Hong Kong has published its long-awaited Code of Practice for third party funders, and announced that amendments to the Arbitration Ordinance which permit funding of Hong Kong arbitrations will come fully into force on 1 February 2019. Similar amendments to the Mediation Ordinance (Cap. 620) have been deferred for further consultation.
Tag: Third Party Funding in Arbitration
We are pleased to release the third issue of our periodic publication “Cross-Border Litigation”, designed to highlight legal and practical issues specific to litigation with an international aspect.
Tapping into the expertise of the firm’s leading commercial litigators across the globe, the publication gives readers the benefit of their hands-on experience and flags key developments that should be on commercial parties’ radars.
Topics covered in this issue include:
- A selection of recent developments from across the globe
- Litigation funding on the rise internationally
- Judicial turf wars in Dubai
Is this the end of the “conduit” jurisdiction?
- Multi-jurisdictional litigation: Lessons from cross-border intellectual property enforcement
Our new Milan office and Laura Orlando
- The growing “internationalisation” of China’s courts
- Indonesia-related commercial contracts
Guide to dispute resolution clauses
To download the publication, click here.
To read the previous issues, click here.
Hong Kong's Legislative Council has passed a law allowing third parties to fund arbitrations seated in the territory, as well as work done in Hong Kong for arbitrations seated elsewhere, and for mediations. This development has been long anticipated, and will be widely welcomed by Hong Kong's thriving arbitration community, which views it as essential to Hong Kong maintaining its status as one of the world's most popular arbitral seats.
The new law, in the form of amendments to the Arbitration Ordinance (Cap. 609), abolishes the doctrines of champerty and maintenance for arbitration, clearing the way for parties with no legitimate interest in the proceedings to fund them, in return for a share in any award or settlement. Third parties can include lawyers and law firms, although not if they act for any party to the proceedings. Similar amendments are made to the Mediation Ordinance (Cap. 620).
The amendments are expected to take effect later this year, to allow time for development of an appropriate funder code of conduct.
Last week saw two important and novel pieces of legislation related to dispute resolution put before the Singapore Parliament. The first is a bill to amend current legislation to permit third party funding in international arbitration and related litigation. The second is a bill to encourage mediation through, amongst other things, giving binding force to settlement agreements reached through mediation.
Following consultation in October 2015 (discussed in our earlier blog here), the Hong Kong Law Reform Commission (LRC) released a report last week in which it recommended that third party funding of arbitration should be allowed for arbitrations seated in Hong Kong, and also for services provided in Hong Kong for arbitrations taking place outside Hong Kong.
The Hong Kong Law Reform Commission has today published a Consultation Paper recommending that third party funding should be permitted for arbitrations in Hong Kong. The Paper invites public comment on the recommendation, and how third party funding should be adopted in Hong Kong. A link to the paper can be found here.
The Consultation Paper is a comprehensive study of the third party funding industry, examining current third party funding methods in other jurisdictions, as well as the potential benefits and drawbacks of permitting third party funding for arbitration in Hong Kong. The Consultation Paper also reviews the current law relating to third party funding in Hong Kong, as well as the law and regulation for third party funding in several other jurisdiction (including England & Wales, Australia, USA, Mainland China, and Singapore).
Justin D'Agostino, the Global Head of Herbert Smith Freehills' Dispute Resolution practice and the firm's Regional Managing Partner for Asia and Australia, is a member of the Law Reform Commission Sub-Committee which drafted the Consultation Paper. The Sub-Committee includes key members of Hong Kong's arbitration community, including Kim Rooney, a barrister at Gilt Chambers (Chair of the Sub-Committee), Teresa Cheng SC, Chairwoman of HKIAC, Robert Pang SC, Jason Karas and Victor Dawes SC.