Case Update: SK Engineering & Construction Co Ltd v Conchubar Aromatics Ltd and another appeal [2017] SGCA 51 – Court of Appeal reverses sanction of scheme of arrangement

Significance: Singapore Court of Appeal reverses the High Court decision’s to sanction a scheme of arrangement on the basis that certain majority creditors owed genuine debts to the companies in question, and found that the High Court should not have sanctioned the schemes without proof of authenticity of those debts. The Court also found that there was material non-disclosure of the rejection of a restructuring proposal. The Court of Appeal also considered factors to consider in determining whether a creditor is a related

The Court of Appeal also considered factors to consider in determining whether a creditor is a related creditor to the company (at [41]):-

(a) The scheme company controls the creditor or vice versa. Alternatively, the scheme company and the creditor have a common controlling shareholder, ie, a shareholder who owns (directly or indirectly) 50% or more of the shares in each of these companies.

(b) The creditor and the scheme company have common shareholder(s) who hold a less than 50% but more than de minimis stake in both companies. In this regard, what would be considered de minimis would depend on the facts; for instance, the threshold would be higher in the case of a public listed company as opposed to a private company.

(c) The creditor and the scheme company have common director(s), in particular, director(s) who propose or support the scheme.

(d) The scheme company and the creditor do not have any common shareholder(s), but their controlling shareholder(s) are either:

(i) related by blood, adoption or marriage; or

(ii) where the controlling shareholder(s) are corporate entities, in turn controlled by individual(s) who are related by blood, adoption or marriage.

(e) The creditor is related by blood, adoption or marriage to the controlling shareholder(s) or director(s) of the scheme company.

Handbook on Competition Law & E-Commerce in ASEAN

The Competition Commission of Singapore (CCS) has recently launched on 16 August 2017 a handbook to help ASEAN member states and businesses address and navigate competition law issues relating to e-commerce. I was there at the Competition Law Conference when Trade Minister Lim Hng Kiang launched it by entering a pin code into a federated locker (Singapore’s nation-wide infrastructure to boost last mile delivery services).

Here are some helpful pointers from the Handbook for businesses, especially e-commerce startups operating in South-East Asia (SEA) and ASEAN countries, to consider in ensuring they do not flout competition laws, which may result in heavy financial penalties and expenditure of significant time and resources in assisting in investigations.

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Legislative Update: new Tripartite Standard on Employment of Term Contract Employees

On 31 July 2017, the Ministry of Manpower, the National Trades Union Congress, and the Singapore National Employers Federation jointly released the new Tripartite Standard on Employment of Term Contract Employees (the “Standard“). The new Standard is not mandatory, but employers who adopt the Standards can distinguish themselves terms of human resource and employment practices, enhancing their attractiveness as employers and staff retention.

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Legislative Update: Consultation & Proposed Amendments to PDPA in view of technological advancements and data security issues

The Personal Data Protection Act (PDPA) came into effect on 1 July 2014, and was developed with reference to international frameworks, namely the OECD Guidelines on the Protection of Privacy and Transborder Flows of Personal Data (“OECD Guidelines”) and the APEC Privacy Framework, and data protection laws of jurisdictions such as the European Union, the United Kingdom, Hong Kong, Canada, Australia and New Zealand.

In view of technological advances and global developments, such as Big Data, cybersecurity and cyberterrorism, Internet of Things and Artificial Intelligence, the Personal Data Protection Commission (PDPC) is considering other possible bases for collecting, using and disclosing personal data under the PDPA, as well as the need for mandatory data breach notifications to PDPC and affected individuals under the PDPA. The PDPC is also cognisant that there may be instances where consent is not desirable or appropriate, such as for detection of fraud or security threats.

The PDPC is therefore considering 2 main amendments to the PDPA:

  1. enhanced framework for the collection, use and disclosure of personal data (the “Enhanced Framework”); and
  2. mandatory data breach notification framework.

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Case Update: Warner-Lambert Company LLC v Novartis (Singapore) Pte Ltd [2017] SGCA 45 – landmark decision on patent law

Warner-Lambert Company LLC v Novartis (Singapore) Pte Ltd [2017] SGCA 45

Significance: Landmark Singapore Court of Appeal decision on issues in patent law not previously considered before by the Singapore courts. The case involved two large pharmaceutical companies. These issues relate to the protection of subsequent medical uses of known substances and the validity of “Swiss-style” claims under the Patents Act. Warner-Lambert Company LLC’s appeal failed in this case. It tried to apply to amend its patent which was alleged to be invalid for claiming a monopoly over methods of treatment of the human or animal body, something impermissible under Singapore’s patent law as section 16(2) of the Patents Act provides: “An invention of a method of treatment of the human or animal body by surgery or therapy or of diagnosis practised on the human or animal body shall not be taken to be capable of industrial application.” The Court upheld the trial judge’s findings that the amendments, if granted, would extend the scope of protection of the patent and that there had been undue delay by Warner-Lambert in seeking the amendments which warranted the exercise of the court’s discretion to disallow the amendments.

MAS clarifies approach to ICO or token sales

On 1 August 2017, MAS issued a press release clarifying its approach to initial coin or token offerings (ICO) or token issuance or sales. This note provides some comments on MAS’ clarification. It is of significant interest because there have been several ICOs conducted in Singapore recently, and has thus attracted interest in prospective issuers looking to raise funds by way of ICO. This comes shortly after the US Securities and Exchange Commission (SEC) announced that certain ICOs would amount to “securities”.

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Case Update: Law Society of Singapore v Sum Chong Mun [2017] SGHC 80 – Court disciplines lawyers for LPA improper witnessing

Law Society of Singapore v Sum Chong Mun [2017] SGHC 80

Significance: High Court of Three Judges reprimands two lawyers with regard to one of them signing as certificate issuer / witness of a lasting power of attorney (LPA) without actually witnessing the donor signing the document.

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