Foreclosing Disclosure: Third-Party Funding Agreements and Privilege under SIAC Rules

[Mustafa and Pranav are students at Rajiv Gandhi National University of Law.]

Arbitral rules are often revised to align institutional practice with modern procedural efficiencies. The Singapore International Arbitration Centre (SIAC) introduced its latest rules on 1 January 2025, replacing the erstwhile 2016 version. The SIAC Rules 2025 incorporate significant procedural changes, such as preliminary determination, information security, etc. The most outstanding addition is an explicit provision related to third-party funding (TPF) agreements. It confers upon the tribunal broad discretionary powers to order disclosure of the said documents.

Rules of other institutions, such as the Hong Kong International Arbitration Centre (see here, Article 44), or the International Chamber of Commerce (see here, paragraph 20), only impose a mandatory requirement on parties that have secured TPF to reveal the existence and identity of their funders. SIAC’s mandate differs uniquely, empowering the tribunal to order the full disclosure of TPF agreements. However, the tribunal may need to balance unbridled authority with concerns of disclosing privileged information embodied in such agreements. 

Tracing the SIAC’s Powers: Shift from 2016 to 2025 Rules

Explicit provisions permitting disclosure of TPF agreements were absent in the SIAC Rules 2016. To fill this gap, the Practice Note ‘On Arbitrator Conduct in Cases Involving External Funding’ (PN) was released in 2017. However, the PN merely supplemented the tribunal’s power to conduct inquiries as it deemed necessary or expedient (see PN, paragraph 5). In fact, the SIAC in Speers and Johnson v. MakeMyTrip and Hotel Travel clarified that nothing in the PN mandates the disclosure beyond the existence and identity of the funder (see paragraph 81). 

Consequently, one may arguably rely upon Rule 27(f) of the SIAC Rules 2016, which gives the tribunal additional powers of document production it considers relevant to the case and material to its outcome. The tribunal would also have to determine the admissibility of such documents (see SIAC Rules 2016, Rule 19.2). In practice, tribunals rely upon the International Bar Association Rules on the Taking of Evidence in International Arbitration (IBA Rules) to define the contours of these standards. The threshold of relevance and materiality is high - documents sought by a party must be necessary to “evidence facts from which legal conclusions can be drawn” and for a “comprehensive assessment of the respective issue of law by the arbitral tribunal”. However, no published commercial arbitral award can confirm the application of Rule 27(f) of SIAC Rules 2016 for complete disclosure of TPF agreements. 

As a structural overhaul, the SIAC Rules 2025 introduce Rule 38.4, which allows the tribunal to make such orders for disclosure of TPF agreements ‘as it sees fit’. On a plain reading, the provision grants the tribunal significantly broader, lenient, and explicit discretion compared to the standards of relevance and materiality. Yet, the tribunal is still required to determine the admissibility of all evidence (see SIAC Rules 2025, Rule 32.3). Through this gateway, privilege as a ground to challenge the admissibility of entire TPF agreements remains an unexplored realm.

Privilege as a Ground to Bar Disclosure

The application of privilege to TPF agreements in commercial arbitration is not clear. TPF agreements introduce an entirely new dynamic in the arbitral process. It establishes a pyramidal relationship between the attorney, client, and the third-party funder. A TPF agreement may contain strategically sensitive information, such as budget caps and termination clauses. These are included by the funder based on its assessment of the merit of the funded party’s claim. Such information can provide a tactical advantage to the other party, if disclosure of the full TPF agreement is ordered by the tribunal under Rule 38.4 of the SIAC Rules 2025. 

Further, the content and scope of privilege varies across legal traditions. Generally, in both civil and common law jurisdictions, only attorney-client communication is considered privileged. In the case of the former, such privilege is usually embodied in the doctrine of ‘professional secrecy’, whereby a lawyer has a statutory obligation to safeguard their client’s information. However, in common law jurisdictions, the privilege belongs to the client, who can also waive the same. Therefore, privilege can bar disclosure of documents in common law jurisdictions, but such protection may be absent in civil law states. 

However, it remains unclear whether the privilege extends beyond the attorney-client relationship to a TPF agreement. The Supreme Court of New Zealand in Waterhouse v. Contractors Bonding Ltd and the Supreme Court of British Columbia in Stanway v. Wyeth Canada has held that third-party litigation funding agreements can contain privileged commercially sensitive information. The Bombay High Court in Larsen and Toubro Limited v. Prime Displays Private Limited recognised that documents that have come into existence in the anticipation of litigation would be privileged. Similarly, courts in the United States in Devon IT, Inc v. IBM Corp and Miller UK Ltd. v. Caterpillar have recognised privilege in the context of agreements involving external funders. By analogy, there is no reason why such protection cannot be credibly extended to TPF agreements entered by parties to an arbitration under the SIAC Rules 2025. This extension, however, may not be feasible if both parties are from civil law jurisdictions where the obligation to maintain confidentiality is lawyer-centric. 

At the foremost, it is imperative that the tribunal resolve the applicable privilege standard. In the absence of an agreed law on privilege, tribunals frequently resort to the ‘most favourable privilege’ rule, i.e., the law proffering the greatest protection to the party must be applied. If both the parties are from common law jurisdictions, it is likely that privileged content contained in the TPF agreement will be recognised. If either party is from a common law jurisdiction, then the application of the ‘most favourable privilege’ rule might produce a similar result. 

There is a dearth of jurisprudence on privilege extending to TPF agreements and its standards vary domestically. However, the issue warrants greater attention in light of Rule 38.4 of the SIAC Rules 2025. The SIAC remains the most preferred arbitral institution in the Asia-Pacific region with 90% of its caseload being international in nature. Further, parties from over 110 jurisdictions and 6 continents have been involved in SIAC arbitrations. To strike the balance between parties’ rights and confidentiality of privileged TPF agreements, a tribunal constituted under the SIAC rules can adopt two approaches: either order a redacted disclosure, or order disclosure only to the tribunal. 

Conclusion

While the latest SIAC rules empower the tribunal to order full disclosure of TPF agreements, such unbridled disclosure can potentially disadvantage the funded party. The jurisprudence regarding privilege extending beyond the traditional attorney-client standard remains foggy. Yet, at least in the context of TPF agreements entered into by parties in many common-law states, privilege may arguably extend to commercially sensitive information contained in such agreements. Therefore, even if the tribunal has wide powers under Rule 38.4 of the SIAC Rules 2025, any order for production of full TPF agreements can still be open to challenge on the ground of privilege.