Like That Law

Legal matters from a Singapore perspective with a focus on corporate law

[likethatlaw]

Singapore Market Watch - OCBC does well (but NPLs rising?)

OCBC 2015 net profit S$3.9B (up 2%)

OCBC 2015Q4 revenue: S$2.3B (+13%)

OCBC 2015Q4 profit: S$960M (+21%)

Includes OCBC WingHang which became subsidiary in 2015Q3

OCBC 2015 final dividend: 18c (unchanged)

OCBC 2015 NPL 0.9% (increased from 0.6% in 2014), 0.39% contributed by oil and gas NPL

OCBC 2015 NPL: S$1.97 B (2014: S$1.28B)

OCBC NPL - global financial crisis: 1.7%, peak: 1.9%

Source: Straits Times article

[likethatlaw]

Singapore Economy Watch - much bad news, but SG Gov is trying to fix it, and the S$ may slide soon

Singapore non-oil domestic exports (Nodx) (proxy for wholesale trade services) shrink 9.9% year on year in January 2016 

Singapore Purchasing Managers Index (PMI) contracted for 7th straight month

Singapore’s full year 2015 GDP will be released next week

Changi Airport Group giving cargo partners S$14 million in “cost relief”

PSA International’s Singapore ports throughput down 8.7%

NTUC has formed a Financial Sector Tripartite Committee (FTSC) with the Government and banking sector to ready the financial sector workforce for change (job cuts in Barclays and Standard Chartered)

Co-chaired by MAS MD Jacqueline Loh and NTUC assistant secretary-general Patrick Tay

Supported by the Association of Banks in Singapore (ABS) and Institute of Banking and Finance (IBF)

ABS has a website advertising job openings in banks

MAS expected to allow Singapore dollar to weaken if economy doesn’t recover

Singapore Budget may include tax rebates or lower foreign worker levies

COE prices expected to trend south as supply expected to continue growing until late next year

Source: Straits Times various articles

[likethatlaw]

Punitive damages in Singapore contract law!

First time ever.

Chan Seng Onn J in Airtrust (Hong Kong) Ltd v PH Hydraulics & Engineering Pte Ltd [2015] SGHC 307 :

“Given the above, I agree with the Plaintiff’s submission that the Defendant’s overall conduct is sufficiently outrageous and reprehensible to call for an imposition of punitive damages. I find that the threshold to award punitive damages has been crossed. This is an exceptional case. What was done was blatantly irresponsible designing, engineering and manufacturing.” 

(emphasis added)

[likethatlaw]

SGX reprimands Sunvic

Sunvic, an S-chip issuer, is in trouble for not disclosing interested person transactions worth RMB 1.6 billion which made up a (whopping) 30% of its net tangible assets in 2015. No shareholder approval or ratification was obtained either.

BT Article

SGX reprimand

Sunvic’s current board of directors:

Sun Xiao (ED and CEO)

Yang Guoqiang (ED)

Zhu Wuling (ED)

Siow Chee Keong (Lead ID) Management consultant with JF Virtus

Raymond Ong Sie Hou (ID) Director at CTLC Law Corporation

Yap Chee Wee (ID) Founder of Fleur Capital, fund management company

[likethatlaw]

Lack of quorum - apply under Section 182 CA?

- Majority shareholder called meeting

- Other shareholders refused to attend

- Majority shareholder applied under s182CA to hold EGM of one

- SGHC said: s182 required impracticability, and shareholders not wanting to attend constituted impracticability. 

- SGHC also rejected the argument that a different approach should be applied to family companies, and found no evidence that the company should be run by consensus.

Lim Yew Ming v Aik Chuan Construction [2015] SGHC 101

[likethatlaw]

If you’re a majority shareholder being sued - wind up?

- Minority shareholder Petroships tried to sue directors and shareholder of company under s216A (under s216A, must establish that suit is prima facie in interests of company)

- Majority shareholder then decided to wind-up the company voluntarily and the liquidator did not want to proceed with Petroships’ claim (note: voluntary liquidation means majority shareholder could remove the liquidator, and had done so when previous liquidators investigated Petroships’ claim)

- SGHC said that because company is winding-up and under (disinterested) liquidator’s control instead of the majority shareholder, hard to establish that suit against majority shareholder was in interests of company

-SGHC suggested:

Petroships could have applied under s302 CA to remove liquidators and replace with their own nominees

Petroships could have applied to court to have the liquidator’s decision reversed

Petroships could have asked court to exercise common law power to allow Petroships to sue in name of company against suitable indemnities

Petroships could have applied under s294(3) CA or s310(3) CA to prevent liquidators from being removed

- Difference is Petroships would have been paying the costs for these applications. Under s216A, the company would have borne the costs. 

Petroships Investment v Wealthplus [2015] SGHC 145

[likethatlaw]

Arbitration vs. Litigation in Singapore (hint: Arbitration wins)

Need to know: 

s216 minority shareholder claims are arbitrable

General presumption that all claims within an arbitration clause are arbitrable (even if arising under statute)

If court proceedings are stayed for arbitration and the arbitration is slow, you might be able to go back to court

Further details:

Silica claimed the majority shareholders had the company issue shares in breach of the M&AA thus diluting Silica and leaving it out of management.

Lionsgate applied for stay in favour of arbitration under s6(1) of the International Arbitration Act which lets the court order a stay if it is “satisfied” that there is no “sufficient reason” why the matter should not be arbitrated.

High Court felt that the dispute was not arbitrable because (i) claim was under statute and not under SPA with arbitration clause; (ii) not all parties and aspects of the dispute caught by arbitration agreement; (iii) procedural complexity.

But Court of Appeal allowed arbitration because there was no public element in commercial disputes that required a court instead of an arbitrator.

CA also noted that only a prima facie review of the arbitration agreement was required, i.e. existence. Also declared that if there’s an arbitration agreement there’s a presumption that the subject matter is arbitrable unless Parliament had a different intention or against public policy. 

CA rejected HC’s concerns of remedial inadequacy and procedural complexity - BUT said that the stay would be conditional upon the arbitration being administered expeditiously, undue delay would enable a party to apply to Court for the stay to be lifted.

Tomolugen v Silica Investors [2015] SGCA 57

Also see: 

Titan Unity [2013] SGHC 28

Malini Ventura v Knight Capital [2015] SGHC 225