Regional Round-Up

CAMBODIA

Cambodia and South Korea Sign Agreement for the Avoidance of Double Taxation (DTA)

On 25 November 2019, at the ASEAN-Republic of Korea Commemorative Summit and the First Mekong-ROK Summit in Busan, Korea, the Royal Government of Cambodia ("RGC") and the Republic of Korea entered into an agreement for the avoidance of double taxation ("DTA"). Signed by the Cambodian Minister of Foreign Affairs and International Corporation Prak Sokhonn and his Korean counterpart Kang Kyung-wha, the DTA is the ninth that the RGC has entered into with a foreign country.  RGC has signed eight other agreements with Brunei, China, Hong Kong, Indonesia, Malaysia, Singapore, Thailand and Vietnam.

The DTA has provisions similar to those signed with the other eight countries, including that which allows the tax residents in Cambodia and South Korea to be provided with a corporate tax credit for income that has been subject to tax in the counterparty's jurisdiction. The treaty also provides for a reduction in the standard withholding tax rates for cross border transactions between the two jurisdictions. In addition, the treaty provides an information exchange mechanism between the tax authorities of both countries to enhance tax enforcement against tax evasion, base erosion and profit shifting by taxpayers.

The DTA will come into force after the completion of ratification procedures by both countries.

The DTA between the Philippines and the RGC is in the pipeline and may soon be concluded, according to a recent report from the Philippine Department of Finance.

The Construction Law Enters into Force on 3 November 2019

On 3 November 2019, the Law on Construction entered into force ("Law"). The Law aims to establish principles, building technical regulations, and rules and procedures for construction sector management throughout Cambodia to ensure quality, security, safety and greater efficiency across this sector.

Under the Law, the Ministry of Land Management, Urban Planning and Construction (MLMUPC) is the competent authority that oversees and manages the construction sector.

The Law includes various provisions related to construction authorisation and construction site inspections. For example, entities that carry out any construction activity such as repair, modification, installation or demolition work are required to obtain approval from the competent authority before commencing such an activity. They must also obtain a construction site opening permit prior to the commencement of a construction and a site closing permit upon completion of the construction.

The Law features new provisions including those that relate to: (i) the obligation of an owner to obtain an occupancy certificate; (ii) defect liabilities; and (ii) the carrying out of quality and safety inspections of all buildings within a stipulated period. 

As many buildings are currently not in compliance with the Law, the Law provides for a two-year 'grace' period to building owners to give them sufficient time to make the necessary changes to comply with the Law. Owners of existing constructions that were built without the necessary permits or those that are considered non-compliant before enforcement of the Law should apply for an occupancy certificate within two years from the Law coming into operation.

The Law on E-Commerce Promulgated

On 2 November 2019, the Law on E-Commerce ("E-Commerce Law") was promulgated. The E-Commerce Law aims to: (i) govern electronic commerce in Cambodia; (ii) provide legal certainty in commercial and civil transactions by electronic system; and (iii) promote public confidence in using electronic communication. The E-Commerce Law does not apply to activities, documents and transactions related to: (i)  the formation or enforcement of powers of attorney; (ii) the formation or execution of a testament, codicil or other matters relating to succession; (iii) any contract for the sale, transfer or disposition of rights to immovable property or any interests in such immovable property; (iv) the transfer of immovable property or any interests relating to the immovable property; and (v) any other exceptions as may be provided for by a sub-decree.

The E-Commerce Law provides legal recognition on the validity of electronic communications and signatures, and supports the use of electronic communications in contract formation and as evidence. It also sets out the requirements on electronic records and signatures, imposes liabilities on intermediaries and electronic commerce service providers, and lays down the foundation for electronic filing with governmental institutions.

Under the E-Commerce Law, electronic payment businesses, intermediaries, and electronic commerce service providers are required to obtain approvals/licenses from the relevant authorities before commencing operations or engaging in certain activities. In addition, the E-Commerce Law imposes on these entities disclosure and data protection obligations, and requires them to offer their customers the option to reject unsolicited commercial communications.

After entering into force, the E-Commerce Law shall first be broadcast for a period of six months before its implementation.

The Law on Consumer Protection Comes into Operation on 2 November 2019

On 2 November 2019, to support Cambodia's rapidly growing economy, the Law on Consumer Protection ("CP Law") was promulgated, alongside the Law on Construction and the Law on E-Commerce.

The CP Law sets out rules to guarantee the rights of consumers and ensure that businesses conduct commercial activities in Cambodia fairly. The CP Law applies to any person who conducts any trading activities in Cambodia, regardless of whether these activities are for profit. It applies to the sale of goods, services, and real rights over immovable property.

Pursuant to the CP Law, a National Committee on Consumer Protection (NCCP) will be established to be Cambodia’s competent authority for consumer protection. One of its mandates is to encourage consumers in each industry to form associations to protect their respective interests.

The CP Law provides a non-exhaustive list of examples of unfair trading activities and practices. It stipulates that any activity or practice that provides false, misleading, or deceptive advertisements, and any business model that is equivalent to a pyramid scheme, are deemed unfair trading activities and practices. The activities that may constitute unfair trading activities and practices in specific industries may be provided by future regulations.

The CP Law also prescribes the minimum disclosure of information standards that businesses must meet with respect to consumers, such as the labeling requirements. The standards applicable to specific industries will also be prescribed by the relevant industry regulators. One notable standard that must be observed in providing information to the consumers is the use of the Khmer language in product labels.

CHINA

Significant Developments in China's Treatment of Foreign Investment – Implementing Regulation of Foreign Investment Law Comes into Effect on 1 January 2020

On 1 January 2020, the Implementing Regulation on the Foreign Investment Law of the People's Republic of China ("Implementing Regulation"), which was promulgated by the State Council of the People's Republic of China on 26 December 2019, came into effect. This follows the promulgation of the Foreign Investment Law of the People's Republic of China ("PRC Foreign Investment Law") on 15 March 2020 (which has come into effect since 1 January 2020). According to Premier Li Keqiang, "the Implementing Regulation aims to further strengthen the market-oriented business environment governed by a sound legal framework, and to reassure foreign investors and businesses regarding fair competition."

The three fundamental themes in the Implementing Regulation are: Investment Promotion, Investment Protection, and Investment Administration. Many of the common concerns long expressed by foreign investors in China are addressed within the provisions of the Implementing Regulation, such as the enforceability of incentive policies by government, the registration structure and procedure of foreign invested companies, IP protection, forced technology transfers, trade secrets and the transitional period for the existing foreign-invested companies.

It is also notable that there are still existing regulations, policies and rules issued by relevant authorities regarding foreign investment in China in the past years, which may not be fully consistent with the PRC Foreign Investment Law and the Implementing Regulation. Such regulations, policies and rules are also expected to be cleaned up and/or amended in accordance with the PRC Foreign Invested Law and the Implementing Regulation. Although the Implementation Regulation has made it clear that the PRC Foreign Investment Law and the Implemental Regulation prevail in the event of any inconsistency between the previous regulations, policies and rules and the PRC Foreign Investment Law and its Implementation Regulation, in practice there may be still uncertainties if the previous regulations conflict with the new law.

China New Cryptography Law Comes into Force on 1 January 2020

On 1 January 2020, the Cryptography Law of People's Republic of China (中华人民共和国密码法) ("Cryptography Law") came into force.

The Cryptography Law was enacted for the purposes of:

1. standardising the application and management of cryptography; 


2. safeguarding network and information security, national security as well as social public interests; and


3. protecting the legitimate rights and interests of citizens, legal persons and other organisations.

Salient objectives of the Cryptography Law include:

1. emphasising the grooming and rewarding of cryptography talents, and the express positioning of cryptography as an integral part of local-level development plans;


2. reinforcing China's intention to develop and establish standardisation, certification, accreditation and supervisory frameworks, thereby positioning and entrenching itself as a standard-setting body in the field of commercial cryptography; and


3. according protection to proprietary technology and information, including imposing express prohibitions on forced technology transfers and disclosure of source codes.

The Cryptography Law is a strong policy statement that China intends to adopt greater institutional efforts to further strengthen and promote the development and application of blockchain technology, and to entrench itself as a leading global player and standard-setter.

An Upgrade in Free Trade – China-Singapore Free Trade Agreement Upgrade Protocol Comes into Force

On 16 October 2019, the China-Singapore Free Trade Agreement ("CSFTA") Upgrade Protocol ("Upgrade Protocol") came into force. The articles relating to the Rules of Origin took effect later on 1 January 2020. The Upgrade Protocol seeks to enhance the trade and investment linkages between the two countries.

The Upgrade Protocol enhances numerous areas of trade and investment between China and Singapore, including trade in goods and services, investment and customs. It also introduces new chapters on competition, environment and e-commerce.

The Upgrade Protocol introduces a number of enhancements across various areas of trade and investment, including the improved Rules of Origin. The improved Rules of Origin seek to enhance market access for goods. One of the key improvements is that more petrochemical exports from Singapore will qualify for preferential treatment when imported into China. This took effect from 1 January 2020.

The CSFTA has had a greatly positive impact on trading relations between the two countries. Bilateral merchandise trade grew at 6.6% and investments grew at 11.9% per year on average. China remains Singapore's largest trading partner, while Singapore has been China's largest foreign investor since 2013. Further, in 2018, total bilateral trade between Singapore and China reached S$135 billion.

For more information, please click here to read our client update.

INDONESIA

Welcoming Indonesia's E-Commerce Regulation: A Snapshot

In closing 2019, the Indonesian government enacted the much-anticipated e-commerce regulation, which regulates various players in an e-commerce transaction and service providers.  It also regulates e-contracts, online advertisements and personal data protection. 

One of the key features of the e-commerce regulation is that it applies to foreign businesses that satisfy the thresholds in terms of the number of transactions, transaction value, number of delivery or the amount of traffic (which numbers are not yet provided in this regulation). A foreign business that satisfies the applicable thresholds will be subject to Indonesian tax. 

Another feature of the e-commerce regulation is the introduction of safe harbour provisions, similar to the provisions under the US Digital Millennium Copyright Act and the EU E-Commerce Directive. The safe harbour provisions of the regulation provide broad immunity to e-commerce service providers and intermediary service providers from the legal consequences arising from illegal third-party content. 

Lastly, the regulation also stipulates that a cross-border transfer of personal data out of Indonesia can only be made to countries which have standard personal data protection regimes that are on par with Indonesia.

Supreme Court Decision a Blow to Restructuring after PKPU

A recent Supreme Court decision involving PT Arpeni Pratama Ocean Line Tbk. ("APOL") cast a doubt on the practice of amending a composition plan, which is commonly done in the context of a suspension of debt payment or Penundaan Kewajiban Pembayaran Utang ("PKPU") in Indonesia. 

In the decision, the Supreme Court cancelled an amended composition plan pursuant to an application by one creditor to cancel the amended composition plan, despite approval from the majority of APOL's creditors to amend the plan. The Supreme Court stated that a court-approved composition plan is akin to a court decision, which means that it cannot be amended privately by the parties, and that an amendment of the composition plan contradicts the principle of fairness and equity in bankruptcy law. 

As a result of this decision, moving forward, it would be prudent for parties not to rely solely on the amendment to a composition plan as a means to restructure debts after the PKPU process.

Wading Through Indonesia's New Water Resources Law

After more than three decades, the Indonesian government finally issued a new law on water resources to replace the 1974 Irrigation Law (which was revived in 2015, when the Constitutional Court struck down a 2004 law governing utilisation of water resources). 

A key development in the new law is the introduction of a clear hierarchy of water utilisation, with usage for basic daily needs, public agricultural activities and drinking water supply systems at top of the hierarchy, and usage for activities relating to non-commercial purpose (e.g. for religious, cultural and social endeavours) and business purposes at the bottom of the hierarchy. 

The government also affirms control over water resources in the new law by, among other things, imposing a licensing regime for water utilisation for activities for non-commercial and business purposes. Here, state-owned entities enjoy a priority and private entities can only apply for a license if they comply with the water resources management outlines and plans and certain administrative technical requirements. 

While the new law is certainly welcomed, there are still questions, including those that relate to the drinking water sector. This would hopefully be addressed in the yet-to-be issued implementing regulations.

New Merger Control Regulation: Asset Acquisitions Subject to KPPU Notification and Update to New Merger Control Regulation

With effect from 3 October 2019, an asset acquisition transaction must be notified to the  Indonesia Competition Commission (Komisi Pengawas Persaingan Usaha or "KPPU")  if such a transaction (not including a transaction involving parties in the banking sector):

1. exceeds the applicable thresholds (either the combined Indonesian asset value of the transacting parties exceeds IDR2.5 trillion and/or the combined Indonesian sales value of the transacting parties exceeds IDR5 trillion); and


2. results in a change of control over the acquired assets; and/or


3. increases the acquirer’s ability to control certain markets.

While the first and second requirements are clear, the third requirement will be determined by the KPPU on a case-by-case basis by looking at certain objective criteria, such as whether the assets are sold under an ordinary sales activity and whether the acquisition may potentially increase the market share or allow a vertical integration of the purchaser or its group company. 

The new requirement was implemented pursuant to the KPPU Regulation No. 3 of 2019 on Assessment of Merger or Consolidation of Business Entities or Share Acquisition of Companies that Could Result in Monopolistic and/or Unfair Business Competition Practices in response to the need for KPPU to oversee non-share-based transactions that may raise anti-competitive concerns.

LAO PDR

Reducing Patent Application Pendency and Increasing Patent Quality in Lao PDR

Under the Lao Law on Intellectual Property that was revised in June 2018 ("Amended IP Law"), patent applicants may still be frustrated by the lengthy application pendency in the Department of Intellectual Property of the Ministry of Science and Technology of Laos ("Lao DIP").

The alternative key procedures to accelerate Lao patent postulation are as follows:

1. Laos participates in the ASEAN Patent Examination Cooperation ("ASPEC") which allows applicants of patent protection in other ASEAN patent offices to save cost and time when seeking a patent protection. The other eight participating members of the ASPEC are the ASEAN IP Offices of Brunei Darussalam, Cambodia, Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam. ASPEC, therefore, enables Lao DIP to utilise the search and examination results from any of these IP Offices as references in the Lao patent application when that IP Office has found at least one claim novel and inventive. In order to qualify for ASPEC, a patent application filed at the Lao DIP must be a corresponding patent application to one that is filed and examined in another ASEAN patent office. Patent applications are corresponding applications if they are linked by a Paris Convention priority claim (from one to the other or from both to another patent application) or are both national phase entry applications from the same Patent Cooperation Treaty ("PCT") application.


2. Pursuant to a framework that was established by an agreement between the Lao DIP and the Japan Patent Office ("JPO"), when patent applications have been examined and granted at the JPO, patent rights may also be granted to corresponding applications which have been filed in Laos without conducting substantial examinations. Therefore, applicants of Lao patent applications who own patents granted by the JPO can request accelerated decisions on eligibility for the grant of the Lao patent applications with the Lao DIP at any time after the grant of the Japanese patent. The requirements for the request for accelerated decisions on eligibility for the grant of the Lao patent applications are that the designated patent application filed with the Lao DIP must share the same earliest priority date and, like ASPEC, be linked by Paris Convention or PCT priority.


3. According a Memorandum of Understating signed in 2018 to further the IP cooperation between China (represented by China National Intellectual Property Administration (CNIPA)), and Laos (represented by the Lao DIP), patent applicants who own valid Chinese patents may also request accelerated eligibility for grant decisions on Lao patent applications. The Memorandum of Understanding is entered into under the Belt and Road Initiative and China-ASEAN IP cooperation. 


4. On 27 November 2019, the Lao DIP signed a Memorandum of Cooperation ("MOC") with the Intellectual Property Office of Singapore ("IPOS") which will enable Singapore-granted patents to be re-registered in Laos to accelerate enterprise access into both the Singapore and the Lao markets. In addition, the MOC enables the Lao DIP to tap on IPOS' patent search and examination expertise and services for prosecution of Lao patents. Utilising the IPOS patent services and expertise, the Lao DIP seeks to improve the quality of Lao-granted patent.

Laos, Singapore Further IP Cooperation to Accelerate ASEAN's Innovation Growth

On 27 November 2019, at the sidelines of the 2nd ASEAN-Korea Heads of IP Offices Meeting held at Seoul, Korea, the Department of Intellectual Property ("DIP") of the Ministry of Science and Technology of Laos and the Intellectual Property Office of Singapore ("IPOS") signed a new intellectual property ("IP") cooperation to allow innovative enterprises swifter access to the combined market of both countries.

The Memorandum of Cooperation ("MOC") bridges the innovation ecosystems of both countries to support the translation of ideas, IP and intangible assets ("IA") into products and services in the ASEAN region. IPOS will lend its deep technical IP knowledge and services to support Laos in building its innovation ecosystem and contribute to economic integration in ASEAN through IP and IA.

The MOC covers two broad areas of collaboration:

1. the DIP will tap on IPOS’ patent search and examination expertise and services to grant quality patents in Laos; and


2. the DIP will allow Singapore granted patents to be re-registered in Laos, accelerating enterprise access into both markets.

The MOC also affirms the mutual commitment of both countries to cooperate in supporting the innovation ecosystem. It will enhance coordination between Laos and Singapore and provide greater support to innovators growing and protecting their IP in both countries and the region.

IP today is a key enabler in transforming ASEAN into a highly innovative and economically competitive region.

MALAYSIA

Central Bank of Malaysia Issues Exposure Draft on Licensing Framework for Digital Banks

On 27 December 2019, the Central Bank of Malaysia (Bank Negara Malaysia or "BNM") issued an Exposure Draft on the proposed Licensing Framework for Digital Banks in Malaysia ("Exposure Draft").

The Exposure Draft outlines the licensing framework for persons who wish to carry on a "digital banking business" or "Islamic digital banking business". The aforesaid terms are defined as a banking or Islamic banking business (as defined in the Financial Services Act 2013 and Islamic Financial Services Act 2013, or "FSA" and "IFSA", respectively) which is carried on primarily or wholly through digital or electronic means.

Some key points addressed in the Exposure Draft include the following:

1. in assessing whether an applicant fulfils the "best interest of Malaysia" criteria (which is one of the factors considered by BNM when assessing an application for a banking licence), the applicant is required to demonstrate a commitment to drive financial inclusion, including ensuring quality access and responsible usage of financial services, particularly to underserved and hard-to-reach segments that may be unserved;


2. during the first three to five years of operations ("Foundational Phase"), the licensed digital bank must maintain at all times a minimum amount of capital funds of RM100 million, subject to an asset limit of RM2 billion;


3. licensed digital banks will generally be subject to the same regulatory requirements that apply to licensed banks/licensed Islamic banks. However, during the Foundational Phase, the licensed digital bank will enjoy simplified regulatory requirements for the areas identified in the Exposure Draft; and


4. to "graduate" from the Foundational Phase, the licensed digital bank may make an application to BNM after the first three years of operations, subject to the fulfilment of the relevant criteria identified in the Exposure Draft.

BNM will accept public feedback on the Exposure Draft until 28 February 2020. Applications for the digital banking licence will open upon issuance of the final Policy Document, whereupon BNM has stated that it intends to issue up to five licences to qualified applicants.

Anti-Fake News Act 2018 Officially Repealed

Shortly before the 2018 Malaysian general elections, the Anti-Fake News Act 2018 (“Fake News Act”) was passed in Parliament amidst criticisms that it would be used as a tool by the (then) government to curtail freedom of speech ahead of the general elections. Under the Fake News Act, those found guilty of spreading “fake news” could be jailed for up to six years and subject to a fine of up to RM500,000.

On 19 December 2019, the Anti-Fake News (Repeal) Bill 2018 (“Repeal Bill”) was approved by the Dewan Negara (i.e. the Senate). This is the second time the Repeal Bill has been tabled before the Senate, as when it was initially passed by the Dewan Rakyat (i.e. the House of Representatives) in August 2018, it was rejected by the Senate in September of the same year.

This is in accordance with Article 68 of the Federal Consitution of Malaysia which enables the retabling of a bill that has been rejected by the Senate after a prescribed cooling-off period of one year.   

It is not known when the Repeal Bill will be gazetted. However, it should be noted that this Bill expressly provides that: (i) the Repeal Act will not affect any orders and/or any applications for an order made under the Fake News Act prior to the coming into force of the Repeal Act; and (ii) on the coming into force of the Repeal Act, any investigations, prosecution or proceedings in respect of any offence which was pending under the Fake News Act may be continued. 

MCMC Issues Final Report on Allocation of Spectrum Bands for Mobile Broadband Services in Malaysia

In recognising the need for different frequency ranges to deliver widespread coverage of broadband services in Malaysia, and to meet the requirements of future networks and 5G services, the Malaysian Communications and Multimedia Commission ("MCMC") issued its final report on the allocation of spectrum bands for mobile broadband services in Malaysia ("Report") following a public inquiry process conducted earlier in 2019.

In its Report, the MCMC identified the following bands to be the pioneer spectrum bands in Malaysia for the roll out of 5G:

1. 700 MHz;


2. 3.4 GHz to 3.6 GHz ("3.5GHz"); and


3. 24.9 GHz to 28.1 GHx ("26GHz and 28GHz").

The existing allocation for deployment of current 4G technology, including the existing allocation of the 2300 MHz and 2600 MHz bands, will be maintained until December 2021 pending maturity of these bands for 5G.

According to the Report, assignment for the 700MHz and 3.5GHz bands will be made through a tender process and allocated to a single entity comprising a consortium formed by multiple licensees, instead of allocating these bands to individual licensees.

The said tender process is expected to commence in the first quarter of 2020, where 2x30 MHz of the 700 MHz band and 100 MHz of the 3.5 GHz band will be made available by the MCMC. The remaining frequencies within the 700 MHz and 3.5 GHz bands will be considered for assignment at a future date.

The 26GHz and 28GHz bands will be assigned using different methods depending on the frequency range. In this regard, four blocks of 400 MHz in the frequency range of 24.9 GHz to 26.5 GHz will be assigned through a tender process to licensees on a nationwide basis, whereas the remaining four blocks of 400 MHz in the frequency range of 26.5 GHz to 28.1 GHz will be assigned based on a first-come first-served basis and will be open to any party, including non-licensees, for the purpose of deploying localised and/or private networks.

The tender process for the frequency range of 24.9 GHz to 26.5 GHz is expected to commence during the first quarter of 2020. A successful party in the tender process will not be eligible to apply for the remaining frequency range of 26.5 GHz to 28.1 GHz.

In respect of the roll out for the first two bands of 700 MHz and 3.5 GHz, the MCMC has rationalised the awarding of the spectrum for 5G to a single consortium in order to make the rollout of 5G more cost and resource effective, as it not only reduces redundancies but also translates to more affordable 5G for consumers. The MCMC has committed to continue monitoring costs and what is transferred to the consumer, with the criteria for the corporate structure of 5G consortiums to be revealed in March or April 2020.

Prospective Application of the Construction Industry Payment and Adjudication Act 2012

In the landmark Federal Court decision in Jack-In Pile (M) Sdn Bhd v Bauer (Malaysia) Sdn Bhd & another appeal [2020] 1 CLJ 299, it was held that the Construction Industry Payment and Adjudication Act 2012 ("CIPAA") applies prospectively and therefore does not apply retrospectively to construction contracts which were entered into before the coming into operation of the CIPAA. The CIPAA came into operation on 15 April 2014, and was enacted for the purpose of facilitating regular and timely payment, to provide a mechanism for speedy dispute resolution through adjudication and to provide remedies for the recovery of payment in the construction industry. Essentially, the Federal Court held that:

1. if a legislation is intended to have retrospective effect, it must be clearly stated by express provisions within the Act itself; and


2. in the absence of express words to such effect, a statute, whether it is procedural or substantive in nature, cannot be applied retrospectively to impair a substantive right. The CIPAA does not contain any provision suggesting that it has retrospective effect. Furthermore, if the CIPAA were to apply retrospectively, it would affect the substantive right of parties. An illustration of this is section 35 of the CIPAA which prohibits the use of "pay-when-paid" clauses, which were commonly used prior to the CIPAA being enacted. Traditionally, parties had the right to include a "pay-when-paid" clause with the effect that the main contractor was not obliged to make payment to the sub-contractor until the main contractor has received payment from the employer for the related progress payment. With section 35 of the CIPAA, such clauses are now void. If section 35 of the CIPAA has retrospective effect, it would have impaired the parties' substantive right – the right of freedom to contract vis-à-vis the use of the "pay-when-paid" clauses, a right which existed prior to the coming into operation of the CIPAA. Accordingly, the CIPAA should not have retrospective effect.

Malaysian Court of Appeal Confirms That Time for Delivery of Vacant Possession Starts to Run from Date of Sale and Purchase Agreement

This appeal concerned the judicial review of a tribunals' decision to award liquidated damages to purchasers of a property for the developer's delay in delivering vacant possession of the property. The Court of Appeal gave effect to the express provision in the sale and purchase agreement ("SPA") of the parties, which stated that time for delivery of vacant possession was 24 months from the date of the SPA.

The effect of this decision is that the Court of Appeal is seen to have departed from two previous Supreme Court decisions in Hoo See Sen & Anor v Public Bank Bhd & Anor [1988] 1 CLJ (Rep) 125 and Faber Union Sdn Bhd v Chew Nyat Shong & Anor [1995] 3 CLJ 797 which held that the time for the delivery of vacant possession starts to run from the date when the purchaser pays the booking fee. The grounds for the Court of Appeal decision include, among other things, the following:

1. the provision in the SPA related to the time for the delivery of vacant possession was clear and unambiguous and was in the prescribed form provide in Schedule G to the Housing Development (Control and Licensing) Regulations 1989 ("Schedule G"). The courts therefore need not resort to case law to interpret the time for delivery of vacant possession;


2. the role of a tribunal is distinct from a court of law, and as such, it should have applied the provision of the SPA as it was, and should not have referred to judicial interpretation when the meaning of the provision was clear; and


3. the two previous Supreme Court decisions were distinguished on the basis that the case of Hoo See Sen (which was followed in Chew Nyat Shong) was prior to the coming into effect of Schedule G.

This decision has been seen to provide clarity to developers and purchasers as to when vacant possession of a property must be delivered. This in turn minimises the exposure of developers to liability in paying liquidated damages as the time for the delivery of vacant possession starts to run from the date of the SPA and not an earlier date such as the date on which the booking fee is paid.

MYANMAR

Anti-Money Laundering Order and Supreme Court Announcement for Lawyers

On 18 December 2019, following the issuance of Anti-Money Laundering Order No. 45/2019 by the President’s Office on 14 November 2019 (“Order”), the Supreme Court issued an announcement ("Announcement") which along with the Order, require all lawyers, notaries, legal professionals and accountants engaging in a transaction for or on behalf of their customers/clients, to notify the Financial Intelligence Unit (“FIU”) of any suspicious transaction that they may come to know of in the course of their work.

These professionals and individuals are required to promptly notify the FIU if the amount of the subject transaction or the property involved equals or exceeds the designated threshold, or they have reasonable grounds to believe that the subject money or property is obtained by illegal means or is related to money laundering or financing of terrorism or an attempt to do so. Failure to lodge such a report with the FIU may amount to an offence under section 46 of the Anti-Money Laundering Law 2014, which is punishable with imprisonment for three to seven years and a fine of MMK300 million.

Online Trademark Registration, Online IP Agent System

Although the Trademark Law was published on 30 January 2019, it is not yet in force as the President has not issued a notification to this effect. Pending the coming into operation of the law, on 17 December 2019, the Department of Intellectual Property ("DIP") under the Ministry of Commerce ("MOC") hosted a seminar on E-Filing Website for Trademark Registration in Nay Pyi Taw to introduce the new online trademark filing system as well as explain the necessary procedures relating to it.

To use the online trademark filing system, applicants are required to submit user application proposals to the DIP. The DIP will then provide them with usernames and passwords. The procedure for the registration of a trademark includes the following:

1. filing an application for trademark registration via the Online IP Agent System; and


2. submitting supporting documents such as the Power of Attorney (POA), the Declaration of Ownership filed with the Deeds Registration Office (ORD) with the date of first use and evidence of use of the mark in Myanmar, details of the proprietor (name, address, country/jurisdiction of incorporation), specification of goods and services, and the mark itself (including the type of mark and colour description).

We understand that the DIP will establish two intellectual property ("IP") offices in Myanmar (in Yangon and Nay Pyi Taw). The DIP will announce the official filing fees for trademark registration applications one month before the soft opening of the IP offices, which is expected to take place in early February 2020. During the soft opening period, only the re-registration applications by existing trademark owners will be accepted. There will be a six-month grace period from the end of the soft opening period to allow individuals who fail to re-register their mark during the soft opening phase to do the necessary re-registration. They will, however, be charged late filing fees. The grand opening of the IP offices is tentatively scheduled in the third or fourth quarter of 2020, after which applications to register new marks will be allowed. 

New entrants who wish to register marks must prepare a request-letter for registration which will include submission of information such as the name and address of the applicant, the name and address of its representatives, clear and complete descriptions of the marks that the applicant intends to register, and the name and class of the subject goods or services in accordance with the international classifications under the new Trademark Law.

Offshore Remittance Business License Regulations

On 15 November 2019, the Central Bank of Myanmar ("CBM") issued Notification No. 21/2019 ("Notification") setting out the offshore remittance business license regulations with the view of reducing unofficial offshore remittances and to provide a legal framework for such activities.  The Notification sets out the application process for an offshore remittance business license ("ORBL"), the rules on security deposits and revolving funds, anti-money laundering provisions, and penalties for non-compliance of the regulations.

The following documents must be submitted when applying for an ORBL:

1. Certificate of incorporation (COI) under the Myanmar Companies Law 2017 (MCL);   
2. tax clearance certificates and invoices attesting the official sources of income for the company's security deposit;
3. business operation plan;
4. cash distribution program;
5. an undertaking by the company to comply with the Foreign Exchange Management Law, the Financial Institutions Law, the Anti-money Laundering Law and the Anti-terrorism Law; and
6. customer complaint program and accounting scheme.

The supporting documents relating to the entity's responsible persons which must also be submitted include the following:

1. documents with the names, working experience and fields of expertise of the responsible persons who will manage the offshore remittance business ("ORB"), as well as the ORB's beneficial owners, management personnel, shareholders and compliance officers;
2. police clearance certificates of compliance officers, agents, sub-agents or officers-in-charge of the ORB branch offices, and shareholders holding 10% or more in the ORB; and
3. a training course completion certificate of compliance with the Anti-money Laundering Law and Anti-terrorism Law conducted by the Financial Intelligence Unit in collaboration with the Myanmar Police Force, Special Investigation Department the CBM and Rule of Law Center. 

The review and approval of an ORBL application by the CBM will take 90 days. The validity of an ORBL is three years.

The maximum level of funds receivable or transferable by an ORB licensee on behalf of an individual customer at any given time is US$1,000. The maximum receivable or transferable amount for one person per month is US$5,000 or its equivalent.

As a prerequisite to conducting their activities, ORBs must place a minimum amount of MMK100 million security deposit at a bank holding an authorised dealer license issued by the CBM. This security deposit must be placed in an escrow account that can only be opened by the ORB upon meeting certain conditions. 

From a compliance perspective, ORBL holders must comply with some requirements, including the following:

1. monthly submission of bank statements of agents or offshore branch offices that receive or transfer funds to the Foreign Exchange Management Department ("FEMD");
2. submission of Consolidated Remittance Transaction Statements (CRTS) signed by an authorised representative of the company to the FEMD within seven days after the end of each month;
3. submission of Financial Statements (FS) signed by an authorised representative of the company to the FEMD within one month after the end of the financial year;
4. submission of foreign currency transaction daily accounts to the FEMD using the Electronic Reporting System (ERS) before noon of the next working day;
5. submission of the final status or information regarding an ORBL holder's business operations (such as ongoing litigation, officers being convicted of a crime, death etc.) to the CBM once every six months;
6. in the event that the MMK-denominated amount transferred is equivalent to US$500 or less, the documents indicating the names and national registration card numbers or passport numbers of the transferor and transferee must be maintained for one year from the date of the transfer;
7. if the MMK-denominated amount transferred exceeds US$500, the information relating to the transfer, such as transferor and transferee names, must be maintained for five years from the date of the transfer; and
8. notification to the CBM of the ORBL holder's place of business before commencing operations, and 30 days' prior approval from the CBM for a change of business location.

Non-compliance with the Notification attracts penalties, which include a MMK10 million-fine (minimum). 

The FEMD is the designated department that supervises and regulates ORBs.

PHILIPPINES

The Philippine Stock Exchange Invites the Public to Comment on the Proposed Amendments to the Philippine Mineral Reporting Code

On 29 October 2019, the Philippine Stock Exchange ("PSE") released a circular which proposes amendments to the Philippine Mineral Reporting Code of 2007 ("PMRC"). PMRC sets out minimum standards, recommendations, and guidelines for Public Reporting in the Philippines of Exploration Results, Mineral Resources, and Ore Reserves. 

The proposed changes to the PMRC include (among other reporting and technical requirements): (a) a requirement to complete and document a review of all legal and permit requirements; and (b) a requirement to discuss environmental, social, and health and safety impacts that are expected during the development and operation of mineral resources and ore reserves, and after their closure, and how these will affect employees, contractors, neighbouring communities and customers.

The Philippine Mineral Reporting Code Committee ("PMRCC") was formed in November 2018 to maintain and improve the standards for public mineral reporting in the Philippines, and to ensure that the PMRC is aligned and substantially comparable with internationally recognised reporting standards.  The PRMCC modelled the draft PMRC after the Committee for Mineral Reserves International Reporting Standards (CRIRSCO) International Reporting Template 2019 and Australasian Joint Ore Reserves Committee (JORC) Code of 2012.

The draft was released for comments from the public until 15 December 2019.  To date, the PSE and Securities and Exchange Commission ("SEC") have not adopted the latest draft of the PMRC. Once the SEC approves and adopts the amendments to the PMRC, the implementation is intended to take effect two years from the date of its approval.

Securities and Exchange Commission Promulgates the 2019 NPO Guidelines

On 27 December 2019, the Securities and Exchange Commission ("SEC") issued Memorandum Circular No. 25, Series of 2019, which promulgates the 2019 Guidelines for the Protection of SEC Registered Organizations from Money Laundering and Terrorist Financing Abuse ("2019 NPO Guidelines"). 

The 2019 NPO Guidelines were adopted to establish the regulatory framework for the protection of SEC registered non-profit organisations ("NPOs") from money laundering and terrorist financing abuse. 

The 2019 NPO Guidelines adopt risk-based measures to protect NPOs without being unduly disruptive of the legitimate activities of NPO.  The 2019 NPO Guidelines encourage NPOs to make available to the public accurate, current and complete material information about the entities via online platforms. This include information regarding their status, finances, expenses, projects, activities, the identities of those who control or direct such activities, the composition of their governing boards and their beneficial owners.  NPOs should also adopt policies on good governance to promote accountability, integrity and public confidence in the administration and management of NPOs.

The 2019 NPO Guidelines impose compliance requirements on NPOs at Risk, such as: (a) the audit of the NPOs by an independent Certified Public Accountant of their annual financial statements; (b) the conduct of mandatory background checks of officers and trustees of the NPOs; (c) the mandatory audit by the SEC of the NPOs; (d) the establishment of an internal audit system; and (e) the mandatory attendance in sustained outreach programs of the SEC.  Moreover, the 2019 NPO Guidelines require all non-stock corporations to complete the revised Mandatory Disclosure Form and submit updates on their activities and projects.

Non-compliance with the 2019 NPO Guidelines may result in the imposition of sanctions and penalties, such as fine up to PhP2 million, the suspension or revocation of the Certificate of Incorporation of the NPOs, and other penalties within the power of the SEC to impose.

Extension of Registration Deadline for Operators of Payment Systems Granted by the Bangko Sentral ng Pilipinas (BSP)

The Monetary Board extended the registration deadline for operators of payment systems ("OPS") provided in BSP Circular No. 1049 (Rules and Regulations on the Registration of Operators of Payment Systems) ("BSP Circular") to 1 April 2020. The extension is intended to give OPS more time to register and address various concerns that they may have concerning registration.  

OPSs operating at the time of the effectivity of R.A. No. 11127 or the National Payment Systems Act are required under the BSP Circular to register with the Bangko Sentral ng Pilipinas ("BSP" or the Philippine central bank) no later than three months from the effectivity or by 1 January 2020.  Under the new simplified registration process, the BSP aims to facilitate and encourage compliance of all payment systems operators, particularly the previously unregulated non-financial institutions that are unfamiliar with regulatory compliance.  According to BSP Deputy Governor Francisco Dakila Jr., the new regulation is part of the implementation of R.A. No. 11127 which was approved in February 2019.

R.A. No. 11127 endows the BSP with the power to oversee the payment systems in the Philippines and exercise supervisory and regulatory powers over them for the purpose of ensuring the stability and effectiveness of the monetary and financial system.  BSP-registered/licensed institutions such as banks and non-bank electronic money issuers, which are now considered as OPS under the law, will have to submit a notification to BSP.

Intellectual Property Office of the Philippines Invites the Public to Submit Comments on the Draft Bill for the New Intellectual Property Act

The Intellectual Property Office of the Philippines ("IPOPHL") released a copy of the draft bill for the New Intellectual Property Act, which was opened to comments from the general public until 20 December 2019.  The draft bill contains draft amendments to the current Republic Act No. 8293 or the Intellectual Property Code of the Philippines (IP Code). 

The amendments are intended to promote and support creation, innovation, utilisation, and commercialisation of intellectual property ("IP").  Notable changes include the following:

1. inclusion of protected new plant varieties provided under the Philippine Plant Variety Protection Act of 2002 in the scope of IP;


2. reorganisation of the IPOPHL and institutionalisation of several offices such as the Intellectual Property Academy, Bureau of Copyright and Related Rights, Bureau of Innovation and Business Development, Bureau of Regional Operations, and Information Technology Services;


3. creation of the National Council on Intellectual Property Rights (NCIPR) which will act as the primary inter-agency body on efforts against IP rights violations; and


4. creation of a Sub-Committee on Enforcement of IP Rights in the Digital Environment which is tasked to adjudicate complaints of online infringement activities.

To date, the bill has yet to be filed in either house of Congress.

Amendment of Rules on Bond and Long-Term Negotiable Certificates of Time Deposit Issuance and Indefinite Moratorium

Long-term negotiable certificates of time deposit ("LTNCTDs") are peso-denominated deposit instruments with a term of at least five years. The issuance of LTNCTDs, which effectively “lengthen” the maturity profile of funds sourced by banks, are subject to the Monetary Board's ("MB") approval.

The MB approved the amendments to the rules on the issuance of LTNCTDs, bonds and commercial papers (CPs), allowing related companies of the issuing universal/commercial banks ("U/KBs") and quasi-banks ("QBs") to arrange these financial instruments subject to certain conditions. 

The amended rules require the participation of third-party underwriters/arrangers who are unrelated to the issuing U/KB or QB. Additionally, parties must ensure that an objective conduct of the due diligence review is not undermined and that appropriate safeguards and controls on related-party transactions are instituted to prevent conflict of interest. 

These reforms were introduced to promote efficiency in the issuance of the said instruments by U/KBs and QBs, to protect the interests of the investing public, and to contribute to the development of the capital market.  The amended rules became effective 15 calendar days from its publication in a newspaper of general circulation on 2 December 2019 or on 17 December 2019.

Nevertheless, the MB has set an indefinite moratorium on the issuance of LTNCTDs,  which will commence on 1 January 2021. Banks are given until 30 September 2020 to submit their request for authority to issue LTNCTDs. The moratorium is seen to shift the banks’ funding channel from LTNCTDs to bond issuances.

Securities and Exchange Commission Invites Comments from the Public on the Draft Memorandum Circular on the Revision of the General Information Sheet of Foreign Corporations

On 13 December 2019, the Securities and Exchange Commission ("SEC") released a draft Memorandum Circular on the Revision of the General Information Sheet (GIS) of Foreign Corporations ("draft Memorandum Circular"), that includes a page for the indication of Beneficial Ownership Information.  The SEC sought comments from the public on the draft Memorandum Circular until 10 January 2020.

The draft Memorandum Circular imposes the responsibility to conduct  due diligence on information relating to a foreign corporation's beneficial ownership on the resident agent and country or regional head of the foreign corporation.  Such a responsibility includes the duty to obtain, keep, report and update such information. Any changes to the information relating to beneficial ownership must be indicated in the Notification Update Form and submitted to the SEC within 30 calendar days after the changes occurred or became effective.

The Competition Authorities of the Philippines and China Ink Memorandum of Understanding for Technical Cooperation

On 19 November 2019, the Philippine Competition Commission ("PCC") and the State Administration for Market Regulation (SAMR) of the People’s Republic of China signed a memorandum of understanding ("MoU") with the aim of strengthening bilateral ties on competition law enforcement.

According to the PCC, the MoU lays down a general framework for cooperation in competition enforcement, marking the start of a productive partnership related to an exchange of information, coordination of enforcement activities, notification of cases of mutual interest, as well as technical cooperation and capacity building.  The MoU also provides for a mechanism for the conduct of joint dialogues on economic issues and developments in their respective competition policies and matters of mutual interest.

The move is part of PCC’s efforts to work closely with its international counterparts, including the ASEAN Experts Group on Competition, the International Competition Network (ICN), the United Nations Conference on Trade and Development (UNCTAD) and the Organisation for Economic Co-operation and Development (OECD) Competition Division.

Supreme Court Issues Rules on Dawn Raids to Bolster Cartel Investigations

The Supreme Court issued a Resolution dated 10 September 2019 governing the rules on administrative searches and inspections under the Philippine Competition Act ("PCA"), strengthening the Philippine Competition Commission’s ("PCC's") ability to carry out dawn raids on entities suspected of violating the country’s antitrust law.

Beginning 16 November 2019, the Rules on Administrative Search and Inspection under the PCA took effect ("Dawn Raid Rules"), enabling the PCC to exercise its power to conduct dawn raids pursuant to an order of a special commercial court under section 12(g) of the PCA.

The Dawn Raid Rules govern the application, issuance and enforcement of inspection orders for administrative investigations of alleged violations of the PCA.  Under the Rules, an application for examination must be acted upon within 24 hours from its filing.  Furthermore, an inspection order issued by the court will allow the PCC and its deputised agents to search and inspect business premises, offices, land and vehicles to examine, copy, photograph, record or print information in order to prevent the removal, concealment, tampering with or destruction of such information.  This inspection order, which is effective for an initial period determined by the court (not exceeding 14 days from its issuance), may be extended upon a motion for a period not exceeding 14 days from the expiration of the initial period.  Notably, any person or entity that fails or refuses to comply with an inspection order may be cited for contempt of court.

According to the PCC, dawn raids or unannounced on-site inspections are widely used by competition authorities around the world to uncover evidence in aid of investigation and prosecution of anticompetitive agreements and conduct, such as cartels and abuses of dominance.  This is because cartels operate on clandestine arrangements. The Dawn Raid Rules are expected to strengthen  the PCC’s ability to uncover anticompetitive behaviour and pin down such offence covered by the PCA.

Philippine Government Aapproves the Implementing Rules and Regulations of Republic Act No. 11222 (Simulated Birth Rectification Act)

On 7 October 2019, the Philippine government approved the Implementing Rules and Regulations ("IRR") of the Simulated Birth Rectification Act ("SBRA"), which was passed by the Philippine Congress on 21 February 2019. The aim of the SBRA is to simplify adoption proceedings and encourage adoption and rectification of simulated births. The IRR took effect on 10 December 2019, after the lapse of 15 days from its publication in the Official Gazette on 25 November 2019.

Under the SBRA and its IRR, a person who simulated the birth of a child for the child’s best interest on or before the effectivity of the SBRA on 28 March 2019, is exempt from criminal, civil and administrative liability and is granted amnesty, provided that: (a) a Petition for Adoption with an application for the rectification of the simulated birth record is filed on or before 29 March 2029; (b) the child has been consistently considered and treated as his or her own; and (c) the child has been living with or under the custody of the prospective adoptive parents for at least three years.

Under the SBRA and its IRR, the administrative adoption order has the same effect as a judicial decree of adoption, whereby the adoptee is considered the adopter’s legitimate child for all intents and purposes.  Thus, in lieu of going through court proceedings, a person seeking to adopt a child may file a petition with the Office of the Social Welfare and Development Officer where the child resides.  Nonetheless, the SBRA imposes the penalty of imprisonment for six years and one day to 12 years and/or a fine of not less than PhP200,000 on any person who fails to comply with the procedure for adoption provided by the law.

SINGAPORE

Payment Services Act 2019 Effective from 28 January 2020

The Payment Services Act 2019 ("PS Act") came into force on 28 January 2020 (except three provisions setting out related amendments to other Acts) and repealed the Payment Systems (Oversight) Act ("PS(O) Act") and the Money Changing and Remittance Businesses Act ("MCRBA") to consolidate the regulation of payment services under a single legislation.

In addition, the PS Act expands the scope of regulated payment services to keep up with new technological developments in payment services and the various risks they pose. It adopts a licence-based framework for payment service providers and a designation regime for payment systems.

Payment Services Act 2019

In summary, the PS Act regulates the provision of the following payment services:

1. account issuance services;
2. domestic money transfer services;
3. cross-border money transfer services;
4. merchant acquisition services;
5. e-money issuance services;
6. digital payment token services; and
7. money-changing services.

Persons which carry on business in providing these services must obtain the necessary licence to provide the relevant payment services. The classes of licence available are:

1. Money-Changing Licence;
2. Standard Payment Institution Licence; and
3. Major Payment Institution Licence.

Regulations Issued under the Payment Services Act 2019

To effect the objectives of the PS Act, a set of regulations was issued under the PS Act on 5 December 2019. The regulations also took effect on 28 January 2020. Some of the key regulations issued under the PS Act are set out below.

(a)  Payment Services Regulations 2019 ("PSR")

The PSR is the main set of regulations for licensees and regulated entities under the PS Act. The PSR covers the following key aspects:

1. Requirements for licensed payment service providers ("licensees"): These will include control of provision of payment services, financial requirements and business conduct requirements that will apply to licensees where relevant.
2. Requirements for designated payment system ("DPS") entities: These are largely similar to those currently imposed on DPS operators, settlement institutions and participants under the PS(O) Act.
3. Exemptions and other requirements: These include exemptions and also general requirements that apply to licensees, and DPS entities. 

Payment Services (Exemption for Specified Period) Regulations 2019 ("PS(E)R")

To allow a grace period for transition, the PS(E)R provides for a set of temporary exemptions for persons who before or on 28 January 2020 carry on the prescribed payment services from holding a licence under the PS Act for a specified grace period, provided that they meet the conditions prescribed in the PS(E)R, including notifying the MAS within 30 days after 28 January 2020 of the date on which the person commenced business in providing the relevant payment service (in the form and manner of notification specified on MAS website ).

For more information, please click here to read our client update.

European Union-Singapore Free Trade Agreement Comes into Force on 21 November 2019

On 21 November 2019, the EU-Singapore Free Trade Agreement ("EUSFTA") came into force. This marks a new chapter in the economic relations between Singapore and the European Union ("EU").

The key benefits of the EUSFTA include:

1. Tariff elimination – The EUSFTA provides for the progressive elimination of tariffs on all qualifying products over a period of five years. Singapore will remove tariffs on all EU products entering Singapore. The EU will remove tariffs on 84% of all Singapore products entering the EU within the first year, and the remaining 16% over a period of three to five years.


2. Reduced non-tariff barriers – Unnecessary technical barriers to trade (TBT) for Singapore and EU exporters which sometimes make it difficult for companies to sell their products in different markets will be removed. The provisions in the agreement go beyond the requirements of the World Trade Organization’s Technical Barriers to Trade (TBT) Agreement, and are aimed at reducing costs for exporters.


3. Liberal and flexible rules of origin – The EUSFTA provides for liberal and flexible rules of origin in respect of key exports of Singapore. These include automobiles, chemicals, clothing and textiles, electronics, machinery, petrochemicals and pharmaceuticals.

The EU is Singapore's largest foreign investor and services trading partner, and third-largest goods trading partner. This development opens new trade opportunities for businesses in Singapore and the EU.

For more information, please click here to read our client update.

Court of Appeal Decision Addresses Important Jurisdictional Issues in Complex Cross-border Disputes

The Rajah & Tann team led by Danny Ong and Yam Wern-Jhien, specialists in international litigation, has clinched another significant victory on behalf of the MAN group in the Singapore chapter of the long-running litigation against the Skaugen group arising from the supply of marine diesel engines manufactured by MAN.

In MAN Diesel & Turbo SE and anor v IM Skaugen SE and anor [2019] SGCA 80, the Singapore Court of Appeal reversed the decision of the High Court and ordered the service of writ on the MAN entities outside jurisdiction to be set aside, effectively spelling the end of the Singapore chapter of this long-running litigation.

The case is of both practical and academic importance, as it contains authoritative guidance on the role of an appellate court in the review of decisions on jurisdictional issues, the relevance of subsequent events in an application to set aside service out of jurisdiction, how multiple inter-related claims are to be treated in the jurisdiction inquiry, how the availability of the Singapore International Commercial Court (SICC) features in the forum non conveniens analysis, and the test to be applied when assessing where a tortious cause of action arises for purposes of the jurisdiction gateway analysis.

This recent victory comes on the back of two previous landmark judgments in this series of litigation: Re IM Skaugen SE and other matters [2019] 3 SLR 979, now considered the leading case on the enhanced scheme of arrangement framework introduced pursuant to the Companies (Amendment) Act 2017; and Man Diesel Turbo SE v IM Skaugen Marine Services Pte Ltd [2019] 4 SLR 537, which authoritatively laid-down the test to be applied for applications to adjourn proceedings for the enforcement of a foreign arbitral award under section 31(5) of the International Arbitration Act.

For more information, please click here to read our client update.

Enforcement of Arbitral Awards – How Important is the Seat of Arbitration?

Resisting the recognition and enforcement of an arbitral award can be a challenging endeavour. There are limited grounds on which enforcement can be opposed, and the courts have thus far taken a pro-arbitration position of non-interference. However, in STGroup Co., Ltd. & 2 Ors v Sanum Investments Limited [2019] SGCA 65, the Singapore Court of Appeal demonstrated when it would refuse enforcement of an award in the context of a wrongly-seated arbitration.

The arbitration agreement between the parties in this case had specified the seat of arbitration as Macau. However, the actual arbitration was seated in Singapore instead. The Singapore High Court nonetheless allowed the enforcement of the award against most of the respondents in the arbitration, finding the error in seat to be a mere procedural irregularity.

The Court of Appeal reversed this aspect of the High Court's decision, holding that an award arising from a wrongly-seated arbitration should not be recognised or enforced because it is not in accordance with the parties' arbitration agreement. The decision highlights the importance of the correct seat of arbitration, because it determines the national law under whose auspices the arbitration shall be conducted, as well as significant issues relating to the conduct of arbitration and the validity and finality of the award.

Francis Xavier, SC, Tee Su Mien and Edwin Tan from the Commercial Litigation Practice of Rajah & Tann Singapore were instructed counsel before the Court of Appeal, successfully resisting the enforcement of the arbitration award.

For more information, please click here to read our client update.

THAILAND

Provisions on Collection of Tax on Land and Buildings under the Land and Building Tax Act Take Effect on 1 January 2020

Thailand's new Land and Building Tax Act B.E. 2562 (2019) ("Act") came into force on 13 March 2019. The provisions in the Act on the collection of tax imposed on land and buildings took effect from 1 January 2020.

According to the new provisions, a person who is an owner or possessor of land or buildings on 1 January of any year shall be liable to pay tax for the year.

The tax rates imposed on land or buildings are as follows:

1. not exceeding 0.15% of tax base for land or buildings used for agriculture;
2. not exceeding 0.3% of tax base for land or buildings used for dwelling;
3. not exceeding 1.2% of tax base for land or buildings used for purposes other than those mentioned in (i) and (ii); and
4. not exceeding 1.2% of tax base for land or buildings that are desolate or not utilised as it should be.

Thailand Trade Competition Commission's New Guideline on Franchising Business

Thailand's Office of the Trade Competition Commission (OTCC) has published new regulations prescribing trade practice guidelines for specific business sectors. On 9 December 2019, the Notification of the Trade Competition Commission Re: Guideline for Consideration of Unfair Trade Practices in Franchising Business B.E. 2562 (2019) ("Notification Re: Franchising Business") was published in the Government Gazette. It came into force after the lapse of 60 days from the date of publication.

The Notification Re: Franchising Business applies specifically to franchising businesses. A franchise business is described as business where one party, the franchisor, enters into a written contract authorising another party, the franchisee, to undertake a business which employs the format, system, process and rights of the franchisor or which the franchisor has the right to authorise the franchisee to undertake for a specified period of time or in a specified area, whereby, such a business is subject to the support and control of the franchisor and the franchisee is obliged to pay remuneration to the franchisor.

New Transfer Pricing Disclosure Form – Submission Required within 150 Days of FY End

In November 2019, the Thai Revenue Department published a new Transfer Pricing Disclosure Form requiring the disclosure of the following:

1. information about the relationships between related parties; and
2. the value of related party transactions.

The form, which was annexed to a Notification of the Director General of the Revenue Department, is available in Thai at this link: 

https://www.rd.go.th/publish/fileadmin/user_upload/kormor/newlaw/dgpareport1.pdf

Disclosure must be made by parties with an annual turnover of at least THB200 million and must be done within 150 days from the end of the accounting year (please see Section 71 Ter, last paragraph, of the Revenue Code).

VIETNAM

New Labour Code

On 1 January 2021, the new Labour Code ("New Labour Code"), which was enacted by the National Assembly in November 2019, will come into effect. It will replace the existing Labour Code which was enacted in 2012.

The New Labour Code maintains an approach that favours the protection of employee rights. Unilateral termination rights for the employers under the New Labour Code remain unchanged, however employees will have the ability to terminate their labour contracts without notice in certain circumstances.

The key changes contained in the New Labour Code relate to the overhaul of the existing labour contract regime and the definition of a labour contract (and hence, labour relationship). The New Labour Code will not allow seasonal or specific job contract (permitting only the definite-term and indefinite-term contracts) and will extend the definition of a labour contract to any contracts that contain certain “labour-like” terms (e.g. tasks to be completed, compensation or salary and supervision from the payor).

Draft Amending Decree on Non-Cash Payments

On 6 November 2019, the State Bank of Vietnam (SBV) issued an updated draft decree to amend Decree 101/2012/ND-CP on non-cash payments ("Draft Decree"), which was opened to public comments.

A notable change introduced by the Draft Decree is the proposed 49% foreign ownership cap on companies engaging in payment intermediary services (PIS). Currently, most PIS companies are foreign-owned. Operations of these existing PIS companies are expected to be affected, as the Draft Decree does not include a full grandfather clause. The Draft Decree proposes to apply the foreign ownership cap to an existing PIS upon the earlier of the expiry of its PIS licence or a change in shareholders to the company.

Among other changes, the Draft Decree also proposes to regulate “mobile money” service under the Vietnamese law. This service comprises electronic money issued by a PIS provider providing telecommunications services by identifying clients through mobile subscriber databases.