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Legal Updates

Legal Updates for September 2021

High Court Sets Out Law on Striking Out of Pleadings for Non-Compliance with Discovery Obligations
In Saxo Bank A/S v Innopac Holdings Limited [2021] SGHC 214, the Singapore High Court set out the applicable principles on when it would exercise its discretion to strike out a litigant's pleading for non-compliance with the Rules of Court or orders of court specifically in a situation where discovery obligations have been breached.

Here, the Court found that the defendant had repeatedly failed to comply with its discovery obligations, including those subject to an "unless" or peremptory order. Applying the relevant principles, the High Court struck out the defendant's Defence and Counterclaim and entered judgment for the plaintiff. The plaintiff was successfully represented by Harish Kumar, Daniel Quek, Low Weng Hong and Edina Lim of Rajah & Tann Singapore LLP.

Rental Waiver Framework for SMEs and Specified Non-Profit Organisations Affected During Phase 2 (Heightened Alert)
On 14 September 2021, the COVID-19 (Temporary Measures) (Amendment No. 4) Bill ("Bill") that seeks to amend the COVID-19 (Temporary Measures) Act 2020 ("Act") was passed in Parliament. The Act provides for, among other things, targeted and temporary reliefs for individuals and businesses that are unable to perform certain contracts due to the uncertainties brought about by COVID-19.

Among other changes, the Bill amends the Act to provide a Rental Waiver Framework ("RWF") to support Small and Medium Enterprises ("SMEs") and specified non-profit organisations ("NPOs") affected by the tightened safe management measures during Phase 2 (Heightened Alert). Eligible tenants of commercial properties may apply for waiver of rent and licence fees under their leases and licences in specified situations, for the period starting on 5 August 2021 and ending on 18 August 2021.

Under the RWF, landlords will be required to provide a rental waiver of two weeks of gross rent[1] to eligible SME and specified NPO tenant-occupiers of qualifying commercial properties. The RWF complements earlier support measures, one of which was the Rental Support Scheme ("RSS") that provides one month of rental support in total as cash for qualifying tenants in privately owned commercial properties. Together with the RSS cash payouts, these tenants will benefit from a total of about 1.5 months of rental support.

The RWF is expected to start in October 2021.

In this Update, we outline the main aspects of the RWF which are pertinent to tenants, intermediary landlords (landlords who are not the property owners and sublet the property) and property owners.

China Will Enter a New Era of Personal Information Protection
On 20 August 2021, the 13th National People's Congress of the People's Republic of China passed the Personal Information Protection Law (中华人民共和国个人信息保护法) ("PIPL"), which will take effect on 1 November 2021. The PIPL, together with the Cybersecurity Law which came into effect on 1 June 2017, and the Data Security Law which came into effect on 1 September 2021, form the core tenets of cybersecurity and data protection in China.

Compared with the second draft of the law, the enacted draft of the PIPL introduced several important new rules that will have a significant impact on how Personal Information Processors such as Internet and social media giants may handle and process Personal Information. This update will examine some of the key highlights of the PIPL.

Keeping Organisations PDPA Compliant – Updated PDPC Guides on Data Protection
To assist organisations in complying with their data protection obligations, the Personal Data Protection Commission ("PDPC") has issued a number of guides on data protection. On 14 September 2021, the PDPC announced the following guides:

  1. New Guide to Data Protection Practices for Info-Comm Technology Systems;
  2. Updated Guide to Developing a Data Protection Management Programme; and
  3. Updated Guide to Data Protection Impact Assessments.

In this Update, we highlight the key changes to the PDPC guides, what organisations should be aware of, and how the multi-disciplinary team from Rajah & Tann Singapore's Technology, Media and Telecommunications practice and from Rajah & Tann Cybersecurity can support organisations seeking to assess their data protection systems and conduct remedial efforts.

Safeguarding your Business's 'Crown Jewels' – A Primer on Dealing with Confidential Information
Confidential information such as trade secrets, proprietary know-how, strategy documents, technical drawings / plans, financial data and customer lists often constitute the most valuable assets or 'crown jewels' that a business or company owns. What happens however when an ex-employee misuses the company's confidential information—particularly if it results in the loss of a key business contract to a competitor? What legal recourse does the company have and what kind of compensatory damages can the company recover against the ex-employee? This was the situation that the plaintiff company in the recent Singapore High Court case of Angliss Singapore Pte Ltd v Yee Heng Khay (alias Roger) [2021] SGHC 168 found itself in.

This Update provides a summary of the case, highlights the key aspects of the Court's decision, and offers practical insights and suggestions for consideration.

Court of Appeal Rules on When to Intervene in a Judicial Manager's Exercise of Discretion
While a judicial manager is given a wide discretion to employ his skills and expertise in managing the affairs of a company in judicial management, the shareholders or creditors of the company may apply to court for relief where they contend that the company's affairs, business, or property have been managed by the judicial manager in a manner which is or was unfairly prejudicial to their interests. Yihua Lifestyle Technology Co., Ltd., & Anor v HTL International Holdings Pte. Ltd. [2021] SGHC 86 is the first decision of the Singapore High Court which had an opportunity to consider and opine on the applicable principles on when it would be appropriate to intervene in a judicial manager's exercise of discretion. The High Court's decision was recently affirmed on appeal by the Singapore Court of Appeal in Yihua Lifestyle Technology Co., Ltd., & Anor v HTL International Holdings Pte. Ltd. [2021] SGCA 87.

The Court here rejected the Appellants' attempt to displace the discretion exercised by the judicial managers of a company in deciding to sell the company's assets to the Respondent Purchasers rather than the Appellants' preferred purchasers. The Respondent Purchasers were successfully represented by Mark Cheng, Chew Xiang, Ho Zi Wei, and Tan Tian Hui of Rajah & Tann Singapore LLP (with Audent Chambers LLC as instructed counsel).

Singapore Introduces Proposed New Laws to Counteract Foreign Interference
The Ministry of Home Affairs has introduced the Foreign Interference (Countermeasures) Bill ("Bill") for first reading in Parliament on 13 September 2021. The Bill seeks to reduce the risk of acts of foreign interference by electronic communications activity through the strengthening of Singapore's ability to prevent, detect and disrupt such interference. The Bill proposes to counter the threat of hostile information campaigns by establishing new offences targeting the perpetrators of such attacks, and setting out obligations on relevant parties such as those providing social media services, email or instant messaging services, internet access services, and running websites. The Bill also seeks to combat the use of local proxies by foreign entities to push their agenda, imposing various obligations on Politically Significant Persons.

This Update highlights the key elements of the Bill, and in particular what social media service providers and relevant electronic service providers as well as members of the media and telecommunications industry should be aware of regarding potential obligations and restrictions.

Weight Accorded to Pre-nuptial Agreement Lessened Due to Inconsistent Behaviour
Pre-nuptial agreements that set out the division of assets in the event of a divorce are becoming less stigmatised in Singapore nowadays, growing in popularity across a diverse demographic ranging from younger millennials to high net-worth individuals. Pre-nuptial (and indeed, post-nuptial) agreements are one of the circumstances that may be considered by the court in ordering the division of matrimonial assets. However, in Singapore, it is established law that pre-nuptial agreements cannot be enforced in and of themselves and are subject to the court's scrutiny. Rather, the court retains the ultimate power to divide matrimonial assets in such proportions as the court thinks just and equitable, and will determine the weight that ought to be accorded to the pre-nuptial agreement.

In CLB v CLC [2021] SGHCF 17, the High Court found that the weight to be given to a pre-nuptial agreement was significantly diminished by the parties having behaved inconsistently with the pre-nuptial agreement throughout the 16-year marriage.

In this Update, we examine the key takeaways from the case that parties may wish to pay attention to, whether they are considering entering a pre-nuptial agreement themselves or seeking to ensure an existing pre-nuptial agreement will be upheld as far as possible.

Online Retailers to be Cautious Against Using Misleading Sales Tactics
In recent years, online sales have taken the retail scene by storm and with a significant number of consumers having turned to shopping online during the COVID-19 pandemic.

In response to numerous complaints from consumers concerning errant online retailers alleged to have misled consumers into purchases, the Consumers Association of Singapore ("CASE") and the Competition & Consumer Commission of Singapore ("CCCS") have issued an advisory on commonly used online tactics and certain precautionary measures for consumers ("Advisory"). Whilst the Advisory mentions overseas online retailers, online retailers with a presence in Singapore are not beyond scrutiny by CASE and CCCS.

In this Update, we highlight some common tactics by online retailers/businesses that have been the subject of complaints and what online retailers should consider doing instead to avoid these issues.

Public Consultation on Legislative Changes to Facilitate Transition to Low-Carbon Generation Sources
The Ministry of Trade and Industry ("MTI") and the Energy Market Authority ("EMA") are conducting a public consultation on the Energy (Resilience Measures and Miscellaneous Amendments) Bill ("Bill"). In line with MTI and EMA’s programme to transition Singapore's electricity generation to low-carbon generation sources, the Bill sets out proposed amendments to the EMA Act, the Electricity Act, and the Gas Act, to empower EMA to require electricity generation licensees to reduce greenhouse gas emission standards and to introduce provisions that will ensure the sustainability, security, and reliability of the power sector. These changes may affect how businesses in the energy industry will have to operate in the future, and the emission standards that they may be held to.

This Update highlights the key features of the Bill. Feedback on the Bill should be submitted to MTI and EMA by 16 September 2021. Corporations affected by the proposed changes in the Bill may touch base with our Sustainability team with regard to assistance in providing feedback.

Singapore SPACs Listing Framework Takes Effect on 3 September 2021
With effect from 3 September 2021, Special Purpose Acquisition Companies ("SPACs") are allowed to list on the Mainboard of the Singapore Exchange Securities Trading Limited ("SGX-ST Mainboard"), providing companies with an attractive alternative capital fund raising route.

The new initiative was announced by the Singapore Exchange Limited ("SGX") on 2 September 2021, following its consultation paper released in March 2021 that has received over 80 responses, "possibly the highest response rate to an SGX consultation in recent times", according to SGX. With significant support from the respondents to the SGX consultation for the introduction of a SPACs listing framework in Singapore, SGX proceeds with its proposal to offer SPACs as an investment product in the Singapore capital market. Changes to the SGX-ST Mainboard Listing Rules to implement the SPACs listing framework took effect on 3 September 2021.

This Update highlights the key requirements of the listing framework for SGX SPACs which aim to balance safeguarding investors' interests against certain concerns posed by the unique features of SPACs and the capital raising needs of the market.

Requirements on Climate-Related Disclosures and Board Diversity Policy Proposed for SGX-Listed Companies
Against the background of accentuated demand by various stakeholders for climate-related information and disclosure on board diversity, the Singapore Exchange Regulation ("SGX RegCo") proposes requiring issuers listed on the SGX-ST Mainboard) and Catalist (collectively, "issuers") to:

  • Include climate-related disclosures in their sustainability reports consistent with recommendations of the Task Force on Climate-Related Financial Disclosures under a "phased approach"; and
  • Put in place a board diversity policy and describe the policy in their annual reports.

These proposals are detailed in SGX RegCo's consultation paper on "Climate and Diversity: The Way Forward". Other salient proposals in the consultation paper include requirements for assurance of sustainability reports, reporting timeframe for issuing sustainability reports, and trainings for directors on sustainability.

At present, SGX RegCo proposes that it will not prescribe any specific sustainability reporting frameworks and Environmental, Social and Governance ("ESG") indicators for issuers. Instead, SGX RegCo proposes, in a separate consultation paper on "Starting with a Common Set of Core ESG Metrics", a common set of core ESG metrics as a starting point for issuers in their reporting of material ESG factors as well as an ESG data portal for structured access to ESG data.

The consultations for both consultation papers are open until 27 September 2021.

This Update highlights significant aspects of these key proposals and their potential impact on issuers to consider.

China's Data Security Law Comes into Effect on 1 September 2021
The Data Security Law of the People's Republic of China (中华人民共和国数据安全法) ("Data Security Law"), which was passed by the Standing Committee of the National People's Congress of the People's Republic of China on 10 June 2021, has come into effect from today, 1 September 2021. The Data Security Law comprises 55 Articles spread across 7 Chapters, and deals with important issues such as Data Security and Development, Data Security Systems, Data Protection Obligations, and Security and Openness of Governmental Data. This update sets out some of the key highlights of the Data Security Law.

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