Hong Kong Law Reform Commission Consults on Third Party Funding for Arbitration

Julia CharltonPartner, Charltons

Law Reform Proposed to Allow Third Party Funding for Hong Kong Arbitration

Introduction

In October 2005 a Sub-Committee of the Law Reform Commission of Hong Kong published a detailed Consultation Paper on Third Party Funding for Arbitration (see archive) proposing that third party funding for arbitration taking place in Hong Kong should be allowed under Hong Kong law. Comments on the Consultation Paper should be submitted by 18 January 2016. The common law doctrines of maintenance and champerty are major obstacles to Third Party Funding of litigation, but it is not clear whether these doctrines apply to arbitration. Nor is it clear whether the exceptions to the common law doctrines extend to arbitration. Given that the Hong Kong courts have left open the legal position, the Consultation Paper has made four recommendations which, if enacted, will ensure legal certainty for parties who resolve disputes through arbitration. The justification for reform is to maintain Hong Kong’s status as a “pro-arbitration regime” thereby ensuring its continued success as a major regional and international arbitration centre. read more


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