Legal Updates

Legal Updates for January 2024

Singapore High Court Finds Broker Not Liable for Investor's Decisions
When an experienced investor suffers losses after instructing his broker to sell his futures contracts, to what extent can the broker be held liable for his losses?

In Rajesh Harichandra Budhrani v INTL FCStone Pte Ltd and others [2024] SGHC 18 ("Budhrani"), the dispute centred around several telephone conversations between the plaintiff and two employees of the first defendant, a Singapore-incorporated company dealing in capital markets products and exchange-traded derivatives contracts. During the conversations, the plaintiff instructed the employees to sell 66 of his silver futures contracts. After the sale, however, the plaintiff's account remained in deficit, and he brought proceedings against the defendants for alleged loss of profit.

Budhrani raises several interesting issues for investors and brokers alike. Can a margin call be issued on a Saturday? Does the unfair contracts terms regime apply to a contractual term stating that the broker assumes no responsibility for any information provided? Under what circumstances would a seasoned investor be considered as having been subject to duress and undue influence?

On these and other issues in Budhrani, the High Court found resoundingly in favour of the defendants, who were represented by Disa Sim, Torsten Cheong, and Jodi Siah of Rajah & Tann Singapore.

Judge, Jury and Investigator: Court of Appeal Outlines Scope of Liquidator's Investigative Duties and Powers
When a company is being wound up, its liquidators have powers to investigate into the company's affairs and dealings. Such powers are for the purpose of discharging their duties as officers of the court to steward the estate in liquidation.

However, to what extent are liquidators supposed to investigate the company's affairs, particularly in the event of disputes between shareholders? Is it within the liquidators' purview to determine, for instance, the true ownership of the shares of members in order to distribute the assets of a company to the members?

These and other issues arose in Rashmi Bothra v SuntecCity Thirty Pte Ltd [2023] SGCA 38, in which the Court of Appeal ("CA") considered whether the High Court Judge ("Judge") had correctly rejected a shareholder's nominees as liquidators due to a perception of conflict and bias that would arise if the liquidators were required to determine the true beneficial ownership of her shares. The CA considered the purpose of the liquidators' investigative duties, finding that (i) the issue of beneficial ownership should be determined in separate proceedings between the relevant parties and not by the liquidators, and (ii) concerns of perceived conflict and bias surrounding the shareholder’s nominee liquidators were unfounded.

The appellant was successfully represented by Vikram Nair, Foo Xian Fong, and Glenna Liew of Rajah & Tann Singapore.

Singapore Issues Draft Model AI Governance Framework for Generative AI
The AI Verify Foundation and the Infocomm Media Development Authority announced on 16 January 2024 that they have developed a draft Model AI Governance Framework for Generative AI ("Draft Framework"). The Draft Framework seeks to set out a systematic and balanced approach to address Generative AI concerns while continuing to facilitate innovation. It looks at nine proposed dimensions to support a comprehensive and trusted AI ecosystem and offers practical suggestions that model developers and policymakers can apply as initial steps.

The Draft Framework welcomes views from the international community, which will support finalisation of the Model AI Governance Framework in mid-2024. Comments on the Draft Framework are to be submitted by 15 March 2024. In this Update, we highlight the key elements of the Draft Framework and the principles and recommendations contained therein.

Regional Trade Year-end Highlights 2023
Happy 2024! To wrap up the year 2023 and further to our Regional Trade Mid-year Highlights issued in August last year, we are pleased to present an overview of the various trade law related developments in the region. 2023 has been a year of moving onward from the pandemic, though fraught with gloomy growth predictions. In spite of this, trade law has continued to evolve, with legislations, regulations, and policies continuously upgrading to better facilitate the movement of goods across borders. We discuss some of the key developments across Southeast Asia, on topics such as anti-dumping and safeguard measures, developments relating to export/import, free trade agreements, as well as sanctions.

Some of the key developments highlighted in this Update include those on anti-dumping and safeguard duties in Malaysia, Thailand, Philippines, and Vietnam. There are also developments to improve the ease of import and export of goods, by way of agreements for the mutual recognition of Authorised Economic Operator (“AEO”) programmes across countries, in particular the ASEAN AEO Mutual Recognition Agreement signed by all 10 ASEAN Member States. Singapore has updated its rules on its Free Trade Zones (“FTZ”), which imposes fresh obligations on FTZ cargo handlers, shipping agents, and air cargo agents. Businesses involved in the Malaysian market should also be cognisant of the enhanced marking obligations on wholesalers, manufacturers, imports and producers in relation to pre-packaged goods. Under the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (“CPTPP”), Vietnam has also introduced requirements on the import management of refurbished goods to meet their obligations.

Countries have also remained active in the negotiation and signing of both bilateral and multilateral free trade agreements ("FTA"), in a bid to facilitate greater trade and investment flows. Regionally, an update of significance is the enhancement of the ASEAN – Australia – New Zealand Free Trade Area (AANZFTA), which is ASEAN’s most comprehensive ASEAN-Plus FTA to date, with improvements being made in e-commerce, investment, services, consumer protection, and government procurement, amongst others. The UK is also set to join the CPTPP, which will help countries such as Malaysia, Singapore and Vietnam in gaining greater market access to the UK and present new opportunities for trade and investment. Going into 2024, we expect to see newer FTAs possibly incorporating elements such as digital trade, green economy, and e-commerce, which will further aid businesses in navigating the rapidly changing landscape. On sanctions, while there have been minimal developments in the second half of 2023, businesses should continue to stay alert to ensure that they comply with them, given the severity of breaching sanctions. There is enforcement activity, occurring as recent as in December 2023.

Moving forward into 2024, we wish you a smooth and prosperous year. We look forward to working and enaging with you, whether it is to ensure legal compliance, assisting to resolve any issues, or advising you on how to best utilise FTAs to improve your cross-border trade processes. We are also happy to help in conducting trainings or have a dialogue with you, to provide you with unique insights specific to your industry. Please feel free to reach out any time if you have any queries, or if you would like to have a chat.

Regional Guide on Listings & Initial Public Offerings in Southeast Asia
Rajah & Tann Asia is pleased to present this guide on listings and initial public offerings in Southeast Asia to you, which we believe will be a useful aid to listing aspirants in the Asia region. As a summary, this guide gives a general overview of the key requirements and processes involved in listings and initial public offerings in the following jurisdictions:

• Singapore
• Indonesia
• Malaysia
• Thailand
• Cambodia
• Vietnam

In addition to the above, this guide also provides a general overview of the capital markets and/or stock exchanges in the region.

Rajah & Tann Asia is here to assist you in every step of your way towards a successful listing. If you have any queries on any specific jurisdiction(s), please feel free to reach out to any one of our experts in our Rajah & Tann Asia and we will be happy to assist.

This publication is up to date as of 3 January 2024. As the report is cast in general terms and not exhaustive, detailed advice must be sought on specific situations or queries.

High Court Examines Threshold for Sole Custody Orders Involving Parental Absence
Does a parent’s absence from a child’s life warrant the making of a sole custody order? The case of WMR v WMQ examines the threshold for the making of sole custody orders, in particular, where parental absence is involved.

Here, the Father successfully appealed the Family Court’s decision to grant the Mother’s application to vary a joint custody order to sole custody to her, based in part on the Father’s six-year absence from the children’s lives. The High Court reinstated the Father’s right to custody over the children by way of a joint custody order.

Kevin Tan and Shawn Teo of Rajah & Tann Singapore LLP acted as instructed counsel for the Father (instructed by Imperial Law LLC) in this successful appeal.