of law. Now, it might be said, the exact reverse of the prohibition is justified for the same reason."3
By contrast, in 2012, Hong Kong's Law Reform Commission found that "the community at large does not accept the idea of funding litigation for profit."4 Likewise, in Singapore, the old adage remains that "he who pays the piper often calls the tune"5, and, despite speculation, the 2012 amendments to Singapore's arbitration acts left the issue untouched.
Nevertheless, the judiciary in both jurisdictions has started to chip away at the old common law prohibition. In Hong Kong, for instance, third party funding may be used by liquidators to pursue claims on behalf of insolvent companies,6 and the Court of Final Appeal has expressly left open the question of whether it is permitted for arbitrations.7 Conversely, in Singapore, the Court of Appeal has decided that the ban applies to arbitration.8 However, it has been recently suggested that third party funding might be possible in certain situations – for example, where the funder has a legitimate interest in the outcome of the litigation, or where it is clear that the administration of justice would not be perverted.9
Keeping up with the West
Our 2015 International Arbitration Survey, conducted with Queen Mary University London (QMUL), revealed that Hong Kong and Singapore are now the third and fourth most preferred venues for international arbitration behind the traditional domination of London and Paris.10 Both Asian jurisdictions are alive to the need to keep that momentum if they are not to lose the ground they have worked hard to gain.11 As early as 2013, Secretary for Justice, Rimsky Yuen, spoke of third party funding as an area of possible reform as part of Hong Kong's commitment to "spare no effort" to remain "an arbitration friendly jurisdiction".12
Hence, while Singapore still recognises the traditional concern "to protect vulnerable litigants, prevent the judicial system from becoming a site for speculative business ventures and to guard against potential abuse of court processes", it is also keenly aware that third party funding is flowing into other major arbitration centres around the world:
"Singapore is cognisant of the practices and business requirements of commercial parties, many of whom choose to arbitrate in Singapore despite their dispute having no connection to the jurisdiction."13
Likewise, it is no coincidence that the Hong Kong's Law Reform Commission listed "[p]reserving and promoting Hong Kong's competitiveness as an arbitration centre" as the first benefit of third-party funding.14 Ultimately, the desire to stay ahead may trump all else.
Now – a cautious race to reform?
For Singapore, this reform would be achieved by two main amendments. The first provision would abolish the common law restrictions on third party funding.15 The second provision would apply specifically to third party funding in international arbitration proceedings and related court and mediation proceedings, including enforcement of awards.16 It would expressly provide that third-party funding