Litigation in Asia has Arrived
Singapore: With the March 1, 2017, Civil Law Act, litigation financing was allowed for international arbitrations. Under this framework, litigation financing agreements are not illegal contrary to public policy, as long as they relate to a permitted category of dispute resolution proceedings. For now, this is limited to international arbitration and related proceedings. As a whole, this act received a warm welcome from practitioners, financers, and potential parties. Lastly, at the time the Civil Law Act was introduced, Senior Minister Indranee Rajah, SC indicated that there was a possibility that the Act would be expanded to include other categories of dispute resolution proceedings.
Hong Kong: In June 2017, the Legislative Council of Hong Kong passed the Arbitration and Mediation Legislation Ordinance. This Ordinance was gazette on June 23 of that year but, was only partially entered into force. The sections that officially lifted the prohibition on litigation financing are not yet operational. On December 3rd of the next year, the Secretary for Justice issued a Code of Practice for Litigation Financing of arbitration, and concurrently gave notice that the Ordinance would fully go into force on February 1st, 2019. Once in force, this new legislation will allow for litigation financing in arbitration cases, both international and domestic seated in Hong Kong.
Elsewhere: Litigation financing has been the subject of much discussion in Seoul, Korea, and Tokyo, Japan. Currently, in both countries, there is no law that expressly permits or prohibits litigation financing. Thus, a grey area exists. Calls for clarifying legislation have increased and it will be interesting to see how the future plays out.
Keywords: litigation finance, Civil Law Act, Ordinance, Singapore, Hong Kong
Work Cited: Marla Decker, Third-Party Funding in Asia: Arrived, and Set to Thrive, Above the Law (December 12, 2018)
