Case Update: Shanghai Turbo Enterprises Ltd v Liu Ming [2018] SGHC 172 – floating governing law and jurisdiction clause held unenforceable

Significance: Singapore High Court held that a floating governing law and jurisdiction clause was invalid and unenforceable. Citing Prof Yeo Tiong Min’s Halsbury’s Laws of Singapore volume on Conflict of Laws, the Court held that if the proper law of a contract cannot be determined from a governing law clause at the time of the formation of the contract, then that clause does not satisfy as an express proper law. The Court then found that it could not sever the unenforceable governing law portion from the jurisdiction clause. The clause in the case effectively said that the governing law and jurisdiction was “laws of Singapore /or People’s Republic of China” and “Courts of Singapore /or People’s Republic of China”. It would do well for parties take proper legal advice on the validity of such important clauses, and not assume they can simply gamble this as a compromise of some sort or as some option for one party later on.

Case Update: China Medical Technologies, Inc (in liquidation) v Wu Xiaodong [2018] SGHC 178 – Mareva Injunction in aid of foreign proceedings granted

Significance: Singapore High Court held that the Court is empowered under s 4(10) of the Civil Law Act (“CLA“) to grant a Mareva injunction (injunction to freeze assets) in aid of foreign court proceedings, subject to certain prerequisites. Notably, prior to this, there are 2 conflicting High Court decisions, and a Court of Appeal decision which did not definitively decide, on this issue. The High Court granted such a Mareva injunction in aid of Hong Kong court proceedings on the facts.

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Case Update: Ricardo Leiman v Noble Resources [2018] SGHC 166 – Contractual Discretion and Legal Doctrine of Penalties

Significance: Singapore High Court held that contractual discretion in employment contract is subject to an implied term that the discretion is exercised rationally, not arbitrarily or capriciously, in good faith, and consistent with its contractual purpose. Further, the Court applied the new UK Supreme Court test for penalty clauses in Cavendish Square Holding BV v Makdessi [2016] AC 1172 (UKSC) (“Cavendish“), observing that the clause in question is not a straightforward damages clause, hence the usefulness in applying the Cavendish test.

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Shareholders Agreement Drafting Questionnaire

What is a Shareholders Agreement?

A shareholders agreement is a legal document setting out the rights and obligations of the shareholders in a company. Shareholders agreements are often used in private companies or joint ventures. Unlike the company constitution, the shareholder agreement is not mandatory under the Companies Act. The Companies Act is the main governing legislation for companies incorporated in Singapore. If there is no shareholders agreement, the relationships of shareholders as between themselves and with the company are governed by the constitution or articles of association of the company.

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Case Update: Tan Kok Yong Steve v Itochu Singapore Pte Ltd [2018] SGHC 85 – High Court upholds 2-year non-compete clause, grants injunction

Significance: the Singapore High Court (Coram: Tan Siong Thye J) upheld a two-year restraint of trade, non-competition, clause and ordered an injunction against an ex-employee. The Court also held there was a valid agreement for a severance package which was not predicated on the employee’s compliance with the non-competition undertaking.

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Case Update: Singapore High Court holds no general implied duty of confidentiality between lender and borrower

International Financial Services (S) Pte Ltd v Old Mutual International Isle of Man Ltd Singapore Branch [2018] SGHC 127

Significance: the Singapore High Court held at [27] that there is no implied general duty of confidentiality between a lender and borrower.

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Case Update: Hasan Shofiqul v China Civil (Singapore) Pte Ltd [2018] SGHC 128 – Meaning of executive in Employment Act – construction supervisor?

Significance: this is the first case where the Singapore High Court elaborated on the meaning of “executive” in the Employment Act for determining whether an employee was entitled to Part IV provisions of the Employment Act, including being paid for overtime work and for working on rest days and public holidays. The Court held that the claimant, who was a construction site supervisor in charge of a team of other construction workers was not an executive.

Key points:

  • Just because an employee is designated or has the job title of a “supervisor” does not mean he is an executive for the purposes of the Employment Act.
  • Generally, the essence of the inquiry is whether the employee is of a class of employees able to safeguard their own interests independently of legislation: [60].
  • Factors which the Court would consider include ([64]-[71]):
    • type of supervisory or management powers given to the employee – whether the employee had actual decision making and control powers
    • qualifications of the employee
    • salary amount.
    • complexity of the work
    • whether the work required specialised training.

General Contract Drafting Questionnaire

Every legal contract or agreement is different. But the general structure of most contracts is the same. I’ve come up with a General Contract Drafting Questionnaire to help people think about what to specify in their contracts. The general questionnaire structure is below. If you want to provide me with your questionnaire response for me to assist you in drafting a contract, the Google form is accessible here.

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Prudential Assurance Co Singapore Pte Ltd v Tan Shou Yi Peter [2018] SGHCR 4 – Singapore High Court Assistant Registrar rules on interrogatories about authenticity of audio recordings

The High Court Assistant Registrar (“AR”) summarised helpful guidance on when interrogatories may be ordered under Order 26, rule 1 of the Rules of Court.

Interrogatories is a form of discovery of facts (and not documents) to be utilised early in the proceedings to focus the dispute and save costs.

Interrogatories are more readily allowed where (at [13]):

“(a) they direct the parties’ attention to the central issues in contention at an early stage, thus reducing the need for counsel to focus time and effort on peripheral and uncontested matters;

(b) they have direct bearing on the issues in dispute, and will ease the subsequent passage of cross-examination by delineating the precise matters in contention;

(c) there would be real, substantial and irremediable prejudice if the interrogatories are refused (although these are not prerequisites to finding that interrogatories are necessary);

(d) they can be answered without difficulty and can potentially dispose of entire lines of questioning, or even the need to call certain witnesses; or

(e) the information sought, if introduced only in cross-examination, may catch opposing counsel unaware and create the need for adjournments and a flurry of interlocutory applications to address the new developments.”

Interrogatories may more readily be refused where (at [14]):

“(a) they are oppressive in nature, in that they exceed the legitimate requirements of the circumstances at hand, or impose a burden on the interrogated party that is entirely disproportionate to the benefit to be gained by the interrogating party;

(b) they amount to an attempt to fish for information, in the hope of stumbling upon something that will support the interrogating party’s case;

(c) they are of a more ancillary nature that are more appropriately sought in cross-examination;

(d) they concern matters which a witness will testify to at trial;

(e) they are intended merely to obtain the identities of witnesses and documents which the other party intends to produce; or

(f) they seek mere evidence which does not form any part of the material facts in dispute.”

The Court accepted that interrogatories can be issued in relation to authenticity in the event that authenticity is disputed (Swain v Hest Australia Ltd v Anor [2003] TASSC 104): at [20].

The general proposition that interrogatories should not be allowed to seek admissions of fact from a witness who would be attending at trial ought not be interpreted as an absolute prohibition of interrogatories against all persons who would be witnesses at trial, regardless of the circumstances at hand. In particular, the proposition should not be taken to preclude the administering of interrogatories, where allowing the same would be entirely in line with O 26 r 1(1) of the Rules of Court, viz, necessary for the fair disposal of the matter or for saving costs: at [21].

In Foo Ko Hing v Foo Chee Heng [2002] 1 SLR(R) 664 (HC), the High Court allowed the administration of interrogatories on a non-party witness (pursuant to O 26A r 1 of the Rules of Court) notwithstanding that he would be giving oral testimony at trial. The court’s rationale for doing so was to avoid disruptions to the trial, in view that the witness in question was not willing to provide an affidavit of evidence-in-chief: at [22].

The Court allowed part of the interrogatories in this case for several reasons.

Allowing the “Primary Queries” now would potentially dispose of entire lines of questioning and expert inquiry. The answers to the Primary Queries will provide clarity, in advance of trial, on the precise dispute in relation to an important aspect of authenticity that may otherwise involve the furnishing of a large range of evidence, including expert evidence. This would thus avoid incurring costs. See [24].

There is little reason to believe that the Defendant would offer the relevant information in his affidavit of evidence-in-chief. Furthermore, provision of information only in the affidavit of evidence-in-chief would be too late. See [25].

While the information sought in the interrogatories may be potentially obtained from other witnesses, the Defendant’s responses may well be in the nature of admissions: at [26].

The Defendant would not face “insurmountable difficulties” in answering the interrogatories, and allowing such interrogatories would not cause prejudice to his challenge to authenticity of the recordings: at [27].