Legal Updates

Legal Updates for Sep - 2020

Decision 11/2019/QD-PQTT: The Hanoi Court's Setting Aside of a Vietnamese Arbitral Award

On 14 November 2019, the People’s Court of Hanoi passed Decision 11/2019/QD-PQTT to set aside an arbitral award under Vietnam’s Law on Commercial Arbitration 2010. The setting aside was based on three grounds:

  1. The tribunal's decision to change the location of the hearing venue, which was a departure from the parties' original agreement reached during the arbitration;
  2. The tribunal's reliance on the IBA Rules on the Taking of Evidence with regard to the Respondent's witness evidence; and
  3. The tribunal's failure to embark on its own assessment of the quantum of damages, instead relying solely on the Claimants' expert evidence.

This decision is a departure from the court's recent strong track record in upholding the enforceability of Vietnamese awards, particularly those rendered under the Arbitration Rules of the Vietnam International Arbitration Centre.

30 Sep 2020 | Vietnam

Are Arbitrations Shifting Away from Hong Kong and Towards Singapore? The Impact of the Hong Kong National Security Law
In the field of arbitration, Singapore and Hong Kong have been considered to be competitors for the position of regional hub for commercial dispute resolution. Both jurisdictions stand among the leading destinations for arbitration not just in Asia, but in the world.

However, Hong Kong has been facing months of demonstrations since 2019 regarding mainland China's influence in the special administrative region. Following this, on 30 June 2020, the Law of the People's Republic of China on Safeguarding National Security in the Hong Kong Special Administrative Region (more commonly known as the Hong Kong National Security Law) was enacted by the Standing Committee of the National People's Congress of the People's Republic of China.

The National Security Law has raised concerns amongst some commercial parties over the stability of Hong Kong and the implications for its legal system. While it remains to be seen whether these concerns are overstated, the current impact of such sentiment can be seen in statistical and anecdotal evidence. In this Update, we take a look at the effect of the National Security Law and what it might mean for arbitration in Hong Kong and Singapore.
25 Sep 2020 | Singapore

Strengthening Measures for Enforcement of the Law on Telecommunications

To implement the regulations in the telecommunications sector more effectively, the Telecommunication Regulator of Cambodia ("TRC") issued guideline No. 1606 dated 12 August 2020 on Strengthening Measures for Enforcement of the Law on Telecommunications ("Guideline"). The Guideline requires the telecommunication operators to comply with certain obligations such as timely self-declaration and payment of licence fees (allocated revenue), and contributing certain percentages of their gross annual revenue to prescribed funds.

23 Sep 2020 | Cambodia

2021 Minimum Wage for Workers in the Textile, Garment and Footwear Industries

The Ministry of Labour and Vocational Training ("MLVT") issued Prakas No. 303/20 dated 10 September 2020 on the Minimum Wage Determination for Workers in Textile, Garment and Footwear Sectors for 2021 ("Prakas"). According to the Prakas, starting from 1 January 2021, the minimum wage of workers in the textile, garment and footwear industries will be increased to US$192 per month from the current US$190 per month.

23 Sep 2020 | Cambodia

RGC Updates on Subsidies for Employees in the Garment and Tourism Sectors during the Employment Suspension

To update the amounts of subsidy provided by the Royal Government of Cambodia (“RGC”) to employees in the garment and tourism sectors, the Ministry of Labour and Vocational Training has issued several notifications as follows:

  • three notifications on 24 July 2020;
  •  two notifications on 29 July 2020;
  •  three notifications on 31 July 2020;
  •  two notification on 26 August 2020;
  •  one notification on 2 September 2020, and
  •  one notification on 10 September 2020.

Generally, the amount of subsidy varies with the period of employment suspension, and subject to fulfilment of certain conditions such as employees who have completed soft skills training.

21 Sep 2020 | Cambodia

TRC Issues Guidelines Requiring Telecommunication Operators to Seek Approval Prior to Certain Activities

Pursuant to Article 22 and Article 63 of the Law on Telecommunications, the Telecommunication Regulator of Cambodia ("TRC") issued guideline No. 1252 dated 30 June 2020 instructing all telecommunication operators to seek TRC's approval prior to undertaking any activity related to mergers and acquisitions, pledging rights conferred by TRC (for instance under the permit, certificate, or licence) as security, and composition change of their management teams. 

21 Sep 2020 | Cambodia

Trademark Registration Order: Ministry of Commerce Order No. 63/2020- Soft Opening of New Registration System

On 28 August 2020, the Ministry of Commerce ("MOC") issued Order No. 63/2020 ("Order") directing all Trademark Owners to apply for trademark registration. A "Trademark Owner" is defined under Section 93(a) of the Trademark Law as an owner of a mark which is registered at the Deeds Registration Office, or an owner of a mark which is not registered but is actually in use in the Myanmar market. The Order requires such Trademark Owners to apply for Trademark Registration starting from 1 October 2020 as the Government seeks to transition from a First to Use System to a First to File System.

21 Sep 2020 | Myanmar

Clarification on Compensation in Cases of Termination of Undetermined Duration Contract

On 14 August 2020, the Ministry of Labour and Vocational Training ("MLVT") issued a clarification on the compensation in lieu of prior notice and damages in cases of termination of undetermined duration contract ("UDC"), providing additional explanation to Letter No. 295 dated 29 July 2020 of the Inspection Department of the MLVT on clarification of "damages" and “compensation in lieu of prior notice”.

18 Sep 2020 | Cambodia

Employing Foreign Employees Beyond the Permitted Quota

The Ministry of Labour and Vocational Training ("MLVT") has issued Prakas No. 277/20 dated 14 August 2020 on Employing Foreign Employees Under Special Condition ("Prakas") relating to allowance to employ foreign employees beyond the "10% permitted quota" that employers/enterprises can employ. Under normal circumstances, any enterprise may only employ foreign employees up to a maximum number that is equivalent to 10% of the total number of Cambodian employees in that enterprise ("10% permitted quota").

18 Sep 2020 | Cambodia

MAS Consults on Draft Notices Setting Out Revised Examination Requirements for Appointed Representatives under SFA and FAA
The Monetary Authority of Singapore ("MAS”) is seeking comments on proposed changes to the Notices which prescribe the competency requirements for representatives conducting regulated activities under the Financial Advisers Act ("FAA") and Securities and Futures Act ("SFA"). Appointed representatives are required to meet minimum academic qualifications and pass the relevant modules of the Capital Markets and Financial Advisory Services Examination ("CMFAS Examination") before they are allowed to carry out the relevant regulated activities under the FAA and SFA.

The draft Notices which are the subjects of the current MAS consultation exercise aim to incorporate the following key changes to the CMFAS Examination requirements:
  • Introducing ethics and skills content to form the new rules, ethics and skills modules;
  • Customising content of the CMFAS modules with reference to job roles instead of regulated activities;
  • Streamlining the securities and derivatives exchange rules content; and
  • Providing an option to take new combined product knowledge modules.
Comments on the draft Notices set out in the MAS "Consultation Paper on Draft Notices on the Competency Requirements for Representatives Conducting Regulated Activities under the Financial Advisers Act and Securities and Futures Act" must be submitted to MAS by 5 October 2020.

18 Sep 2020 | Singapore

Further Changes to COVID-19 (Temporary Measures) Act Concerning Rental Relief, Collective Sales, Construction Contracts and Meetings
On 4 September 2020, the COVID-19 (Temporary Measures) (Amendment No. 2) Bill ("Bill") was passed in Parliament, setting out further proposed amendments. The Bill seeks to strengthen the COVID-19 (Temporary Measures) Act by:
  1. Expanding the powers of rental relief assessors;
  2. Allowing applications for the extensions of deadlines for collective sales;
  3. Clarifying the interaction between Part 8 of the Act (which deals with contracts affected by delay in the performance or breach of a construction contract, supply contract or related contract) and other dispute resolution proceedings; and
  4. Enhancing the certainty of alternative meeting arrangements.
This Update highlights the key features of the Bill.
17 Sep 2020 | Singapore

MAS Imposes New Requirements on Execution of Customers’ Orders on Capital Market Intermediaries w.e.f. 3 March 2022
With effect from 3 March 2022, capital markets intermediaries will be required to establish and implement written policies and procedures to:
  • Place and/or execute customers’ orders on the best available terms ("Best Execution"); and
  • Place and/or execute comparable customers’ orders according to time of receipt of such orders.

This new requirement is set out in new Notice SFA 04-N16 on Execution of Customers' Orders issued by the Monetary Authority of Singapore ("MAS") on 3 September 2020. The accompanying Guidelines to MAS Notice SFA 04-N16 on Execution of Customers' Orders was also issued on the same day to provide guidance on the interpretation of the Notice.

This follows the MAS' consultation on the proposal in November 2017. A Response to the Feedback Received on the Consultation was published on 3 September 2020.

This Update highlights the key features of the Best Execution requirement and its application on capital markets intermediaries.

16 Sep 2020 | Singapore

CCCS Price Transparency Guidelines for Suppliers to Take Effect on 1 November 2020
The Consumer Protection (Fair Trading) Act ("CPFTA") is a major pillar of Singapore's consumer protection framework. It provides consumers with legal safeguards against unfair practices, enables them to have recourse to civil remedies before the courts, and is administered by the Competition and Consumer Commission of Singapore ("CCCS"). Under the CPTFA, consumers have the statutory right to commence legal action against a supplier who engages in an unfair practice.

On 7 September 2020, CCCS published the Guidelines on Price Transparency ("Guidelines") to set out how CCCS will give effect to the CPFTA in relation to four pricing practices: drip pricing; price comparisons; discounts; and the use of the term "free". The Guidelines are founded on the principles that suppliers should not make false or misleading claims, and should be transparent and clear in their communication with consumers. The Guidelines were finalised by CCCS after considering the responses received from a public consultation on the draft Guidelines last year (see here for our Client Update on the draft Guidelines).

This Update provides an overview of the Guidelines and flags key points that suppliers should take note of, particularly as the onus falls on suppliers, in the event of a consumer dispute, to prove that they did not engage in an unfair practice.
16 Sep 2020 | Singapore

Updated Public Sector Standard Conditions of Contract (or "PSSCOC", 8th Edition, July 2020)
The Public Sector Standard Conditions of Contract ("PSSCOC") is a standard contract form commonly used for public sector construction contracts in Singapore. It was first published in 1995 by the Building and Construction Authority and had undergone updates throughout the years. Recently, the BCA published the latest edition of the PSSCOC ("8th Edition") which serves as an update of the previous edition published in July 2014 ("7th Edition").

Generally, the 8th Edition does not make fundamental changes to the allocation of risks and responsibilities between the Employer and the Contractor but serves to provide greater clarity and certainty to parties by introducing several points of clarification. In this update, we highlight a number of differences between the 7th and 8th Editions of the PSSCOC.
14 Sep 2020 | Singapore

Restructuring & Insolvency Regimes in Southeast Asia: A Comparative Overview
As business and commerce becomes increasingly cross-border in nature, it is important for businesses to have knowledge of restructuring and insolvency regimes of foreign jurisdictions. This is particularly relevant in the Southeast Asia region, given the close connection and links amongst the Southeast Asian states.

In this publication, we take a broad look at the key areas of interest in the restructuring and insolvency regimes across the region. The comparative overview covers various differences and similarities in the respective restructuring and insolvency frameworks in these jurisdictions.

Rajah & Tann Asia, as a regional network of law firms, has an established presence across Southeast Asia. Our regional offices have the requisite restructuring and insolvency expertise to assist with your queries and restructuring and insolvency needs across these jurisdictions.
11 Sep 2020 | Singapore

New Decree against Spam

On 14 August 2020, the Government issued Decree No. 91/2020/ND-CP on anti-spam text messages, emails and calls ("Decree 91"). Decree 91 will take effect from 1 October 2020 and replace Decree No. 90/2008/ND-CP against spam ("Decree 90"). Unlike its predecessor, Decree 91 now explicitly captures phone calls within the scope of spam.

10 Sep 2020 | Vietnam

New Notice from Prime Minister's Office on COVID-19 Reinforcement Measures

On 31 August 2020, the Prime Minister's Office issued the Notice on the Reinforcement Measures on Containment, Prevention and Full Response to the COVID-19 Pandemic ("Notice"). Pursuant to the Order of the Prime Minister No. 06/PM dated 29 March 2020 referred to in the Notice, and the report and instruction of the Prime Minister on 28 August 2020, the Prime Minister's Office made known the restrictions on movement and gatherings which must be implemented from 1 to 30 September 2020 to contain the COVID-19 pandemic in Laos.

07 Sep 2020 | Lao PDR

Recognition and Support for Arbitration under Indonesian Law

Alternative dispute resolution ("ADR") has been long recognised and practiced in Indonesia. The promulgation of the Indonesian Arbitration Law has encouraged the business community to increase the use of arbitration over other dispute resolution options. The legislative framework and the growing trend towards arbitration as an ADR option has resulted in the development of reliable and professional arbitration firms in Indonesia. 

In this Update, we examine the framework of arbitration in Indonesia with reference to the: 

  1. applicable legislation;
  2. timeframe for arbitration;
  3. involvement of the courts;
  4. types of disputes that may be resolved by arbitration; and
  5. arbitration institutions within Indonesia.
04 Sep 2020 | Indonesia

Setting Aside Recognition of Foreign Bankruptcy Orders for Breach of Natural Justice
With the cross-border nature of transactions and the holding of assets across jurisdictions, the cooperation of foreign courts is often vital in the effective conduct of insolvency proceedings. In Paulus Tannos v Heince Tombak Simanjuntak [2020] SGCA 85, the Singapore Court of Appeal set aside the High Court's recognition of Indonesian bankruptcy orders on the ground of breach of natural justice. The Court of Appeal found that the appellants had not received due notice of the relevant bankruptcy proceedings, and that they were accordingly deprived of the opportunity to be heard.

The decision highlights the main principles of natural justice in enforcement and recognition proceedings. On a practical level, it demonstrates the evidence that should be produced in order to demonstrate compliance with the rules of natural justice, including evidence of service and of foreign law.
04 Sep 2020 | Singapore

Prakas No.346 to Impose Capital Gains Tax on Resident and Non-Resident Taxpayers to Take Effect on 1 January 2021

The Ministry of Economy and Finance (“MEF”) has issued Prakas No.346 on Capital Gains Tax (“CGT”) dated 1 April 2020 (“Prakas”). The Prakas was intended to be effective from 1 July 2020. However, the Director General of the General Department of Taxation (“GDT”) has verbally announced that the implementation of this Prakas will be delayed to 1 January 2021.

The purpose of this Prakas is to impose tax on capital gains realised by both resident and non-resident taxpayers. Article 4 of the Prakas explicitly defines a resident taxpayer as being limited to a natural person resident taxpayer whereas a non-resident taxpayer includes both a natural person and a legal entity non-resident taxpayer.

This Update highlights the key features of this Prakas:

  • Definitions of "capital asset" and "capital gains";
  • Methods of calculating capital gains for the purpose of determining CGT;
  • Consequences of failure to pay CGT; 
  • Exempt transactions; and 
  • CGT with respect to capital gains realised from overseas assets
03 Sep 2020 | Cambodia

Do Professional Services Firms Owe a Duty of Care for Findings Affecting Third Parties?
It is uncontroversial that an auditor, if appointed by a company to conduct an audit, owes a duty of care to the company, but does not generally owe a duty of care to any third party, such as a director or shareholder of the company. A question arises whether this principle also applies to the similar but not identical situation of a professional services firm engaged to perform a fact-finding review of transactions of a company. Would that firm owe a duty of care to a third party who may be affected by its factual findings? This was the question considered by the Singapore High Court in Tan Woo Thian v Pricewaterhousecoopers Advisory Services Pte Ltd [2020] SGHC 171.

The Defendant professional services firm in this case had been engaged by a Singapore-listed company to conduct a fact-finding review on certain transactions. The Court found that the Defendant did not owe the Plaintiff officer of the company a duty of care in its investigation of the transactions and the preparation of its report, as the Defendant had failed to prove the existence of a special relationship between himself and the Defendant, and because there were policy considerations which militated against the imposition of a duty of care. The Defendant was successfully represented by Patrick Ang, Chew Xiang, Chow Jie Ying and Torsten Cheong from Rajah & Tann Singapore LLP.
02 Sep 2020 | Singapore

Amendment to Insolvency Act 1967 to Mitigate Financial Ramifications of COVID-19 and Provide Individuals with Additional Protection From Bankruptcy

On 25 August 2020, the Insolvency (Amendment) Bill 2020 (“Insolvency Bill”) was passed with a simple voice majority in the Dewan Rakyat. It appears that the Insolvency Bill is intended to mitigate the financial ramifications of the unprecedented COVID-19 pandemic and to provide individuals with additional protection from the threat of bankruptcy.

This Update provides in a nutshell the key changes introduced by the Insolvency Bill.

01 Sep 2020 | Malaysia

Food Regulations Revised on 31 August 2020 to Align Requirements on Use of Food Additives with International Standards & Facilitate Trade
The Food Regulations ("Regulations") has been amended on 31 August 2020 to:
  1. allow the use of new food additives;
  2. extend the use of existing food additives;
  3. align existing provisions with international standards; and
  4. facilitate trade by deleting Regulation 204(2) specifying the geographical origin of Scotch whisky.
This Update provides a brief summary of the amendments to the Regulations with reference to the consultation conducted previously by the Singapore Food Agency and its responses to comments received.
01 Sep 2020 | Singapore