Singapore High Court held employer not obliged to comply with its own employment policies: Kallivalap Praveen Nair v Glaxosmithkline Consumer Healthcare Pte Ltd [2022] SGHC 261

Interesting case: Kallivalap Praveen Nair v Glaxosmithkline Consumer Healthcare Pte Ltd [2022] SGHC 261

Ex-employee claimed that employer GSK breached its employment contract by failing to follow its own employment policies.

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SGHC on intention to repair in cost of cure damages claims

Singapore Law; Legal; Lawyer

Significance: the General Division of the Singapore High Court in JSD Corp Pte Ltd v Tri-Line Express Pte Ltd [2022] SGHC 227 (coram: Goh Yihan JC) clarified that a claimant’s intention to repair will be a very significant factor in the court’s assessment on whether to grant cost of cure damages in claims of breach of contract or negligent damage to property.

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Case: Court’s comments on contractual discretion and implied term of mutual trust and confidence

Significant comments by the Appellate Division of the Singapore High Court.

In Dong Wei v Shell Eastern Trading (Pte) Ltd [2022] SGHC(A) 8, the Court in obiter dicta considered and said that:

a. although it has been held that an employer’s exercise of a contractual discretion is subject to requirements of rationality, good faith and consistency with the contractual purpose (Leiman, Ricardo and another v Noble Resources Ltd and another [2018] SGHC 166 at [112]-[114]; Braganza v BP Shipping Ltd and another [2015] 1 WLR 1661);

b. such a fetter on contractual discretion should not extend to the contractual right to terminate with notice (at [88]);

c. further, this fetter would cut both ways and also limit an employee’s right to terminate with notice (at [92]);

d. the existence of an implied term of mutual trust and confidence in employment contracts under Singapore law is not yet settled (The One Suites Pte Ltd v Pacific Motor Credit (Pte) Ltd [2015] 3 SLR 695 (CA) at [44]);

e. the High Court of Australia in Commonwealth Bank of Australia v Barker (2014) 312 ALR 356 had firmly rejected this in Australian law. The Court’s reasoning there would be cogent in the Singapore law context too.

#singaporelaw #law #employmentlaw #litigation #contractlaw

Ma Hongjin v SCP Holdings Pte Ltd [2020] SGCA 106 – Doctrine of Consideration in Variation of Contracts Upheld

Singapore Law; Legal; Lawyer

Significance: five-person bench of the Singapore Court of Appeal refuses to abolish the doctrine and requirement of valid consideration for variation of contracts, while suggesting that contracting parties may expressly agree to dispense with the requirement for varying a particular contract.

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Choice of Law for Arbitration Agreements

Singapore Law; Legal; Lawyer

The highest courts of Singapore and the United Kingdom have recently issued decisions regarding the choice of law to govern arbitration agreements.

Singapore Courts’ Approach

In BNA v BNB and another [2020] 1 SLR 456; [2019] SGCA 84 (“BNA”), the Singapore Court of Appeal adopted at [44]-[48] the following three-step approach from BCY v BCZ [2017] 3 SLR 357 (HC) (“BCY”):

  • The parties’ express choice of proper law governing the arbitration agreement is first identified (the “Express Choice of Law”).
  • If there is no express choice, the court ascertains the parties’ implied choice of law based on their intentions at time of contracting (the “Implied Choice of Law”).
  • If an express or implied choice is absent, the law governing the arbitration agreement is the system of law with the closest and most real connection to it.

This is based on the framework in Sulamerica Cia Nacional de Seguros S.A. v. Enesa Engenharia S.A. [2012] EWCA Civ 638 (“Sulamerica”).

An express choice of the proper law of the main contract does not, in and of itself, also constitute the proper law of the arbitration agreement: BNA at [61].

There is a presumption that the parties’ choice of law for the entire/main/underlying contract (containing the arbitration clause) also reflects the parties’ implied choice of law governing the arbitration agreement (BNA at [61]).

However, this presumption can be rebutted. The choice of a seat that is different from the place of the law of the main contract is not by itself sufficient to displace the starting point: BNA at [62]; BCY at [65].

The inquiry of whether the presumption is displaced only becomes relevant if the law of the seat is materially different from the (I suppose, putative) law governing the arbitration agreement (lex arbitri): BNA at [63]. E.g. if the seat of arbitration is Singapore but the assumed lex arbitri by that point in the analysis is the law of the People’s Republic of China (PRC).

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Case: Leiman, Ricardo and another v Noble Resources Ltd and another [2020] 2 SLR 386 (CA) – Law on Penalty Clauses

Singapore Law; Legal; Lawyer

Significance: Court of Appeal partly allows appeal against High Court decision and declines to decide on whether the law in Singapore on penalty clauses should be modified in the light of the new UK Supreme Court test for penalty clauses in Cavendish Square Holding BV v Makdessi [2016] AC 1172 (UKSC) (“Cavendish“) which the High Court below applied.

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Case Update: B2C2 Ltd v Quoine Pte Ltd [2019] SGHC(I) 3; Quoine v B2C2 [2020] SGCA(I) 2 – SICC / Singapore Court of Appeal on cryptocurrency and mistake in contract formed using algorithm

Singapore Law; Legal; Lawyer

Singapore Court of Appeal (“CA“) decision in Quoine Pte Ltd v B2C2 Ltd [2020] SGCA(I) 2 is groundbreaking for its analysis of contract formation through a deterministic algorithm code. Case summary here.

The majority of the CA (Jonathan Mance IJ dissenting) decided on the following key points:

When analysing mistake for contract vitiation, if a contract was formed through deterministic algorithms (i.e. it always produces the same output given the same input), it is the programmer’s state of knowledge that is relevant and to be attributed to the parties: at [98].

The inquiry should be whether, when programming the algorithm, the programmer was doing so with actual or constructive knowledge of the fact that the relevant offer would only ever be accepted by a party operating under a mistake and whether the programmer was acting to take advantage of such a mistake: at [103].

The relevant time frame within which the knowledge of a programmer or the person running the algorithm should be assessed is from the point of programming up to the point that the relevant contract was formed: at [99].

The CA held it was not necessary to decide whether cryptocurrency, specifically BTC, was a species of property that was capable of being held on trust. No express trust arose over the BTC in B2C2’s account as there was no certainty of intention to create a trust. The mere fact that Quoine’s assets were segregated from its customers’ could not in and of itself lead to that conclusion. On the facts, the manner in which the BTC was stored militated against the finding of a trust: at [144] and [145].

The CA did comment in obiter dicta that “[t]here may be much to commend the view that cryptocurrencies should be capable of assimilation into the general concepts of property. There are, however, difficult questions as to the type of property that is involved”: at [144].

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Case Update: Malayan Banking Bhd v Barclays Bank PLC [2019] SGHC(I) 04 – SICC holds implied contract for inter-bank payment based on SWIFT

Singapore Law; Legal; Lawyer

Significance: The Singapore International Commercial Court (SICC), coram Jeremy Lionel Cooke IJ, held that Barclays Bank entered into an implied contract with Maybank to make the payment according to the payment instruction sent prior and was not entitled to subsequently refuse payment on alleged suspicion of fraudulent circumstances of the payment. The SICC also held that Barclays failed to prove a market practice which could be implied by custom or usage as a term of the implied contract.

Comment: It is rare for an implied contract to be found. And for legal principles to be clarified in application to the inter-bank SWIFT system.

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

Singapore Law; Legal; Lawyer

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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Case Update: ACTAtek, Inc v Tembusu Growth Fund Ltd: SGCA holds wrongful call of event of default as anticipatory repudiatory breach of contract

Singapore Law; Legal; Lawyer

ACTAtek, Inc and another v Tembusu Growth Fund Ltd [2016] SGCA 50 PDF

This case concerned a venture capital fund, Tembusu Growth Fund Ltd (“Tembusu“), suing an investee company ACTAtek Inc., which is part of a group of companies providing identification management solution, under the tort of misrepresentation in relation to two convertible loan agreements and its plan to list on the New Zealand stock exchange. The Singapore Court of Appeal reversed the High Court’s decision below, holding that the venture capital fund was in anticipatory repudiatory breach of the contract by wrongly calling events of default such that the investee company’s plan to list on the NZ stock exchange was derailed. The Court considered the interesting point of law being “what are the legal consequences that flow if an event of default is found to have been wrongly declared and damages are suffered as a result?” ([at [2]). The decision also traversed other issues of law including misrepresentation and the application of Sembcorp Marine Ltd v PPL Holdings Pte Ltd [2013] 4 SLR 193 principles regarding implied terms in contract.

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