Two new Bills were introduced in Parliament yesterday by Senior Minister of State for Law Indranee Rajah, to enhance Singapore's status as an international hub for commercial dispute resolution.
One of them, the Civil Law (Amendment) Bill, will enact a framework for third-party funding in international commercial arbitration. This allows businesses an additional option to finance such proceedings - which could be funded by a party not involved in the dispute - and is allowed in major arbitration centres such as London and Paris.
The other Bill, the Mediation Bill, is set to make settlements more enforceable.
As Asia's trade and business sectors continue growing, regional demand for legal services, particularly in dispute resolution, is expected to increase, said the Law Ministry.
Last year, the Singapore International Arbitration Centre saw 271 cases, its highest number of new cases filed in recent years. Some 84 per cent were international, involving at least one foreign party, and 42 per cent had no connection with Singapore at all.
Number of cases filed at the Singapore International Arbitration Centre
International, with at least one foreign party
No connection with Singapore
The Law Ministry added that allowing third-party funding will help to consolidate Singapore's position as a "key seat of arbitration in Asia". In third-party funding, an entity not connected to a dispute provides funds to one party in return for financial gain, such as a share of damages awarded. Traditionally, an involved party or related company foots the bill.
The Law Ministry said a third- party funding agreement cannot be enforced now. In the past, this was to protect vulnerable parties, prevent the judicial system from becoming a site for speculative business ventures and guard against abuse of court processes.
The new framework will change the situation and set out rules for parties. Only professionals whose main businesses include financing claims will be allowed under the criteria. Lawyers will have to disclose who the involved funders are and should not have an interest in the funders or receive commission.
The Mediation Bill, which will apply to international commercial mediation, among others, is set to give agreements more teeth.
Currently, if parties do not comply with a settlement agreement, one of them will need to start court proceedings to enforce this as a breach of contract.
The Bill will provide another means of enforcement. Parties may record an agreement as an order of court, which can be directly enforceable if they do not comply.
They can apply to halt ongoing court proceedings pending the outcome of mediation as well.
While confidentiality of proceedings will be preserved, the Bill will clarify circumstances where communications can be disclosed or admitted into court.
The amendment will also make clear that having foreign mediators and lawyers will not mean unauthorised practice of Singapore law, said the Law Ministry.
Meanwhile, the Ministry of Manpower also introduced amendments to the Retirement and Re-employment Act yesterday to implement the higher re-employment age of 67.
From July next year, employers are required to rehire workers up to the age of 67, up from 65 today, as long as the workers are fit and performing in their jobs.