Lawlines Volume 9 Issue 3 - Rajah & Tann AsiaFS).pdf · include corporate and commercial law, corporate restructuring, employment and immigration law, franchising and business transactions

LawLinesVol 9 . Issue 3 • September 2007

Rajah & Tann’s Quarterly Journal on articles of current interest, features, cases and legislative developments

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AROUND RAJAH & TANNA Round-Up Of Key Deals And Events In The Third Quarter Of 2007

Around Rajah & Tann

A Round-Up Of Key Deals And Events In The Third Quarter Of 2007

International Arbitration Practice Group

Feature Articles

Courts Get Tough On Industrial Accidents: First Prosecution Under The Workplace Safety & Health Act

Animation And Games: Finding The Cauldron Of Gold

A Brief Overview Of Market Rigging And Its Consequences

Case Bites

Legislation Bites

As we head into the fi nal quarter of the year, Rajah &

Tann is once again on a hiring spree. Among the new

additions to the Firm are senior partners from various

disciplines, and a large team comprising several

senior corporate lawyers. This swells our headcount

to over 210 lawyers. We have also garnered wins

at the annual Asian Legal Business Deals of the

Year Awards 2007 and our partners have collected

several more accolades along the way.

New HiresWe are extremely pleased to welcome a large

number of lateral hires who have either joined us

recently, or who will be joining us very shortly.

Aurill Kam rejoins the Firm as a partner of the

Commercial Litigation Practice Group after a

five-year stint with the Monetary Authority of

Singapore (‘MAS’). Before she left the

MAS, she was Head of the Market &

Business Conduct Department and

part of MAS’ management team.

The department was responsible for

capital markets regulatory development, corporate

governance standards for listed companies, and

market conduct policies (under the Securities

and Futures Act and Financial Advisers Act).

The department also administered the licensing

and regulatory framework for fi nancial advisers

and Singapore’s national financial education

programme, MoneySENSE. Aurill also served as

Director & Head, Enforcement Division (Securities

& Futures Supervision Department), when the civil

penalty enforcement regime for market under the

Securities and Futures Act was operationalised.

During that time, she handled various enforcement

cases involving corporate misfeasance, insider


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page 3 of 51 pages



trading, manipulation and other forms of securities

contraventions.

Gregory Vijayendran was formerly the

co-head of the Banking & Insolvency

Practice of a major fi rm and has now

joined our Commercial Litigation

Practice Group. He practices civil

and commercial litigation encompassing banking,

company and shareholder disputes, commercial

crime, corporate insolvency, employment law,

defamation, negligence, contentious probate and

other tort claims. Among his signifi cant cases

include acting for the incumbent liquidators of

Daewoo in a novel insolvency application for

conversion of a creditors’ voluntary liquidation to a

compulsory liquidation. Gregory is also a very active

member of the Law Society, currently co-chairing

The Law Society Publications Committee. Gregory

is a prolifi c writer and his contributions include the

chapter in ‘Legal Issues: Singapore’ published in the

Asian Development Bank Guide to Restructuring in

Asia 2001, which he has co-authored, and being

on the panel of contributors to the Singapore Court

Practice 2003 and Singapore Precedents and

Forms (Wills Trusts and Administration).

Tan Lee Cheng has joined the

Commercial Litigation practice of

Rajah & Tann. Lee Cheng headed

the Insurance practice group at her

previous firm. Lee Cheng acts for

major insurance companies in almost all classes of

insurance with particular emphasis on construction

insurance, professional indemnity insurance and

fi nancial lines insurance. Lee Cheng is well regarded

for her expertise in construction insurance having

advised and represented the project underwriters

in the North East Line MRT project (NEL), the

Circle-Line Project (CCL) and the Kallang / Paya

Lebar Expressway (KPE). In this capacity, she led

a team representing the lead insurer and reinsurers

in the high profi le Nicoll Highway Collapse inquiry

in 2004. Effectively bilingual, Lee Cheng has also

represented several local and foreign clients in their

resolution of claims involving Chinese contracting

parties in mediations and arbitrations.

Yang Lih Shying has been appointed

Chief Representative of our Shanghai

Offi ce. He has almost thirty years of

experience in legal practice. During

that period, he was most active as a

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page 4 of 51 pages



commercial litigator in the High Court and Court of

Appeal in a wide variety of cases, primarily involving

maritime and international trade. Lih Shyng has

extensive experience advising and representing PRC

clients as well as Singapore business entities in their

commercial dealings involving China. Between 2003

and March 2007, he was the chief representative

of a major Singapore law fi rm’s Shanghai offi ce.

For nearly a decade, Lih Shyng has been advising

Singapore and international clients on issues relevant

to foreign investment and mergers and acquisitions

in China, as well as representing PRC companies

in their business ventures in Singapore. Lih Shyng

is also an active arbitrator, especially in disputes

involving PRC parties or where proceedings are

conducted wholly or partly in Chinese.

Cheng Yoke Ping joins the Corporate

& Capital Markets Practice Group

as a partner. She has more than ten

years’ experience in mergers and

acquisitions, schemes of arrangement,

corporate fi nance, capital markets and general

corporate work. Yoke Ping also advises on

regulatory issues including securities laws and

regulations, stock exchange requirements and

procedure and compliance issues.

Additionally, a large team of corporate lawyers will

be joining us in September 2007. The team, which

includes senior practioners Andrew Ong, Christina

Ng, Evelyn Wee and Lim Wee Hann, are a welcome

addition to our already strong corporate team. Their

expertise and experience in cross-border transaction

will further bolster our regional capabilities.

Andrew Ong joins the Corporate Practice Group

with a wealth of expertise in corporate as well as

technology law. His primary focus is on information

technology, telecommunications and media law,

where he has received numerous accolades and

been cited as a leading telecommunications lawyer

by legal ranking journals. His other areas of practice

include corporate and commercial law, corporate

restructuring, employment and immigration law,

franchising and business transactions generally.

Andrew is also involved in cross-border work, with

an emphasis on Sri Lanka and Cambodia.

Christina is primarily involved with mergers and

acquisitions in the region, in particular, South East

Asia. She also has vast experience in venture

capital and direct investments. Christina is also an

experienced tax practitioner, and her speciality is

in structured fi nance and tax driven cross-border

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page 5 of 51 pages



transactions. At her previous fi rm, she headed the

Indonesia and Thai desks, and co-headed the

South Asia desk.

Evelyn practices corporate, securities and banking

law. In the course of her work, she is involved in

cross border transactions, venture capital funds,

asset management, syndicated loans, ship and

construction fi nancing as well as mergers and

acquisitions. She also has experience in capital

markets issues, listings and work related to listed

companies.

Wee Hann’s primary areas of practice are cross-

border investments and acquisitions, corporate

restructuring and employment and immigration law.

He was resident partner in the Vietnam branches

in Hanoi and Ho Chi Minh City of his previous

fi rm, where he provided consultancy services on

corporate and banking matters to companies and

foreign investors. He also co-headed the Medical

Science practice group at his previous fi rm.

Awards & Accolades Rajah & Tann has had several notable wins in this

year’s Asian Legal Business Deals of the Year

Awards 2007. We have continued our winning

streak by once again clinching the Construction

Law Firm of the Year as well as the Shipping Law

Firm of the Year. Our Insolvency and Corporate

practices also proved their mettle again by winning

the Singapore Insolvency & Restructuring Deal of

the Year for Accord Customer Care Solutions and

the Singapore M&A Deal of the Year for the much

publicised PacNet – MediaRing deal.

Rajah & Tann has also once again been ranked

among the top fi rms advising on M&As in Asia

(excluding Japan) in the first half of this year.

We ranked within the top twenty M&A advisers

for announced deals in the Thomson Financial

M&A League Tables. We were also featured in

Mergermarket’s 2007 House League Tables of

Legal Advisers to Asia-Pacifi c M&A.

A large number of our lawyers have been nominated

to Who’s Who Legal: Singapore 2008, with several

receiving multiple nominations. Steven Chong

SC, Sundaresh Menon, Quentin Loh SC and

Andre Yeap SC were nominated for Commercial

Litigation, with Steven also being nominated for

Shipping & Maritime, Menon also being nominated

for Commercial Arbitration and Construction, and

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page 6 of 51 pages



Quentin also being nominated for Insurance &

Reinsurance.

Together with Menon, Choy Chee Yean was the

other nominee for Construction. We continued

our lead in Shipping with our other partners Jainil

Bhandari and Leong Kah Wah also making the

list. White-collar crime expert Hamidul Haq was

nominated in the category of Business Crimes,

while our Competition lawyers Kala Anandarajah

and Dominique Lombardi did us proud by making

the list for Competition. Kala was also nominated

for Corporate Governance. In Insolvency &

Restructuring, experts Patrick Ang and Lee Eng

Beng received nominations, affi rming their status

as top lawyers in their fi eld. En-bloc sale veteran

Gan Hiang Chye also received a nomination in

Real Estate, while Lau Kok Keng and Rajesh

Sreenivasan were honoured with nominations in

Regulatory Communications. Our M&A experts

Wong Kok Hoe and Serene Yeo, who have played

an active role in the Singapore market, also received

due recognition with their nominations.

In other publications, Kala Anandarajah was

named in Euromoney Experts Guide to the World’s

Leading Corporate Governance Lawyers 2007,

while Kok Hoe was named in Euromoney Experts

Guide to the World’s Leading Capital Markets

Lawyers 2007.

National Day HonoursWe are also extremely proud to announce that

Gan Hiang Chye has been awarded the Public

Service Star at this year’s National Day Awards.

Gan has served as the Deputy President of the

Strata Titles Boards for many years and has

received the award in this capacity. He is no

stranger to public service, and is also currently

a Board member of the Building Construction

Authority and the Chairman of the Conveyancing

Practice Committee and Council member of the

Law Society of Singapore.

Major Disputes & Signifi cant DealsMajor Disputes

In a case dealing with important issues such as

conflict of interests between a customer and

private banker, as well as undue infl uence, Francis

Xavier and Boey Swee Siang from our Commercial

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page 7 of 51 pages



Litigation Practice Group are defending the

American Express Bank (‘Bank’) against a major

claim by Madam Susilawati, a wealthy Indonesian

customer of the Bank’s private banking division.

She has sued the Bank, demanding that it return

US$17.5 million of her money drawn down to

offset trading losses incurred by her son-in-law, Mr

Lim Thian Long, pursuant to a third party pledge

(‘Third Party Pledge’) which Madam Susilawati

had signed, to guarantee Mr Lim’s debts to the

Bank. She claims that, when she signed the Third

Party Pledge, she was under the undue infl uence

of Mr Lim. Madam Susilawati alleges, among

other things, that she was dependent on Mr Lim

to manage her account, since she was not highly

educated or literate in English. The Firm’s lawyers

are arguing that she had executed the Third Party

Pledge in the exercise of her free and independent

mind, in the full knowledge that she was pledging

the sums in her account to cover Mr Lim’s liabilities

and that she was a savvy investor.

Francis also represented the Law Society in

objecting to Far Eastern Economic Review’s appeal

for a Queen’s Counsel to be allowed to represent

the Review in a lawsuit brought against it by Prime

Minister Lee Hsien Loong and Minister Mentor

Lee Kuan Yew. The Law Society was successful

in its objections and the application to allow

representation by Queen’s Counsel was denied.

The lawsuit in question involves a high profile

defamation case.

Chandra Mohan, another partner from our

Commercial Litigation team, has been involved in

several notable cases before the Court of Appeal.

In JSI Shipping (S) Pte Ltd v TeoFoongWong

LCLoong, Chandra acted for the respondents

when the appellants appealed against Justice Lee

Seiu Kin’s decision dated 6 December 2006 to

dismiss the Plaintiffs’ claim against the Defendants

for breach of contract in that the Defendants had

failed in its duty as auditor to identify abuse of the

Plaintiffs’ funds by a director of the Plaintiffs at the

material time.

Chandra is also acting in The Republic of the

Philippines v Maler Foundation and 5 others for

the 1st to 5th Respondents. The Appellants are

appealing against the whole of Justice Kan Ting

Chiu’s decision dated 27 December 2006, whereby

the Honourable Justice Kan had dismissed the

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page 8 of 51 pages



Plaintiffs’ application to stay the interpleader

proceedings in OS No 134/2004/Q.

Irving Choh recently defended Tran Thi Gai who

married three men in fi ve years. She was still married

to her fi rst husband when she wed her present

spouse. She pleaded guilty to the bigamy charge

and to the other charges of making a false marriage

declaration and entering Singapore illegally.

Edwin Lee and Looi Ming Ming from the Projects

& Infrastructure Practice Group successfully

represented a Hong Kong public-listed developer

in its claim for refund of tax paid against the

Comptroller of Income Tax. The developer’s gains of

S$12 million from the sale of an upscale residential

development was assessed as trading gains by the

Comptroller, but before the Income Tax Board of

Review, Rajah & Tann successfully argued that the

gains were capital gains and hence not taxable.

Signifi cant Deals

In terms of Corporate deals, Wong Kok Hoe and Sin

Chei Liang are acting for United Test and Assembly

Center Ltd (‘UTAC’) (a SGX-ST mainboard

listed company) in relation to its entering into an

Implementation Agreement with a Consortium

comprising Affinity Equity Partners and TPG

Capital and its proposed Scheme of Arrangement,

pursuant to which the Consortium is to acquire all

the issued shares of UTAC.

They are also acting for Holcim Investments

(Singapore) Pte Ltd and its ultimate holding

company, Holcim Ltd (‘Offeror’), which has entered

into a series of acquisitions with approximately 35

shareholders of Jurong Cement Limited (‘Target’).

Following the acquisitions of approximately 47.3%

of the issued shares in Target, the Offeror made a

mandatory conditional cash offer to acquire all the

remaining issued shares in the capital for the Target.

The deal is valued at approximately S$93 million

based the issued share capital of the Target as at

the date of the general offer.

Chei Liang is also involved in the following deals:

Acting for Timespace Trading Limited, which

has entered into a concert party consortium

arrangement with Standard Chartered Private

Equity, CVC Capital Partners Asia Pacifi c II LP and

CVC Capital Partners Asia Pacifi c II Parallel Fund

to form a consortium and make a mandatory

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page 9 of 51 pages



general cash offer for Amtek Engineering Ltd.

The entire offer size is approximately S$515.5

million.

Acting for Sonus Pte Ltd, Sky Alliance Global

Holdings Limited and Yap Beng Kooi (‘Vendors’)

in the sale of 90% issued shares in the capital of

Plimsoll Corporation Pte Ltd by the Vendors to

the purchaser. The balance 10% of the issued

shares is subject to put and call options between

the purchaser and the Vendors.

Goh Kian Hwee, Serene Yeo, Cynthia Goh and

Yanni Long are acting for Indofood Agri Resources

Ltd. (‘IndoAgri’) in the proposed acquisition

by IndoAgri (a company listed on the SGX-ST)

and its 90 per cent-owned subsidiary, PT Salim

Ivomas Pratama (‘PT SIMP’), of a majority stake

in PT Perusahaan Perkebunan London Sumatra

Indonesia Tbk (‘Lonsum’), a company listed on the

Jakarta and Surabaya stock exchanges, at a total

consideration of S$1.6 billion, as follows:

shares and mandatory convertible notes (‘MCNs’)

in Lonsum, representing 64.4% of its enlarged

share capital assuming conversion of the MCNs

from First Durango, the Ashmore Funds and Mr

Eddy Sariaatmadja, at a total consideration of

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approximately S$1 billion, comprising S$879.1

million cash and 98,082,830 new shares in

IndoAgri at the issue price of S$1.2758 per new

IndoAgri share; and

the remaining shares in Lonsum at the price of

Rp6,900 per share pursuant to a tender offer

by PT SIMP, amounting to an aggregate of

S$589 million (assuming full acceptances of

the tender offer).

Kian Hwee and Serene are also advising SC Global

Developments Ltd in a proposed underwritten scrip

dividend scheme involving the potential issue of up

to 6.7 million new SC Global shares. The deal value

is estimated to be approximately S$14.55 million

(based on net dividends to be paid out).

Kian Hwee, together with Lawrence Tan, recently

acted for Hwa Hong Corporation Limited in

connection with the subscription by its subsidiary

of S$42 million in principal amount of Secured Fixed

Rate Senior Notes due 2010, which were issued by

Sardinia Properties Pte Ltd to partially fi nance the

development of the property at 37 Scotts Road.

Arnold Tan, our Funds specialist, acted for

Blackhorse Asset Management in the launch of

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page 10 of 51 pages



The Blackhorse Enhanced Vietnam Inc Fund, a

leveraged absolute return product that invests

both in Vietnam’s nascent stock market and in

private companies preparing for initial public

offerings.

Arnold has also acted for Blackhorse Asset

Management in its launch of The Blackhorse

Early-Stage Technology, or BEST, Fund, on

July 1. The long / short fund, which focuses on

emerging technology companies in Asia, will

concentrate on companies working in computer

hardware, software, semiconductors, displays,

communications, memory storage and tech

services. It will invest in both publicly listed

companies and unlisted equities, mainly ones that

are due for a public listing or merger in the near

future.

Liew Lan Hing, Howard Cheam and Felicia Lai are

the solicitors to China Sports International Limited

in connection with its listing and quotation on the

Mainboard of the SGX-ST, which was launched on

9 July 2007. China Sports International Limited,

which is in the sports fashion footwear and

apparel industry, plans to raise S$74.7 million in

net proceeds through the IPO.

Lan Hing and Audrey Ng also acted for DBS

Bank Ltd, the issue manager, in the listing of Uni-

Asia Finance Corporation. The listing will raise

approximately S$41.4 million in gross proceeds.

On the Competition law and Merger regulation

front, Kala Anandarajah and team have been

acting for several high profi le investigations by

the Competition Commission of Singapore as

well as in cross-border mergers taking place

amongst multi-national corporations. The team has

advised industries in the media and entertainment,

publishing as well as in the fi nancial industries

regarding the mergers taking place and the possible

impact in Singapore.

A team of lawyers from Rajah & Tann’s iTec Practice

Group, headed by Rajesh Sreenivasan, has been

appointed by Nokia Siemens Networks (‘NSN’)

to provide legal services in NSN’s participation in

the NextGeneration Broadband Network tender,

called by the Infocomm Development Authority of

Singapore. The tender calls for the deployment and

operation of a new communications network that

will provide high bandwidth data and telephony

access through extending the optical fi bre network

into the home. Rajah & Tann will advise on issues

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page 11 of 51 pages



relating directly to the tender and downstream

issues with suppliers and partners.

Rajesh and his team are also acting for and

advising the Government of the Islamic Republic of

Afghanistan (‘Afghan Government’) on two projects.

He has been appointed by the United Nations

Development Program to work with the Afghan

Government’s Ministry of Communications and

Information Technology (‘MCIT’) to comprehensively

review the current state of ICT legislation and policy

in Afghanistan, gather feedback with the various

Afghan Government Ministries and other interested

parties and propose draft legislation needed

to provide a sound legislative and regulatory

foundation for the growth and development of

a thriving ICT sector in the Islamic Republic of

Afghanistan.

Rajesh has also been appointed by the World Bank

to advise the MCIT on a set of comprehensive

policies and regulations for the regulation and

operation of the proposed Afghan National Data

Centre (‘ANDC’). The scope of work entails tasks

which include a comprehensive review covering

the existing data storage and access practices in

Afghanistan, presentation of and working through

case studies and scenarios to posit likely situations

and management mechanisms for the same in

relation to data centre access and operation, and

proposing and drafting of a set of policies and

regulations for the regulation and operation of the

ANDC.

The Property practice continues in its sweep of

en bloc deals. Gan Hiang Chye recently acted for

CapitaLand in the en bloc purchase of Char Yong

Gardens, a freehold condominium at the corner of

Cairnhill and Hullet roads, for S$420 million. Gan

and Lim Lee Kian also acted for the owners in the

en bloc sale of eight houses along Pulasan Road

to Vicland Pte Ltd.

Gan and Lee Kian are also acting for Hong Leong

International Property Investments (Singapore) Ltd

in the sale of 1 Finlayson Green building for a sum

of S$230.88 million.

Edwin Lee from the Projects & Infrastructure

Practice Group has advised on the tender for the

organisation of an international event known as

the Singapore International Water Week (‘SIWW’).

SIWW is a platform to attract new investments

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page 12 of 51 pages



into Singapore, increase R&D opportunities and

showcase Singapore capabilities in the fi eld of

water and environment. It focuses on practical water

technology and business solutions, best practices

in the successful delivery of various aspects of

water resource and wastewater management.

SIWW is positioned as a complementary forum

to existing well-recognised global water forums

such as Stockholm World Water Week and World

Water Forum.

Books And ContributionsPartners Quentin Loh SC and Edwin Lee have

authored a book entitled ‘Confidentiality In

Arbitration: How Far Does It Extend?’. The

monograph explores the concept of confi dentiality

in arbitration proceedings and its exceptions.

Case law in England is examined and compared

with the positions in Australia, New Zealand,

the United States, Sweden, France, Germany

and Singapore. The various institutional rules on

confi dentiality are also studied. In the foreword of

the book, The Right Honourable the Lord Mustill

refers to the book as ‘a thoughtful analysis and

exposition’ of the subject.

Kala Anandarajah has contributed a chapter

on Singapore in the International Comparative

Legal Guide - Environmental Law 2007 as well

as the International Comparative Legal Guide

- Pharmaceutical Advertising 2007. Leonardo

Bernard, a foreign lawyer in our Firm, also assisted

in the latter publication. The guides, which are

written by leading lawyers in their respective fi elds,

is aimed at providing the international practitioner

and in-house counsel with a comprehensive

worldwide legal analysis of the topics.

Seminars We have almost reached the end of this year’s

Lunchtime Seminar Series. This quarter witnessed

a whole variety of interesting and noteworthy topics

being presented. Rajesh Sreenivasan from our iTec

Practice Group spoke on the topic ‘An Update On

Outsourcing’, Susan Paat from our Indonesian

Desk discussed the topic ‘Indonesia’s Business

Law: Foreign Direct Investment’ and Francis Xavier

and Gregory Vijayendran gave a presentation on

the topic ‘Managing Arbitration Disputes In The

Region’. We also had a talk on the topic ‘Security

of Payment: Issues Raised From Adjudication

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page 13 of 51 pages



Determinations’, where Edwin Lee discussed the

adjudications determinations that have been made

since the Security of Payment Act came into effect

on 1 April 2005.

The last seminar in this series for the year will be

held on 4 October, and the topic is ‘Opportunities

In The Indian Property Sector and SEZs’. The

series will be back next year, so do watch out

for it.

Concluding WordsAs we head to the end of the third quarter and into

the fi nal quarter of 2007 with an enlarged team of

experts, and an unwavering commitment to our

clients, Rajah & Tann is poised to serve you even

better in the months ahead.

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page 14 of 51 pages



The growth of international trade and commerce

has resulted in the corresponding growth of cross-

border disputes. In Asia Pacifi c where numerous

international trade and business transactions take

place, arbitration has become an increasingly

popular way of resolving disputes and Singapore

is gaining its reputation as an excellent forum for

international arbitration.

Given this background, it is critical that law fi rms

position themselves with extensive arbitration

expertise to service the needs of their clients and

those who may wish to engage their services.

Rajah & Tann has been in the forefront in meeting

this challenge through its International Arbitration

Practice.

Leading International Arbitration Practice The International Arbitration Practice in Rajah

& Tann has consistently ranked among the top

international arbitration practices in Singapore,

recognised by leading publications like Asian

Legal Business, Chambers Global, Asia Pacifi c

Legal 500 and Global Counsel 3000. The UK-

based Asia Pacifi c Legal 500 noted that the Firm

‘is at its strongest in corporate, construction,

IT and shipping arbitrations…’. Global Counsel

3000 declared Rajah & Tann as a ‘leading

litigation and arbitration practice in Singapore’.

The award winning members of the team are

known for consistently delivering top-quality

service and providing clients with real and sensible

solutions.

Depth Of ExperienceThe arbitration team comprises lawyers with multiple

jurisdictional qualifi cations, who together bring to the

practice a wide range of experience and expertise

in corporate, commercial and construction as well

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page 15 of 51 pages



as shipping disputes in Asia Pacifi c. The team’s

predominant focus is on international arbitration.

Led by Chong Yee Leong and anchored by leading

and illustrious arbitration practitioners, Sundaresh

Menon, Steven Chong SC and Quentin Loh SC,

the team has worked together for nearly a decade

and in that time established a close and collective

work ethic which has been an invaluable factor

underpinning the team’s success. The team has

been consistently recognised as the top international

arbitration team in South East Asia.

Breadth Of PracticeMembers of the team have been retained

as arbitrators, advisors and / or counsel on

arbitrations conducted under the auspices of

the leading arbitration institutions in the world,

including the International Court of Arbitration

of the ICC, the London Court of International

Arbitration, the American Arbitration Association,

the Hong Kong International Arbitration Centre,

the Singapore International Arbitration Centre,

the Kuala Lumpur Regional Centre for Arbitration,

the Thai Arbitration Institute, and the Society of

Maritime Arbitrators.

In the past year, the team has been involved

in arbitrations conducted throughout Asia and

Europe, including Singapore, Bangkok, Kuala

Lumpur, Hong Kong, New Delhi, Taipei, London,

Paris, Geneva and New York. We have also acted

for or against governments and government-linked

entities in Singapore, Malaysia, Thailand, Brunei,

Indonesia, Laos and Hong Kong. The extensive

geographical range of our practice refl ects the

international nature of our clientele and the matters

that we handle.

Client DiversityBecause of the diversity of our clients, we have in-

depth knowledge of a wide variety of industries. The

disputes handled involve complex and multilayered

legal and factual issues. A substantial number of

these cases involve extensive collaboration with

industry experts and specialists in state-of-the-art

technology.

The team has worked on disputes in the following

areas:

corporate and commercial matters, such

as complex cross-border joint venture and

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page 16 of 51 pages



shareholder disputes, banking, f inance,

insurance, regulatory, distributorship and

employment disputes;

oil and gas upstream and downstream;

power p ro jec ts and power purchase

agreements;

telecommunication networks, infrastructure and

sales;

infrastructure projects such as airports, railways,

ports, highways, suspension bridges, tunnels

and sewerage systems;

building projects including residential, industrial,

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mixed-development and commercial building

projects; and

maritime and shipbuilding contracts.

Concluding Words Amidst Singapore’s changing fi nancial and legal

landscape, the Firm’s International Arbitration

Practice is determined to excel in its areas of

specialisation. We will continue to anticipate and

fulfi ll the needs of our clients and provide them

with creative and pragmatic solutions to further

their interests.

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page 17 of 51 pages




FEATURES

The fi rst prosecution under the Workplace Safety

& Health Act (‘WSHA’), which came into force on 1

March 2006, has taken place with the District Court

in Public Prosecutor v Low Lye Wah MOM 58 of

2007 handing out a stiff three-month jail sentence.

Was this decision too harsh? After all, none of the

three charged and convicted in the far more serious

cases involving the Nicoll Highway collapse were

jailed. So, in seeking to get tough on industrial

safety, have the courts gone too far?

This article takes a quick look at the Low Lye Wah

case and the rationale of the Court in imposing the

jail sentence on the accused. It also examines how

this case compares to pre-WSHA cases in so far as

the courts’ sentencing policy is concerned.

The Facts In March 2006, a marine worker was hit on the head

by a 15 kg bag of tools that was being lowered from

a ship into a ferry boat next to it. The bag came

loose and fell about 10 metres, hitting the worker

underneath. The worker was not wearing a helmet

at the time and passed away.

The worker was employed by a marine contractor

called Leelloyds that was contracted to repair

and service a generator on a ship. Following the

accident, both Leelloyds and the person in charge

of the workers, Low Lye Wah (‘Low’), were charged.

Leelloyds pleaded guilty to a charge under section

12(1) of the WSHA and was fi ned S$100,000 (out of

a maximum fi ne of S$500,000) for failing to ensure

the safety and health of its employees.

Low also pleaded guilty. Low was responsible for

rigging and lowering loads from the ship to the

ferry boat. He had instructed workers (including the

deceased) to wait on the ferry boat to receive the

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loads. When it came to the third and fourth loads,

Low started lowering the fourth load before the third

load was untied. This action exposed the workers

waiting below to the risk of objects falling onto them

and that was exactly what happened.

Low ultimately pleaded guilty to a charge under

section 15(3) of the WSHA:

‘(3) Any person at work who, without reasonable

cause, wilfully or recklessly does any act which

endangers the safety or health of himself or others

shall be guilty of an offence.’

The Court accepted that Low’s actions were

reckless within the meaning of section 15(3) of the

WSHA and convicted him. Low could have been

fi ned up to S$200,000 or imprisoned for a term not

exceeding two years or subject to both. The Court

decided to jail Low for three months.

The Jail SentenceThe Judge recognised that there are similar offences

under the Penal Code relating to acts which

endanger the life or safety of others, ie section

336 (performing an act that rashly or negligently

endangers life or the personal safety of others),

section 337 (causing hurt by such acts), section

338 (causing grievous hurt by such acts), and

section 304A (causing death by a rash or negligent

act not amounting to culpable homicide).

He then said that although the Penal Code offences

were of general application and the punishments

under the WSHA were much heavier, he felt that the

sentencing principles in the analogous cases under

the Penal Code provisions would be relevant. On this

basis, the Judge felt that the ‘scale would start with

mere negligence and end with gross recklessness’.

There would be no jail where the death was caused

by a negligent act, but where the death was caused

by a rash act, imprisonment would be appropriate.

On the facts, the Judge felt that the acts of Low

crossed the line into a custodial sentence. The

key factor was the fact that Low was very much

aware that what he was doing was risky to the

workers and could injure them, but he decided

to run the risk anyway.

How Does The Case Compare To Pre-WSHA Cases?The approach taken by the Judge in this case is

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very much in keeping with the pre-WHSA cases

where prison sentences are restricted to cases of

gross and wilful negligence.

In the Nicoll Highway case of Public Prosecutor

v Shun Sugawara, Kazuo Shimada And Paul

Broome [2006] SGDC 42, the same approach

was taken. The three accused were charged with

offences under the Factories Act (‘Act’) including

contravention of section 89(5) of the Act, ie for

causing the deaths of four persons, who had

died during the collapse of the retaining wall. The

maximum punishments therefore included custodial

sentences. The three were sentenced to fi nes of

S$120,000 for Sugawara and S$160,000 each

for Broome and Shimada. No custodial sentences

were imposed. The Court held:

‘In coming to the appropriate sentence, it is

important to note that the agreed facts contain

no evidence of untoward risk taking, or deliberate

adventurism. There was no allegation even that

these men were callous or generally incompetent.’

And that ‘substantial fi nes …would be suffi cient

to address the public interests and seriousness

of the offences at hand. ’

Similarly, in Public Prosecutor v Soo Kim Shiun

[2005] SGMC 36, the project manager in charge of a

work site was charged and found guilty of ‘conniving’

in the failure to test the structural adequacy of a

hopper-cum-cage that was being used at a work

site under section 88(13) of the Act. The cage was

dislodged and fell on a worker who died as a result.

The Court only imposed a S$20,000 fi ne because it

found the misconduct was the result of inadvertence

rather wilful or callous behaviour.

Concluding Words This new decision of the Low Lye Wah case

confi rms that under the WSHA, the courts will

continue the sentencing policy of drawing a

distinction between cases of gross and wilful

negligence (where the accused would be jailed)

and cases of negligence simpliciter (where the

accused would not), and secondly, so far as the

imposition of a jail sentence is concerned, the

sentence is consistent on the basis of the fi nding

that the death had been caused by a rash act.

On that basis, the decision to impose a custodial

sentence is not excessive by past standards. It

also means that it is still possible even under the

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WHSA to avoid a jail sentence even when death

has been caused.

As to the length of the sentence, although stiff

and naturally dependent on the particular facts

of this case, the length of jail meted out is hardly

surprising given the intent and aims of the WSHA

to get tough in the wake of increasing numbers of

industrial accidents that occurred in 2005 – 2006

that led to the enactment of WSHA itself, as noted

in the Judge’s own reasons.

Indeed, going by statistics, the punishments are

likely to get even tougher. In addition to attention

grabbing incidents like Biopolis and Nicoll Highway,

there are a great number of cases that are no less

tragic involving a single or less than three deaths. For

example, in May 2007 alone, there were reported 10

fatalities and two injuries in a total of nine separate

incidents, the most serious case being the widely

reported industrial fi re at the ExxonMobil Plant at

Ayer Chawan where there were three fatalities.

That these incidents involved companies across

a wide spectrum of industries from petro-

chemicals to marine and civil construction to a

port operator demonstrates that the problem of

industrial accidents is not one that is restricted

to any one industry. Naturally, the particular facts

and circumstances of these cases will have to

be carefully examined and not all of these cases

necessarily involve breaches of the WSHA.

Philip L. Tay Partner, Admiralty & Shipping Practice GroupDID: 6232 [email protected]

For more information, contact:

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The interactive digital media industry in Singapore

is abuzz with excitement, in large part engendered

by the Singapore government’s attention of late.

Interactive digital media has been identifi ed to be

a key growth sector for Singapore’s economy in

the years ahead by the high-powered Research,

Innovation and Enterprise Council during its

inaugural meeting in 2006, chaired by Prime

Minister Lee Hsien Loong. Games and animated

productions are two important sectors of the

interactive digital media industry. The Singapore

government has set aside S$500 million over

5 years (2006 – 2010) to develop this nascent

industry.

The arrival of reputable foreign players stands

testimony to the government’s efforts in harnessing

this industry as a growth engine for Singapore.

Singapore can proudly boast the likes of Lucasfi lm

Animation, Electronics Arts and 10tacle Studios as

having set up shop here.

Local corporations have recognised the potential of

this industry for what it can offer towards increasing

shareholder value. What better example than

engineering conglomerate Singapore Technologies

Engineering, whose subsidiary, ST Electronics,

has opened an animation studio and has co-

produced a US$20 million animated fi lm, the Ten

Commandments, which is scheduled to be released

some time this year in more than 600 cinemas in

the USA.

This article is the fi rst of a two-part series, with this

fi rst part focusing on animated productions and the

second on games. In this article, we will be looking

at some of the issues that may affect the producer

of an animated fi lm (‘Producer’) in its exploitation

of the completed animated fi lm.


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Producing An Animated FilmThere are three key phases to an animated fi lm

production. They are as follows:

the development phase where screenplay or

script development takes place, crews and

voice actors are engaged, rights and content

clearance looked at and production fi nance

sourced;

the production phase where the animated fi lm

is produced; and

the distribution phase where the animated fi lm

and ancillary rights including merchandising are

exploited.

The Source MaterialAn animated fi lm could be based either on an

existing copyright work or a newly commissioned

work.

In the case of an existing copyright work, it could

be a novel, magazine article, play or existing

screenplay or script. Such works cannot be

adapted into an animated fi lm without the consent

of the copyright owner. Hence, the Producer will

a)

b)

c)

want to either obtain an outright assignment of all

intellectual property rights in the existing work, or

a licence for it to lawfully produce the animated

fi lm. An assignment is always preferred as it means

the Producer has absolute control over its use

of the existing copyright work and exploitation

thereafter.

Should a licence be obtained instead, the Producer

would be well advised to ensure that the licence

agreement clearly sets out the ambit of its rights

to usage and exploitation as its ability to recoup its

investment in producing the animated fi lm depends

entirely on the permitted modes of exploitation.

Territorial limits are but one of the key provisions

to be aware of. Depending on the nature of the

production, the territories in which the Producer

may exploit the animated fi lm would determine the

success or failure of the fi lm. For English based

animated films, the North American market is

certainly one market that should not be passed

over. Another key consideration is the media of

exploitation. This could be theatrical, non-theatrical,

home video, etc.. Most Producers would often not

restrict themselves to theatrical exploitation as the

attendant risks are high. Home video is viewed as

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a lucrative mode of exploitation and such rights are

usually hotly sought after by the Producer.

In obtaining an assignment of an existing work, it is

quite common for a Producer to take an option over

an existing copyright work for a lesser fee instead

of acquiring all rights via an outright assignment

from the outset at the full purchase price. Such an

option and assignment agreement will permit the

Producer for a limited period on an exclusive basis

to develop the project in exchange for an option

fee. Development work at this stage could include

engaging voice actors and crew and budgeting.

Should the Producer wish to thereafter ‘greenlight’

the project, it may exercise the option which will

enable it to acquire the rights in perpetuity of the

existing copyright work.

Where commissioning a new copyright work

on which the animated fi lm is to be based on,

the Producer has to ensure that the copyright

in the work is assigned to the Producer, failing

which the commissioned party would own the

work, curtailing the Producer’s ability to exploit

the fi nished product, unless further consents are

obtained from the commissioned party. Hence,

it is of utmost importance that the agreement

between the commissioned party and the Producer

unequivocally spells out that such rights are

assigned to the Producer. Apart from that, it is usual

to ask for all moral rights (such as the right of an

author to be identifi ed as the author of the work

and the right of an author to object to derogatory

treatment of the work) in the work to be waived,

failing which the commissioned party would still

retain some control over the Producer’s exploitation

of the commissioned work despite the copyright

therein having been assigned to the Producer.

Warranty Of Non-InfringementWhether the animated fi lm is produced based on

an existing work or on a commissioned work, the

Producer should pay due attention to whether such

work itself infringes the intellectual property rights

of any third party. It is therefore customary for the

Producer to insist on a warranty from the author

of the existing work or of the commissioned work

that such work does not infringe the intellectual

property rights of any third party. Depending on

the credibility of the owner who has given such a

warranty, some Producers may take the warranty

at face value while others would carry out further

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due diligence to trace the chain of title and verify

the sanctity of the warranty.

A Producer would shudder at the thought of his

production infringing the intellectual property rights

of a third party. The Producer could not only face

a claim for damages, but also be prevented by the

third party by way of an injunction, from exploiting

the production, thereby forestalling its ability to

generate revenue and recoup its investment.

Raising FundsProducers often do not have sufficient funds

themselves to complete production of the animated

fi lm. As such, it is common for Producers to source

for funding from third parties. This could be by way

of equity investment, distribution advances via pre-

sales to distributors and co-productions.

As far as equity investment is concerned, apart

from ensuring that the agreement between the

investor and the Producer is weighted in favour of

the investor, the investor would wish to have some

form of security over its investment. As such, it is

a given that the investor will want to have a share

of ownership of the copyright in the animated

fi lm. The investor will also be looking to recoup its

investment from the revenue generated from the

worldwide exploitation of the animated fi lm and

merchandising rights. Some of the commercial

terms that are the subject of lengthy negotiations

between the Producer and an investor include the

proportion of copyright in the animated fi lm that the

investor owns jointly with the Producer, the order

of repayment to the investor from the receipts of

the exploitation of the animated fi lm (for example,

it could be investor A being repaid its investment

before investor B or pari passu and pro rata, ie

without preference and in proportion to each

investor’s respective contributions), the mechanics

of profi t participation, screen credits, termination

consequences and Producer warranties. These

terms have important ramifi cations as they will have

a direct impact on the Producer’s profi ts arising

from its production venture.

Finding The Cauldron Of GoldHaving a fi rst class animated production in terms

of storyline, visual effects, cinematography and

voice actors does not necessarily guarantee the

success of the production as revenue ultimately

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depends on the whimsical tastes of consumers.

That said, should a production garner a popular

response from consumers worldwide, this may

give the Producer a sense of comfort of profi ts to

come. However, if the Producer had been less than

circumspect in dealing with the various agreements

which it had inked with underlying rights owners,

investors and other third party participants, it may

have unwittingly signed away its entitlement to

riches. Hence, realising that the main asset of an

animated production is the underlying intellectual

property is a positive fi rst step in the right direction.

Having in place robust agreements to clarify the

rights and obligations of each participant in the

production vis-à-vis such intellectual property is

an imperative second step to fi nding that cauldron

of gold.

Lionel TanPartner, iTec Practice GroupDID: 6232 [email protected]


Steve TanSenior Associate, iTec Practice GroupDID: 6232 [email protected]

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page 26 of 51 pages



In today’s thriving market, it may be worthwhile to

revisit the law against market rigging in Singapore.

The purpose of this short article is to provide a brief

overview of the more common forms of market

rigging which are prohibited under the provisions of

the Securities and Futures Act (‘SFA’) and highlight

the changing judicial perspectives of the Singapore

courts in dealing with these offences.

False TradingSection 197(1) of the SFA prohibits generally the

creation of a false or misleading appearance of

active trading, the price of or the market for any

securities on a securities market. The essential

element of the offence is whether the conduct in

question was intended or likely to create a false or

misleading appearance of an active market or in the

price or market of the securities. Hence, that there

has been a genuine business transaction involved

may not be wholly relevant. It may not even be

relevant that the market was not affected by the

conduct of the transaction. For instance, the act of

intentionally churning trade volumes of a security

may amount to an offence under section 197(1) of

the SFA. Exploiting the market pre-opening or pre-

closing routine to set an artifi cial price for securities

may also amount to a similar offence.

More specifi c forms of prohibited market conduct are

set out in sections 197(2) and 197(3) of the SFA.

‘Wash Sales’ Sections 197(2) of the SFA sets out a specifi c

prohibition against what is commonly known

as ‘wash sales’. ‘Wash sales’ generally involve

securities transactions which do not result in any

change in benefi cial ownership but are intended

to ‘maintain, infl ate, depress or cause fl uctuations

in, the market price of any securities’. There is no


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change in benefi cial ownership if a person has an

interest in the securities before the transaction and

retains his interest after the transaction. ‘Wash

sales’ take place typically when a person trades in

securities using multiple trading accounts (usually

not belonging to him, but which he controls), so that

the securities in which he has an interest are moved

or transferred among these trading accounts. As

the person retains his interest in these securities

after the transactions, such conduct potentially

creates a false impression of active trading which

may affect the price of the securities. However,

section 197(6) of the SFA provides a defence

if the person did not conduct the transactions

for the purpose of creating a false or misleading

appearance in the market price of the securities.

Section 197(2) of the SFA also prohibits any use

of fi ctitious transactions or devices to affect the

price of securities.

‘Matched Orders’ Sections 197(3)(b) and 197(3)(c) specifi cally prohibit

the abuse of matched orders. Matched orders are

achieved by simultaneously entering identical or

nearly identical buy and sell orders for a security to

create a false appearance of active trading in the

market. Under section 197(3) of the SFA, any practice

of entering matched orders would be deemed to

have created a false or misleading appearance of

active trading in the securities concerned, unless

the person can establish that his actions were not

pursuant to such illegal purpose.

Market Manipulation & Short Selling Section 198(1) of the SFA prohibits a person from

carrying out ‘2 or more transactions in securities

of a corporation...that have...the effect of raising,

lowering, maintaining or stabilising the price of the

securities...with intent to induce other persons to

subscribe for, purchase or sell securities of the

corporation or of a related corporation’. For the

purposes of this section, the term ‘transaction’

includes the making of offers to buy or sell

securities as well as invitations to treat. The ambit

of this provision is very wide and may under some

circumstances even encompass within its scope

common trading strategies such as short-selling

or naked-shorting. Short-selling involves selling

of a stock that a person does not yet own by

‘borrowing’ the stock. That person hopes to profi t

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by buying the stock back at a lower price before

returning it. It is essentially a gamble on price

decline. Naked shorting is based on the same

principle but involves the selling of a stock that has

not even been affi rmatively determined to exist. For

short-selling or naked-shorting to be an offence

under the SFA, there must, however, exist an ‘intent

to induce’ others to trade in the securities.

So far, there has been no opportunity for the courts

to scrutinise the legitimacy of short-selling or naked-

shorting, especially where such trading strategies

were used to ‘induce’ the investing public to trade

in securities. Unlike some other jurisdictions such

as Malaysia, Singapore presently has no specifi c

regulatory regime to limit or restrict short-selling or

naked-shorting.

Extra-territoriality & Criminal Sanctions The rationale behind the law is to ensure that the

Singapore market refl ects the forces of genuine

supply and demand. To that end, section 339 of

the SFA grants the enforcement agencies and the

courts extra-territorial jurisdiction to investigate

and try a person who, while outside Singapore,

has carried out prohibited transactions in the

Singapore market.

Any person convicted of an offence for market

rigging may be punished with a fine up to

S$250,000 or imprisonment for a term of up to

seven years or with both.

Before 2006, the Singapore courts often imposed

fi nes rather than imprisonment for offences of market

misconduct under section 197 of the SFA. This may

have to do with the fact that courts used to consider

such offences as mala prohibita, or conduct which

is prohibited because of specific prohibition or

regulation, as opposed to mala in se, or conduct

which is morally or socially reprehensible. Since Ng

Geok Eng v Public Prosecutor [2007] 1 SLR 913,

the courts have changed their stance. Ng Geok Eng

is a case involving ‘wash sales’. The High Court in

Ng Geok Eng held that the ‘approach of imposing a

fi ne in almost every case fails to suffi ciently express

the abhorrence with which our society regards such

conduct’. The High Court added that ‘[a]n offence of

false trading is one which strikes at the fundamental

integrity of our securities market’ and that ‘[p]ersons

found guilty of such offences should be taken to task

far more fi rmly than they have been thus far’ such

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Hamidul HaqPartner, Commercial Litigation Practice GroupDID: 6232 [email protected]


Thong Chee KunSenior Associate, Commercial Litigation Practice GroupDID: 6232 [email protected]

that ‘[t]he courts should not shy away from imposing

custodial sentences for offences of false trading or

market rigging’.

Following Ng Geok Eng, it is likely that the courts will

adopt a similarly tough stance against other forms of

market misconduct including offences arising from

section 198(1) of the SFA (market manipulation) and

section 218 of the SFA (insider trading).

The Civil Penalty Regime Under The SFAIt is foreseeable that the civil penalty regime of the

SFA would become an increasingly popular option

for persons who, having run foul of the law, hope

to be able to avoid criminal action and possibly

imprisonment. Under the SFA, an offender may avoid

the wrath of the courts by entering into an agreement

with the Monetary Authority of Singapore (‘MAS’)

to pay civil penalty fi nes, with or without admission

of liability but subject to the consent of the Public

Prosecutor. In practice, the MAS and the Public

Prosecutor may agree and consent to resolving

less egregious offences by way of civil penalty only

if the offender admits to liability. Some cases under

section 197(1) of the SFA which were resolved

recently by way of civil penalty involved individuals

who conducted false trading in the shares of China

Merchants Holdings (Pacific) Ltd, Eagle Brand

Holdings Ltd and ASA Group Holdings Ltd.

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page 30 of 51 pages



CASE BITES

Admiralty & Shipping Detention Of Salvage Vessel By Port Authorities Not A Frustrating Event

In The ‘Sea Angel’ (2006), T, the salvors of a

grounded tanker time chartered the vessel, SA,

to transship the tanker’s cargo to a larger tanker.

When the transshipment was completed, the vessel

SA was unable to depart because the port refused

to issue a ‘No Demand Certifi cate’ (‘NDC’), until

all costs relating to the oil pollution damage from

the grounding had been paid. The vessel SA was

redelivered late and the owners of SA claimed hire

due under the charterparty from the time T ceased

to pay hire, up to redelivery. T contended that the

charterparty was frustrated by the unlawful refusal

of the port to issue a NDC.

The English High Court noted that frustration was

concerned with the incidence of unforeseen risks.

For instance, frustration was not concerned with

events which had been anticipated and provided

for in the contract itself. In a case involving pollution,

a salvage contractor was exposed to the risk

of governmental intervention and unreasonable

detention of its craft. This risk was addressed in

the contract between the salvor and the tanker

owner. Accordingly, the Court held that there was

no frustrating event.

Whether Charterer Liable For Deadfreight AIC Ltd v Marine Pilot Ltd (2007) involved a dispute

as to whether a charterer was liable for deadfreight

under a charterparty. At the load port, the charterer

formally tendered a loading quantity close to the

deadweight of the vessel. However, the quantity

loaded was significantly less because of draft

restrictions caused by the silting of the dredged

channel.

The English High Court held that the obligation

to pay deadfreight was only triggered if the

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charterer failed to supply a full cargo. Where

there was a tender of full contractual performance

by the charterer, there was no failure to supply

and accordingly, there was no obligation to pay

deadfreight. It was further argued by the owner

that even if the tender had satisfi ed the charterer’s

obligation to furnish, the existence and availability of

the option to load the balance of the cargo by ship-

to-ship (‘STS’) transfer meant that the charterer

could not escape liability for its failure to load the

full cargo if it failed to exercise the STS option.

The Court rejected this and held that the charterer

was not obliged to require an alternative means of

loading in order to top up the contractual minimum

where the failure to load the contractual minimum

had nothing to do with the act or omission.

Banking & Finance Moneylenders Act Not Intended To Apply To Arm’s Length Commercial Transactions

In Donald McArthy Trading Pte Ltd v Pankaj s/o

Dhirajlal (2007), the respondent entered into an

agreement with the appellants to allow, for and in

consideration of some commission and interest, the

use of the respondent’s letters of credit facilities with

various banks to fi nance the purchase of goods by the

appellant. Subsequently, the appellant defaulted on

its obligations under the agreement whereupon the

respondent commenced an action for the amounts

owing. In its defence, the appellant argued that the

arrangement under the agreement amounted to a

moneylending transaction and that the terms of the

agreement were thus illegal and unenforceable under

the Moneylenders Act (‘MLA’) as the respondent was

an unlicensed moneylender.

The Singapore Court of Appeal held, disagreeing

with the appellant, that the MLA was not intended

to apply to transactions made at arm’s length

between commercial entities so as to prohibit or

impede legitimate commercial intercourse between

them but instead was social legislation designed to

protect individuals from unscrupulous unlicensed

moneylenders.

ContractsCourt Awards Compensation For Wasted Management Time In Dispute In Bridge UK.Com Ltd v Abbey Pynford Plc (2007),

the English High Court awarded a company,

apart from other claims, damages for the wasted

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management time of a company executive spent

dealing with the dispute. The Court relied on

the earlier case of R+ V Verischerung AG v Risk

Insurance and Reinsurance Solutions SA (2006),

where management time was deemed recoverable,

provided that it has been demonstrated with

sufficient certainty that the wasted time was

indeed spent on investigating and / or mitigating

the relevant tort.

The Court, in its award of compensation to Bridge

for wasted management time, also accepted as

valid Bridge’s method of calculation of the wasted

time, which was a retrospective assessment by

the executive of the hours he had spent on various

matters based on documents relating to the case

and from his own records.

An Exclusion Clause That Is Too Broad Will Not Be Considered Reasonable

In Regus (UK) Ltd v Epcot Solutions Ltd (2007),

the English High Court, though recognising that

companies frequently try and exclude as much

liability as possible in their standard terms and

conditions, held that there are clear limits on what

can and cannot be so excluded.

Regus’ usual terms and conditions, in its tenancy

agreement with Epcot, included an exclusion clause

(‘Clause 23’) which limited Regus’ liability in any

circumstances for ‘loss of business, loss of profi ts,

loss of anticipated savings, loss of or damage to

data, third party claims or any consequential loss’.

Clause 23 also limited liability in respect of other

losses, damages, expenses or claims.

The Court held that Regus’ failure to provide

adequate air conditioning was a breach of

contract. As such, Epcot was entitled to recover

damages for any loss which it had suffered as

a result, subject to Clause 23. The Court held

that Clause 23 fell within section 3 of the Unfair

Contract Terms Act 1977 (the equivalent of section

3 of the Singapore Unfair Contract Terms Act) as

it restricted liability in respect of a breach. The

Court found that Clause 23 was unreasonable as

it sought to deprive Epcot of any remedy at all for

serious breaches by Regus.

Oral Contracts Can Be Binding Even Where Certain Aspects Not Yet Agreed On

In Bear Stearns Bank Plc v Forum Global Equity

Ltd (2007), the High Court of England held that

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an oral contract over the phone is binding, and

a verbal agreement did not have to be reduced

to writing.

In concluding that the oral contract between Bear

Stearns and Forum was enforceable, the Court

held that where parties have shown an intention

to be contractually committed, even though

deferring discussion of some aspects of the

deal, courts will recognise a contract unless the

outstanding aspect is essential and the contract

is too uncertain or incomplete to be enforced

without it. The Court added that in the absence of

an express agreement, there was an implied term

of the agreement that the parties would execute it

within a reasonable time.

The Court also added that the law will imply any

terms necessary to give business effi cacy to what

was agreed by the parties. Further, the Court

added that no specifi c forms of words are needed

nor do all matters need to be agreed on in order to

conclude a contract of this kind. However, to avoid

a binding contract from being made, parties need

to say something explicit to that effect.

Construction ‘Unreasonable Or Vexatious’ Termination

In Reinwood Ltd v L Brown & Sons Ltd (2007),

the English High Court considered the test to be

applied when deciding whether a contract had been

determined by a contractor in an ‘unreasonable or

vexatious’ manner. The claimant contractor entered

into a contract with the defendant employer for

the construction of residential apartments. The

defendant purported to terminate the contract

on the grounds that the claimant had repeated a

specifi ed default by failing to pay sums that were due

under an interim certifi cate. The claimant submitted

that, even if the notices were valid, the defendant

had acted ‘unreasonably or vexatiously’ within the

meaning of a certain clause of the contract and that

the notice of determination was, for this reason, void

and ineffective.

Applying the principles laid down in the leading

cases on the meaning of ‘unreasonably or

vexatiously’, the Court held that the contractor had

acted neither vexatiously nor unreasonably. It had

not acted vexatiously because it had not acted with

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any motive or intention of harassing, oppressing

or annoying the employer. Nor had it acted

unreasonably given all the facts and circumstances

of the case. The defendant had acted to protect its

legitimate interest in being paid the monies which it

considered it was entitled to and, in doing so, could

not be said to have acted unreasonably.

The Meaning Of ‘Under The Contract’ In A Letter Of IntentIn Skaanska Rashleigh Weatherfoil Ltd v Somerfi eld

Stores Ltd (2006), the English Court of Appeal held

that the words ‘under the terms of the Contract’

in a letter of intent had the effect of incorporating

into the contract represented by the letter of

intent, the terms of the draft contract which had

been under negotiation between the parties prior

to the sending of the letter of intent (unless those

terms were inconsistent with the terms of the

letter of intent).

The Court rejected the submission that the

reference to ‘the Contract’ was only for the purpose

of identifying the services to be performed. In

reaching this conclusion the Court placed primary

emphasis on the natural meaning of the words

‘under the Contract’ and stated that the adoption

of a commercially minded construction of a clause

does not give to the court a licence to re-write the

contract simply because the terms appear a little

unexpected, unreasonable or unwise.

Corporate & Capital Markets Retrospective And Unilateral Imposition Of Term Requiring Director To Retire At 55

In See Teow Chuan v YAM Tunku Nadzaruddin

Ibni Tuanku Jaafar (2007), the issue before the

Malaysian Court of Appeal (Putrajaya) was whether

the company could, by board resolution, require the

plaintiff to retire on the ground that he had already

attained 55 years of age, an event which took place

some three years earlier. The plaintiff challenged the

introduction of a new term into his existing contract

that he should retire.

The Court found that it was neither an express nor

implied term of the plaintiff’s contract that he must

retire on attaining 55 years of age. It was also plainly

a term of the contract that the plaintiff would serve

as managing director for as long as he was willing

and able to perform his duties. There was also

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material to support the inference that the resolution

was designed to have the plaintiff removed as

managing director. As the other directors had used

their fi duciary power for a collateral or improper

purpose, namely, to remove the plaintiff, that power

was to that extent invalid. Accordingly, the Court

granted an injunction restraining the implementation

of the resolution on the plaintiff.

Whether There Was Breach Of Duty In Relation To Investment Losses

In Orient Centre Investments v Societe Generale

(2007), a company made a claim for breach of

representations, breach of fi duciary and other duties

and for negligence in relation to its investments in

certain structured fi nancial products with a bank, SG,

as a result of losses sustained in the investments.

The Singapore Court of Appeal found that the

agreements between the company and SG for the

provision of the relevant services provided that the

company was exercising its own business judgment

independently of SG in entering into the agreements,

and that SG was not acting as a fi duciary for or as

an advisor to it in respect of the agreements. The

combined effect of the terms applicable to the

products in question was an insuperable obstacle to

any claim by the company against SG based on the

alleged breach of representations or duties, fi duciary

or contractual or on negligence on the part of G, an

employee of SG. The Court further held that even

if G had made representation concerning capital

preservation and income return, it would not have

assisted the appellants in relation to the structured

products, as they had represented and warranted

that they did not rely on any representation given by

any of SG’s offi cers.

Court Declines Order To Restrain Company From Forfeiting And Selling Shares

In McLaughlin v Dungowan Manly Pty Ltd (2007),

the Supreme Court of New South Wales had to

determine an application to restrain the defendant

company from taking action to forfeit and sell the

shares of the company which belonged to the

plaintiffs, after they had failed to pay a levy on the

same.

In response to an allegation of abuse of powers

by the directors, the Court held that the evidence

did not support an inference that the removal

of the plaintiffs was an actuating purpose in the

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decision to impose the levy. The fi nancial needs

of the company and the absence of means other

than the levy to satisfy them must have led to the

decision to impose the levy regardless of the impact

on the plaintiffs.

The plaintiffs were informed that their shares were

‘liable’ to forfeiture and sale if one or two things

did not happen, that is, payment of the levy or

the making of an arrangement satisfactory to the

company. The Court noted that if the plaintiffs did not

have the fi nancial resources and if, in addition, they

were unwilling or unable to negotiate an acceptable

payment arrangement, resort by directors to the

powers of forfeiture and sale would be appropriate.

The Court accordingly declined the injunction.

Director Held Liable For Unauthorised Loans Made To Another Director

The English Court of Appeal held in Neville v Krikorian

(2006) that a director who knowingly allowed a

practice of lending by his company to a co-director

to be treated as acceptable and to continue, could

properly be said to have authorised individual

payments made in accordance with that practice

pursuant to section 330 of the English Companies

Act (the equivalent of section 162 of the Singapore

Companies Act). This was notwithstanding that he

did not have actual knowledge of each individual

payment at the time that it was made. The Court

further held that the director was also in breach of

duty in failing to take steps to cause the company

to call in the indebtedness after he had learnt of

the practice of directors’ loans which had been

allowed to arise.

Dispute ResolutionPre-nuptial Agreement Recognised By The Court In TQ v TR (2007), a Swedish woman, P, and a Dutch

national, R, agreed before they got married in the

Netherlands that there was to be no common marital

property (‘Agreement’). R came to Singapore to

work. P and the three children of the marriage arrived

a month later to join him. Their marriage turned sour,

prompting P to fi le for divorce in Singapore. One of

the major issues that the Singapore High Court had

to tackle in connection with the parties’ division of

assets was whether the Agreement was enforceable

in Singapore.

Despite the fact that the Agreement was executed

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under Dutch law, the Court still considered whether

it ought to give effect to it as an enforceable

document irrespective of where the parties’

domicile might be. Citing section 112(1) and (2)

of the Women’s Charter (‘Power of court to order

division of matrimonial assets’), the Court stated

that it was entitled to take into account a pre-nuptial

agreement and give effect to it if the circumstances

permit, as in this case. Here, the couple entered

into the Agreement on their own volition, as mature

adults and in the presence of a notary public who

had explained the content and effect of it to P. The

Court took the view that the Agreement must be

upheld and take effect accordingly.

Removal Of Arbitrators

In ASM Shipping Limited of India v Bruce Harris

& Ors (2007), ASM and TTMI entered into a

charterparty which contained a clause providing

for arbitration before a tribunal consisting of one

arbitrator to be approved by ASM, one by TTMI,

and one by the two so chosen.

Following a dispute between the parties, the

charterers began the arbitration and the parties

appointed H and S as arbitrators. M was

subsequently appointed as the third arbitrator. A

fi nding of apparent bias prompted M to resign from

the reference. ASM asserted that the remaining two

arbitrators should be removed because they were

/ would have been infected also by the apparent

bias of M. The English High Court stressed that

it does not necessarily follow from the fi nding of

apparent bias on the part of M that the whole of the

arbitral tribunal and each member of it are tainted

by apparent bias. Here, circumstances did not

exist that gave rise to justifi able doubts as to the

impartiality of the two remaining arbitrators.

Law Of General Importance And ‘Special Reasons’ As Grounds For Appeal

In Ng Chin Siau and Others v How Kim Chuan

(2007), H sought leave to appeal against an adverse

judgment of the Singapore High Court which

reversed an arbitrator’s decision. Essentially, the

Singapore High Court declared that a clause in the

partnership agreement between H and the other

partners (plaintiffs herein) was not applicable in the

assessment of the valuation of the partnership’s

goodwill because it was not adequately pleaded.

The Court dismissed the application. Citing section

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49(11) of the Arbitration Act, it held that leave to

appeal to the Court of Appeal against a decision

on an appeal from an arbitration award may only be

granted if the question of law before it was one of

general importance, or one which for some special

reason should be considered by the Court of

Appeal. A ‘question of law of general importance’

should be one of ‘general principle upon which

further argument and a decision of a higher tribunal

would be to public advantage’. There was a ‘special

reason’ to consider the appeal if the question of law

was a question on which the judge’s decision had

been obviously wrong. The formulation ‘obviously

wrong’ imposed a higher burden on the prospective

appellant than the formulation ‘prima facie error of

law’ did. The Court ruled that in the present case,

the fi nding that the clause was not applicable on

the basis that it was not adequately pleaded was

not obviously wrong so as to permit an appeal to

the Court of Appeal.

‘Without Prejudice’ Letter

In Greenline-Onyx Envirotech Phils, v Otto

Systems Singapore Pte Ltd (2007), G defaulted

in its payment obligations to O. Consequently, O’s

lawyers sent a demand letter to G. Following an

unsuccessful attempt to hold a meeting to discuss

the settlement of the debt, G’s lawyers replied in a

letter (‘Letter’) to dispute the outstanding balance

stated in the demand letter.

The issue in this case was whether G had, by

the Letter, acknowledged its debt due to O.

The Singapore Court of Appeal took note of G’s

argument that, notwithstanding that the Letter

admitted that there was debt due and owing, so

long as the quantum of the debt was in dispute, the

Letter could not have amounted to an admission

of debt. The Court rejected this contention. It held

that given the clear words of the Letter, there was

no reason why O should not be allowed to rely on

G’s own admission for the purpose of establishing

it as an acknowledgment of a debt.

Letters Not Protected By ‘Without Prejudice Privilege’

In Bradford & Bingley v Rashid (2006), there was an

exchange of correspondence between a creditor

and a debtor following the creditor’s invitation to

the debtor for the latter to make a proposal for

the payment of his outstanding indebtedness. In

the fi rst letter, the debtor wrote that it was not in a

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position to ‘repay the outstanding balance, owed

to you’. The creditor’s solicitors responded, stating

that the creditor was willing to consider writing off

a substantial amount of the debt if the debtor were

in a position to raise up a lump sum payment. The

debtor’s agent then wrote a second letter informing

the creditor that it was willing to pay a certain

amount towards the ‘outstanding amount’ as a

fi nal settlement.

The English House of Lords declared that each of

the letters constituted a clear acknowledgment of

debt. It held that neither of the letters was protected

by the ‘without prejudice’ rule from being admitted

in evidence as acknowledgement because

there was no dispute to be compromised. The

correspondence treated the debt as an undisputed

liability and dealt only with whether, what and to

what extent the debtor could meet that liability.

Certain Communications Can Be Covered By Both Legal Advice Privilege And Litigation Privilege In Skandinaviska Enskilda Banken AB, Singapore

Branch v Asia Pacifi c Breweries (Singapore) Pte

Ltd (2007), the Singapore Court of Appeal, in

dismissing the appeal of the appellant banks

seeking disclosure, held that communications

made by Asia Pacifi c Breweries (Singapore) Pte

Ltd to PricewaterhouseCoopers and Drew &

Napier LLC, and vice versa, were related to current

or contemplated imminent litigation and as such

would be covered by both legal advice privilege

and litigation privilege.

The Court held that legal advice privilege existed

regardless of whether litigation was contemplated,

though it did not apply to communications by third

parties to the solicitor unless they were made to the

solicitor as agent for the client. In this respect, the

Court also took the view that a party could still be

an agent even though he acted as more than just

a conduit for communication between the client

and the legal adviser.

Qualifi ed Privilege In Publication In Jameel (Mohammed) v Wall Street Journal

Europe Sprl (2006), Wall Street Journal (‘Wall

Street’) published an article listing the respondent

company as one of the bank depositors in Saudi

Arabia which might have some potential ties with

terrorists. The company fi led a defamation case

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against Wall Street. The judge ruled against the

qualified privilege invoked by Wall Street as a

defence on the ground that Wall Street had failed

to obtain the permission of the company prior to

publication to include its name in the article.

The English House of Lords upheld the defence of

qualifi ed privilege and confi rmed that the doctrine in

Reynolds v Times Newspaper Ltd (2001) attached

to the published article. The Reynolds privilege is

available to the public media when they disseminate

stories of public interest containing defamatory

material. According to the House, the inclusion of

a defamatory statement in the article was justifi ed

as it made a proper contribution to the whole thrust

of the publication. It was also held that since the

article had been written by an experienced and

specialist reporter and approved by senior staff who

had sought to verify its contents, failure to obtain

the company’s response was an insuffi cient ground

on which to deny the privilege.

Letters Not Protected By ‘Without Prejudice Privilege’The plaintiff in Sin Lian Heng Construction Pte Ltd v

Singapore Telecommunications (2007) fi led a case

for non-payment of contractual obligations against

the defendant. In its counter-claim, the defendant

pleaded various admissions which were allegedly

made by the plaintiff’s offi cers. The admissions were

made in the course of site meetings (‘Meetings’)

and in a letter made by the plaintiff to the defendant

(‘Letter’). The plaintiff objected to the admissions,

arguing that the same had been made ‘without

prejudice’ and were therefore privileged.

The Singapore High Court held that the plaintiff was

entitled to invoke the protection afforded by the

‘without prejudice’ privilege in respect of the Letter

but not in respect of the Meetings. The Meetings

were not conducted in the context of an attempt

to compromise a dispute and therefore could not

be regarded as constituting negotiations genuinely

aimed at settling a dispute. As for the Letter, it

was written in the context of and shortly after the

Meetings, and perhaps as a result of the discussions

during the Meetings. From the surrounding

circumstances and the content of the Letter itself,

the Letter was intended to shift the discussion to a

new phase directed at fi nding a commercial solution

acceptable to both parties. The Letter clearly fell

within the protection afforded by the privilege.

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EmploymentDuty Of Employer To Ensure Health, Safety And Welfare Of Employees In R v HTM Ltd (2006), the English Court of

Appeal had to determine whether under the

circumstances, foreseeability was relevant to an

employer’s duty of ensuring, so far as is reasonably

practicable, the health and safety of its employees

at work pursuant to section 2(1) of the Health and

Safety at Work etc Act (the equivalent of section

12(1) of the Singapore Workplace Safety and

Health Act).

The Court ruled that foreseeability was relevant

to the duty of ensuring the health and safety

of employees while at work. Accordingly, an

employer who wished to call evidence at trial to

establish foreseeability could not be precluded

from adducing evidence as to the likelihood of the

incidence of the relevant risk to support its case

that it had taken all reasonable steps to eliminate

the risk. It was stressed that the risk of accident

had to be weighed against the measures necessary

to eliminate the risk.

Insolvency Whether Compulsory Winding Up Should Displace Voluntary Winding Up In Sysma Construction Pte Ltd v EK Developments

Pte Ltd (2007), the directors of EK lodged a

statutory declaration that the company could not

carry on business as it was insolvent. E and L were

appointed as EK’s provisional liquidators. Sysma

did not want E and L to be the liquidators of EK

and sought instead to nominate H as the liquidator.

Sysma thereafter applied for leave for compulsory

winding order against EK following the appointment

of E and L as liquidators.

The Court dismissed the application for leave.

It held that Sysma did not have a strong and

legitimate sense of grievance if EK was not wound

up compulsorily, and that this outcome would

not offend the general principles of fairness and

commercial morality. It noted that Sysma only

petitioned for compulsory winding up when E and

L were appointed as liquidators. Sysma could

have challenged the appointment by applying to

the court for the removal of E and L under section

302 of the Companies Act.

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Undue Preference

In The Liquidator of Leong Seng Hin Piling Pte

Ltd v Chan Ah Lek (2007), the Singapore High

Court had to determine whether the cash payment

made by the company in this case in favour of the

second defendant amounted to undue preference

within section 329(1) of the Companies Act in

relation to sections 98 to 100 of the Bankruptcy

Act.

The Court observed that the cash payment

took place less than two years prior to the

commencement of winding up and the second

defendant, during that time, was an ‘associate’

of the company within the meaning of section

99(5) read with section 101(4) of the Bankruptcy

Act. As such, it was incumbent upon the second

defendant to rebut the statutory presumption

that the cash payment to him was infl uenced by

a desire to prefer him. The Court found that the

second defendant failed to rebut the statutory

presumption in respect of a certain portion of the

cash payment. He was thus asked to pay back

this sum of money.

iTec Obligation Of Confi dence Can Be Owed By Third Parties

In Douglas v Hello! Ltd (2007), the House of Lords

held that the publishing of unauthorised celebrity

photographs by a magazine (Hello!) amounted

to a breach of commercial confi dentiality owed

to another magazine (Ok!), which had paid

considerable amounts for the benefit of that

confi dence.

The Court viewed the case as one about

commercial confi dentiality by regarding the celebrity

photographs as commercially valuable pieces of

information. The Court held that the Douglases,

by keeping their wedding private in accordance

with their exclusive arrangements with OK!, had

succeeded in creating an obligation of confi dence

owed to them by all those who attended the

wedding, whether invited or not. Thus, the taking

of any photographs without consent and the

subsequent publication thereof was a breach of the

Douglases’ personal rights of confi dentiality.

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Accordingly, the Court found that since the

arrangements that gave rise to the confi dentially

were entered into for the benefi t of OK!, then OK!

was entitled to take the benefi t. Thus, the Court

found that Hello! owed an obligation of confi dence

to OK!, even though they had not explicitly agreed

to such an obligation. The Court further added

that this obligation of confi dence owed by Hello!

could not be destroyed by OK!’s publication of the

photographs before Hello!.

More Than ‘Bringing To Mind’ Needed To Show Trademark Infringement

In Intel Corporation Inc v CPM United Kingdom

Ltd (2007), the English Court of Appeal held that

the mere ‘bringing to mind’ of an earlier trademark

with a reputation was not enough to prevent a later

trademark registration. The Court also held that

the use of a trademark, for dissimilar goods or

services, which merely ‘brings to mind’ a registered

trademark which has a reputation would not infringe

that registered trademark.

The Court held that more than a tenuous association

between the two marks would be needed to

establish a ‘link’. In addition, the Court added ‘if a

trade mark for particular goods or services is truly

inherently and factually distinctive it will be robust

enough to withstand a mere passing bringing to

mind when it or a similar mark is used for dissimilar

goods or services.’

The Court also pointed out that it was very

important that the harm or prospect of harm to a

trademark must be real and tangible and that ‘a

mere possibility or assertion of damage is just too

remote and would leave trademark owners in too

monopolistic a position’.

PropertySale By Mortgagee In Meretz Investments NV and another v ACP Ltd

and others (2006), the mortgagee was granted

the power of sale to secure the sums it lent to a

company in relation to the development costs of

a construction project. The construction ran into

fi nancial diffi culties. The mortgagee, concerned that

it would be unable to realise its security, decided

to exercise its power of sale.

The English High Court held that the mortgagee had

properly exercised its power of sale. Unlike statutory

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powers conferred for the public benefi t or a trustee’s

powers conferred for the benefi t of benefi ciaries, a

mortgagee’s powers were conferred upon it for its

own benefi t. It was thus legitimate for a mortgagee

to exercise its powers for the purpose of protecting

its security. Where a mortgagee had mixed motives,

one of which was a genuine purpose of recovering

the amount secured by the mortgage, the exercise

of that power would not be invalidated merely on that

ground. Since at least one of the purposes of the

mortgagee’s exercise of its power of sale had been

to recover the whole or part of the debt due, it was

not in breach of its equitable duty and the sale that

took place could not be set aside.

Remedies Only A Deliberate Inducement To Breach A Contract Can Be PunishedIn Mainstream Properties Ltd v Young and others

and another (2007), the House of Lords ruled that a

person cannot be sued for inducing another person

to breach a contract unless it can be shown that the

inducement was knowing and deliberate.

In a case of ‘inducing a breach of contract’, the

person procuring the breach of contract would

be held liable in tort for being an accessory to the

liability of the contracting party. An example of

such a situation is where a company ‘poaches’

an employee, causing that person to breach the

terms of his contract.

In this case, the Court observed that a third party

may know nothing of the contract, and may quite

unknowingly and unintentionally procure a breach

of the contract by offering an inconsistent deal to

a contracting party, which persuades the latter to

default on its contractual obligations. As such, the

Court held that the third party would not be liable

in such a case, even if it acts carelessly. The Court

further added that the third party in this instance

owes no duty of care to the victim of the breach

of contract.

TaxAnnual Value Of Property For Purposes Of Property TaxThe Singapore Court of Appeal in BCH Retail

Investment Pte Ltd v Chief Assessor (2007) was

confronted with the issue of whether all reasonable

advertising and promotion expenses incurred in

relation to a commercial property may be deducted

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from the gross rental of such property for purposes

of property tax.

The Court referred to the definition of ‘annual

value’ under section 2 of the Property Tax Act and

stressed that the provision focused on the elements

of rent and letting. As such, only these elements

should be included in the annual value of a given

property for the purposes of levying property tax.

The Court pointed out that any expenses that were

not related to the elements of rent or letting ought to

be excluded from the computation of annual value.

Thus, not all reasonable advertising and promotion

expenses incurred in relation to the subject property

may be deducted from the gross rental.

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LEGISLATION BITES

Corporate & Capital Markets SGX Consultation - New Listing Rules To Enhance Competitiveness Of Securities MarketOn 23 May 2007, the Singapore Exchange Limited

(‘SGX’) issued a consultation on proposed new

listing rules aimed at enhancing the competitiveness

of its securities market. The focus for the respective

boards is as follows:

Mainboard - to attract larger companies and

maintain the quality of listed companies; and

SESDAQ - to transform it into a sponsor-

supervised board which will target both local and

foreign growth companies.

The SGX also issued, on 18 May 2007, a

consultation paper on proposed amendments to

the minimum bids schedule for the SGX securities

market. These amendments follow from the

fi rst public consultation launched by the SGX in

•

•

February 2006 and include the following:

a reduction in the minimum bid sizes for securities

priced above S$3; and

an increased single tier forced order schedule for

securities to refl ect the reduction in the minimum

bid sizes.

For these purposes, ‘securities’ exclude ETFs,

bonds, debentures, loan stocks and those securities

traded in Japanese Yen and Hong Kong Dollar.

A Client Update on these developments has been

issued, and is available on eOASIS.

Proposed Amendments To Listing Rules Involving Trading Halt, Suspension Of Trading And Cash Companies

On 10 May 2007, the Singapore Exchange Limited

(‘SGX’) issued a consultation paper proposing

amendments to the listing rules, which included

the following:

•

•

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page 47 of 51 pages



trading halt, suspension of trading and cash

companies;

shortening of the minimum duration of trading

halt;

clarifying rules relating to suspension of trading

when the issuer is unable to continue as a going

concern;

allowing trading of cash companies with

safeguards,

announcement of grants of employee share

option;

alignment of all references to issued share

capital with the Companies (Amendment) Act

2005; and

introduction of miscellaneous listing rules, for

example, to clarify the application of listing rules

for REITs and ETFs.

A Client Update on this matter has been issued,

and is available on eOASIS.

Practice Statement Issued On Application Of Take-over Code To REITs

The Securities Industry Council (‘SIC’) has

announced that the Singapore Code on Take-

•

•

•

•

•

•

•

overs and Mergers (‘Code’) will be extended to

apply to Real Estate Investment Trusts (‘REITs’).

This announcement follows from the consultation

on the Code conducted by the SIC in June 2006,

when the SIC disclosed that it was studying

the issue of whether the Code should apply to

REITs.

The Securities and Futures Act and the Code

will be amended to facilitate the extension of the

Code. In the meantime, the SIC suggested in a

Practice Statement issued on 8 June 2007 that

parties who are currently engaged in a take-over

or merger transaction involving a REIT comply

with the Code. This means that although it is not

mandatory, such parties are strongly encouraged

to apply the Code.



Consultation On Dissolution Of Compensation Fund For Derivatives MarketThe Singapore Exchange Limited has issued a

consultation paper on the dissolution of the SGX-

Derivatives Trading Compensation Fund (‘Fund’).

The Fund was set up by the predecessor of the

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http://eoasis.rajahtann.com/eOASIS/gn/at.asp?pdf=../lu/pdf/07-May-SGX-Listing-Rules2(1).pdf&module=LU&topic=LU000396&sec=a

http://eoasis.rajahtann.com/eOASIS/gn/at.asp?pdf=../lu/pdf/07-June-Reits.pdf&module=LU&topic=LU000400&sec=a



page 48 of 51 pages



SGX-Derivatives Trading Ltd (‘SGX-DT’), SIMEX,

in order to provide compensation to investors,

the exchange or the clearing house if a loss was

incurred through the default or defalcation of any of

SIMEX’s derivatives members. The Fund will expire

on 24 November 2007. The SGX has proposed

dissolving the Fund in order to apply its assets more

effectively. The SGX is of the view that the Fidelity

Fund, which was established under the Securities

and Futures Act, provides suffi cient protection for

investors.



Competition The Competition (Amendment) Bill Passed In Parliament On The Merger Regime Parliament passed the Competition (Amendment)

Bill (‘Amendment Bill’), which outlines the new

regulatory regime for mergers, on 21 May 2007.

This new merger regime is part of the Competition

Act (‘Act’) and will come into effect on 1 July 2007.

The Act itself was passed in October 2004 and

the Amendment Bill represents the third, and fi nal,

phase of implementing the Act in Singapore.



Dispute ResolutionNew SIAC Arbitration Rules, Schedule Of Fees And Practice Notes

The Singapore International Arbitration Centre

(‘SIAC’) has published new arbitration rules

which came into force on 1 July 2007. The new

arbitration rules aim to improve the effi ciency

in the resolution of international commercial

disputes through the consolidation of 10 years of

experience in case administration and adopting

best practices in institutional arbitration. For a

copy of the new SIAC Rules 2007, please click

on this link.

A new Schedule of Fees and supplementary

Practice Notes for Ad Hoc and Administered Cases

also came into force on 1 July 2007. For the new

schedule of fees, please click on this link.

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http://eoasis.rajahtann.com/eOASIS/gn/at.asp?pdf=../lu/pdf/07-Jul-SGX-Consultation.pdf&module=LU&topic=LU000403&sec=a

http://eoasis.rajahtann.com/eOASIS/gn/at.asp?pdf=../lu/pdf/07-May-Merger-Regime(2).pdf&module=LU&topic=LU000395&sec=a&target=_new

http://www.siac.org.sg/rules-siac.htm

http://www.siac.org.sg/fees-sche.htm



page 49 of 51 pages



Insolvency Proposed Debt Repayment Scheme The Ministry of Law and the Insolvency & Public

Trustee’s Offi ce have issued a consultation paper

on the proposed Debt Repayment Scheme (‘DRS’)

to help wage-earner debtors with relatively small

unsecured debts not exceeding S$100,000 avoid

bankruptcy.

The DRS seeks to benefi t both the creditor and

the debtor. Under the DRS, the debtor is given the

opportunity to pay off all or some of his debts under

a repayment plan over a period of time. If he dutifully

meets his fi nancial obligations under the repayment

plan, the debtor will be able to avoid the stigma of

bankruptcy and have a fresh start. At their end, the

creditors will receive not less than what they would

have otherwise received had the debtor gone into

bankruptcy. The public consultation closed on 1

June 2007.



PropertyDispensation Of Classifi cation Of ‘Minor’ And ‘Non-Minor’ ErrorsPursuant to Practice Circular 1 of 2007 issued by

the Singapore Land Authority (‘SLA’), the Registrar

of Titles will dispense with the classifi cation of

‘minor’ and ‘non-minor’ errors in the amendment

of instruments that are provisionally registered.

He will now also allow the solicitor who signed

the Certificate of Correctness to authorise a

representative from the same fi rm who is not a

practicising solicitor to attend to the amendment

of all types of errors. The current practice is that

solicitors are required to attend personally at

the Registry of Titles to amend errors which are

classified as ‘non-minor’ errors in instruments

which are pending registration.

This development was made to simplify SLA

practices and procedures to serve law fi rms and

clients better. Practice Circular 1 of 2007 takes

effect immediately.

For a copy of Practice Circular 1 of 2007, please

click on this link.

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http://eoasis.rajahtann.com/eOASIS/gn/at.asp?pdf=../lu/pdf/07-Apr-Dept-Repayment(1).pdf&module=LU&topic=LU000392&sec=a

http://www.sla.gov.sg/doc/new/PC%201%20of%202007.pdf



page 50 of 51 pages



TaxPublic Consultation On Draft Income Tax (Amendment) Bill 2007The Ministry of Finance issued on 15 June 2007

the draft Income Tax (Amendment) Bill 2007 (‘Bill’)

for public consultation. The Bill incorporates

amendments to the current Income Tax Act relating

to the tax changes announced by the Second

Minister for Finance, Mr Tharman Shanmugaratnam,

in his 2007 Budget Statement, and refi nements to

existing tax policies and administration resulting

from on-going reviews of the income tax system.

The consultation closed on 14 July 2007.



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Case Bites

Legislation Bites

http://eoasis.rajahtann.com/eoasis/gn/at.asp?pdf=../lu/pdf/07-Jun-Draft-Inc-Tax-Amd-Bill.pdf&module=LU&topic=LU000401&sec=a



Admiralty & ShippingSteven Chong SC 6232 [email protected] Sing Toh SC 6232 [email protected] 6536 1335

BankingSoon Choo Hock 6232 [email protected] 6438 0248

Business Finance & InsolvencyPatrick Ang 6232 [email protected] Eng Beng 6232 [email protected] 6438 4787

CompetitionKala Anandarajah 6232 [email protected] 6557 0901

Capital Markets & Corporate FinanceWong Kok Hoe 6232 [email protected] Kian Hwee 6232 [email protected] Serene W Yeo 6232 [email protected] 6536 9453

Commercial LitigationFrancis Xavier 6232 [email protected] 6533 0827

DerivativesDavid Yeow 6232 [email protected] 6438 0248

iTecLau Kok Keng 6232 [email protected] Sreenivasan 6232 [email protected] 6438 5227

International ArbitrationSteven Chong SC 6232 [email protected] Menon 6232 [email protected] Loh SC 6232 [email protected] Yee Leong 6232 [email protected] 6438 1995

PRACTICE GROUP CONTACT PARTICULARS

ADVOCATES & SOLICITORSCOMMISSIONERS FOR OATHS, NOTARIES PUBLIC TRADE MARK & PATENT AGENTS

The information contained in this newsletter is correct to the best of our knowledge and belief at the time of writ-

ing. The contents are intended to provide a general guide to the subject matter and should not be treated as a

substitute for specifi c professional advice for any particular course of action as the information may not necessarily

suit your specifi c business and operational requirements. It is to your advantage to seek specifi c legal advice for

your specifi c situation. In this regard, you may call the writer of the article, the lawyer you normally deal with or

e-mail Rajah & Tann’s Knowledge & Risk Management Group at [email protected].

© Rajah & Tann: September 2007. All rights reserved.

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