HOZU Capital Joins the Third-Party Funding Discussion in Malaysia at Asia ADR Week 2026

HOZU Capital Joins the Third-Party Funding Discussion in Malaysia at Asia ADR Week 2026

With the Arbitration (Amendment) Act 2024 and the Code of Practice for Third Party Funding 2026 taking effect on 1 January 2026, Malaysia has significantly advanced the modernization of its statutory framework for third-party funding in arbitration. The new regime expressly recognizes and regulates third-party funding in arbitration, removing common-law restrictions on maintenance and champerty in relation to arbitration funding agreements. It further addresses key areas including disclosure, conflicts, funder conduct and capital adequacy, bringing Malaysia closer to established funding jurisdictions such as Hong Kong and Singapore and marking an important development for legal finance in Asia.

Against this evolving regulatory backdrop, and to shed further light on the practical implications of these developments, on 14 September 2026, the IBA Asia Pacific Arbitration Group and the Asian International Arbitration Centre presented “Disruptors in International Arbitration” in Kuala Lumpur as an associated event of Asia ADR Week 2026. The programme brought together leading practitioners and experts to discuss emerging developments, reshaping how international disputes are funded, managed and resolved. It focused on two key themes: the evolution of third-party funding and the growing use of responsible AI in legal practice. Discussions examined the expanding role of third-party funding in Malaysia and international arbitration, as well as the opportunities and challenges it presents. The programme also addressed the ethical and practical implications of AI for arbitration, advocacy and dispute resolution.

HOZU Capital was invited to contribute its perspective as an Asia-based litigation funder. Our Head of International Business, Tiana Zhang, joined the panel “Evolution of Third-Party Funding” alongside Aniz Ahmad Amirudin of Cecil Abraham & Partners, Sharon Chong of Skrine, Mitchell Dearness of Omni Bridgeway, Kelvin Seetof Cheang & Ariff, and Brett Frazer of Harvey. The discussion was moderated by Pablo F. Maqueda of WongPartnership LLP and Koh Swee Yen, S.C., Co-Chair of the IBA Asia Pacific Arbitration Group.

The panel explored how Malaysia’s new third-party funding regime affects case assessment, funder oversight and compliance. Drawing on HOZU Capital’s regional underwriting experience, Tiana explained that while the new regime adds a Malaysian compliance layer, the fundamentals of fundability remain merits, proportional economics, recoverability and a workable process. She also discussed the practical boundary between funder oversight and control, emphasizing that case strategy and settlement remain with the claimant. Tiana encouraged claimants to engage funders early once core merits and quantum are established, noting that HOZU Capital, as an Asia-focused funder, is committed to working alongside Malaysian parties to navigate the new landscape with practical, tailored funding options.