Rajah & Tann Regional Round-Up
your snapshot of key legal developments in Asia
Issue 4 - Oct/Nov/Dec 2019
 

Payment Services Act 2019 Effective from 28 January 2020

The Payment Services Act 2019 ("PS Act") came into force on 28 January 2020 (except three provisions setting out related amendments to other Acts) and repealed the Payment Systems (Oversight) Act ("PS(O) Act") and the Money Changing and Remittance Businesses Act ("MCRBA") to consolidate the regulation of payment services under a single legislation.


In addition, the PS Act expands the scope of regulated payment services to keep up with new technological developments in payment services and the various risks they pose. It adopts a licence-based framework for payment service providers and a designation regime for payment systems.


Payment Services Act 2019


In summary, the PS Act regulates the provision of the following payment services:


  1. account issuance services;
  2. domestic money transfer services;
  3. cross-border money transfer services;
  4. merchant acquisition services;
  5. e-money issuance services;
  6. digital payment token services; and
  7. money-changing services.

Persons which carry on business in providing these services must obtain the necessary licence to provide the relevant payment services. The classes of licence available are:


  1. Money-Changing Licence;
  2. Standard Payment Institution Licence; and
  3. Major Payment Institution Licence.

Regulations Issued under the Payment Services Act 2019


To effect the objectives of the PS Act, a set of regulations was issued under the PS Act on 5 December 2019. The regulations also took effect on 28 January 2020. Some of the key regulations issued under the PS Act are set out below.


(a)  Payment Services Regulations 2019 ("PSR")


The PSR is the main set of regulations for licensees and regulated entities under the PS Act. The PSR covers the following key aspects:


  1. Requirements for licensed payment service providers ("licensees"): These will include control of provision of payment services, financial requirements and business conduct requirements that will apply to licensees where relevant.
  2. Requirements for designated payment system ("DPS") entities: These are largely similar to those currently imposed on DPS operators, settlement institutions and participants under the PS(O) Act.
  3. Exemptions and other requirements: These include exemptions and also general requirements that apply to licensees, and DPS entities. 

Payment Services (Exemption for Specified Period) Regulations 2019 ("PS(E)R")


To allow a grace period for transition, the PS(E)R provides for a set of temporary exemptions for persons who before or on 28 January 2020 carry on the prescribed payment services from holding a licence under the PS Act for a specified grace period, provided that they meet the conditions prescribed in the PS(E)R, including notifying the MAS within 30 days after 28 January 2020 of the date on which the person commenced business in providing the relevant payment service (in the form and manner of notification specified on MAS website ).


For more information, please click here to read our client update.


European Union-Singapore Free Trade Agreement Comes into Force on 21 November 2019

On 21 November 2019, the EU-Singapore Free Trade Agreement ("EUSFTA") came into force. This marks a new chapter in the economic relations between Singapore and the European Union ("EU").


The key benefits of the EUSFTA include:


  1. Tariff elimination – The EUSFTA provides for the progressive elimination of tariffs on all qualifying products over a period of five years. Singapore will remove tariffs on all EU products entering Singapore. The EU will remove tariffs on 84% of all Singapore products entering the EU within the first year, and the remaining 16% over a period of three to five years.

  2. Reduced non-tariff barriers – Unnecessary technical barriers to trade (TBT) for Singapore and EU exporters which sometimes make it difficult for companies to sell their products in different markets will be removed. The provisions in the agreement go beyond the requirements of the World Trade Organization’s Technical Barriers to Trade (TBT) Agreement, and are aimed at reducing costs for exporters.

  3. Liberal and flexible rules of origin – The EUSFTA provides for liberal and flexible rules of origin in respect of key exports of Singapore. These include automobiles, chemicals, clothing and textiles, electronics, machinery, petrochemicals and pharmaceuticals.

The EU is Singapore's largest foreign investor and services trading partner, and third-largest goods trading partner. This development opens new trade opportunities for businesses in Singapore and the EU.


For more information, please click here to read our client update.


Court of Appeal Decision Addresses Important Jurisdictional Issues in Complex Cross-border Disputes

The Rajah & Tann team led by Danny Ong and Yam Wern-Jhien, specialists in international litigation, has clinched another significant victory on behalf of the MAN group in the Singapore chapter of the long-running litigation against the Skaugen group arising from the supply of marine diesel engines manufactured by MAN.


In MAN Diesel & Turbo SE and anor v IM Skaugen SE and anor [2019] SGCA 80, the Singapore Court of Appeal reversed the decision of the High Court and ordered the service of writ on the MAN entities outside jurisdiction to be set aside, effectively spelling the end of the Singapore chapter of this long-running litigation.


The case is of both practical and academic importance, as it contains authoritative guidance on the role of an appellate court in the review of decisions on jurisdictional issues, the relevance of subsequent events in an application to set aside service out of jurisdiction, how multiple inter-related claims are to be treated in the jurisdiction inquiry, how the availability of the Singapore International Commercial Court (SICC) features in the forum non conveniens analysis, and the test to be applied when assessing where a tortious cause of action arises for purposes of the jurisdiction gateway analysis.


This recent victory comes on the back of two previous landmark judgments in this series of litigation: Re IM Skaugen SE and other matters [2019] 3 SLR 979, now considered the leading case on the enhanced scheme of arrangement framework introduced pursuant to the Companies (Amendment) Act 2017; and Man Diesel Turbo SE v IM Skaugen Marine Services Pte Ltd [2019] 4 SLR 537, which authoritatively laid-down the test to be applied for applications to adjourn proceedings for the enforcement of a foreign arbitral award under section 31(5) of the International Arbitration Act.


For more information, please click here to read our client update.


Enforcement of Arbitral Awards – How Important is the Seat of Arbitration?

Resisting the recognition and enforcement of an arbitral award can be a challenging endeavour. There are limited grounds on which enforcement can be opposed, and the courts have thus far taken a pro-arbitration position of non-interference. However, in STGroup Co., Ltd. & 2 Ors v Sanum Investments Limited [2019] SGCA 65, the Singapore Court of Appeal demonstrated when it would refuse enforcement of an award in the context of a wrongly-seated arbitration.


The arbitration agreement between the parties in this case had specified the seat of arbitration as Macau. However, the actual arbitration was seated in Singapore instead. The Singapore High Court nonetheless allowed the enforcement of the award against most of the respondents in the arbitration, finding the error in seat to be a mere procedural irregularity.


The Court of Appeal reversed this aspect of the High Court's decision, holding that an award arising from a wrongly-seated arbitration should not be recognised or enforced because it is not in accordance with the parties' arbitration agreement. The decision highlights the importance of the correct seat of arbitration, because it determines the national law under whose auspices the arbitration shall be conducted, as well as significant issues relating to the conduct of arbitration and the validity and finality of the award.


Francis Xavier, SC, Tee Su Mien and Edwin Tan from the Commercial Litigation Practice of Rajah & Tann Singapore were instructed counsel before the Court of Appeal, successfully resisting the enforcement of the arbitration award.


For more information, please click here to read our client update.




Please note that whilst the information in this Update is correct to the best of our knowledge and belief at the time of writing, it is only intended to provide a general guide to the subject matter and should not be treated as a substitute for specific professional advice.

 

Rajah & Tann Singapore LLP

9 Straits View
Marina One West Tower
#06-07
Singapore 18937
Republic of Singapore
http://sg.rajahtannasia.com


Contacts:

Francis Xavier, SC, PBM
Partner
D (65) 62320551
francis.xavier@rajahtann.com

Chia Kim Huat
Partner
D (65) 62320464
kim.huat.chia@rajahtann.com

Howard Cheam
Partner
D (65) 62320685
howard.cheam@rajahtann.com

Rajah & Tann Asia is a network of legal practices based in South-East Asia. Member firms are independently constituted and regulated in accordance with relevant local legal requirements. Services provided by a member firm are governed by the terms of engagement between the member firm and the client.

This Update is solely intended to provide general information and does not provide any advice or create any relationship, whether legally binding or otherwise. Rajah & Tann Asia and its member firms do not accept, and fully disclaim, responsibility for any loss or damage which may result from accessing or relying on this Update.