Two Bills Passed to Boost Singapore’s Position as Dispute Resolution Hub

SINGAPORE: Parliament on Tuesday (Jan 10) passed into law two bills – the Civil Law Amendment Bill and the Mediation Bill – to bolster Singapore’s position as a dispute resolution hub.

The former allows third-party funding to finance international commercial arbitration, while the latter beefs up enforcement of mediated settlements to support international commercial mediation.

Previously, the law prevented parties which had no interest in arbitration proceedings from giving assistance. But with the Civil Law Amendment Bill, there is now a framework for third-party funding in Singapore.

Third-party funding is a feature in leading arbitration centres such as London, Paris and Geneva. Singapore now joins those cities, and the Law Ministry said the move will strengthen the country’s position as a key arbitration seat globally.

Maxwell Chambers, which houses the Singapore International Arbitration Centre, will be enlarged to allow greater scope for settling disputes.

In Parliament on Tuesday, Senior Minister of State for Law Indranee Rajah said: “It will offer businesses an additional financing and risk management tool when engaged in the relevant categories of proceedings. This includes the financing of valid claims which they may otherwise not pursue due to financial constraints.

“Businesses that seek to access third-party funding will typically have to undergo a rigorous process of claim assessment by the chosen funder.”

Member of Parliament (MP) for Bukit Batok Murali Pillai added: “Third-party funding allows commercial funders to enable the funded party to litigate what the funder perceives to be a legitimate case. In this manner, third-party funders’ funding facilitates access to justice by enabling parties who may not have sufficient financial means to prosecute their genuine disputes to do so.”

With the Mediation Bill, the Government also wants to reinforce Singapore as a preferred place for dispute resolution. Under it, once parties reach a settlement, they may apply to court to have the agreement recorded and enforced as a court order.

“Without this amendment, a party has to go through onerous steps of enforcing the agreement as a contractual claim, or apply to court for a consent order. This Bill remedies this deficiency and enhances the attractiveness of mediation as a choice alternative dispute resolution with finality and expediency where the parties decide to exercise this right,” said MP for Holland-Bukit Timah GRC Christopher De Souza.

The court may however refuse to record a settlement agreement if it is contrary to public policy.

The Bill will not apply to mediation conducted under the Industrial Relations Act, those conducted by the Family Justice Court under the Women’s Charter, or those conducted under the Small Claims Tribunal framework. This is to prevent inconsistency with existing rules guiding other types of mediation.