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Legal Updates

Legal Updates for August 2020

August 2020 Ministerial Statement: Further Support for Businesses and Workers
Life seems unlikely to return to normal anytime soon as the COVID-19 pandemic continues to swirl around the globe, particularly for some key sectors such as aviation and tourism. As certain support lifelines provided for in the past four Budgets draw close to their expiry dates without significant alleviation of the need for them, there have been stirrings of unease among businesses and workers.

On 17 August 2020, the Deputy Prime Minister and Minister of Finance, Mr Heng Swee Keat, released a Ministerial Statement setting out further financial support measures to help workers and businesses stay afloat in the short term and adapt by seizing growth opportunities in a COVID-19 world.

This Update will focus on the measures targeting businesses and workers, which can be broadly categorised into the following:

  1. Extension of the existing Jobs Support Scheme ("JSS");
  2. New Jobs Growth Incentives scheme to encourage hiring of locals;
  3. Supporting workers; and
  4. Sector-specific relief for aviation, tourism, and startups.

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.

Voluntary Arrangements in Bankruptcy – Evidence and Standard of Scrutiny
The Singapore insolvency regime contains a number of alternatives to bankruptcy, one of which is a voluntary arrangement ("VA"). A VA is essentially a negotiated arrangement between a debtor and his creditors for the repayment of the debts, and its implementation is supervised by an appointed nominee. In Re Aathar Ah Kong Andrew [2020] SGHC 173, the Singapore High Court considered a number of issues relating to VAs, including the degree of scrutiny required of the nominee and the evidence that a nominee is entitled to rely on.

The Court found that the appointed nominee in this case had not met the duty of scrutiny required, and that he had wrongly relied on certain evidence presented only after the meeting between the debtor and creditors. The Court held that these were material irregularities and ultimately revoked the VA in question. Jansen Chow and Sasha Gonsalves of Rajah & Tann Singapore LLP successfully represented the creditor opposing the proposed VA.

The Duties of a Partner in a Family Partnership
In traditional family business partnerships, it is not uncommon for the patriarch or matriarch of the family to assume that the business assets are his or hers to use and intermingle with personal assets. This conduct is risky and may have significant repercussions down the road because each partner owes fiduciary duties to the partnership and to the other partners. This was demonstrated in the Singapore High Court decision of Lee Ker Min (by his litigation representative Lee Kai Teck Roland) v Lee Gin Hong (as executor and trustee of the estate of Ng Ang Chum, deceased) and another [2020] SGHC 159.

In this case, the Plaintiff and his mother were partners in a family partnership. The Court allowed the Defendants’ counterclaim, which was based on the Plaintiff's use of the partnership's monies and overdraft facility for his personal expenses in breach of his fiduciary duties. The Defendants were successfully represented by Jonathan Toh and Wong Shi Yun of Rajah & Tann Singapore LLP.

SGX RegCo Consults on Changes to Listing Rules to Enhance Enforcement and Whistleblowing Frameworks
The Singapore Exchange Regulation ("SGX RegCo") is seeking feedback on proposed changes to the SGX Listing Rules (Mainboard) and the SGX Listing Rules (Catalist) relating primarily to SGX RegCo's enforcement framework and the whistleblowing regime. The proposals are set out in its consultation paper issued on 6 August 2020.

Responses must be submitted to SGX RegCo by 7 September 2020.

This Update provides an overview of the following key proposals relating to the enforcement framework and whistleblowing regime:

  • widening SGX RegCo's non-appealable enforcement powers to achieve swifter enforcement outcomes;
  • broadening the circumstances requiring SGX's approval for the appointment of a director, chief executive officer and chief financial officer;
  • enhancing SGX RegCo's administrative powers relating to objections to appointments and suspension of directors or executive officers with questionable character and integrity; and
  • requiring issuers listed on the SGX-ST Mainboard and Catalist to disclose how they have complied with best practices on whistleblowing.

Court Grants Rare Extension of Time for Commencing Arbitration Proceedings
A court order granting an extension of time for commencing arbitration proceedings is less than common. In Times Trading Corporation v National Bank of Fujairah (Dubai Branch) [2020] EWHC 1983 (Comm), the English High Court allowed an application for such an extension. The Court's decision was in the ultimate analysis driven largely on whether the conduct of the respondent made it unjust to hold the applicant to the relevant time bar.

Kendall Tan and Max Lim of Rajah & Tann Singapore LLP acted for the applicant bank in related Singapore proceedings, as well as in the conduct of the English court proceedings in conjunction with Messrs Campbell Johnston Clark and instructed Counsel.

COVID-19 and Remote Arbitration: How are Major Arbitral Institutes Adapting to the New Normal?
As the famous maxim goes, justice delayed is justice denied. Amidst the COVID-19 pandemic, twelve arbitral institutions came together on 16 April 2020 to publish a joint statement on supporting "international arbitration's ability to contribute to stability and foreseeability in a highly unstable environment, including by ensuring that pending cases may continue and that parties may have their cases heard without undue delay."

Here, we take a look at some issues with remote arbitration, and what steps the following six major arbitral institutions ("Arbitral Institutions") are taking to manage cases during the COVID-19 pandemic:

  1. Singapore International Arbitration Centre ("SIAC");
  2. Indonesia National Board of Arbitration (Badan Arbitrase Nasional Indonesia ("BANI"));
  3. China International Economic and Trade Arbitration Commission ("CIETAC");
  4. Hong Kong International Arbitration Centre ("HKIAC");
  5. International Chamber of Commerce International Court of Arbitration ("ICC Court"); and
  6. London Court of International Arbitration ("LCIA").

Recent Penalties for Tax Offences
Singapore has long leaned on its famously low personal and corporate tax rates to attract international business to its shores. However, its business-friendly approach is inextricable from its reputation for low corruption and strict enforcement of its laws, combining to create a predictable and stable environment for local and international corporations to conduct their business dealings.

Tax laws in Singapore are enforced by the Inland Revenue Authority of Singapore ("IRAS"). In the past few weeks, IRAS has cracked down on a slew of tax offences committed by directors and companies in relation to income tax (both personal and corporate) and Goods and Services Tax ("GST"), sending a clear signal that infringement of tax laws will not be tolerated.

Temporary Relief Measures for Tenants and Landlords, Purchasers and Developers in COVID-19 (Temporary Measures) (Amendment) Act 2020 (Updated 11 August 2020)
The COVID-19 (Temporary Measures) Act 2020 ("principal Act") provides for, among other things, targeted and temporary reliefs for individuals and businesses that are unable to perform certain contracts due to the uncertainties brought about by COVID-19.

On 5 June 2020, the COVID-19 (Temporary Measures) (Amendment) Bill 2020 was passed in Parliament. The COVID-19 (Temporary Measures) (Amendment) Act 2020 ("Amendment Act") aims to revise the principal Act to provide for, among other changes, relief measures relating to tenants, landlords and intending purchasers, including a framework for rental relief. On 31 July 2020, the provisions in the Amendment Act setting out these relief measures as well as the statutory limit on the amount of late payment interest and charges for arrears under certain prescribed contracts came into force. In this Update, we share with you the key features of the provisions of the principal Act and the subsidiary legislation that deal with these measures.

MAS Proposes New Omnibus Act to Implement Financial Sector-Wide Regulatory Approach
The Monetary Authority of Singapore ("MAS") is seeking feedback on a proposed new omnibus Act ("new Act") as set out in the "Consultation Paper on the New Omnibus Act for the Financial Sector" ("Consultation Paper") issued by MAS on 21 July 2020. The new Act aims to introduce a financial sector-wide regulatory approach for MAS by consolidating the provisions that relate to MAS' regulatory oversight of different financial institution classes in a single Act.

In addition, new provisions on the following areas are proposed to be included in the new Act:

  • Requirements to regulate digital token service providers created in Singapore for anti-money laundering and countering of financing of terrorism purposes;
  • Harmonised power to impose requirements on technology risk management;
  • Harmonised and expanded power to issue prohibition orders; and
  • Statutory protection from liability for mediators, adjudicators and employees of an operator of an approved dispute resolution scheme.
This Update highlights the key new provisions that are proposed to be introduced in the new Act.

Transitional Provisions under the Insolvency, Restructuring and Dissolution Act
The Insolvency, Restructuring and Dissolution Act 2018 ("IRDA") came into operation on 30 July 2020. The IRDA sets out the new regime for personal and corporate insolvency in Singapore. However, not all existing insolvency proceedings are immediately subject to the IRDA. The IRDA contains provisions to provide for transition over to the new regime.

In this Update, we look at the cut-off dates under the IRDA and when its provisions begin to apply with regard to winding-up, judicial management, schemes of arrangement, foreign proceedings, the regulation of insolvency practitioners and the restrictions on ipso facto clauses.

Dos and Don'ts for Financial Reports Amid COVID-19: SGX RegCo's Expectations
The COVID-19 pandemic has created "significant uncertainty, or even threats to business prospects" to issuers listed on SGX-ST Mainboard and Catalist ("listed issuers"). Emphasising the need for "high quality and reliable financial statements", the Singapore Exchange Regulation ("SGX RegCo") recently issued a statement on the Regulator's Column on 27 July 2020, setting out its expectations of financial reports, including interim financial reports ("27 July 2020 Statement").

This Update highlights salient points raised by SGX RegCo in its 27 July 2020 Statement which listed issuers, their boards of directors, and management must take note of in preparing financial reports, including interim financial statements.

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.

Treatment of Collaborations During COVID-19: CCCS Guidance
The COVID-19 pandemic has resulted in tremendous disruption to logistics and supply chains and many companies face challenges in respect of demand. To deal with the effects of the outbreak, collaborations may be necessary between competitors.

Against this backdrop, the Competition & Consumer Commission of Singapore ("CCCS") has on 20 July 2020, issued a Guidance Note on Collaborations between Competitors in response to the COVID-19 Pandemic ("Guidance Note"), to provide clarity to businesses on how CCCS will view collaborations between competitors during this exceptional period.

This Update highlights a few salient points from the Guidance Note on the assessment framework CCCS will use to assess certain collaborations between competitors which are put in place from 1 February 2020 and end by 31 July 2021.

Guide to Procurement of Infrastructure Projects in Southeast Asia
As the custodians of the country, Governments are entrusted with the responsibility to develop new public facilities and infrastructure, operate and maintain such public facilities and undertake significant upgrades to existing public facilities and infrastructure, to serve the needs of its people. Governments in developing and developed countries have sought participation from the private sector as an alternative additional source of development and funding. The Public-Private Partnership ("PPP") model provides Governments with the capacity to assess and manage fiscal impact whilst managing the risk transfer between the public and private partner in order to extract long-term value-for-money over the life of the project.

This publication serves as a guide to highlight the similarities and differences of the reasons and motivations for implementing the PPP model by the Governments of selected countries in Southeast Asia. It also sets out the framework and policies for government procurement adopted for infrastructure projects in these jurisdictions.

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