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Jurisdiction guide to third party funding in international arbitration

international arbitration

Third Party Funding in international arbitration has been permitted in Singapore since 2017

Third Party Funding (TPF) in international arbitration seated in Singapore and related court (including enforcement) and mediation proceedings has been permitted in Singapore since 2017. This was an important step towards reinforcing Singapore’s position as the leading Asia Pacific international dispute resolution hub. Singapore’s Minister of Law announced on 10 October 2019 that TPF will be extended to domestic arbitrations in 2019 as well as to certain proceedings in the Singapore International Commercial Court (SICC) and mediations connected with those proceedings. However these changes are currently still awaiting implementation.

Only professional funders are permitted to enter into TPF arrangements in Singapore. A qualifying third party funder must carry on the “principal business” of funding dispute resolution proceedings (in Singapore or elsewhere) and have a paid up share capital or managed assets (as defined in the Regulations) of not less than S$5 million (US$3.7m) or the foreign currency equivalent.

Singapore lawyers and foreign lawyers based in Singapore are permitted to introduce or refer third party funders to clients provided they receive no direct financial benefit from the introduction or referral. Lawyers are also allowed to advise or act for their clients in relation to TPF contracts (as long as they do not receive any financial benefits, other than fees for legal services). Foreign lawyers not based in Singapore are free to represent parties in international arbitrations in Singapore and are not regulated by the Singapore legislation. They therefore have even more flexibility in relation to TPF arrangements. read more

Source: Angus Frean, Dr. Dean Lewis, Frédéric Gillion, Jason Hambury, Jed Savager, and Scheherazade Dubash | Pinsent Masons