Singapore and Hong Kong both moved, within months of each other in 2017, to formally legalize third-party funding of arbitration, a deliberate policy choice to strengthen their standing as international arbitration seats, since sophisticated claimants increasingly expect funding to be available wherever they choose to arbitrate. Hong Kong's Arbitration and Mediation Legislation (Third Party Funding) (Amendment) Ordinance, following a 2016 Law Reform Commission report, confirmed that the common law doctrines of maintenance and champerty do not apply to third-party funding of arbitration and associated proceedings, and a Code of Practice for Third Party Funding of Arbitration followed in December 2018 to govern how funders operate.
Singapore took a parallel but separately legislated path the same year, and later extended the permitted scope of funding to proceedings before the Singapore International Commercial Court and related appeals and mediations in 2021, recognizing that the SICC's role as a hub for cross-border commercial disputes made funding availability there just as important as in arbitration itself.
Both regimes share a common structural choice: rather than leaving funding unregulated, each requires funders to meet minimum capital adequacy standards and imposes specific disclosure obligations once a funding arrangement is in place, positioning Hong Kong and Singapore as a middle path between the largely unregulated U.S. commercial funding market and the more prescriptive approach now being debated in the EU. For claimants and counsel choosing where to seat an arbitration, funding availability and its accompanying rules have become a genuine factor in that decision, not an afterthought.