Singapore - Part II Country Report - Handbook on Third-Party Funding in International Arbitration
Originally from Handbook on Third-Party Funding in International Arbitration
1.1. TPF Regime in Singapore
1.1.1. Is TPF commonly used in your Jurisdiction? If yes, since when (is it a new trend or a well-established practice)?
No, TPF is not commonly used in Singapore as up until March 2017, there was a ban on it. Up until that point, Singapore continued to retain the traditional English common law prohibition against maintenance and champerty, and any agreements affected by maintenance or champerty would be void for being contrary to public policy or illegal. The Court of Appeal had also held in a 2007 decision that this prohibition applied to arbitration proceedings governed by Singapore law as well. This may be compared with a 2015 High Court case, Re Vanguard Energy Pte Ltd, which held that litigation funding may be permitted in Singapore in certain insolvency cases. The statutory basis for this decision was section 272(c) of the Companies Act, which states: “The liquidator may … sell the immovable and movable property and things in action of the company by public auction, public tender or private contract with power to transfer the whole thereof to any person or company or to sell the same in parcels”. Ultimately, the concern with TPF was that a party with no apparent connection to the dispute could be given the share of the proceeds in the event of a successful claim, and vulnerable parties could be oppressed by such funding schemes.
Critically, however, in June 2016, the Ministry of Law commenced a public consultation exercise regarding the Draft Civil Law (Amendment) Bill and Civil Law (Third-Party Funding) Regulations. The proposed legislative amendments would enact a framework for TPF for international arbitration proceedings by: