What is Litigation?
The private commercial litigation funder, who has no direct interest in the proceedings will fund the litigants either all or in part for legal costs. Litigation funder’s return is tied to the success of the case(s). In return for providing the monetary resources up-front for the litigant, the funder receives a portion of a pre-agreed settlement or judgement. As in contrast, if the case is unfavourable to the litigant, the funder recovers nothing and nothing is owed by the litigant.
Litigation & Private Commercial Funding
Our financial services division is a unique division within Krish Maniam & Co. This division provides financial assistance to clients who need litigation funding, i.e. unable to bear the legal cost. This way a litigant with a very probable case can still seek a remedy despite not being able to bear the cost of the litigation or arbitration, as the case may be. Krish Maniam & Co. or through its related clients also finances or bridges commercial deals or provide temporary funding for commercial transactions, but all of these are on a case to case basis. This is usually provided for our clients and in matters wherein our firm is engaged in.
For Claimants
  • Legal expenses locked in
  • The means to pursue a claim to conclusion signposted
  • Insurance available for any liability to pay an opponent’s costs
  • The ability given to access and pay for a great legal team
  • Ongoing additional expert input on risks that arise
For Legal Team
  • Enables more good cases to be taken on
  • Provides assurance that fees will be paid promptly
  • Ensures clients with good claims have the means to pursue them
  • Reassures risk averse clients that downsides are covered
  • Gives access to a second opinion on risk from seasoned risk professionals

Our Assurance

As a litigation funder, we will make available funds to pay legal and other costs associated with a claim in return for an agreed share of any successful return. If there is no recovery, or if the claim is lost, there is no debt to repay as we provide protection for the claimant by assuming the risk.

Financing Legal and Commercial Growth within Lawful Frameworks

The intersection of litigation and private commercial funding represents an evolving and strategic aspect of modern commercial practice. It reflects how legal disputes and corporate growth can be effectively managed through structured financial solutions that preserve liquidity while enabling companies to pursue their rights or expand their operations.

At its essence, this area covers two dimensions:

Litigation funding — third-party financing of legal proceedings, and

Private commercial funding — structured capital provision for business expansion, mergers, and investment exercises.

Both are critical instruments in contemporary business and legal strategy, ensuring access to justice, financial efficiency, and commercial opportunity.

Litigation Funding: The Modern Mechanism

Litigation funding, sometimes referred to as third-party funding (TPF), occurs when a non-party provides financial resources to a litigant to cover the costs of pursuing or defending legal proceedings. In return, the funder typically receives a pre-agreed share of any damages or recovery if the case succeeds, and nothing if it fails.

Traditionally, such arrangements were prohibited under the doctrines of champerty and maintenance, inherited from English common law. However, the commercialisation of legal disputes and the cost of modern litigation have led to a global re-examination of these principles.

In Malaysia, while the doctrines remain part of the common law, their strict application has been relaxed. The courts recognise that not all funding arrangements are contrary to public policy, especially where the funder has a legitimate commercial interest in the litigation.

In Re Nautical Supreme Sdn Bhd [2017] MLJU 224, the Malaysian High Court observed that funding arrangements may be permissible where they are bona fide, transparent, and do not compromise the administration of justice. Similarly, commercial funders often operate through assignments of proceeds, security interests, or financing agreements, which are not in themselves illegal.

As a result, litigation funding is increasingly viewed as a legitimate access-to-justice mechanism, particularly in:

  • Commercial disputes involving large-scale claims;
  • Insolvency litigation, where liquidators pursue recovery for creditors;
  • Cross-border arbitration, especially under the Arbitration Act 2005;

Enforcement of foreign judgments or awards, where costs are high and outcomes uncertain.

In Malaysia, while the doctrines remain part of the common law, their strict application has been relaxed. The courts recognise that not all funding arrangements are contrary to public policy, especially where the funder has a legitimate commercial interest in the litigation.

In Re Nautical Supreme Sdn Bhd [2017] MLJU 224, the Malaysian High Court observed that funding arrangements may be permissible where they are bona fide, transparent, and do not compromise the administration of justice. Similarly, commercial funders often operate through assignments of proceeds, security interests, or financing agreements, which are not in themselves illegal.

As a result, litigation funding is increasingly viewed as a legitimate access-to-justice mechanism, particularly in:

Legal Framework and Safeguards

Although Malaysia lacks a specific statute regulating third-party funding (unlike Singapore or Hong Kong), the legality of such arrangements depends on:

  • Public policy — the agreement must not encourage frivolous or vexatious litigation;
  • Transparency — the funding terms must be disclosed to the court or arbitral tribunal, where required;
  • Non-interference — funders must not control the conduct of proceedings or influence legal strategy;
  • Fair return — the profit-sharing ratio must be reasonable and not exploitative.

The trend toward regulated litigation funding is gaining recognition in the region. Singapore’s Civil Law (Amendment) Act 2017 expressly permits third-party funding for international arbitration, and similar reforms are under consideration in other common law jurisdictions.

Malaysia is expected to follow this trajectory, particularly in arbitration and insolvency contexts, as commercial realities demand more flexible financing options for meritorious claims.

Private Commercial Funding: Capital for Corporate Growth

Beyond litigation, private commercial funding refers to the provision of capital from non-institutional sources such as private equity, family offices, or specialised investment funds for corporate growth and restructuring.

Such funding may take the form of:

  • Equity participation – investors acquire shares or stakes in a company;
  • Convertible debt instruments – loans that can be converted into equity;
  • Project-based financing – funding specific ventures, acquisitions, or expansions;
  • Bridge financing – temporary capital provided pending public listing or longer-term financing.

These arrangements must comply with the Companies Act 2016, Capital Markets and Services Act 2007, and Bank Negara Malaysia guidelines where applicable.

Private funding agreements must also address:

  • Disclosure obligations to shareholders and regulators;
  • Anti–money laundering (AMLA) compliance;
  • Security documentation, including charges, debentures, or guarantees; and
  • Exit strategies and return mechanisms for funders.
Synergy Between Litigation and Commercial Finance

In practice, these two dimensions often converge.

For instance:

  • A company involved in high-stakes litigation may seek litigation funding to preserve cash flow;
  • Upon successful recovery, the proceeds may attract private capital investment for expansion;
  • In insolvency or restructuring, creditors and funders may collaborate to finance legal recovery actions or corporate rehabilitation under Sections 366–373 CA 2016 (Schemes of Arrangement).

Thus, the ability to structure and manage lawful funding mechanisms is not merely a financial strategy — it is a legal safeguard that supports access to justice, operational continuity, and shareholder value.

Ethical and Regulatory Considerations

Any form of third-party funding must observe ethical boundaries. Lawyers cannot hold conflicting financial interests in the outcomes of cases under the Legal Profession (Practice and Etiquette) Rules 1978, unless expressly permitted under professional regulations.

Proper disclosure and independence remain critical. Courts and arbitral tribunals may require disclosure of funding arrangements to prevent conflicts of interest involving arbitrators or opposing parties.

Litigation And Private Commercial Funding

We provide financial assistance to clients who need litigation funding

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