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TRANSCRIPT
Legal BulletinA summary of developments in the law
At a glance
Banking
Singapore High Court considers scope of conclusiveevidence clause in banking documentation
6
Corporate
MOF and ACRA invite comments on wide-ranging changes toCompanies Act and revised regulatory framework for foreignentities
11
SGX issues guide on sustainability reporting for listedcompanies
13
Dispute Resolution
Singapore Court of Appeal elaborates on relationshipbetween insolvency and arbitration in upholding High Courtdecision
16
Intellectual Property & Technology
Singapore High Court dismisses application by a nightcluboperating at Marina Bay Sands to strike out trade mark actionby Bali restaurant and bar Ku De Ta
19
Media & Telecommunications
Mandatory cross-carriage obligations to take effect on1 August 2011
23
Tax
IRAS issues e-Tax Guide on “Income Tax & Stamp Duty:Mergers and Acquisitions Scheme”
25
News
Allen & Gledhill New Partners 2011 33
Allen & Gledhill wins Who’s Who Legal Country Award 2011for Singapore
34
Click here for Table of Contents
Vol 23 No 7 July 2011 ALLEN & GLEDHILL LLP
2Legal Bulletin July 2011
In this issue
Articles
Banking
MAS revises MAS Notice 632 and responds to feedback onConsultation Paper on Rules on Residential Property Loans:Mortgage equity withdrawal loans and aggregation of loans frommoneylenders
4
Singapore High Court considers scope of conclusive evidenceclause in banking documentation
6
Competition
CCS issues clearance decision relating to joint ventureagreement between three airline companies on air transportationof passengers
10
Corporate
MOF and ACRA invite comments on wide-ranging changes toCompanies Act and revised regulatory framework for foreignentities
11
SGX issues guide on sustainability reporting for listed companies 13
Continuous all day trading on SGX securities market from1 August 2011
13
Singapore High Court judge considers right of access to companydocuments in the context of a derivative action
14
Dispute Resolution
Singapore Court of Appeal elaborates on relationship betweeninsolvency and arbitration in upholding High Court decision
16
Insurance
MAS issues consultation paper on “Proposed Revisions to theRisk Based Capital Framework - Financial Resources Adjustment,Reinsurance Adjustment, C2 Risk Requirements”
17
Intellectual Property & Technology
JPO and IPOS extend Pilot Patent Prosecution Highway foranother year till 1 July 2012
18
IPOS launches IP Competency Framework and ideas2IP 18
Singapore High Court dismisses application by a nightcluboperating at Marina Bay Sands to strike out trade mark action byBali restaurant and bar Ku De Ta
19
Editorial Team
Margaret Chew
Elizabeth Wong
Soo Seong Theng
Hong Farn Ling
Anitha Rajaram
The contents of the LegalBulletin are intended to providegeneral information. Although weendeavour to ensure that theinformation contained herein isaccurate, we do not warrant itsaccuracy or completeness oraccept any liability for any lossor damage arising from anyreliance thereon. The information inthis Legal Bulletin should notbe treated as a substitute forspecific legal advice concerningparticular situations. If youwould like to discuss theimplications of these legaldevelopments on your businessor obtain advice, please do nothesitate to approach your usualcontact at Allen & Gledhill LLPor the editors of the Legal Bulletin,Margaret Chew (+65 6890 7500 [email protected]) and Elizabeth Wong (+656890 7559 or [email protected]).
3Legal Bulletin July 2011
Media & Telecommunications
Mandatory cross-carriage obligations to take effect on 1 August2011
23
SGNIC launches Internationalised Domain Names with effect from4 July 2011
24
Real Estate
MAS consults on proposed residential property loans fact sheet 25
Tax
IRAS issues e-Tax Guide on “Income Tax & Stamp Duty: Mergersand Acquisitions Scheme”
25
MOF consults on draft Income Tax (Amendment) Bill 2011:Implementing Budget 2011 changes
26
MOF consults on draft Goods and Services Tax (Amendment) Bill2011: Implementing Budget 2011 changes
29
General
MAS issues regulations providing for sanctions and freezing ofassets in relation to Libya
30
Accounting Standards Council issues accounting standard andfinancial reporting framework for charities
31
News
Acquisition of Allgreen Properties Limited 31
Silver Oak Ltd.’s Series 002 Commercial Mortgage-Backed Notes 32
Equity Fund Raising by Olam International Limited 32
Issue of A$500 million Senior Unsecured Floating Rate Notes due2014 under the US$5 billion Programme for Issuance of DebtInstruments of Oversea-Chinese Banking Corporation Limited
32
Acquisition of Hsu Fu Chi International Limited 33
S$2.16 billion revolving credit facility to SingTel Group TreasuryPte. Ltd.
33
Allen & Gledhill New Partners 2011 33
Allen & Gledhill wins Who’s Who Legal Country Award 2011 forSingapore
34
Allen & Gledhill LLP also publishes the monthly Financial Services Bulletin.
To view the July 2011 issue, please click here.
4Legal Bulletin July 2011
Articles
Banking
MAS revises MAS Notice 632 and responds to feedback onConsultation Paper on Rules on Residential PropertyLoans: Mortgage equity withdrawal loans and aggregationof loans from moneylenders
From 13 January 2011 to 14 February 2011, the Monetary Authority ofSingapore (the “MAS”) sought comments on the proposals in its consultationpaper entitled “Rules on Residential Property Loans” (the “ConsultationPaper”). Primarily, the MAS proposed a requirement for financial institutions(“FIs”) to comply with regulatory loan-to-value (“LTV”) limits on mortgageequity withdrawal loans (“MWLs”) and to aggregate loans from moneylendersused to pay for residential property purchases, for LTV computation.
On 13 July 2011, the MAS issued a revised MAS Notice 632 “ResidentialProperty Loans” (“MAS Notice 632”) and released its response to commentsreceived on the consultation paper. Most notably, the MAS has decided tomaintain the status quo for MWLs for non-individuals, that is to say, MWLs tonon-individuals will not be subject to a regulatory LTV limit. The MAS willproceed to introduce regulatory LTV limits on MWLs to individuals.
The MAS’ response on issues that are of wider interest are highlighted below.
Background
On 13 January 2011, the MAS, jointly with the Ministry of Finance and theMinistry of National Development, announced measures to maintain a stableand sustainable residential property market in Singapore. The measures tookeffect on 14 January 2011 and included LTV limits of 60% and 50% onhousing loans for purchasers who are individuals and non-individualsrespectively.
In its Consultation Paper, the MAS proposed requiring FIs to comply withregulatory LTV limits on MWLs that are secured on residential property, butnot used for the purchase of the residential property. These limits were to beset at the same level as the regulatory LTV limits on housing loans grantedfor the purchase of residential properties.
The MAS had also proposed that, for the purpose of LTV computation, FIsmust aggregate the borrower’s loans from moneylenders, if any, which areused to pay for the property purchase.
50% LTV limit on MWLs to non-individuals
On account of the following feedback, the MAS will maintain the status quofor MWLs for non-individuals, i.e. MWLs to non-individuals will not be subjectto a regulatory LTV limit:
the 50% LTV limit on MWLs would limit credit supply to small andmedium-sized enterprises (“SMEs”) and increase their cost of borrowing;
the operational difficulty of applying the 50% LTV limit as FIs often offerSMEs a package of credit facilities which is secured on a pool ofcollateral. In such loan structures, FIs do not apply a separate LTV limiton credit facilities secured solely on residential property.
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However, the MAS expects FIs to continue to exercise prudent creditassessment in granting MWLs to non-individuals and to apply appropriateLTV limits on these MWLs based on their credit assessment.
80%/60% LTV limit on MWLs to individuals
The MAS will introduce regulatory LTV limits on MWLs to individuals. Wherethe borrowers are individuals, a MWL on a residential property, together withthe outstanding balance of any credit facilities secured on that property, willbe subject to an LTV limit of:
80%, if the borrower has no outstanding credit facility for the purchase ofanother property; or
60%, if the borrower has any outstanding credit facilities for the purchaseof another property.
The MAS expects FIs to exercise due diligence and judgment on possiblecircumvention of these regulatory LTV limits on MWLs to individuals, forexample, by individuals setting up vehicles to invest in property. Where “shellcompanies” are set up by individuals solely to obtain a MWL, FIs should“look through” and apply the 80%/60% LTV limit on MWLs to such “shellcompanies” as if they were individuals. However, the 80%/60% LTV limitwould not apply to companies.
Aggregation of loans from moneylenders for computation of LTV
Self-declaration: The MAS received suggestions from respondents thatFIs be allowed to rely on the borrower’s self-declaration on whether hehas borrowed from moneylenders to make the property purchase. TheMAS will allow an FI to rely on self-declaration by the borrower onwhether he has borrowed from moneylenders or other sources to fundthe property purchase. The FI should consider an appropriately-wordedself-declaration by the borrower on whether he has borrowed from anyother source other than the FI to pay towards the property purchase, andnot restrict the content of the self-declaration to borrowing from licensedmoneylenders only.
Definition of “moneylender”: The MAS received feedback that theproposed legal definition of “moneylender” may be too wide. Theproposed definition included “licensed moneylenders”, “excludedmoneylenders” and “exempt moneylenders” as defined in theMoneylenders Act. Among the three categories, licensed moneylendersare the most common source of loans for the public. Taking the feedbackinto account, the definition of “moneylender” in MAS Notice 632 nowencompasses only licensed moneylenders.
Reference materials
Please click on the provided links to access the following materials from theMAS website www.mas.gov.sg:
MAS Notice 632: Residential Property Loans
MAS Response
For further information, pleasecontact:
Francis MokTel: +65 6890 [email protected]
Karen TiahTel: +65 6890 [email protected]
Wong Sook PingTel: +65 6890 [email protected]
6Legal Bulletin July 2011
For more information about the consultation paper, please click here to readan article entitled “MAS conducts public consultation on “Rules onResidential Property Loans”: Mortgage equity withdrawal loans to complywith loan-to-value limits and aggregation of loans from moneylenders” thatwas featured in a previous issue of the Allen & Gledhill Legal Bulletin(January 2011).
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Singapore High Court considers scope of conclusiveevidence clause in banking documentation
Jiang Ou v EFG Bank AG [2011] SGHC 149
In the case of Jiang Ou v EFG Bank AG [2011] SGHC 149, the SingaporeHigh Court had to consider the effect of a conclusive evidence which thedefendant bank sought to rely on to exculpate itself from liability for the fraudof its own employees engaging in unauthorised trades.
Commonly found in banking documentation, a conclusive evidence clauseplaces the onus on the customers to verify their bank statements andrequires the customers to notify the bank if there is any discrepancy in thebank statement. If the customer fails to do so within the stipulated time, hewould be precluded from challenging the correctness of the statement.
On the facts of the case, the court found that the bank could not establishthat it had mailed the relevant bank statements to the customer, and hence,could not rely on the conclusive evidence clause in the banking documents.
Notably, the court proceeded to hold that, even if the bank statements hadbeen mailed to the customer the conclusive evidence clauses which thebank sought to rely on did not protect the bank from liability in respect ofunauthorised transactions. Further, the court held that conclusive evidenceclauses which purport to exclude liability for the fraud of banks’ employeeswere contrary to public policy considerations and did not satisfy thereasonableness test under the Unfair Contract Terms Act (the “UCTA”).
Facts
The plaintiff, Jiang Ou (“Madam Jiang”) was a citizen of the People’sRepublic of China (“China”) and a permanent resident of Singapore. Thedefendant, EFG Bank AG (“EFG Bank”) was a bank incorporated inSwitzerland and licensed to operate as a bank in Singapore.
Madam Jiang opened a non-discretionary account (the “Account”) with EFGBank, pursuant to which Madam Jiang’s instruction or mandate was requiredprior to the execution of any transaction by EFG Bank. Mr Ng Ton Yee(“Mr Ng”), an employee of EFG Bank, was assigned as Madam Jiang’s clientrelationship officer.
Mr Ng admitted to Madam Jiang that he had entered into 160 transactionswithout her knowledge or consent which resulted in losses to the Account. Asa result, the Account suffered a loss of US$2,338,278.68. EFG Bank deniedliability for the losses and consequently Madam Jiang commenced thisaction, seeking recovery of the sum of US$2,338,278.68 from EFG Bank onthe principal basis that the 160 transactions were executed without herknowledge or consent.
7Legal Bulletin July 2011
Having conceded that the 160 transactions were unauthorised, EFG Bank’sdefence at trial was that by reason of receipt of all the transactiondocuments, pursuant to the conclusive evidence clauses set out in clauses3.1and 3.2 of the account mandate and trading terms and general conditions(the “Agreement”), as well as the presumption of delivery of the transactiondocuments under clause 4 of the general conditions, Madam Jiang wasprecluded from disputing the unauthorised transactions. Under clause 4,documents were deemed to be validly given by EFG Bank to Madam Jiangby mailing them by ordinary mail to Madam Jiang.
Madam Jiang claimed that she did not receive any of the transactiondocuments from EFG Bank.
Transaction documents not sent to Madam Jiang
Having carefully considered the evidence adduced by EFG Bank, the courtfound that EFG Bank failed to discharge its burden of proof that thetransaction documents were sent and therefore the presumption of deliveryas provided for in clause 4 of the General Conditions did not arise.
As EFG Bank’s substantive defence, premised on the legal effect of clauses3.1 and 3.2, was entirely dependent on establishing proof of posting underclause 4, the court’s finding that the bank had failed to prove that thetransaction documents had been sent to Madam Jiang effectively disposedof the bank’s defence. On this ground alone, Madam Jiang’s claim wasallowed as it was common ground that the 160 transactions were allunauthorised.
Nevertheless, for completeness, the court considered the applicability ofclauses 3.1 and 3.2 to exclude EFG Bank’s liability for the 160 transactionson the premise that the transaction documents were in fact posted to MadamJiang.
Conclusive evidence clauses
The court had to consider whether clauses 3.1 and 3.2 were wordedsufficiently wide to exclude liability for unauthorised transactions carried outby EFG Bank’s own employees. The court also examined, as a matter ofpublic policy, whether banks should be able to exclude liability for the fraudor unauthorised dealings of its employees even if the clauses were wideenough to encompass such a situation.
In the course of its judgment, the court pointed out that the operation of aconclusive evidence clause is not a substitute for the customer’s mandate or,simply put, does not create authorisation where there was none. In thecourt’s view, conclusive evidence clauses merely impose a duty on thecustomer to verify his or her bank statements and to inform the bank ofdiscrepancies failing which the customer is precluded from disputing thecorrectness of the transaction. Accordingly, the confirmation slip sent by thebank was conclusive evidence of the correctness, rather than capable ofoperating as retrospective “authorisation” of the transaction though theoutcome would be no different. In the final analysis, whether a particular riskof loss due to error, discrepancy, forgery or just plain unauthorisedtransaction is shifted onto the customer is a question of construction of therelevant clause.
The court opined that if a bank sought to contractually allocate the burdenand responsibility of the duty to inform of any forgery or unauthoriseddrawing or instruction on the customer, no less than clear and unambiguous
8Legal Bulletin July 2011
reference would suffice. Sufficiently wide language ascertainable by areasonable person to include the specific liability borne by the customerwould also, in theory, suffice.
Thus, in order for EFG Bank to successfully rely on clauses 3.1 and 3.2, itwould have to overcome the following hurdles:
(a) Discharge its burden of proof that the transaction documents were sentby ordinary mail to give rise to the presumption of delivery under clause4. The court already found that EFG Bank had failed to cross this firsthurdle.
(b) Assuming the burden was successfully discharged, EFG Bank had toshow that clauses 3.1 and 3.2 were sufficiently wide or expresslycovered unauthorised transactions executed in the absence ofinstructions.
(c) Even if the language was sufficiently wide or expressly coveredunauthorised transactions, it had to be considered whether clauses 3.1and 3.2 applied to unauthorised transactions carried out fraudulently byEFG Bank’s employee.
(d) Finally, if the clauses expressly or impliedly applied to unauthorisedtransactions carried out by EFG Bank’s employee, it had to beconsidered whether such clauses should be upheld as a matter ofpublic policy and/or under the Unfair Contract Terms Act (the “UCTA”).
Ambit of clauses 3.1 and 3.2
The court noted that the language of clauses 3.1 and 3.2 contemplatedtransactions executed on the instructions by the customer or his authorisedrepresentative. There was no reference in clauses 3.1 or 3.2 to the exclusionof liability for transactions carried out in the absence of instructions. In fact,the contrary was apparent. Clause 3.3 provided that the transactionconfirmations were only for record purposes. Therefore, delivery or receipt ofthe transaction confirmations alone was not treated as instruction havingbeen given for the transaction in question.
By express reference to “instructions” specific to clauses 3.1, 3.2 and 3.3, itwas clear that the Agreement did not intend for unauthorised transactionsexecuted in the absence of any instructions from the customer to be includedwithin the ambit of the clauses. Instead, in the court’s view, clauses 3.1 and3.2 would only protect EFG Bank from liability against “discrepancies” and/or“omissions” in the execution of the customer’s instructions. As such, thecourt found that the clear and unambiguous wording of clauses 3.1 and 3.2excluded from the scope of its protection transactions carried out without anyinstructions from the customer.
Clauses to exclude liability for the fraud of banks’ employees
Given that the 160 transactions were executed knowingly by Mr Ng onMadam Jiang’s Account without any instruction from Madam Jiang, it mustfollow that such transactions were in effect carried out fraudulently by EFGBank’s employee, Mr Ng.
The court was of the view that, at best, clauses 3.1 and 3.2 sought toexclude liability for errors caused by its lack of due diligence. It was alsoclear from other provisions of the Agreement that EFG Bank did not intendfor clauses 3.1 and 3.2 to exclude liability caused by the fraud or wilfulmisconduct of its employees.
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The court held that if EFG Bank had intended to shift the risk of fraud by itsemployee to its customers, nothing short of express reference in the relevantclause to such a risk would have sufficed. Clauses 3.1 and 3.2 clearly did notexpressly or impliedly cover unauthorised transactions carried outfraudulently by its employee in the absence of instructions.
Void under UCTA and/or contrary to public policy
The court was of the view that conclusive evidence clauses which purport toexclude liability for the fraud of banks’ employees stood contrary to publicpolicy considerations and would run foul of the reasonableness test underUCTA.
Notwithstanding that on the court’s construction of clause 3.1 and 3.2, thesituation in question did not arise, the court stated that it is plainly unreasonablethat a bank should be able to shift the risk of unauthorised transactions by afraudulent employee (within its own sphere of control) to an innocent customerby way of a conclusive evidence clause. The purpose for the introduction ofconclusive evidence clauses was to enable banks to contractually allocate riskswhich were better managed by customers, brought about by tainted transactionsoutside the purview of the bank. In recognition of this rationale, conclusiveevidence clauses have been upheld due to the relative ease of detection offorgeries by the customer as opposed to the bank.
However, the converse must be true as regards transactions executedfraudulently by banks’ employees. Using conclusive evidence clauses toallocate the risk of fraud of an employee of the bank to the customer wouldbe entirely inconsistent with the core rationale underpinning the court’swillingness to uphold these clauses in the first place, as the allocation of therisk of fraud of the bank’s employees, by reason of the relative ease ofdetection and control, should rightfully and reasonably be borne by the bank.
The court held that, shifting the attendant risk and liability for the fraud orwilful misconduct of employees of banks by way of conclusive evidenceclauses, would undermine public confidence and trust in the banking system.Clauses which attempted to shift such risk to the customers wereunreasonable under the UCTA as well as void as a matter of public policy.
Learning points
The decision is notable because it is one of the few cases in which aSingapore court has held that a bank is not entitled to rely on a conclusiveevidence clause to resist liability in respect of alleged unauthorisedtransactions. The decision is a timely reminder that conclusive evidenceclauses are not a panacea, which can be relied on by a bank in response toall allegations of wrongdoing.
Ultimately, this decision stands for the proposition that a conclusive evidenceclause does not absolve a bank from liability in respect of transactions whichwere in fact unauthorised or liability in respect of the fraudulent acts of thebank’s employees.
The outcome of this case may have been different if the court did not make afinding that the transactions were unauthorised and that the bank’s employeehad acted fraudulently. Notably, in this case, the court was of the view thatdelivery of the bank statements, and the absence of any objection from thecustomer, was not by itself evidence of the customer’s instructions and thatthe operation of a conclusive evidence clause in such circumstances doesnot create authorisation where there was in fact none.
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If you would like to discuss theimpact of this case on yourbusiness, please contact:
Loong Tse ChuanTel: +65 6890 [email protected]
Kristy TanTel: +65 6890 [email protected]
10Legal Bulletin July 2011
Competition
CCS issues clearance decision relating to joint ventureagreement between three airline companies on airtransportation of passengers
On 4 July 2011, the Competition Commission of Singapore (the “CCS”)issued a clearance decision relating to the joint venture agreement (the“JVA”) between All Nippon Airways Co Ltd, Continental Airlines, Inc andUnited Air Lines, Inc. The JVA focuses on passenger air services and isintended to be executed in 2011. Once executed, it will last for an indefiniteduration. Pursuant to the JVA, all three parties will jointly set capacity,schedules and fares for certain transpacific routes. They will design aformula to redistribute pooled revenues to individual carriers. The revenueswill be pooled from the routes brought together.
Following a thorough review by the CCS, it was determined that the JVAwould not infringe the Competition Act (the “Act”) on the basis that the JVAhas a demonstrable net economic benefit. Section 34 of the Act deals withthe prohibition against anti-competitive agreements, decisions andpractices. An agreement that falls within the scope of section 34 of the Actmay, on balance, have a net economic benefit if, on a case-specificquantitative and qualitative analysis, it is demonstrated to contribute toimproving production or distribution or promoting technical and economicprogress, and it does not impose on the undertakings concernedrestrictions which are not indispensible to the attainment of those objectivesor afford the undertakings concerned the possibility of eliminatingcompetition in respect of a substantial part of the goods in question.
The CCS will publish the grounds of decision on its websitewww.ccs.gov.sg in due course. Please click here to view theannouncement on the CCS website.
As a matter of background, the parties had notified the CCS to review theJVA on 13 January 2011. Essentially, one or all parties to an agreementmay make a voluntary notification to the CCS if there are possible anti-competitive concerns that might arise from the agreement which mightinfringe the Act.
The advantage of making a voluntary notification for a decision to the CCSis that the CCS will generally take no further action once a decision hasbeen given unless there are reasonable grounds for believing that there hasbeen a material change of circumstance or there is a reasonable suspicionthat information on which it has based its decision was materiallyincomplete, misleading or false. Most importantly, a decision cannot bereopened by the CCS on the basis of a complaint made by a third party.
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For further information, pleasecontact:
Daren ShiauTel: +65 6890 [email protected]
This recent development was firsthighlighted in the Allen & GledhillCompetition Law Alert of 8 July2011. If you would like to be on ourcompetition and antitrust relatedelectronic communications mailinglist, please e-mail us [email protected]
11Legal Bulletin July 2011
Corporate
MOF and ACRA invite comments on wide-ranging changesto Companies Act and revised regulatory framework forforeign entities
Introduction
On 20 June 2011, the Ministry of Finance (the “MOF”) and the Accountingand Corporate Regulatory Authority (the “ACRA”) jointly released twoconsultation papers inviting comments on:
Report of the Steering Committee for Review of the Companies Act(the “Report”); and
Proposed revised regulatory framework for foreign entities in Singapore.
The consultation period will end on 16 September 2011.
Consultation paper on the Report
The Report was prepared by the Steering Committee (the “Committee”)established by the Government in 2007 to conduct a fundamental review ofthe Companies Act (the “CA”). It is divided into the following six chapters,comprising 217 recommendations.
Chapter 1: Directors
Chapter 2: Shareholders’ rights and meetings
Chapter 3: Shares, debentures, capital maintenance, schemes,compulsory acquisitions and amalgamations
Chapter 4: Accounts and audit
Chapter 5: General company administration
Chapter 6: Registration of charges
Key recommendations in the Report include:
Removing maximum age limit for directors
Extending directors’ disclosure obligations or duty to act honestly andexercise reasonable diligence to Chief Executive Officer of a company
Enfranchising indirect investors (e.g. institutional investors and fundmanagers holding shares through nominee company or custodian bank)by allowing certain categories of members to appoint more than twoproxies (the “multiple proxies regime”)
Adopting “multiple proxies regime” to enfranchise CPF investors
Simplifying rules for the use of electronic transmission for giving noticesand sending documents
Adopting one uniform solvency test for all transactions subject to capitalmaintenance regime (excluding amalgamations)
12Legal Bulletin July 2011
Abolishing financial assistance prohibitions for private companies
Replacing the status of “exempt private company” with new “smallcompany” criteria in determining whether a company is required to beaudited
Removing the requirement to keep a register of members for privatecompanies and using the register of members maintained by the ACRAas the main and authoritative register
Removing the requirement for a company to keep a register for directors,secretaries and auditors and using the registers kept by the ACRA as theauthoritative registers
Abolishing the requirement to keep a register of managers
Merging memorandum and articles of association as one document
Consultation paper on regulatory framework for foreign entities
The Committee recommends that the laws relating to the registration andregulation of foreign entities, namely branches of foreign corporationsregistered in Singapore, should be placed in a separate legislation(the “Proposed Act”) to facilitate the streamlining of the CA. The scope ofthe Proposed Act is based on the existing framework under the CAregulating foreign companies but will be enhanced with some modifications.The consultation paper on the revised regulatory framework for foreignentities contains 40 recommendations.
The key changes to the regulatory framework for foreign entities include:
Changing the reference of “foreign company” to “foreign entity” torecognise that the scope of this definition does not only include a“company or corporation” incorporated outside Singapore
Reducing the minimum number of agents required to be appointed by aforeign entity from two to one
Imposing a new obligation on a foreign entity to appoint a replacementagent before an existing agent can resign to ensure accountability
Requiring foreign entities to provide more comprehensive disclosurerequirements by recommending the foreign entities to lodge similarcomponents of their head office financial statements and other reports asthose expected of locally incorporated companies
Reference materials
The following materials related to the above development are available fromthe MOF website at www.mof.gov.sg:
MOF press release on the consultation papers
Annex A: Report of the Steering Committee for Review of theCompanies Act
Annex B: Highlights of the Steering Committee’s recommendations
For further information, pleasecontact:
Ang Cheng Hock, SCTel: +65 6890 [email protected]
Christine ChanTel: +65 6890 [email protected]
Kok Chee WaiTel: +65 6890 [email protected]
Lee Kim ShinTel: +65 6890 [email protected]
Andrew M. LimTel: +65 6890 [email protected]
Christina OngTel: +65 6890 [email protected]
Tan Su MayTel: +65 6890 [email protected]
Tan Tze GayTel: +65 6890 [email protected]
Lucien WongTel: +65 6890 [email protected]
Yap Lune TengTel: +65 6890 [email protected]
13Legal Bulletin July 2011
Annex C: Consultation paper on the regulatory framework forforeign entities in Singapore
Annex D: Highlights of ACRA’s recommendations on the regulatoryframework for foreign entities
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SGX issues guide on sustainability reporting for listedcompanies
On 27 June 2011, the Singapore Exchange Limited (the “SGX”) issued a “Guideto Sustainability Reporting for Listed Companies” (the “guide”). The guide setsout the SGX’s policy statement on sustainability reporting (the “policystatement”) as well as answers to frequently asked questions on sustainabilityreporting. The issuance of the guide follows a public consultation conducted inAugust 2010 which received positive feedback in support of disclosure andaccountability for operating and developing businesses in a sustainable manner.
The SGX hopes that the guide will assist more listed companies in extendingtheir reporting on corporate governance to environmental and social aspectsof the company’s performance. Although some listed companies already leadwith high standards of sustainability reporting, the SGX notes that most listedcompanies have not adopted sustainability reporting, perhaps due to factorssuch as costs, reporting scope and lack of familiarity with the process.Currently, sustainability reporting is voluntary.
Reference materials
The relevant SGX press release and guide are attached. To view them onthe SGX website www.sgx.com, please click on the provided links:
Press release
Guide to Sustainability Reporting for Listed Companies
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Continuous all day trading on SGX securities market from1 August 2011
Singapore Exchange Limited (the “SGX”) will be implementing continuoussecurities trading from 0900 hours to 1700 hours each day from 1 August2011. This was announced in a press release issued by the SGX on 30 June2011.
Market hours will therefore overlap with those of other Asian exchanges,enabling investors trading pan-Asian securities to respond to regional marketmovements and news flow.
With the change, SGX Member firms will offer retail investors various ways toexecute orders. These include online trading services, the use of centraldealing desks where orders can be channelled for order execution whenTrading Representatives or brokers are away, the appointment of a back-upTrading Representative, and the use of mobile technology by TradingRepresentatives to execute orders when they are off premises.
For further information, pleasecontact:
Christine ChanTel: +65 6890 [email protected]
Sophie LimTel: +65 6890 [email protected]
Christina OngTel: +65 6890 [email protected]
Yap Lune TengTel: +65 6890 [email protected]
For further information, pleasecontact:
Christine ChanTel: +65 6890 [email protected]
Sophie LimTel: +65 6890 [email protected]
Christina OngTel: +65 6890 [email protected]
Yap Lune TengTel: +65 6890 [email protected]
14Legal Bulletin July 2011
Reference material
To read the press release from the SGX website www.sgx.com, please clickhere.
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Singapore High Court judge considers right of access tocompany documents in the context of a derivative action
Hiap Seng & Co Pte Ltd v Lau Chin Hu & Ors [2011] SGHC 143
In the recent Singapore High Court decision of Hiap Seng & Co Pte Ltd v LauChin Hu & Ors, Kan Ting Chiu J considered the right of a party having control ofa derivative action filed on behalf of a company to the company’s documents.The learned judge held that this right of access to such documents flows fromthe authority to institute the derivative action, and it should not be confused withthe right of discovery between adversarial parties in an action or the right of acompany director to the records of a company. Kan J ordered the defendants,who were the directors of the company, to provide the directors who werebringing the derivative action in the name of and on behalf of the company (theplaintiffs), access to such relevant documents that were in their possession,control and power so that the best case can be pleaded and presented on behalfof the company.
Background
The plaintiffs and defendants were directors/shareholders of the company.All the parties were members of the same family and the company was afamily business.
In 2009, the plaintiffs obtained a High Court order (the “2009 Order”) giving themleave to bring an action in the name of and on behalf of the company against thedefendants for breaches of their directors’ duties to the company. The 2009Order also put the plaintiffs in control over the conduct of the action. For moreinformation about the 2009 Order, please click here to read the article“Singapore High Court grants leave for action on behalf of company undersection 216A of Companies Act” which was featured in a previous issue of theAllen & Gledhill Legal Bulletin (October 2009).
Slow progress in derivative suit prompted application for access torelevant documents
Consequently, the plaintiffs filed the current derivative suit against thedefendants. However, due to the slow progress in the action and persistent non-co-operation on the part of the defendants, the plaintiffs caused the company tofile a summons seeking access to relevant documents which were in thedefendants’ possession, custody or power, that either belonged to the companyor ought to be within the possession, custody and power of the company, andwhich ought to be disclosed pursuant to the company’s discovery obligations inthe derivative suit. The application was made on the following grounds:
The defendants refused to allow the plaintiffs to enter into the company’soffice premises; and
The plaintiffs, as directors of the company, were entitled under section199(3) of the Companies Act to inspect the accounting and other recordswhich explain the transactions and financial position of the company.
15Legal Bulletin July 2011
The Assistant Registrar dismissed the plaintiffs’ application and theyappealed.
Capacity of plaintiffs in seeking access to company’s documents
In considering the appeal, Kan J held that the application and the parties’positions on the plaintiffs’ right of access to the documents had to beconsidered against the plaintiffs’ and the defendants’ rights and obligationsunder the 2009 Order. In particular, when the plaintiffs filed the derivativeaction pursuant to the 2009 Order, they were not suing in their capacities asshareholders or directors of the plaintiffs. Instead, they were suing thedefendants on behalf of the company.
Hence, the plaintiffs had a duty to ensure that the derivative action wasprosecuted properly and diligently, and that they must act responsibly andreasonably in the interests of the company. As such, the plaintiffs wereobliged to review all relevant documents, whether in their possession or not,so that the best case can be pleaded and presented on behalf of thecompany. The learned judge also opined that the plaintiffs would be indereliction of their duty if they neglected to access such documents andreview them.
Defendants must allow access to documents
Accordingly, Kan J held that the defendants must recognise the plaintiffs’right to pursue the action on behalf of the company. Hence, if there weresuch documents in their possession and control as directors of the company,the defendants must allow the plaintiffs access to the documents. Any refusalto give access was, prima facie, a breach of their directors’ duties to act inthe interests of the company, and that would include giving assistance to thecompany to prosecute the action effectively, and not to hinder its efforts.
Right to access documents stemmed from authority to institutederivative action
Kan J highlighted that the right of access to the relevant documents of thecompany stemmed from the authority to institute the action, and it was not tobe confused with the right of discovery between adversarial parties in anaction or the right of a company director to the records of a company. Assuch, the application was procedurally regular and unexceptional since theapplication for access to documents was made by way of a summons as partof the on-going action.
Conclusion
Kan J ordered the defendants to provide access to such relevant documentsthat were in their possession, control and power.
Comment
The situation described in this case is fairly common. A party who has soughtand obtained leave to commence a derivative action on behalf of a companyis almost always not in control of the company. On the other hand, the onescontrolling the company are usually more likely than not to be the defendantsin such a derivative action. This case makes it clear that the parties in controlof the company cannot frustrate the derivative action by refusing access tothe parties in control of the derivative action.
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If you would like to discuss theimpact of this case on yourbusiness, please contact:
Vincent LeowTel: +65 6890 [email protected]
Tham Wei ChernTel: +65 6890 [email protected]
16Legal Bulletin July 2011
Dispute Resolution
Singapore Court of Appeal elaborates on relationshipbetween insolvency and arbitration in upholding HighCourt decision
Larsen Oil and Gas Pte Ltd v Petroprod Ltd (in official liquidation in theCayman Islands and in compulsory liquidation in Singapore)[2011] SGCA 21
In Larsen Oil and Gas Pte Ltd v Petroprod Ltd (in official liquidation in theCayman Islands and in compulsory liquidation in Singapore) [2011] SGCA21, the Singapore Court of Appeal endorsed, and elaborated on, the stancetaken by the High Court concerning the relationship between arbitration andinsolvency.
Brief facts
The dispute between the parties centred on the relationship between theBankruptcy Act’s avoidance provisions - upon which the insolvent party(Petroprod) sought to rely on to avoid transactions agreed to with the otherparty (Larsen) - and an arbitration clause which was included in the mainagreement between the parties, which Larsen sought to enforce.
High Court judgment
The Singapore High Court opined that the policy underlying the avoidanceprovisions in the Bankruptcy Act and the Companies Act (the “Acts”) wouldbe compromised if their enforcement were subject to private arrangements(including an agreement to arbitrate) between the company and an individualcreditor as the rights created by the provisions exist for the benefit of thegeneral body of creditors. The avoidance provisions protect against adiminution of the assets available to the general body of creditors by providingfor the avoidance of a transaction which confers an unfair advantage on oneparty. In this case, the court held that the claims under the Acts in relation tothe payments made by the plaintiff to the defendant were not arbitrable.
In the circumstances, the court held that it would be preferable to consider allthe plaintiff’s claims in a similar forum so as to achieve a swift, economicaland internally consistent settlement of all the disputes in question. Theapplication for a stay in favour of arbitration was therefore denied.
The Court of Appeal upheld the decision of the High Court but expounded onthe relationship between insolvency and arbitration.
Concept of non-arbitrability a cornerstone of arbitration
The Court of Appeal agreed with the High Court on the importance ofdetermining arbitrability in deciding whether to grant a stay. The court notedthat, contrary to what the High Court had said in this regard, the ArbitrationAct did indeed make explicit reference to the concept of arbitrability insection 48(1)(b)(i), which relates to the setting aside of an arbitral award. Thecourt stated that this can be done by the courts if “the subject-matter of thedispute is not capable of settlement by arbitration”. The Arbitration Act doesnot, however, provide guidance on what disputes are arbitrable, which ledthe court in this instance to judge that “it has been left to the courts to shapethe contours of the arbitrability exception”.
This recent development was firsthighlighted in the Allen & GledhillArbitration Alert of 6 July 2011. Ifyou would like to be on ourarbitration related electroniccommunications mailing list, pleasee-mail us [email protected]
The court looked to the report issued in 2000 in relation to a review ofSingapore’s arbitration legislation where it was made clear that the policy ofencouraging arbitration as currently included in the Arbitration Act is subjectto other competing policy considerations, especially insolvency andbankruptcy issues. The court finds that the drafters of Singapore’s arbitrationlegislation regarded the question of arbitrability as subject to public interestconsiderations. It recognised that insolvency and bankruptcy law is an area“replete with public policy considerations that were too important to be settledby parties privately through the arbitral mechanism”.
The court noted that the concept of non-arbitrability was a cornerstone of thearbitration process which allowed the courts to refuse to enforce anotherwise valid arbitration agreement on policy grounds. The court noted thatthe insolvency regime’s objective of facilitating claims by a company’screditors against the company and its pre-insolvency management overridesthe freedom of the company’s pre-insolvency management to choose theforum where such disputes are to be heard. The court found it “very hard tojustify” compelling the liquidator - the representative of the creditors - to giveup its rights to judicial remedies in favour of arbitration. The courts shouldtherefore treat disputes arising from the operation of the statutory provisionsof the insolvency regime per se as non-arbitrable even if the parties
If you would like to discuss theimpact of this case on yourbusiness, please contact:
Dinesh DhillonTel: +65 6890 [email protected]
Edwin TongTel: +65 6890 7867
17Legal Bulletin July 2011
expressly included them within the scope of the arbitration agreement.
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Insurance
MAS issues consultation paper on “Proposed Revisions tothe Risk Based Capital Framework - Financial ResourcesAdjustment, Reinsurance Adjustment, C2 RiskRequirements”
On 11 July 2011, the Monetary Authority of Singapore (the “MAS”) issued aconsultation paper on “Proposed Revisions to the Risk Based CapitalFramework - Financial Resources Adjustment, Reinsurance Adjustment,C2 Risk Requirements”.
The consultation was carried out as part of the ongoing refinement of theRisk Based Capital (“RBC”) Framework for insurers. The MAS conducted areview in the following areas:
Credit risk arising from contracts of insurance: Insurers are exposedto credit risk as part of the insurance business arising from the receipt ofpremiums from their insureds and the reinsurance recoverables due fromthe reinsurers. An insurer will record a receivable due from its reinsureronce the claim on a (reinsured) policy has been paid by the insurer. TheMAS proposed various changes, e.g. aligning the tiers of period that thereinsurance recoverables on paid claims has been outstanding withthose for outstanding premiums.
Contagion risk arising from intra group transactions: As intra grouptransactions may introduce contagion and reputational risk, the MAS hasreviewed the capital treatment of exposure to related parties under theRBC framework.
18Legal Bulletin July 2011
Exposure to related parties from outward reinsurancearrangements: The MAS proposes removing the recognition given tothe reinsurance arrangements between a branch and its head office,
removing the concession given to related parties in the computation ofthe reinsurance adjustment and the inclusion of claims liabilities in thecomputation of reinsurance adjustment.
Consultation period
Any feedback on the proposals is to be submitted to the MAS by11 August 2011.
Reference material
The consultation paper is available from the MAS website www.mas.gov.sgby clicking here.
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Intellectual Property & Technology
JPO and IPOS extend Pilot Patent Prosecution Highway foranother year till 1 July 2012
The IPOS-JPO Patent Prosecution Highway (PPH) pilot programme hasbeen extended for another year with effect from 1 July 2011.
As a matter of background, on 1 July 2009, the Intellectual Property Office ofSingapore (the “IPOS”) and the Japan Patent Office (the “JPO”) launched acooperative initiative called the Patent Prosecution Highway (“PPH”) with apilot period of one year, commencing on 1 July 2009. The programme wasthen extended till 1 July 2011.
This initiative is intended to facilitate faster prosecution of patent applicationsas references to earlier work done at one office could reduce or eveneliminate the need for subsequent search and examination work in the otheroffice. The initiative is also expected to result in better search andexamination as one patent office may check with and rely on the other officefor previously unavailable databases.
The IPOS website www.ipos.gov.sg contains further information on theIPOS PPH pilot programmes, please click here to read.
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IPOS launches IP Competency Framework and ideas2IP
On 25 May 2011, the Intellectual Property Office of Singapore (the “IPOS”)announced the launch of the following:
IP Competency Framework (the “IPCF”);
ideas2IP.
For further information, pleasecontact:
Dr Stanley Lai, SCTel: +65 6890 [email protected]
Low Pei LinTel: +65 6890 [email protected]
For further information, pleasecontact:
Francis MokTel: +65 6890 [email protected]
Sanjiv RajanTel: +65 6890 [email protected]
Corina SongTel: +65 6890 [email protected]
This recent development was firsthighlighted in the Allen & GledhillIntellectual Property & TechnologyReview of 12 July 2011. If youwould like to be on our intellectualproperty and technology relatedelectronic communications mailinglist, please e-mail us [email protected]
This recent development was firsthighlighted in the Allen & GledhillIntellectual Property & TechnologyReview of 12 July 2011. If youwould like to be on our intellectualproperty and technology relatedelectronic communications mailinglist, please e-mail us [email protected]
19Legal Bulletin July 2011
IP Competency Framework
The IPOS has developed the IPCF to define the competencies required forkey IP professionals and practitioners in the industry and accredit theattainment of these competencies into Continuing Professional Developmentqualifications that are recognised by the industry. The IPCF is the first of itskind in the world on a nationwide scale.
Under the IPCF, four key IP occupational levels have been identified, with 57competency units initially created. The IPOS will also accredit trainingproviders who will certify successful programme participants. The IPOS willpartner with the Singapore Workforce Development Agency to create a newsector for IP in Singapore under the Workforce Skills Qualification (WSQ)under a new framework known as IP WSQ.
Further details about the IPCF can be found at www.ipcf.sg. To read theIPOS press release of 25 May 2011 from the IPOS websitewww.ipos.gov.sg, please click here.
ideas2IP
The IPOS launched ideas2IP, an online innovation platform designed tobring inventors and investors together to commercialise good ideas. ideas2IPbridges the gap between IP creation and exploitation. The new initiativeprovides a platform for individual inventors to share their ideas with potentialinvestors in a safe environment. Investors with the means and experiencecan help fund and guide the further development of these ideas into a formthat has commercial potential.
For more details on ideas2IP, please visit http://ideas2ip.sg. To read theIPOS press release of 25 May 2011 from the IPOS websitewww.ipos.gov.sg, please click here.
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Singapore High Court dismisses application by a nightcluboperating at Marina Bay Sands to strike out trade markaction by Bali restaurant and bar Ku De Ta
Guy Neale & Ors v Ku De Ta SG Pte Ltd [2011] SGHC 136
In Guy Neale & Ors v Ku De Ta SG Pte Ltd [2011] SGHC 136, the plaintiff-operators of an exclusive restaurant and bar in Bali, Ku De Ta, who areseeking to stop a nightclub operating at Marina Bay Sands (one of the twointegrated resorts in Singapore) also styled “Ku De Ta” from using the nameand mark “Ku De Ta”, successfully resisted the defendant's application tostrike out the plaintiff's action.
The Singapore High Court considered the scope of sections 55 and 55A ofthe Trade Marks Act (the “Act”) which relate to the protection and permitteduse of well-known trade marks. The decision handed down by the AssistantRegistrar held that the proprietor of a well-known mark is entitled to restrainthe use in Singapore of a registered trade mark in relation to goods orservices for which the latter is registered if (amongst other things) theallegedly offending trade mark is not validly registered. It is also notpremature to bring an action under section 55 of the Act to restrain the use ofthe allegedly offending registered trade mark before the invalidation of thesaid registered trade mark.
For further information, pleasecontact:
Dr Stanley Lai, SCTel: +65 6890 [email protected]
Low Pei LinTel: +65 6890 [email protected]
This recent development was firsthighlighted in the Allen & GledhillIntellectual Property & TechnologyReview of 12 July 2011. If youwould like to be on our intellectualproperty and technology relatedelectronic communications mailinglist, please e-mail us [email protected]
20Legal Bulletin July 2011
Facts
The plaintiffs were a partnership operating a restaurant and bar in Baliknown as “Ku De Ta”. The third plaintiff registered the trade mark “KU DETA” in Indonesia and held proprietorship of that mark on behalf of thepartnership.
The defendant was a company incorporated in Singapore. In 2010, it openeda restaurant and bar at Marina Bay Sands that was also styled “Ku De Ta”. Inthe course of its business, the defendant used two trade marks incorporatingthe words “Ku De Ta”. The defendant was a licensed user of these trademarks (the “Nines Square Registered Marks”), which had been registeredin Singapore by an Australian company.
When the plaintiffs learnt of the defendant’s restaurant and bar in Singapore,they took out an action against it (the “Suit”), seeking an order that thedefendant stop using the name and mark “Ku De Ta”.
One of the causes of action pleaded in the plaintiffs’ Statement of Claim wasfounded on section 55 of the Act. Section 55 provides for the protection ofwell known trade marks whether or not the trade mark has been registered inSingapore, and whether or not its proprietor carries on business or has anygoodwill in Singapore.
In their Statement of Claim, the plaintiffs alleged that the defendant hadinfringed their rights as owners of a well known trade mark protected undersection 55. The defendant’s use of the trade mark “Ku De Ta” was withoutthe partnership’s consent, and had caused and/or was likely to causeconfusion to the public and/or would indicate a connection between thegoods or services of the defendant and the plaintiffs. The plaintiffs alsoclaimed that the defendant’s use of the trade mark “Ku De Ta” would dilutethe distinctive character of the plaintiffs’ trade mark “Ku De Ta”, and/or wouldconstitute the defendant taking unfair advantage of the distinctive characterof the plaintiffs’ trade mark.
The defendant applied to strike out the paragraphs of the Statement of Claimwhich pleaded the plaintiffs’ cause of action under section 55, on the basisthat those paragraphs disclosed no reasonable cause of action.
The defendant’s case
The defendant argued that the protection given to well known trade marksunder section 55 of the Act is limited by section 55A. Relying on section55A(2), the defendant submitted that the plaintiffs had no reasonable causeof action based on section 55.
Section 55A(2) provides that, notwithstanding section 55, the proprietor of awell known trade mark is not entitled to restrain the use in Singapore of anyregistered trade mark in relation to goods or services for which the latter isregistered.
Essentially, the defendant argued that the Nine Squares Registered Markswere registered in Singapore. Since it was a licensed user of those trademarks, it could avail itself of the section 55A(2) defence and this provided acomplete answer to the plaintiffs’ claim under section 55 such that the saidparagraphs in the Statement of Claim could disclose no valid cause ofaction. Accordingly, those portions of the pleading should be struck out.
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The plaintiffs’ case
The plaintiff submitted that section 55A(2) did not provide an absolutedefence to a claim under section 55. The defence would not apply where theregistered trade marks were liable to be invalidated. In addition to the Suitbrought against the defendant, the plaintiffs were also seeking theinvalidation of the Nine Squares Registered Marks against the Australiancompany. The ability of the defendant to raise the section 55A(2) defencewas contingent on the plaintiffs failing in their invalidation application, whichhad yet to be determined. As such, the plaintiffs argued that the highthreshold for a striking out application was not met, given that triable issuesof law and fact were present.
Section 55A(2) not a complete answer to plaintiffs’ claim undersection 55
On perusing the relevant parliamentary debates, the court noted thatsections 55 and 55A were enacted for the purpose of:
(a) giving protection for well known marks;
(b) implementing the United-States Singapore Free Trade Agreement(the “USSFTA”); and
(c) implementing the Joint Recommendation Concerning Provisions on theProtection of Well Known Marks (1999) (“Joint Recommendation”),which is an international standard adopted by the Assembly of the ParisUnion for the Protection of Industrial Property and the GeneralAssembly of the World Intellectual Property Organization on the level ofprotection for well known marks.
The court also found useful the explanatory statement to the Trade Marks(Amendment) Bill (B18/2004) which disclosed that the then-existingsection 55 was replaced with the present day provisions to give effect to theUSSFTA read with the Joint Recommendation, and that a new section 55Awas introduced to set out the permitted uses of well known trade marks forconsistency with the permitted uses of registered trade marks under section28 of the Act.
Pursuant to Article 3 of the Joint Recommendation, member states arerequired to protect a well known mark against conflicting marks, businessand domain names, at least with effect from the time when the mark hasbecome well known in the member state. When a mark is deemed to be inconflict with a well known mark in respect of identical or similar goods and/orservices, member states are obliged to provide certain remedies. Article 4(2)of the Joint Recommendation provides that if the member state’s laws allowthird parties to oppose the registration of a mark, a conflict with a well knownmark constitutes a ground for opposition. Article 4(3) provides that even afterregistration, the owner of a well known mark may request that the conflictingmark be invalidated. Article 4(4) provides that the owner of the well knownmark is entitled to request the prohibition of the conflicting mark.
The court was of the view that if the defendant’s literal interpretation ofsections 55 and 55A(2) of the Act were adopted, the owner of a well knownmark would not be entitled to request the prohibition of the use of aconflicting mark so long as the latter is a registered trade mark. This wouldrender Article 4(4) of the Joint Recommendation otiose, instead of givingeffect to it as sections 55 and 55A were meant to. Arguably, therefore,section 55A(2) could not be said to provide a complete answer to a claimunder section 55 of the Act.
22Legal Bulletin July 2011
In the court’s view, the interpretation that section 55A(2) is not anunassailable defence was also buttressed by the consideration that section55A was meant to render the permitted uses of well known trade marksconsistent with the permitted uses of registered trade marks under section 28of the Act. Section 28(3) provides that a registered trade mark is not infringedby the use of another registered trade mark in relation to goods or servicesfor which the latter is registered. The defence in section 28(3) is not acomplete defence if the allegedly offending mark is not validly registered.
Therefore, if section 55A(2) is to mirror the scope and application of section28(3), it similarly ought not to provide a complete defence where the trademark complained of was not validly registered.
Not premature to bring action for protection of well known trade markbefore invalidation of allegedly offending registered trade mark
The defendant had suggested that procedurally, it was premature to bring acause of action based on section 55 of the Act before invalidationproceedings were commenced. The proper course was for the registeredtrade mark to be properly invalidated before restraining orders were sought.
The court disagreed with this argument for these reasons:
The prolonged use of an invalidly registered trade mark could result insubstantial dilution of the goodwill accruing to the well known mark,which is a form of damage not easily compensable in monetary terms.While the owner of the registered trade mark could arguably state similarconcerns, section 55(7) of the Act places the onus on the owner of thewell known mark to take timely action as he loses his entitlement to seekcertain remedies if he acquiesces for a continued period of five years inthe use of the allegedly offending registered trade mark. This would limitthe damage likely to be suffered by the owner of the registered trademark whereas the converse is not true for the owner of the well knownmark who would therefore be inadequately protected.
One of the purposes of enacting sections 55 and 55A of the Act was togive effect to the Joint Recommendation. The Explanatory Notes to theJoint Recommendation suggests that owners of well known marks wereintended to be given early opportunities to take action against conflictingregistered trade marks. Adopting the defendant’s interpretation ofsections 55 and 55A would not give effect to this intention.
Conclusion
Given the above findings and reasoning, it was by no means plain andobvious to the court that the relevant paragraphs of the plaintiffs’ Statementof Claim could disclose no valid cause of action based on a statutoryinterpretation of sections 55 and 55A of the Act. At the minimum, thepleadings in the Statement of Claim raised a triable issue of law.
Accordingly, the court dismissed the defendant’s application to strike outparts of the plaintiffs’ Statement of Claim.
Allen & Gledhill LLP Partner Kristy Tan represented the successful plaintiffs.
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If you would like to discuss theimpact of this case on yourbusiness, please contact:
Kristy TanTel: +65 6890 [email protected]
23Legal Bulletin July 2011
Media & Telecommunications
Mandatory cross-carriage obligations to take effect on1 August 2011
On 1 July 2011, the Media Development Authority of Singapore (the “MDA”)gazetted amendments to the Code of Practice for Market Conduct in theProvision of Media Services (the “Code”), to take effect on 2 July 2011. Therevised Code provides that, from and including 1 August 2011, designatedpay TV licensees must carry out certain obligations with respect to the cross-carriage of certain “Qualified Content”. The definition of “Qualified Content”has been amended in the revised Code to include channel or programmingcontent which is (i) produced or commissioned by a broadcasting licenseeand transmitted by such broadcasting licensee on its pay TV service on anexclusive basis on or after 1 August 2011; and (ii) acquired, renewed orotherwise obtained on or after 12 March 2010 by a broadcasting licensee fortransmission on its pay TV service on an exclusive basis. Qualified Contentincludes any bundled channels or bundled programming content containingany channel or programming content described above (whether in whole orin part).
Set out below are some of the key revisions to the Code which the MDA hashighlighted:
Designated pay TV licensees must cross-carry Qualified Content in itsentirety and in an unmodified and unedited form.
Consumers should not wait more than five working days to receiveQualified Content once they have made a request to their respectivedesignated pay TV licensee.
Designated pay TV licensees must deal with all consumer feedback orcomplaints on a non-discriminatory basis.
Designated pay TV licensees must ensure that consumers have accessto information on Qualified Content by publishing and maintaining a listof the Qualified Content on their respective websites and viewing guides.
Designated pay TV licensees must offer Qualified Content at the sameprice, terms and conditions to all consumers and subscribers.
The MDA has also clarified that the cross-carriage obligations under theCode will not apply to Qualified Content delivered over the Internet andmobile platforms.
Further, the revised Code provides that a designated pay TV licensee mayseek exemption from its cross-carriage obligations under the Code. Inseeking any such exemption, the designated pay TV licensee must clearlyestablish to the MDA’s satisfaction one or more of the followingcircumstances:
The exemption will benefit the public and media industry.
The designated pay TV licensee is prevented from fulfilling its obligationsby a technical constraint and such technical constraint cannot beremoved without such designated pay TV licensee incurring serious andirreparable harm.
24Legal Bulletin July 2011
(Where the person seeking exemption is obliged to make available itsQualified Content) the channel or content provider does not have therelevant broadcast rights for Singapore and other neighbouringcountries.
(Where the person seeking exemption is obliged to carry QualifiedContent) the relevant person obliged to make available its QualifiedContent has failed to obtain the necessary rights to comply with itsobligations under the Code.
The MDA has indicated that it will review the Code at least every three yearsto ensure that it continues to stay relevant in an evolving market.
Reference materials
The following documents are available on the MDA websitewww.mda.gov.sg. Please click on the relevant titles to read:
Closing Note on Consultation of Implementation on Cross-CarriageMeasure
News release
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SGNIC launches Internationalised Domain Names witheffect from 4 July 2011
With effect from 4 July 2011, the Singapore Network Information Centre(the “SGNIC”), the national registry for domain names, will be acceptingregistrations for Internationalised Domain Names (“IDNs”). This developmentenables consumers and businesses to use full Chinese and full Tamilcharacters in their website addresses. According to the media release by theInfo-communications Development Authority of Singapore (the “IDA”) issuedon 14 June 2011, the launch of IDNs allows consumers and businesses tohave more options for Web addresses that their target market or audiencecan better identify with. The media release then gave the example ofChinese and Tamil-speaking communities in China and India who are alsostarting to use full Chinese and Tamil characters in website addresses.
The launch of IDNs follows the SGNIC’s release of Chinese Domain Names(“CDN”) at the 2nd ( .sg) and 3rd level ( .com.sg) in 2009. It is alsoconsistent with the global trend of using non-Latin characters in domainnames which is common in countries such as Russia, the Republic of Koreaand Saudi Arabia where full IDNs have been implemented.
The SGNIC will offer the IDNs under the top-levels of and
, which means “Singapore" in both Chinese and Tamilrespectively. Registration of IDNs will be carried out in the phases set outbelow.
Phase 1: For existing CDN holders (4 July 2011 - 15 August 2011)
Phase 2: For trade mark holders, government agencies and otherinterested businesses and individuals (12 September 2011 - 8 November2011)
For further information, pleasecontact:
Tan Wee MengTel: +65 6890 [email protected]
Tham Kok LeongTel: +65 6890 [email protected]
This recent development was firsthighlighted in the Allen & GledhillIntellectual Property & TechnologyReview of 12 July 2011. If youwould like to be on our intellectualproperty and technology relatedelectronic communications mailinglist, please e-mail us [email protected]
25Legal Bulletin July 2011
General Launch: 14 December 2011 onwards
Phase 1 and Phase 2 applicants can also apply for registering premiumnames (single-character domain names and numeric domain names) if theyhave registered these premium names under existing .sg categories. Newpremium names can also be applied for under Phase 2.
Reference materials
Please click here for the IDA media release of 15 June 2011 which isavailable on the IDA website www.ida.gov.sg. Please also visit the SGNICwebsite www.sgnic.sg for more information.
To read an article entitled “SGNIC to launch Chinese domain names inSingapore” which was featured in a previous issue of the Allen & GledhillLegal Bulletin (November 2009), please click here.
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Real Estate
MAS consults on proposed residential property loans factsheet
The Monetary Authority of Singapore (the “MAS”) is proposing to requirebanks, finance companies, merchant banks, and direct insurers (collectively,the “FIs”) to provide a fact sheet in a standardised format (the “Fact Sheet”)when marketing residential property loans to consumers. The Fact Sheetaims to provide, within one page, information that is considered essential tothe consumer’s decision on whether to take up a residential property loan.Details of this proposed initiative can be found in the consultation paperissued by the MAS on 22 June 2011. The consultation exercise closed on22 July 2011.
Reference material
The following materials are available from the MAS websitewww.mas.gov.sg:
Press release
Consultation paper
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Tax
IRAS issues e-Tax Guide on “Income Tax & Stamp Duty:Mergers and Acquisitions Scheme”
It was announced in Budget 2010 that a Merger and Acquisition Allowance(“M&A Allowance”) and stamp duty relief under the Mergers andAcquisitions Scheme (“M&A Scheme”) will be introduced to help defray thecosts of acquiring companies. The relevant legislation was introduced by theIncome Tax (Amendment) Act 2010 and the Stamp Duties (Amendment No.2) Act 2010 and was effective from 1 April 2010.
For further information, pleasecontact:
Dr Stanley Lai, SCTel: +65 6890 [email protected]
Low Pei LinTel: +65 6890 [email protected]
Tan Wee MengTel: +65 6890 [email protected]
Tham Kok LeongTel: +65 6890 [email protected]
For further information, pleasecontact:
Francis MokTel: +65 6890 [email protected]
Karen TiahTel: +65 6890 [email protected]
Wong Sook PingTel: +65 6890 [email protected]
On 27 June 2011, the Inland Revenue Authority of Singapore (the “IRAS”)issued an e-Tax Guide on “Income Tax & Stamp Duty: Mergers andAcquisitions Scheme” (the “e-Tax Guide”) to provide guidance on theavailability and application of the M&A Scheme.
Qualifying conditions under the M&A Scheme
The M&A Scheme applies to qualifying acquisitions of ordinary shares in acompany (the “Target Company”) made during the period 1 April 2010 to31 March 2015 (both dates inclusive). For the purpose of the M&A Scheme,the date of acquisition of the ordinary shares (the “Acquisition Date”) is thedate the sale and purchase agreement for the ordinary shares is entered intoor, if there is no agreement, the date of the share transfer.
Under the M&A Scheme, an M&A Allowance is granted to a company(an “Acquiring Company”) who acquires the ordinary shares in the TargetCompany directly or through a wholly-owned subsidiary that is incorporatedfor the primary purpose of acquiring and holding shares in other companies(an “Acquiring Subsidiary”).
The qualifying conditions for an Acquiring Company, an AcquiringSubsidiary, a Target Company, and a qualifying acquisition are set out in thee-Tax Guide.
The M&A Scheme is also applicable to registered business trusts (withmodifications where appropriate).
Allowance and relief under the M&A Scheme
The amount of the M&A Allowance is 5% of the cash consideration paid forthe acquisition and/or the value of any shares issued as consideration. M&AAllowance is also available if any contingent consideration is paid in respectof the acquisition. The maximum amount of M&A Allowance that may begranted to an Acquiring Company for acquisitions made in the basis periodfor a year of assessment is S$5 million.
The maximum amount of stamp duty relief available to an AcquiringCompany under the M&A Scheme is S$200,000 per financial year.
Reference material
To access the full text of the e-Tax Guide from the IRAS website
For further information, pleasecontact:
Sunit ChhabraTel: +65 6890 [email protected]
Nand Singh GandhiTel: +65 6890 [email protected]
Lim Pek BurTel: +65 6890 [email protected]
Tang Siau YanTel: +65 6890 7799
26Legal Bulletin July 2011
www.iras.gov.sg, please click here.
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MOF consults on draft Income Tax (Amendment) Bill 2011:Implementing Budget 2011 changes
From 11 July 2011 to 1 August 2011, the Ministry of Finance (the “MOF”)conducted a public consultation and sought feedback on 37 proposedchanges to the Income Tax Act. For this purpose, a draft Income Tax(Amendment) Bill 2011 (the “draft Amendment Bill”) was released andannexed to the consultation paper.
The changes in the draft Amendment Bill 2011 seek to make changes arisingfrom proposals announced in Budget 2011, as well as non-Budget changes.The following are highlights of some of these changes.
27Legal Bulletin July 2011
Budget 2011 changes
Enhancement of the Productivity and Innovation Credit (“PIC”)Scheme: To further encourage pervasive innovation and productivityefforts, the PIC scheme is simplified and enhanced in four main areas:
The quantum of PIC deduction is increased to 400% of qualifyingexpenditure (up from 250% currently), for the first S$400,000 spenton each qualifying activity (up from S$300,000 currently);
R&D conducted abroad, not just R&D done in Singapore, will qualify;
The S$400,000 expenditure cap per year for YA 2013 to YA 2015 iscombined into a 3-year block of expenditure of S$1.2 million.Businesses have more flexibility to utilise any amount up to the3-year block within YA 2013 to YA 2015 for each qualified activity.
Taxpayers can opt to receive, in lieu of a tax deduction, a cashpayout of 30% of the first S$100,000 of qualifying expenditure, up toS$30,000 (up from the original S$21,000).
One-off corporate income tax rebate or SME cash grant: A corporateincome tax rebate of 20% of the corporate income tax payable, cappedat S$10,000 is granted for YA 2011. As many small and medium-sized(“SME”) companies pay little taxes and so may not benefit fully from the20% rebate, a one-off SME cash grant is given instead. The grant isbased on 5% of the company’s revenue for YA 2011, subject to a cap ofS$5,000.
Introduction of the Foreign Tax Credit Pooling System: Residenttaxpayers may elect for the pooling of tax credits on foreign tax sufferedon their foreign income taxable in Singapore from Year of Assessment(“YA”) 2012 provided certain conditions are fulfilled. The amount offoreign tax credit to be granted is based on the lower of the pooledforeign taxes paid on the foreign income and the total Singapore taxpayable on such foreign income.
Introduction of new Maritime Sector Incentive: All existing taxincentives for the maritime sector are consolidated under the new MaritimeSector Incentive (“MSI”) effective from 1 June 2011. There are three broadcategories under the MSI: (a) International Shipping Operations,(b) Maritime (Ship or Container) Leasing, and (c) Shipping-related SupportServices. Enhancements are also introduced under the MSI.
Deductions for overseas market development expenses: Presently,double tax deductions are available for certain expenses incurred bybusinesses expanding overseas, including expenses incurred foroverseas marketing and project offices. These existing deductions havebeen merged and streamlined into a single scheme for promotinginternationalisation.
250% Deduction on Qualifying Donations extended till 2015: Fordonations made to Institutions of a Public Character, Governmentapproved museums and prescribed educational/research institutionsduring the period from 1 January 2009 to 31 December 2010, the taxdeduction was enhanced to 250% of the amount of donation. The taxdeduction of 250% of the donations made is extended for another fiveyears for donations made from 1 January 2011 to 31 December 2015.
28Legal Bulletin July 2011
CPF contribution rate and salary ceiling changes: It was announcedin Budget 2011 that:
(a) the employer’s compulsory CPF contribution rate will be raised byanother 0.5% point to 16% with effect from 1 September 2011; and
(b) the current CPF monthly salary ceiling of S$4,500 will be raised toS$5,000 with effect from 1 September 2011.
Corresponding changes are made to the Income Tax Act for the taxdeduction allowed on compulsory contributions made by employers tothe CPF.
For more information about the Budget changes, please refer to theSummary Table - Budget 2011 Changes.
Non-Budget 2011 changes
Application of exchange of information (“EOI”) provisions to EOIagreements: Currently, the EOI provisions of the Income Tax Act onlyapply to Avoidance of Double Taxation Arrangements (DTAs) thatincorporate the internationally-agreed standard for the exchange ofinformation upon request for tax purposes. The amendments to the EOIprovisions are to allow Singapore to apply the EOI provisions to EOIagreements as well.
Accord MAS bills and notes tax parity with Singapore GovernmentSecurities: The amendments are intended to allow approved bills andnotes issued by the Monetary Authority of Singapore to enjoy the sametax treatment as that accorded to Singapore Government Securities.
For more information about the Budget changes, please refer to theSummary Table - Non-Budget Changes
Reference materials
For further information from the MOF website www.mof.gov.sg, please clickon the provided links to access the required information:
Press release
Draft Income Tax (Amendment) Bill 2011
Draft Commencement Notification
Summary Table - Budget 2011 Changes
Summary Table - Non-Budget Changes
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For further information, pleasecontact:
Sunit ChhabraTel: +65 6890 [email protected]
Nand Singh GandhiTel: +65 6890 [email protected]
Lim Pek BurTel: +65 6890 [email protected]
Tang Siau YanTel: +65 6890 [email protected]
29Legal Bulletin July 2011
MOF consults on draft Goods and Services Tax(Amendment) Bill 2011: Implementing Budget 2011changes
From 8 July 2011 to 28 July 2011, the Ministry of Finance (the “MOF”)conducted a public consultation on a draft Goods and Services Tax(Amendment) Bill 2011 (the “draft Amendment Bill”).
The proposed changes to the Goods and Services Tax Act (the “GST Act”)seek to implement changes announced in Budget 2011, as well as otherchanges to existing tax policies and administration resulting from on-goingreview of the goods and services tax (“GST”) system. Some of the changesare summarised below.
Budget 2011 tax changes
GST measures for marine industry: To ease GST compliance forbusinesses supporting the marine industry and reflect the internationalcharacter of supplies relating to ships, the GST Act will be amended tointroduce a new GST scheme to allow “approved marine customers” tobuy or rent zero-rated goods for use or installation on a commercial shipthat is wholly for international travel. Under the scheme, a supplier mayzero-rate the supply of such goods to an “approved marine customer”without having to maintain the requisite documentary proof.
GST measures for the biomedical industry: To promote theinternational competiveness of the biomedical sector in Singapore, theGST Act will be amended to extend the Approved Contract Manufacturerand Trader Scheme to qualifying biomedical contract manufacturers.Approved contract manufacturers (including those in the biomedicalsector) will also be allowed to disregard GST on services rendered onfailed or excess production, and to recover GST on local purchases ofgoods used in the contract manufacturing process.
Zero-rating relief for supplies related to goods kept in “approvedspecialised warehouses”: The GST Act will be amended to introduce anew zero-rating relief for specified services supplied to overseas personsand performed on specified goods kept in “approved specialisedwarehouses” in Singapore. The operator of an “approved specialisedwarehouse” will also be able to zero-rate his supply of storage space(a supply of goods) which are provided in his business of storingspecified goods for his overseas customer.
Other tax changes
Expand the scope for local agents in Singapore to recover GST ongoods imported on behalf of overseas persons; and
Clarify the GST accounting rules for specified transactions.
Reference materials
For more information about the proposed changes to the GST Act, pleaserefer to the Summary Table on Tax Changes prepared by the MOF.
For further information from the MOF website www.mof.gov.sg, please clickon the provided links:
For further information, pleasecontact:
Sunit ChhabraTel: +65 6890 [email protected]
Nand Singh GandhiTel: +65 6890 [email protected]
Lim Pek BurTel: +65 6890 [email protected]
Tang Siau YanTel: +65 6890 [email protected]
30Legal Bulletin July 2011
Press release
Draft GST (Amendment) Bill 2011
Draft GST (General) (Amendment) Regulations 2011
Draft GST (Imports Relief) (Amendment) Order 2011
Draft GST (International Services) (Amendment) Order 2011
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General
MAS issues regulations providing for sanctions andfreezing of assets in relation to Libya
The Monetary Authority of Singapore (Sanctions and Freezing of Assets ofPersons - Libya) Regulations 2011 (the “Regulations”) was gazetted on4 July 2011 and came into operation on 8 July 2011.
The Regulations assist in giving effect to United Nations Security Council(the “UN Security Council”) Resolution 1970 (2011) and Resolution 1973(2011).
The Regulations apply to all financial institutions in Singapore and imposeobligations in relation to designated persons. A designated person is anyindividual or entity set out in the UN List, which is a list of individuals orentities identified by the UN Security Council or the Committee of the UNSecurity Council (the “Committee”) as individuals or entities to whom orwhich the measures referred to in paragraph 17 of Resolution 1970 (2011)and paragraph 19 of Resolution 1973 (2011) apply.The Regulations provide for various matters including:
Freezing of assets of designated persons;
Prohibition against supply of financial or other assistance to the LibyanArab Jamahiriya;
Duty of financial institutions to provide information to the MAS; and
Duty of financial institutions to exercise vigilance.
Reference materials
Please click on the provided links to access the following UN SecurityCouncil resolutions from the relevant UN webpagewww.un.org/sc/committees/1970/resolutions.shtml:
Resolution 1970 (2011)
Resolution 1973 (2011)
To access the full text of the Regulations from the MAS websitewww.mas.gov.sg, please click here.
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For further information, pleasecontact:
Francis MokTel: +65 6890 [email protected]
Kenny YapTel: +65 6890 [email protected]
Yap Yin SoonTel: +65 6890 [email protected]
31Legal Bulletin July 2011
Accounting Standards Council issues accountingstandard and financial reporting framework for charities
On 24 June 2011, the Accounting Standards Council (the “ASC”) issued aCharities Accounting Standard (the “CAS”) and set out a financial reportingframework for the preparation and presentation of charities’ financialstatements.
Financial reporting framework
Under the new reporting framework, charities either comply with the CAS orthe existing Financial Reporting Standards (“FRS”).
The CAS sets out the basis for preparing and presenting financialstatements for the charity sector. The CAS complements the FRS and mostcharities will be able to choose between adopting the FRS or the CAS withthe exception of those which hold significant investments in subsidiaries,associate or joint ventures which are not charities, in which case, the FRSmust be complied with.
Charities which adopt the FRS are required to comply with the additionalregulatory requirement specified under the Charities (Accounts and AnnualReport) Regulations 2011 to provide specific disclosures in their financialstatements on loans extended to any parties.Useful references
The Charities Accounting Standard and the related documentation releasedwith regard to the financial reporting framework are available on the CharityPortal, www.charities.gov.sg. The following are links to some of thedocumentation:
Press release
Charities Accounting Standard
Statement of Applicability
Accounting Template
Explanatory Notes
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News
Acquisition of Allgreen Properties Limited
Brookvale Investments Pte. Ltd. (the “Offeror”) is seeking to acquire all theissued ordinary shares in the capital of Allgreen Properties Limited(“Allgreen”) by way of a voluntary conditional cash offer (the “Offer”), at anoffer price of S$1.60 in cash per share to all the shareholders of Allgreenwho accept the Offer. This deal is valued at approximately S$2.54 billion inaggregate.
Advising the Offeror are Allen & Gledhill LLP Partners Lim Mei, Hilary Lowand Lynn Ho, and Associate Mark Quek.
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For further information, pleasecontact:
Chan Hian YoungTel: +65 6890 [email protected]
32Legal Bulletin July 2011
Silver Oak Ltd.’s Series 002 Commercial Mortgage-BackedNotes
Silver Oak Ltd. (“Silver Oak”) issued US$645 million Class A SecuredFloating Rate Notes Due 2018 as the second series of commercialmortgage-backed securities ("CMBS") under its S$10 billion SecuredMedium Term Note Programme (the “Programme”). Established in 2006, theProgramme is backed by, inter alia, a mortgage over Raffles City Singapore.The proceeds from the CMBS were on-lent to RCS Trust, an unlisted unittrust, of which 60% is held by CapitaCommercial Trust (“CCT”) and 40% byCapitaMall Trust (“CMT”), the sponsors of the CMBS.
Advising CCT and CMT are Allen & Gledhill LLP Partners Margaret Chin,Magdalene Leong, Cara Chan, Eudora Tan and Fock Kah Yan, SeniorAssociates Diana Lim and Ong Kangxin and Associate Daniel Yeo.
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Equity Fund Raising by Olam International Limited
Olam International Limited completed an equity fund raising exercisecomprising a placement of new shares and a pro rata, non-renounceablepreferential offering of new shares. The estimated gross proceeds from theexercise are approximately S$494.53 million. Credit Suisse (Singapore)Limited, J.P. Morgan (S.E.A.) Limited, Standard Chartered Securities(Singapore) Pte. Limited and The Hongkong and Shanghai BankingCorporation Limited, Singapore Branch were the joint lead managers, jointbookrunners and joint underwriters.
Advising the joint lead managers on the equity fund raising exercise areAllen & Gledhill LLP Partner Shawn Chen and Senior Associate Sue-AnnPhay.
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Issue of A$500 million Senior Unsecured Floating RateNotes due 2014 under the US$5 billion Programme forIssuance of Debt Instruments of Oversea-Chinese BankingCorporation Limited
Oversea-Chinese Banking Corporation Limited (“OCBC”) has issued A$500million Senior Unsecured Floating Rate Notes due 2014 (the “Notes”) underits US$5 billion Programme for Issuance of Debt Instruments. The Notes willbe listed on the Singapore Exchange Securities Trading Limited. NationalAustralia Bank Limited, Oversea-Chinese Banking Corporation Limited,The Royal Bank of Scotland plc, Australia Branch and Westpac BankingCorporation acted as the joint lead managers and joint bookrunners for theissue.
Advising OCBC as to Singapore law are Allen & Gledhill LLP Partners AuHuey Ling and Long Pee Hua and Senior Associate Lam See Wai.
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33Legal Bulletin July 2011
Acquisition of Hsu Fu Chi International Limited
Nestlé S.A. (“Nestlé”) is proposing to acquire an aggregate interest of 60%of Hsu Fu Chi International Limited (“HFC”), 43.52% by way of a scheme ofarrangement and 16.48% from individual shareholders. Nestlé has enteredinto an implementation agreement with HFC for the scheme, which willinvolve a transfer of the scheme shares for a cash consideration of S$4.35per scheme share. Credit Suisse (Singapore) Limited (“Credit Suisse”) isthe financial adviser to Nestle in relation to the transaction, which is valued atapproximately S$2.1 billion.
As part of the transaction, Arisaig Asia Consumer Fund Limited has enteredinto an irrevocable undertaking to vote its 8.95% shareholding in HFC infavour of the scheme.
Advising Credit Suisse are Allen & Gledhill LLP Partners Andrew M. Lim andChristopher Koh and Senior Associate Wong Yi Jia.
Advising Arisaig Partners (Asia) Pte Ltd, investment adviser of Arisaig AsiaConsumer Fund Limited, are Allen & Gledhill LLP Partners Prawiro Widjajaand Song Su-Min and Associate Lynn Tan Jin Ling.
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S$2.16 billion revolving credit facility to SingTel GroupTreasury Pte. Ltd.
SingTel Group Treasury Pte. Ltd., a subsidiary of SingaporeTelecommunications Limited (“SingTel”), signed an agreement for a threeyear S$2.16 billion committed revolving credit facility with 12 banks forgeneral corporate purposes. The 12 banks comprise Australia and NewZealand Banking Group Limited, Bank of America, N.A., The Bank of Tokyo-Mitsubishi UFJ, Ltd., Citibank N.A., Deutsche Bank AG, DBS Bank Ltd., TheHongkong and Shanghai Banking Corporation Limited, Mizuho CorporateBank, Ltd., Oversea-Chinese Banking Corporation Limited, StandardChartered Bank, Sumitomo Mitsui Banking Corporation and United OverseasBank Limited. This facility is guaranteed by SingTel.
Advising SingTel and SingTel Group Treasury Pte. Ltd. are Allen & GledhillLLP Partners Kok Chee Wai and Ellis Tang, and Senior Associate AndrewChan Han Yang.
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Allen & Gledhill New Partners 2011
We welcome the admission of our new Partner, Chen Lee Won with effectfrom 1 July 2011. To view the announcement, please click here.
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34Legal Bulletin July 2011
Allen & Gledhill wins Who’s Who Legal Country Award2011 for Singapore
Allen & Gledhill LLP has received Who’s Who Legal Country Award 2011for Singapore. The Firm has won this award every year since its inception in2006. To view the announcement, please click here.
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