Legal Updates for March 2021Code of Conduct for Leasing of Qualifying Retail Premises
The Singapore Business Federation introduced a Code of Conduct for Leasing of Retail Premises in Singapore ("COC") on 26 March 2021. The COC aims to provide a set of guidelines for landlords and tenants of Qualifying Retail Premises to enable a fair and balanced position in lease negotiation, and to provide such landlords and tenants with a governance framework to ensure compliance with an accessible dispute resolution framework.
The COC is effective from 1 June 2021, and it is anticipated that the Government will work closely with the stakeholders to turn the code into legislation. This Update summarises the key features and principles of the COC.
MAS Proposes Exemption Framework for Foreign Offices of Singapore Financial Institutions
The Monetary Authority of Singapore ("MAS") is consulting on an exemption framework to exempt the foreign head offices or branches (collectively, "Foreign Offices") of financial institutions in Singapore ("Singapore FIs") from applicable business conduct and representative notification requirements when they serve Singapore customers, subject to boundary and notification conditions ("Branch Framework"). The consultation ends on 15 April 2021.
The proposal aims to level the playing field between the Foreign Offices and foreign-related corporations of the Singapore FIs ("FRCs") which are providing cross-border financial services to customers in Singapore under the FRC framework. Currently, FRCs that have been approved by MAS to operate under the FRC framework are exempt from licensing and the applicable conduct requirements. In 2020, MAS announced that it will move the approval approach under the FRC framework to an ex-post notification approach. However, the ex-post notification FRC framework does not apply to Foreign Offices. This means that the Foreign Offices and their representatives serving Singapore customers will continue to be subject to the business conduct requirements in the Securities and Futures Act and Financial Advisers Act.
Therefore, MAS is proposing the Branch Framework that is similar to the ex-post notification FRC framework to address this issue.
This Update provides an overview of: (i) the proposed Branch Framework and the boundary conditions and notification requirement thereunder; and (ii) the details for operationalising the proposed Branch Framework and the ex-post notification FRC framework.
Extension of Relief Period for Specified Contracts under the COVID-19 (Temporary Measures) Act
The COVID-19 (Temporary Measures) Act ("Act") provides temporary relief for parties that are unable to perform their contractual obligations due to the COVID-19 pandemic. Amongst its measures, Part 2 of the Act provides relief from certain legal and enforcement measures for prescribed categories of contracts, and Part 8B provides for cost sharing between parties to qualifying construction contracts for additional costs caused by delays.
On 26 March 2021, the COVID-19 (Temporary Measures) (Extension of Prescribed Period) Order 2021 extended the relief period to 19 April 2021 for certain measures relevant to the Built Environment and Real Estate sectors. This is to allow Parliament to consider the COVID-19 (Temporary Measures) (Amendment No. 2) Bill 2021 ("Bill"), which the Ministry of National Development intends to introduce on 5 April 2021. The Bill would further extend the relief period to 30 September 2021 for (a) Part 8B of the Act; and (b) construction contracts or supply contracts, or any performance bond granted thereto, under Part 2 of the Act. It would also extend the relief period to 30 June 2021 for options to purchase and sale and purchase agreements with developers under Part 2 of the Act.
In this Update, we provide a reminder of the relief provided for these specified categories of contracts and the practical effect of the further extension.
Applying for a Moratorium in Bankruptcy Proceedings: The Requirement of a Serious and Viable Proposal
Under Part 14 of the Insolvency, Restructuring and Dissolution Act 2018, which deals with bankruptcy proceedings, an insolvent debtor intending to propose a voluntary arrangement may apply to Court for a moratorium restraining bankruptcy applications and other proceedings against the debtor so as give breathing room for consideration of the proposal. In Re Sifan Triyono [2021] SGHC 55, the Singapore High Court highlighted that, in considering applications for such a moratorium, it would filter out proposals which are not "serious and viable".
The High Court in this case dismissed an application for an interim moratorium on the basis that the debtor had not shown his proposal for voluntary arrangement to be serious or viable due to a lack of clarity and transparency. This Update provides a summary of the case and highlights the key points to be observed in a proposal for a voluntary arrangement.
Hazards in Trade Finance: Court of Appeal Considers Issues of Assignment, Set-Off and Competing Agreements
Navigating the course of trade finance is not without its hazards and challenges. Varying trade arrangements and multiplicity of parties often give rise to legal issues and uncertainties. In CIMB Bank Bhd v World Fuel Services (Singapore) Pte Ltd [2021] SGCA 19, the Singapore Court of Appeal had the opportunity to consider such issues of trade finance, including claims under assignment, the resolution of competing contracts, and the right of set-off.
In this case, the plaintiff bank claimed against the defendant as the alleged assignee of purported debts owing from the defendant to the plaintiff bank's borrower. The Court had to grapple with a clause precluding the right of set-off contained in the borrower's standard terms and conditions on one hand and a subsisting offset agreement providing for the right of set-off between the defendant and the borrower on the other hand.
This Update looks at the key points of the Court's judgment and the issues that should be considered by banks and borrowers alike when entering into trade finance agreements.
Regional Guide to Public Mergers & Acquisitions in Southeast Asia
We are pleased to bring you the 2021 Regional Guide to Public Mergers & Acquisitions in Southeast Asia ("Guide"). The Guide provides a brief comparative overview of the regulatory frameworks governing mergers and acquisitions of public-listed companies in Singapore, Malaysia, Indonesia, Thailand, the Philippines and Vietnam.
Leveraging on our experience in carrying out cross-border transactions through our Rajah & Tann Asia network, the Guide highlights the key legal and regulatory issues relevant to cross-border public mergers and acquisitions transactions in Southeast Asia. Together with our Regional Guide to Private Mergers & Acquisitions in Asia (available here), the Guide aims to help you navigate the legal and regulatory regimes on mergers and acquisitions in the region.
A key pillar to our strength in cross-border transactions is our Rajah & Tann Asia network with offices in Cambodia, China, Indonesia, Lao PDR, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam, as well as dedicated desks focusing on Brunei, Japan and South Asia.
Regional Shipping Update: Shipping Law Updates – First Quarter 2021
This is the First Quarter 2021 issue of the Regional Shipping Update of Rajah & Tann Asia’s Shipping & International Trade Practice, a publication that provides a snapshot of the key legal issues in various jurisdictions where our member firms have regional presence.
In this issue, we provide an overview of the procedures for arresting a vessel in Vietnam. We also report the measures that Singapore has recently introduced to ensure safe and responsible practices in the maritime and shipping sector amidst the COVID-19 pandemic.
Keeping Time in Maritime Claims: Limitation Periods and the Single Liability Principle
Following the apportionment of liability in a maritime collision case, the single liability principle provides for the quantum of the smaller recoverable claim to be deducted from the larger recoverable claim, leaving only one net balance to be paid by the net payor. In The CARAKA JAYA NIAGA III-11 [2021] SGHC 43, the Singapore High Court considered how the single liability principle interacts with limitation periods under shipping law. Specifically, in a case where the claim of the net payor against the net payee is time-barred, the Court found that the net payor cannot avail itself of the single liability principle to reduce its liability to the net payee.
In this Update, we summarise the key points of the Court's decision and consider its impact on the management of maritime claims, including whether it will affect the application of limitation periods in the defence of set-off and in invoking limitation under the Convention on Limitation of Liability for Maritime Claims 1976.
Rajah & Tann Singapore Sustainability Update: In Conversation with Seth Tan, Infrastructure Asia, on ESG in Infrastructure Projects
Our Sustainability Practice brings to you the inaugural issue of the Sustainability Updates which shares with you insights distilled from conversations between our Sustainability Partners and experts across sectors and domains on key environmental, social and governance ("ESG") developments and trends.
In this Issue, Lee Weilin and Soh Lip San, our Partners with the Sustainability Practice, explore ESG issues in infrastructure projects by speaking with Seth Tan, Executive Director of Infrastructure Asia, on his views on green and sustainable infrastructure and ESG factors for bankable projects in the region.
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