eOASIS HOME  
LEGAL UPDATES  
NEWSBYTES
REGIONAL ROUND-UP
AUTHORED PUBLICATIONS
COVID-19 RESOURCE CENTRE
ARBITRATION ASIA
 
 
 
    

NewsBytes


Court of Appeal Upholds Liquidator's Rejection of Claims

The Court of Appeal has upheld the High Court's decision in Ong Kian Hoy v Liquidator of HSS Engineering Pte Ltd [2014] SGHC 262, in which the liquidator of an insolvent company was successfully represented by Patrick Ang and Ang Siok Hoon from the Restructuring & Insolvency Practice. The liquidator was again successful before the Court of Appeal, this time represented by Sim Kwan Kiat and Ang Siok Hoon from the Restructuring & Insolvency Practice.

In this case, the Plaintiff director and shareholder of an insolvent company sought to challenge the liquidator's rejection of certain claims in his proof of debt. However, the liquidator's decision to reject the three major claims was upheld by both the High Court and the Court of Appeal.

The first major claim was for personal loans which the Plaintiff had advanced to the company, which the Court found to have been written off by the Plaintiff to allow the company to borrow further funds. The second major claim was for compensation pursuant to a settlement agreement, which was found to be binding on the shareholders and not the company itself. The third claim was for legal fees and costs incurred by the Plaintiff in appealing against the winding up order made against the company, which the Court held should be borne by the Plaintiff and not the company.

Back to Top Print


Court of Appeal Overturns Decision to Set Aside Arbitral Award

The release of a final award in an arbitration does not always mark the end of the dispute. The award may be challenged on a number of grounds, and in the case of AKN v ALC [2015] SGCA 18, the disputed award was brought all the way to the Court of Appeal, where the award was largely reinstated. The Appellant was successfully represented by Andre Yeap, Adrian Wong, Jansen Chow, and Ang Leong How from the Commercial Litigation Practice.

The Appellant in this case had obtained an award in its favour before an arbitral tribunal. The Respondent sought to challenge the award and, before the High Court, managed to get the award set aside in its entirety on the grounds of breach of natural justice, as well as acting in excess of jurisdiction on the part of the tribunal.

However, the Court of Appeal overturned the High Court's decision, effectively reinstating the award, with only parts of the award being set aside. The Court of Appeal found that the High Court had, on certain issues, engaged with the merits of the underlying dispute rather than limiting its inquiry to whether there was a breach of natural justice. Further, where there were in fact breaches of natural justice, the Court of Appeal found that only the directly related parts of the award should be set aside, and not the entire award.

In this decision, the Court reiterated its policy of minimal curial intervention in arbitral proceedings. The Court highlighted that it would not be misled by appeals against the legal merits of an award disguised as alleged breaches of natural justice.

Back to Top Print


Derivative Actions and the Requirement of Good Faith

When a minority shareholder takes out an application under Section 216A of the Companies Act to commence a derivative action, the minority shareholder will always claim to be acting in good faith and in the company's best interests. In Petroships Investment Pte Ltd v Wealthplus Pte Ltd and others [2015] SGHC 145, the Singapore High Court considered how a Defendant could disprove the Plaintiff's averment that it was acting in good faith, and also demonstrate that the proposed derivative action would not be in the interests of the company. The Defendants were successfully represented by Chandra Mohan and Khelvin Xu from the Commercial Litigation Practice.

The Plaintiff, a minority shareholder in an investment company, sought the Court's leave under Section 216A of the Companies Act to commence a derivative action against a number of other companies and two of the company's directors. The Plaintiff alleged that the Defendants had caused the investment company to enter into a number of wrongful transactions. Prior to the application, the Plaintiff had commenced four previous actions against, inter alia, the investment company and certain Defendant companies, all of which had been struck out. In addition, by the time that the application had been filed, the investment company had gone into a members' voluntary liquidation.

In order to determine whether to grant leave, the High Court considered, in particular: (a) whether the Plaintiff was acting in good faith; and (b) whether it appeared prima facie in the interests of the investment company.

In the present case, the High Court found that the Plaintiff was not acting in good faith.  While the derivative action would not be an abuse of the process of the court, the Court nevertheless found that the application was an attempt to circumvent the striking out of the previous four actions, and that the application was therefore not brought in good faith.

In respect of whether the proposed derivative action was prima facie in the interests of the investment company, the High Court held that the underlying rationale for a derivative action no longer applied as independent liquidators had taken control of the investment company. Therefore, the Plaintiff's application to commence a derivative action was dismissed.

This case was featured in the June 2015 issue of our Client Update. To access the Update, click here

Back to Top Print


The Financial Services Industry Reference Check System

What is the scope and extent of duty owed by a financial institution ("FI") to respond to queries made by the Monetary Authority of Singapore ("MAS") and reference check requests made by other FIs in relation to its ex-financial adviser, against the backdrop of the financial services industry standardized reference check system and the Representative Notification Framework? This was the central issue raised in the case of Ramesh s/o Krishnan v AXA Life Insurance Singapore Pte Ltd [2015] SGHC 125, in which the Defendant was successfully represented by K Muralidharan Pillai, Luo Qing Hui and Huang Jieyang from the Commercial Litigation Practice.

This issue falls for consideration by the Singapore courts for the first time since the implementation of the said financial services industry standardized reference check system with effect from 2 October 2006 ("Industry Reference Check System") and the Representative Notification Framework on 26 November 2010. Under this initiative, prospective FI employers are able to conduct consistent reference checks on persons applying for jobs to conduct regulated activities, to ensure that these persons appointed by the FIs satisfy the fit and proper criteria set out by MAS.

The Defendant ("AXA") had responded to reference check requests made by two other FIs on the Plaintiff, an ex-financial services director with AXA, as well as MAS' queries pertaining to the Plaintiff pursuant to the Industry Reference Check System. The Plaintiff subsequently alleged that AXA's reference check responses had caused him not to be employed by the two FIs, and also prevented him from being employable in the insurance industry generally. Ultimately, the Court found that AXA could successfully rely on the defence of justification and defence of qualified privilege such that the Plaintiff’s claims of alleged defamation, malicious falsehood and breach of duty of care failed in their entirety.

Notably, the Court held that the defence of consent succeeded only partially, and made pertinent observations on the issue of consent in the context of the Industry Reference Check System, and also suggested that the insurance industry should look into the scope of the written authorisation that is presently contained in the standard reference check form, to match the information requested with the information actually provided by the ex-employer. Significantly, the Court also held that a FI owed a prima facie duty to take reasonable care in the provision of reference check responses.

This case was featured in the June 2015 issue of our Client Update. To view this Update, click here.

Back to Top Print


China: Advising on Potential Impact of Draft NGO Law

Linda Qiao, Joanna Wang and Wang Chen from Rajah & Tann Singapore's Shanghai Representative Office are advising a foreign industry association on the potential impact of the draft PRC Law on Administration of Overseas Non-Governmental Organisations ("NGO') (Second Draft for Deliberation).  The draft NGO Law intends to apply to overseas NGOs carrying out activities within the territory of the PRC.  If this draft law is passed in its current form, it will have a profound impact on the activities of overseas NGOs in China.  The draft NGO law, since its announcement, has caused considerable debate and controversy.

Back to Top Print


Malaysia: Court has the Power to Assist Bankruptcy Trustee of Japanese Bankrupt to Sell Property

Teng Chong Moi from Christopher & Lee Ong represented a Bankruptcy Trustee of a Japanese bankrupt, now deceased ("Bankrupt"). The bankruptcy order and the appointment of the Bankruptcy Trustee was made by the Japanese District Court. The Bankrupt owned an immovable property in Malaysia ("Property"). The Bankruptcy Trustee made an application to the High Court of Malaya for, among others, an order to vest the Property into the Bankruptcy Trustee and authority to sell the Property ("Application"). The High Court, while holding that the Malaysian Bankruptcy Act 1967 does not apply to a Japanese bankrupt, took into consideration certain matters and opined that the Court has the power to assist the Bankruptcy Trustee in his attempt to sell the Property. The High Court granted the said Application.

Back to Top Print


Placement of Shares by Leader Environmental Technologies Limited

Click here to read the article

Back to Top Print


Rights Issue for Yamada Green Resources Limited

Click here to read the article

Back to Top Print


Gallant Venture Ltd - Issue of Series 004 Notes under the EMTN Programme

Click here to read the article

Back to Top Print



2024: 
December 2023 - January
February

2023: 
December 2022 - January
February
March
April
May
June
July
August
September
October
November

2022: 
December 2021 - January
February
March
April
May
June
July
August
September
October
November

2021: 
December 2020 - January
February
March
April
May
June
July
August
September
October
November