The Global Leader in
Legal Finance and Risk Management

Malaysia has taken a major step forward in modernising its arbitration landscape with the entry into force of the Arbitration (Amendment) Act 2024 (Act) and the Code of Practice for Third Party Funding 2026 (Code). From 1 January 2026, Malaysian parties and international investors can benefit from a clear, robust, and progressive statutory regime for third party funding (TPF) in arbitration. This reform brings Malaysia into alignment with leading arbitral jurisdictions such as Singapore and Hong Kong, and signals a strong commitment to access to justice and investor confidence.

This article argues that insurers’ new policy condition requiring “mutual disclosure” of third‑party litigation funding is unnecessary, unsupported by evidence, and largely unenforceable. It contends the condition lacks true mutuality, improperly interferes with contractual relationships, and would not apply in most liability or coverage disputes—especially where coverage has been denied.

This article examines why the US Bankruptcy Court’s decision in Despins v. ACA Capital Group Limited et al. is a welcome development for the asset recovery community seeking to subject offshore shell companies to jurisdiction in U.S. courts.