Legal Updates for June 2016Technology, Media and Telecommunications Quarterly Regional Update: Halftime Highlights
We are now well into 2016 and as expected it has been a very eventful past six months in the technology, media and telecommunications space. We are pleased to provide this update which looks at the key developments taking place in ASEAN and beyond in the first half of 2016. For example, issues surrounding financial technology have made the news in the past few months, with many regional governments and financial institutions becoming active in this area in a bid to keep up with changing commercial realities. Another issue that is increasingly under scrutiny are the various crowd-sourcing services that are becoming more popular in recent times. Private car hire, ride sharing/carpooling, short term home rentals, and peer to peer lending are all examples of how the increasing proliferation of internet access has created new challenges for regulators. This update is written by our expert practitioners in the Rajah & Tann Asia network, spanning eight countries in the ASEAN region. If you have any questions or issues you wish to discuss with us, do not hesitate to reach out to any of our offices in the region.
The Affirmation of the Open Internet Rules in the US and its Potential Impact on Net Neutrality in the Region
The need for net neutrality and maintaining an open Internet has been a hotly contested issue of late, with the most recent development being the landmark ruling of the US Court of Appeals for the DC Circuit on 14 June 2016 in favour of net neutrality. This update will examine the US ruling and discuss its implications for the future, along with the possible impact in the region.
Features of Design and Build Contracts
"Is a lump sum contract a feature of a 'design and build' contract?" This was, as the judge termed it, "the interesting legal issue" that was thrown up for consideration in the recent Singapore High Court decision of Goh Eng Lee Andy v Yeo Jin Kow [2016] SGHC 110. In this case, the Court examined the key features of 'design and build' contracts and in particular, whether it is necessarily a lump sum contract.
Recognition of Foreign Liquidators - Universalism in Singapore Insolvency Law
In the modern commercial setting, insolvency has taken on an increasingly cross-border nature. Businesses, creditors and assets are rarely confined to a single jurisdiction. In Re Opti-Medix Ltd (in liquidation) and another matter [2016] SGHC 108, the Singapore High Court had to consider the issue of the recognition of foreign insolvency proceedings. In particular, the Court examined the recognition of foreign liquidators from jurisdictions other than the place of incorporation. The decision also looked at the increasing recognition of the need for courts to cooperate in order to effectively and efficiently resolve cross-border insolvency issues.
MAS Responds to Feedback on Proposals for Securities-Based Crowdfunding
Following the issue of its consultation paper setting out proposals and clarifications on facilitating securities-based crowdfunding ("SCF") in February last year ("Consultation Paper"), the Monetary Authority of Singapore ("MAS") finally published its response ("Response") to the feedback received in relation to its Consultation Paper on 8 June 2016. In addition to its earlier proposals which primarily focused on accredited investors and institutional investors, the MAS also announced in its Response, certain refinements to existing rules to better accommodate retail participation in SCF.
This update takes a look at the notable highlights of the regulatory approach for SCF as set out in the Response.
Wrongful Arrest of a Vessel – Dealing with Applications and Appeals
The arrest of a vessel is a powerful tool to obtain pre-judgment security for admiralty disputes, and it often has serious financial consequences. However, where the arrest is found to be malicious, the shipowner may obtain damages for wrongful arrest. In a series of related judgments, the Singapore High Court shed some light on the issue of wrongful arrest. The Xin Chang Shu [2015] SGHC 308 demonstrated when the court will grant an award of damages for wrongful arrest, and The Xin Chang Shu [2016] SGHC 93 considered whether leave of court is required to appeal against a wrongful arrest order.
Toh Kian Sing S.C. and Jonathan Tan of Rajah & Tann Singapore LLP successfully represented the shipowner in both cases.
MAS Issues Consultation Paper on FinTech Regulatory Sandbox Guidelines
The Monetary Authority of Singapore ("MAS") has published a consultation paper on 6 June 2016 on the proposed FinTech regulatory sandbox guidelines (the "Guidelines"). This follows the remarks made by Mr Ravi Menon, the Managing Director of the MAS, on 2 April 2016 at a panel at the Singapore Forum on introducing a FinTech regulatory sandbox approach ("Sandbox") and the Globalising FinTech – Singapore FinTech Festival event organised by the MAS on 31 May 2016. This is also a further step forward in Singapore's efforts to advance and develop the FinTech sector, one of which is the MAS’s commitment to provide funds valued at S$225 million over the next five years under the Financial Sector Technology & Innovation scheme. The proposed Guidelines is intended to set out the objective and principles of the Sandbox as well as provide guidance on the application process. This Update takes a look at the proposed regulatory approach and Guidelines.
The MAS consultation period runs from 6 June 2016 to 8 July 2016. Should relevant firms wish to discuss any issues or concerns relating to the proposed Sandbox or the Guidelines, or require assistance with preparing and putting forward comments to the MAS during this consultation period, please feel free to get in touch with our key partners whose contact details are listed in the Update.
Indonesian Government Issues Revised Negative List
The Indonesian Government has recently revised the Negative List to permit foreign direct investment ("FDI") for the first time in several sectors whilst increasing the FDI limits in others. The 2016 Negative List is set out in Presidential Regulation No. 44 of 2016 and came into effect on 18 May 2016. This Update provides the key highlights of the 2016 Negative List.
New E-commerce Regulations Proposed by European Commission
On 25 May 2016, the European Commission ("EC") published its proposals for two new sets of Regulations to counter the anti-competitive barriers that potentially hinder the free and competitive growth of e-commerce in the European Union. As e-commerce continues to grow and gain significance, competition regulators worldwide face the challenge of understanding and adapting to the unique problems presented by this new disruptive paradigm of business. This article provides a brief overview of the EC's recent efforts to regulate competition in the e-commerce sector and uses the insights drawn from this to highlight the potential for similar regulatory trends occurring in Singapore and the wider ASEAN region.
A Bank's Duties Under Letters of Credit and the UCP 600
Letters of credit have become vital financial instruments in commercial transactions, providing security for payment against delivery, particularly in cross-border transactions. The Uniform Customs and Practice for Documentary Credits 600 ("UCP 600") serves as a standardised set of rules on the issuance and use of letters of credit, and is adopted for use by most banks worldwide. In Grains and Industrial Products Trading Pte Ltd v Bank of India and another [2016] SGCA 32, the Court of Appeal examined the relationship and obligations between beneficiary, issuing bank and the nominated bank under the UCP 600. The beneficiary in this case was successfully represented by Winston Kwek and Max Lim of Rajah & Tann Singapore LLP.
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