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May Hong Kong: Commercial third party funding in arbitration is common practice across many common law countries, but not in Hong Kong. Discussions in May provoked concerns that, given the prevalence of private litigation funding in other jurisdictions, Hong Kong may become less competitive as a potential venue for international dispute resolution and arbitration as compared to those jurisdictions where litigation funding is permissible. Maintenance and champerty remain prohibited in Hong Kong, and the prohibition extends to “no win no fee” conditional fee arrangements. The Law Reform Commission currently has a sub-committee reviewing the legal position relating to third party funding for arbitration, considering the shrinking scope of maintenance and champerty, and the benefits of conditional fee arrangements, such as access to justice and arrangements based on legitimate common interest. There may be a change in the air in 2016, so watch this space. Singapore: In May, a decision of the Singapore Court of Appeal confirmed that interim awards made under Singapore’s International Arbitration Act (IAA) are final and enforceable (PT Perusahaan Gas Negara (Persero) TBK v CRW Joint Operation [2015] 4 SLR 364 (SGCA)) . To read more on this, please see page 34. UK: In Al Waddan Hotel Ltd v MAN Enterprise Sal (Offshore) [2014] EWHC 4796 (TCC) the court held that the employer, Al Waddan, was not entitled to benefit from its own breach when enforcing a condition precedent under the 1987 FIDIC Red Book , which would prevent the contractor, MAN, from referring a dispute to arbitration. As was commented on by the judge, it is well known in the industry that obtaining an engineer’s decision is a condition precedent to referring a dispute to arbitration under a FIDIC contract. He further commented on the well-established principle that co-operation and non-prevention will be implied terms in such a contract. The engineer made it clear that it had ceased to be engineer and would not be determining the dispute, at which point MAN referred the dispute to arbitration. Al Waddan argued that this approach ignored the condition precedent and it must wait for the appropriate period to elapse. MAN argued that Al Waddan could not enforce obligations in a situation which took advantage of its own wrong, namely its failure to appoint an engineer who would make a decision. The court agreed with the contractor, and confirmed the arbitrator’s jurisdiction and the arbitral award. Although the contract was not the current edition of the Red Book (which uses a DAB rather than the engineer), the previous version is still used and to that extent the decision is of interest.
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