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Legal Updates

Legal Updates for October 2020

MAS Issues Guidelines on Individual Accountability and Conduct for Financial Institutions (w.e.f 10 Sept 2021)
With effect from 10 September 2021, all financial institutions ("FIs") regulated by the Monetary of Authority of Singapore ("MAS") (unless excepted) should implement appropriate policies and processes to achieve five accountability and conduct outcomes ("Outcomes") set out in the MAS Guidelines on Individual Accountability and Conduct issued on 10 September 2020 ("IAC Guidelines").

These five Outcomes and specific guidance underpinning each Outcome aim to reinforce FIs' responsibilities in three key areas: (i) promote the individual accountability of senior managers, (ii) strengthen oversight over material risk personnel and (iii) reinforce conduct standards among all employees.

The IAC Guidelines take into account MAS' proposals in its previous consultation papers.

This Update highlights key features of the IAC Guidelines, namely its scope of applicability and MAS' implementation approach, and provides a summary of specific guidance of the Outcomes and several key considerations for FIs to note in achieving the Outcomes.

Managing Manpower Costs: New Guidelines on Wage Cuts and Updated Tripartite Advisory on Retrenchments
In an encouraging sign, Singapore's third-quarter economic growth has expanded by 7.9% in the third quarter from the 13.2% contraction in the preceding quarter. However the economic fallout of COVID-19 will not dissipate anytime soon, especially as new waves of infections continue to surge worldwide. While the government has been encouraging businesses to retain workers where possible, it is now acknowledged that retrenchments and/or wage cuts may be inevitable. Accordingly, there have been two new developments for employers to take note of:

  1. Release of the National Wages Council's ("NWC") 2020/2021 Supplementary Guidelines ("Supplementary Guidelines"), which will apply from 1 November 2020 to 30 June 2021; and
  2. Updates to the Tripartite Advisory on Managing Excess Manpower and Responsible Retrenchment as of 17 October 2020 ("Updated Advisory") issued by the tripartite partners, being the Ministry of Manpower ("MOM"), the National Trades Union Congress ("NTUC") and the Singapore National Employers Federation ("SNEF").

The Supplementary Guidelines sets out principles for wage cuts, while the Updated Advisory provides guidance on conducting retrenchment exercises. We provide an overview of both developments in this Update.

Court Proceedings in New Normal - Successful Application for Leave for Both Foreign Factual and Expert Witnesses to Testify via Video-Link
While Singapore has settled well into the present "new normal" of Phase Two of reopening the economy, travel restrictions and other preventative measures are still largely in place, and may continue to be in place for the foreseeable future. Yet the wheels of justice must continue to turn. Access to justice (fundamental to the rule of law) must continue to be provided by an agile legal system. In circumstances where foreign witnesses are unable to physically attend trial, what considerations will the courts take into account when deciding whether to grant leave for them to give evidence via video-link?

To put matters in context, giving evidence by video-link is, per se, not a new issue. Guiding principles have been established in legislation and earlier cases over the last three decades. However, how such principles are to be applied against the backdrop of the ongoing COVID-19 pandemic is a novel point. Necessity is the mother of invention, and so courts worldwide have devised creative but legally sound solutions that do not cause prejudice to any party.

In the lead up to a recent civil trial (currently part-heard and resuming in late October), conducted entirely remotely, Gregory Vijayendran SC, Kevin Tan, Devathas Satianathan, and Low Weng Hong from Rajah & Tann Singapore's dispute resolution team successfully obtained leave from the Singapore High Court for the Defendant's foreign factual and expert witnesses to give evidence by video-link in a contested application. This was despite the Plaintiff's strenuous objections.

This Update elucidates the considerations that the Court took into account when granting such leave.

Proposed Amendments to International Arbitration Act to Strengthen Legal Framework
Singapore has risen to become one of the leading centres for international arbitration worldwide, with the Singapore International Arbitration Centre ("SIAC") ranked as the most preferred arbitration institution in Asia and the third most preferred arbitration institution in the world. Its global appeal is marked by the international nature of 87% of the new cases, with arbitrating parties from 59 jurisdictions.

To maintain Singapore's competitive edge, the Ministry of Law ("MinLaw") tracks changes in international best practices and consults on how Singapore's legal framework can be improved. Such a consultation was held in June to August 2019 regarding four proposals put forward by MinLaw to amend Singapore's International Arbitration Act ("IAA") (which governs international commercial arbitration proceedings in Singapore). These four MinLaw proposals were to:

  1. Introduce a default mode of appointment of arbitrators in multi-party situations;
  2. Recognise that an arbitral tribunal and the Singapore High Court have powers to enforce confidentiality obligations in an arbitration;
  3. Allow parties to, by agreement, request the arbitrator/s to decide on jurisdiction at the preliminary stage; and
  4. Allow a party to the arbitral proceedings to appeal to the High Court on a question of law arising out of an award made in the proceedings, provided parties have agreed to opt in to this mechanism.

The first two of these proposals were adopted in the International Arbitration (Amendment) Bill ("Bill"), which was passed on 5 October 2020, and we examine them below. It should be noted that while the latter two proposals have not been adopted in the Bill, they continue to be studied by MinLaw.

Legislation Passed in Parliament to Address Issues on Informed Consent and SMC Disciplinary Process
Legislative changes are under way to provide more legal certainty on how a doctor should take informed consent of a patient and to strengthen the disciplinary proceedings of the Singapore Medical Council ("SMC") so that their outcomes are timely, fair, independent and consistent.

On 6 October 2020, these legislative changes which are provided in the Civil Law (Amendment) Bill 2020 ("CLB") and the Medical Registration (Amendment) Bill 2020 ("MRB") were passed in Parliament. The CLB and MRB aim to implement the recommendations of the "Workgroup to Review the Taking of Informed Consent and SMC Disciplinary Process" which are set out in its Report dated 28 November 2019. The CLB and MRB have yet to come into force.

This Update provides a background of the reasons for these changes and a summary of key changes in:

  • the CLB that will set out the legal test for the standard of care when taking informed consent; and
  • the MRB that will provide for changes to enhance the SMC disciplinary process.

Additional Temporary Relief Measures for Property Sector due to COVID-19 Pandemic
On 8 October 2020, the Singapore Government announced additional temporary relief measures ("October 2020 Additional Temporary Relief Measures") for the property sector. The October 2020 Additional Temporary Relief Measures, granted in addition to the temporary relief measures announced on 6 May 2020, offer immediate relief for eligible property developers that are affected by and have experienced disruptions to their construction schedules arising from the COVID-19 pandemic. Again, the Singapore Government has emphasised that these temporary relief measures do not alter the Government's prevailing residential property market cooling measures.

This Update highlights the key features of the October 2020 Additional Temporary Relief Measures, summarising the relief granted and the qualifying criteria.

Simplified Insolvency Programme Tabled in Parliament to Assist Micro and Small Businesses (Corrigendum)
On 5 October 2020, the Insolvency, Restructuring & Dissolution (Amendment) Bill was tabled in Parliament. The Bill seeks to establish a Simplified Insolvency Programme to assist micro and small companies ("MSCs") that require support to restructure their debts or wind up.

The proposed Simplified Insolvency Programme will provide simpler, faster, and lower-cost proceedings for eligible MSCs to pursue restructuring or winding up. It consists of a simplified debt restructuring process and a simplified winding up process. This Update highlights the key elements of the Simplified Insolvency Programme, including eligibility, timelines and how it operates.

Clarification

Our earlier Update of the same title has been revised to clarify the threshold of creditor approval for debt restructuring. Under a regular scheme of arrangement, the threshold requirement for creditor approval is a majority in number representing at least 75% in value of the creditors or class of creditors present and voting either in person or by proxy at the meeting. Under the simplified debt restructuring programme, the threshold requirement for creditor approval is only two-thirds in value (with no numerical majority requirement) of the creditors or class of creditors present and voting either in person or by proxy at the meeting.

Amendments to the Personal Data Protection Act – Key Implications for Organisations in Singapore
On 5 October 2020, the highly anticipated updates to the Personal Data Protection Act 2012 ("PDPA") were tabled before the Singapore Parliament through the Personal Data Protection (Amendment) Bill ("Bill"). This represents the first comprehensive review and update of the PDPA since it was first enacted and will also introduce related amendments to the Spam Control Act ("SCA"). Crucially, the amendments aim to: (i) strengthen organisational accountability; (ii) enhance consumer autonomy; (iii) enhance effective enforcement; and (iv) enable data use and innovation.

In this Update, we highlight the notable amendments to the PDPA and SCA contained in the Bill that organisations should take note of, and also discuss some key commercial implications stemming from the amendments.

Temporary Measures for Collective Sales under the COVID-19 (Temporary Measures) (Temporary Measures for Conduct of Collective Sale of Property) Order 2020
On 5 October 2020, the COVID-19 (Temporary Measures) (Temporary Measures for Conduct of Collective Sale of Property) Order 2020 ("Order") was published in the Government Gazette and came into operation on 6 October 2020. The Order temporarily modifies certain select provisions of the Land Titles (Strata) Act to alleviate the profound effects COVID-19 events may have on the collective sales of properties, allowing for applications for extensions of the usual timelines.

This Update highlights the key features of the Order.

Visit our COVID-19 Resource Centre for views from our lawyers across the region on common issues and legal implications brought about by COVID-19. For specific inquiries, please reach out to your relationship partner or send an email to our COVID-19 Legal Team.

Temporary Measures Extended to 30 June 2021: (1) Alternative Meeting Arrangements; (2) Electronic Dissemination of Rights Issue and Take-over/Merger Documents

The following temporary exemption and/or measures that are provided to overcome the control measures put in place to deal with the COVID-19 pandemic have been extended to 30 June 2021 ("extension"):

  1. Alternative meeting arrangements for various types of entities to convene, hold or conduct meetings by electronic means; and
  2. Electronic dissemination of documents in relation to rights issues of issuers listed on the SGX-ST Mainboard and Catalist and take-over or merger transactions.

This Update provides a summary of the effect of the extension. Refinements to the alternative meeting arrangements for companies, variable capital companies, business trusts, relevant unit trusts and relevant debenture holders to facilitate greater convenience and engagement for virtual meetings are highlighted.

Should the Proper Law of the Arbitration Agreement, in Sulamerica Stage 2, be the Law of the Contract or the Law of the Seat?
In BNA v BNB [2020] 1 SLR 456, the Singapore Court of Appeal adopted the 3-step Sulamerica test for determining the proper law of the arbitration agreement. In this article, we look more closely into the second stage, where the court examines if the parties had made an implied choice of the proper law to govern their arbitration agreement. This is of jurisprudential significance because there seems to be a deviation in the prevailing approaches between the UK and Singapore as to whether the appropriate starting point is the law of the substantive contract or the law of the seat (or the curial law). We examine the apparent divergence, how the issue arose for consideration in the relevant cases, and take a look back at a previous Singapore decision in 2014 advocating the UK position.

Fraud as a Ground for Setting Aside an Adjudication Determination
The Building and Construction Industry Security of Payment Act provides a framework for adjudication of payment claim disputes. Parties may subsequently apply to the High Court to set aside an adjudication determination ("AD") on certain grounds, one of which being where the AD was induced by fraud. In Facade Solution Pte Ltd v Mero Asia Pacific Pte Ltd [2020] SGCA 88, the Singapore Court of Appeal provided in depth guidance on the fraud exception, examining the breadth and effect of fraud on an AD and when the Court may exercise its discretion to sever the parts of an AD infected by fraud.

This Update provides a summary of the Court of Appeal's decision and the key points on fraud in relation to an AD.

No Rubber Stamp – Requirements for Obtaining the Court's Approval for a Scheme of Arrangement
When proposing a scheme of arrangement for the restructuring of its debts, a company must not only obtain the consent of its creditors; it must also obtain the approval or sanction of the court. In the recent UK case of Re Sunbird Business Services Ltd [2020] EWHC 2493 (Ch), the English High Court emphasised that the role of the court in a scheme of arrangement is not to serve as a rubber stamp, providing guidance on how a company should conduct a creditors' meeting and the information which should be properly disclosed to scheme creditors.

The decision seems consistent with the position taken by the Singapore courts, in particular, the Singapore Court of Appeal case of Pathfinder Strategic Credit LP and another v Empire Capital Resources Pte Ltd and another appeal [2019] SGCA 29. This Update provides a summary of the key points in Re Sunbird and the respective positions on disclosure in schemes of arrangement in the UK and in Singapore.

Mandatory Packaging Reporting under the Zero Waste Masterplan
The Mandatory Packaging Reporting ("MPR") framework is a key component of Singapore's Zero Waste Masterplan. In line with this, the National Environment Agency has, on 3 October 2020, announced the launch of the MPR website, which provides information relating to the MPR framework and access to materials such as the packaging data reporting template.

In this Update, we briefly discuss the key aspects of the MPR framework, including its applicability, requirements and timeline.

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