Legal Updates for January 2023Rajah & Tann Asia's Annual Regional Trade Report 2022
2022 has been an interesting year as the world emerged from the pandemic. Hard core restrictions from the pandemic are all but gone and face-to-face meetings are starting to become the norm again. We are not quite at the fervour that we were at pre-pandemic, although the chorus would agree that 2021 remains an exceptional year.
Going into 2023, the prognosis is that it is going to be a challenging year with headwinds. Yet, this may not be the case for trade law related matters, where there have been interesting developments in 2022, and continued supply chain disruptions which are seeing a changing global trade play.
In this Annual Report, we highlight key developments across Southeast Asia, such as regulatory activity relating to anti-dumping and safeguard measures, developments relating to export/import, free trade agreements, as well as sanctions, as they have occurred in 2022. Businesses are reminded to stay updated on legislative and enforcement developments on trade-related matters, which involves not only legal compliance but also understanding practically how to work with regulators. It is important for your internal trade processes to be continually monitored and updated, and for your employees to be continually trained and skilled. If you would like us to come in and do a training or dialogue with you, we would be happy to do so. We look forward to more opportunities to work and engage with you this year.
As we get into the 2023, we wish you the Very Best for the Year, and look forward to working with you. Our team stands ready to assist in any case or query or just to have a chat.
Judicial Approach in MCST Cases: To defer to, or differ from, a Management Corporation?
In Singapore, subsidiary proprietors ("SP") of strata titled developments are required to seek the management corporation's ("MCST") approval to effect improvements to their lot if it affects the appearance of the building, the overarching concern being that of uniformity. If the MCST declines such approval, the SP can bring an action to challenge the MCST's decision. Guiding principles have been established in earlier cases but the analysis of the deference accorded to a MCST's decision is a novel point.
In a recent decision, the MCST of a Development had issued a decision stopping an SP's unapproved renovation works. While the District Court found in favour of the MCST, Gregory Vijayendran SC and Tomoyuki Lewis Ban from Rajah & Tann Singapore's Dispute Resolution team, who were instructed Counsel, successfully appealed against the decision of the District Court and ordered the MCST to approve certain unapproved works. This Update elucidates (i) the considerations that the High Court in Prem N Shamdasani v Management Corporation Strata Title Plan No. 0920 [2022] SGHC 280 took into account in allowing the appeal; (ii) the High Court's clarification of the legal framework under the Building Maintenance and Strata Management Act as to a MCST's power to authorise a SP's request to effect improvements to their lot; and (iii) how and when the exercise of such authority may be challenged.
Bankruptcy Regime to be Administered by Private Trustees in Bankruptcy
As part of the reform of Singapore's bankruptcy and insolvency laws, the personal bankruptcy regime has been moving towards administration by Private Trustees in Bankruptcy ("PTIBs") instead of by the Official Assignee ("OA"). The Insolvency, Restructuring and Dissolution (Amendment) Bill ("Bill"), which was passed in Parliament on 9 January 2023, introduces amendments to mandate that all bankruptcy cases be administered by PTIBs, except those which the OA decides to administer for public interest reasons. To support the shift, the Bill also introduces amendments to improve operational flexibility in determining PTIBs' remuneration.
The Bill also contains miscellaneous amendments that seek to: (a) enhance protection of persons dealing with bankrupts in commercial transactions; and (b) extend the Simplified Insolvency Programme for a further two years to 28 January 2026.
This Update highlights the key features of the Bill and the main amendments which will be effected.
Variations and Back-charges - Singapore Appellate Division of High Court takes Commercial Approach
Construction contracts often contain detailed procedures for the various aspects of the working arrangement between the parties, including the agreed mechanisms for making payment claims or for variation and rectification works, as well as details such as notification periods or approval processes. However, where parties do not comply with the agreed mechanisms, what is the effect upon the relevant contractual claims? When does it bar the claim entirely, and when will the claim be allowed to proceed? The Appellate Division of the Singapore High Court had the opportunity to consider this question in Vim Engineering Pte Ltd v Deluge Fire Protection (S.E.A) Pte Ltd [2023] SGHC(A) 2.
The Court allowed the Appellant sub-subcontractor's claim for variation works, overturning the decision of the High Court Judge. Conversely, the Court substantially reduced the Respondent subcontractor's claim for back-charges as it had not provided sufficient evidence.
The Appellant, previously represented by another firm, had engaged Rajah & Tann Singapore LLP for the appeal, and were successfully represented by Avinash Pradhan, Jasmine Thng and Nikolas Tong.
NEA Seeks Comments on Proposed Amendments to Energy Conservation (Regulated Goods and Registered Suppliers) Regulations
The National Environment Agency of Singapore ("NEA") is proposing amendments to the energy efficiency requirements on regulated domestic goods under the Energy Conservation (Regulated Goods and Registered Suppliers) Regulations 2017 ("EC(RG&RS)R"). The proposed amendments aim to improve energy efficiency in the domestic sector and will help support Singapore’s raised national climate goals to "achieve net zero emissions by 2050" and "reduce emissions to around 60 million tonnes of carbon dioxide equivalent (MtCO2e) in 2030 after peaking emissions earlier". NEA seeks comments on these proposed amendments which are set out in a consultation document released by NEA on 4 January 2023. The consultation exercise will close on 3 February 2023.
This Update highlights the key proposed amendments and the significance to affected suppliers of regulated goods under the EC(RG&RS)R.
SGX RegCo Mandates Tenure Limit on Independent Directors and Disclosure of Remuneration Details of Directors & CEOs
On 11 January 2023, Singapore Exchange Regulation announced that the following new requirements will apply to issuers listed on the Singapore Exchange Securities Trading Limited ("SGX-ST") to institute better corporate governance practices relating to board renewal and disclosure of remuneration of directors and chief executive officers ("CEOs"):
- Mandatory nine-year tenure limit on independent directors; and
- Mandatory disclosure of remuneration details of each individual director and the CEO.
The SGX-ST Listing Manual and the Listing Manual Section B: Rules of Catalist were amended on 11 January 2023 to give effect to these changes. Transitional arrangements are in place to provide issuers listed on the SGX-ST sufficient time to comply with these new requirements.
This Update provides a summary of these two new requirements.
Rajah & Tann Asia's Annual Regional Competition Report 2022
We are delighted to share our Competition Annual Report 2022, showcasing important developments over the year in the region, the work that we have been doing as well the recognition that the teams across the region have received.
The Rajah & Tann Competition & Antitrust and Trade Practice remains the only one of its kind with practitioners on the ground. We are effective and here to work with you to ensure that your requirements are met.
We would be happy to do an update for you on any of the topics raised or something more bespoke if you see a need for it. It is the start of the year after all, and with new beginnings, always good to refresh.
CCCS Clears Singapore Clearing House Association's Bye-Laws Governing Use of FAST
On 8 December 2022, the Competition and Consumer Commission of Singapore ("CCCS") issued a decision pursuant to an application by the Singapore Clearing House Association ("SCHA"), holding that a proposed Rule 27.23 of SCHA's Bye-Laws and its accompanying guidelines (collectively, the "Proposed Rule") concerning the admission and use of Fast and Secure Transactions by non-financial institutions will not infringe section 34 of Singapore's Competition Act 2004 (“Competition Act”). In particular, CCCS examined the scope of exclusion under Paragraph 7 of the Third Schedule of the Competition Act ("Paragraph 7 Exclusion") and concluded that the Proposed Rule falls within the scope of Paragraph 7 Exclusion and therefore, will not infringe section 34 of the Competition Act.
This decision provides guidance on CCCS' approach to the Paragraph 7 Exclusion. We briefly discuss this decision and its significance in this Update.
Strengthening Collaborative Opportunities Between Singapore and Pakistan
Singapore and Pakistan affirmed their longstanding and friendly relations during Minister of Foreign Affairs of the Islamic Republic of Pakistan Bilawal Bhutto Zardari's official visit to Singapore on 9 December 2022. Both countries will also explore strengthening closer collaborative ties and business opportunities between the two countries.
This Update highlights certain key areas of collaborative opportunities between Singapore and Pakistan as highlighted in the recent visit by the Pakistan's Minister of Foreign Affairs, and provides a brief overview of the Pakistan legal system for businesses interested in engaging in business activities in the country.
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