Third-Party Funding in Arbitration
Proposed legislation would abolish the torts of champerty and maintenance to permit third-party funding for international arbitrations, aiming to boost the city-state's competitiveness as a global dispute resolution hub.
Singapore's Ministry of Law has introduced a draft Civil Law (Amendment) Bill and accompanying regulations to formally legalize third-party funding (TPF) for international arbitration. The proposed legislation would abolish the common law torts of champerty and maintenance that have historically prohibited such financing arrangements in the jurisdiction. The reform is a strategic move to bolster Singapore’s standing as a leading international arbitration hub, bringing its legal framework in line with competing jurisdictions like England and Australia. For major corporate clients and their counsel, this development provides a crucial new tool for financing and de-risking high-value commercial disputes. It also presents new strategic considerations for law firms advising on venue selection and case management. The proposed regulations outline specific qualification criteria for funders, requiring that funding is their primary business and that they possess sufficient accessible capital. Counsel should monitor the final form of the legislation following the close of the public consultation period.