The dispute between the Malaysian government and the Sulu heirs has been one of the most high profile international arbitration cases in recent times, raising issues around state sovereignty and the role of third-party funders in international arbitration. Whilst Malaysia has already managed to achieve some success towards overturning the unfavourable arbitration rulings, the government is now increasing its vocal support for reforms around the international regulation of litigation funding.

An article in MalayMail highlights new comments from Datuk Seri Azalina Othman Said, the Malaysian government minister for law and institutional reform, who stated that she had participated in several bilateral meetings with European Union (EU) officials to discuss its own efforts towards regulating third-party litigation funding. These meetings reportedly included representatives from the European Commission, European Parliament and European External Action Service. 

Azalina stated that “there is a pressing need for concerted global action to combat the misuse of third-party litigation funding solely for profit-seeking purposes, which subverts the pursuit of justice.” With the arbitrations and disputes in the Sulu case taking place across several EU jurisdictions, she highlighted that the issues which have affected Malaysia are also of concern to “EU member states that are not spared from such detrimental effects.”

Azalina also expressed her desire for these discussions to continue with a wider and more international scope, including forums with policymakers from the United States and ASEAN. She stated that it was the Malaysian government’s position that there should be “a robust debate on regulating third-party litigation funding vis-a-vis the need for greater transparency, accountability and ethical professionalism among the funders.”