25 July 2016
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Can company indemnities and D&O really protect directors?

Business Times
25 Jul 2016
Lee Kim Shin

D&O policies are subject to market norms, and monetary and time limits. Also, certain risks are simply uninsurable

THE global rise of shareholder activism has been paralleled by increased regulatory attention.

This has created an environment under which board performance and corporate governance have come under unprecedented scrutiny, while directors face ever increasing risks of personal liability for financial or corporate governance lapses.

Under such conditions, is it any wonder that directors are demanding from companies the maximum protection by way of contractual indemnities, or directors and officers liability insurance (D&O)?

A company may be willing to offer broad indemnities, but these cannot be freely negotiated because of restrictions in the Companies Act.

Similarly, D&O policies are subject to market norms, and monetary and time limits. More to the point, certain risks are simply uninsurable.

This article will explore the permitted scope of D&O policies and indemnities in the context of recent changes to the Companies Act.

Companies Act

With two exceptions, the Companies Act prohibits a company from exempting or indemnifying a director from any liability arising from any negligence, default, breach of duty, or breach of trust.

The first exception allows a company to provide third-party indemnities to its directors for liability incurred to a person other than the company.

An example is liability for shareholder class actions; another example would be legal expenses incurred in defending civil or criminal proceedings and regulatory investigations or actions.

Because legal costs cannot be recovered against the prosecution, a third-party indemnity is of significant value to a director who is charged with a criminal offence but is subsequently found innocent.

The Airocean case is an example where directors were involved in protracted criminal proceedings to defend themselves for the company's failure to announce certain information and were finally acquitted of the charges.

The Companies Act, however, imposes limits on third-party indemnities, and these are discussed further below.

The second exception is that companies may purchase, at their own cost, D&O insurance to cover liabilities that arise from a director's negligence, default, and breach of duty or trust.

That said, it should be noted that liabilities arising from a director's fraudulent or dishonest conduct, and criminal fines and civil penalties imposed by regulators, are uninsurable on the simple basis that such insurance is contrary to public policy.

Third-party indemnities and defence funding

The Companies Act expressly prohibits a company from indemnifying a director against:

  • Criminal fines and civil penalties imposed by regulators;
  • Liabilities incurred in defending criminal proceedings in which he is convicted; and
  • Liabilities incurred in defending civil proceedings brought by the company or a related company in which judgment is given against him.

If a conviction or judgement is given against him, the director must repay any loans the company made to him to meet any of these liabilities.

When it comes to defence funding, a D&O policy is a useful supplement as coverage normally extends to defence costs in criminal or civil proceedings as well as regulatory investigations and inquiries, even if the defence is ultimately unsuccessful (unless, of course, these costs are excluded by the policy).

Corporate group

When someone is appointed as a director in a subsidiary by the parent company, or in a joint-venture company, he should consider obtaining an indemnity from the parent or his appointer. This is permitted under the Companies Act, although subject to the same restrictions discussed above.

The D&O policies of many companies also cover a director within the corporate group, which includes subsidiaries. However, they normally exclude associate companies and companies in which the parent has a minority interest.

It is therefore prudent for the director to obtain an indemnity from his appointer or ensure that he is covered under a D&O policy of the joint-venture company or associated company.

Insured vs insured exclusion

It is common for a D&O policy to exclude coverage when a director is sued by the company or other insured person.

This standard exclusion is due to the concern over the independence of claims brought by one insured (for example, the insured company) against another insured (the director of the company that is suing).

The breadth of the "insured versus insured" claim exclusion depends on the terms; there have been instances where insurers have shown a willingness to negotiate coverage.

In this regard, a director should also find out whether the company's D&O policy covers liabilities arising from a derivative action commenced by shareholders "on behalf of the company", or an action by a court or creditor-nominated liquidator of the company.

Environmental claims

The Singapore Exchange (SGX) will require annual sustainability reporting from listed companies on a "comply or explain" basis starting from any financial year ending on or after Dec 31, 2017.

When implemented, this could put a spotlight on a company's compliance with legal requirements relating to environmental, social and governance (ESG) factors which the board has ultimate responsibility for.

It should be noted that D&O policies usually exclude clean-up and pollution costs. Directors should therefore have these aspects covered by the D&O policy or company indemnities.

The observations above demonstrate that boards should regularly review the scope of company indemnities and D&O policies to take into account changes in the law or regulatory requirements, and market practice in the insurance industry.

The writer is a member of the Governing Council of the Singapore Institute of Directors

Source: Straits Times © Singapore Press Holdings Ltd. Permission required for reproduction.

MAS probes case of UOB's unshredded client data

Business Times
19 Jul 2016
Jamie Lee

Action will be taken against banks which fail to safeguard confidentiality of customer information; Personal Data Protection Commission says it is aware of case

[Singapore] THE Monetary Authority of Singapore (MAS) is investigating a case involving UOB, which had its clients' unshredded documents found in a trashbag under a tree at Boat Quay, and said that it will take action against banks that do not safeguard the confidentiality of customer information.

"MAS is currently looking into this matter. MAS expects banks to have in place measures to safeguard the confidentiality of customer information, and will not hesitate to take action against banks which fail to do so," a spokeswoman told The Business Times in response to queries.

It said that in cases involving disclosure of banking customers' personal data, MAS will work with the Personal Data Protection Commission (PDPC) to review the matter.

A PDPC spokeswoman told The Business Times the commission is aware of The Middle Ground articles that highlight the issue of documents containing personal data being disposed of by organisations, and has sought information from The Middle Ground on the matter.

A report from The Middle Ground, an online news website, revealed last week that an entire trash bag filled with UOB documents was found in June behind the bank's headquarters at Raffles Place. The reporters' "dumpster dive" unearthed several corporate statements, loan applications, and internal reports from the bank.

UOB did not deny the report and its findings. It had told The Business Times that it has concluded its investigation in the matter. But it declined to provide more details on the findings of its probe.

The bank said that it "takes very seriously" any breach of customer confidentiality. "We have a strict policy and procedures in place which govern the secure handling and disposal of confidential and sensitive information. Any staff or vendor found in breach of the policy and procedures will be dealt with accordingly."

The news portal put up pictures of the documents - with the sensitive information redacted - that had details of at least one guarantor behind a loan, with his personal details such as his NRIC number and date of birth, in full view, it said.

The Middle Ground found a document seeking a credit increase in millions from a "well-known sports apparel company". It said that it found handwritten scribbles in a notebook with client details and log-in passwords. The bank had also thrown out unshredded documents - marked confidential - of a performance report that highlighted a mix of assets and liabilities, as well as customer loans for its wholesale and retail banking units.

Checks with DBS and OCBC by The Business Times showed that banks typically shred sensitive client documents. The documents should not be discarded in trash bins, recycle bins or other publicly accessible locations.

Source: Business Times © Singapore Press Holdings Ltd. Permission required for reproduction.

Tribunal rejects China's sea claims

Straits Times
13 Jul 2016
Goh Sui Noi

UN-backed panel says China has no historic rights to resources in South China Sea

A United Nations-backed arbitral tribunal has determined that there is no legal basis to China's expansive claims to the South China Sea, in a strongly worded and sweeping ruling that surprised many observers and drew a swift rejection from Beijing.

The tribunal yesterday released its legally binding award on an arbitration case brought by the Philippines against China's claims, in which it invalidated the "nine-dash line" on which China has based its claims. The five-man tribunal based at The Hague ruled that there was no legal basis for China to claim historic rights to resources in the sea areas within the line.

It said there is no evidence that China "had historically exercised exclusive control over the waters or its resources", although its navigators and fishermen, as well as those of other states, had made use of the islands in the areas.

It further invalidated the U-shaped nine-dash line, which covers two-thirds of the South China Sea, by ruling that land forms that China claims in the Spratly chain of islands cannot sustain human habitation or economic life. They are therefore not entitled to extended maritime zones, that is, 200-nautical mile exclusive economic zones (EEZ).

China yesterday dismissed the ruling, with Foreign Minister Wang Yi calling the tribunal a "political farce" that has "put the dispute into dangerous territory of worsening tensions and confrontation".

The Philippines was measured in its response, calling for "restraint and sobriety", even as anti-China activists celebrated by releasing thousands of balloons in the colours of the national flag.

Sounding conciliatory, Philippine Foreign Minister Perfecto Yasay said his country "reiterates its abiding commitment to efforts to pursue the peaceful resolution and management of disputes with a view to promoting and enhancing peace and stability in the region".

Manila had brought the case against China in 2013, months after its giant neighbour wrested control of Scarborough Shoal, within the Asean state's EEZ, and prevented Philippine fishermen from fishing there. The tribunal found that China had violated the traditional fishing rights of Filipinos by not allowing them to fish at the shoal.

In 2014, China began building artificial islands on several reefs that it occupies in the Spratly Islands and placing military installations, including airstrips, on them. This led the United States to start freedom of navigation operations to challenge what it saw as China's excessive maritime claims, adding to tensions in the South China Sea.

The tribunal also addressed China's land reclamation since the beginning of the arbitration. It said China has caused damage to the coral reef ecosystem and permanently destroyed evidence of the natural condition of the land forms as a result, and has therefore "violated its obligations to refrain from aggravating or extending" the disputes.

Analysts were surprised by what they saw as a bold and sweeping ruling. This "will put greater pressure on China to respond, though 'how' is uncertain", said Massachusetts Institute of Technology political science professor M. Taylor Fravel.

Countries in the region reacted by calling for calm and restraint.

Singapore urged "all parties to fully respect legal and diplomatic processes", while Indonesia encouraged "all claimant states to resume talks on the dispute peacefully and in accordance with international law". The White House called on all claimants to "avoid provocative statements or actions" and stressed that it strongly supported the rule of law. Asean did not put out a joint statement, but said through its official Twitter account that member states reiterated their commitment to the early conclusion of a regional Code of Conduct to manage disputes.

CHINA WON'T ACCEPT DECISION

China's territorial sovereignty and maritime interests in South China Sea... will not be affected by the award. China will not accept any proposition or action based on the decision by the South China Sea arbitral tribunal. China has always been a guardian of international rule of law and of fairness and justice, and will always adhere to the path of peaceful development.

CHINESE PRESIDENTXI JINPING

PHILIPPINESURGES RESTRAINT

We call on all those concerned to exercise restraint and sobriety. The Philippines reiterates its abiding commitment to efforts to pursue the peaceful resolution and management of disputes with a view to promoting and enhancing peace and stability in the region.

PHILIPPINESFOREIGN MINISTER PERFECTOYASAY

suinoi@sph.com.sg

The tribunal on...China's nine-dash line claims: Invalid

In what is a major blow to China, the Arbitral Tribunal that ruled on the case brought by the Philippines against China's claims in the South China Sea has invalidated the "nine-dash line" on which these claims are based.

In its award released yesterday, the United Nations-backed tribunal found China's claim to "historic rights" to resources within the line to be incompatible with the allocation of rights and maritime zones under the UN Convention on the Law of the Sea (Unclos).

Any historic rights China might have to resources in the waters "were extinguished" when Unclos came into force, in 1994, it said.

Any claims China makes in the South China Sea must be made based on maritime entitlements from land features, it added.

China's nine-dash line first came to international notice in 2009 when Beijing made a submission to the United Nations stating its claims to islands in the South China Sea, accompanied by a map with nine dashes that extend from its Hainan island, south to Borneo and northwards to Taiwan, in a U-shape.

Based on a 1940s map drawn by the Kuomintang government of China, it encompasses almost the entire sea and overlaps with the territorial claims of four Asean states, including the Philippines, as well as Taiwan.

China has been ambiguous about the nine-dash line - no coordinates are given for it and Beijing has refused to define what it is claiming within that line despite calls from various quarters to do so.

The tribunal said it had examined historical records to determine whether China had indeed rights to resources in the sea before Unclos came into force.

It found that while navigators and fishermen from China and other states had historically made use of the islands in the South China Sea "there is no evidence that China had historically exercised exclusive control over the waters of the South China Sea or prevented other states from exploiting their resources".

It concluded, therefore, that there is no legal basis for China to assert such historic rights to the resources within the sea areas falling within the nine-dash line.

China's claim is further invalidated by the tribunal's ruling on the features that China claims in the Spratlys, which it found to be rocks or low-tide elevations and, therefore, not entitled to an extended maritime zone - that is, a 200-nautical- mile exclusive economic zone within which a state has the right to explore and use the resources.

China has said it will not recognise the ruling and analysts expect that it will continue to adhere to the nine-dash line to exercise what it sees as its maritime and sovereign rights within the line.

"It will still regard the nine-dash line as a line that allows China to exercise its historical rights," said Associate Professor Li Mingjiang of the S. Rajaratnam School of International Studies.

Goh Sui Noi


The tribunal on...'Islands' in Spratlys: There aren't any

None of the Spratly Islands is an island, the Arbitral Tribunal at The Hague ruled yesterday.

The Philippines had sought, among other things, a ruling on whether certain maritime features claimed by both China and the Philippines are islands, rocks or low-tide elevations under the UN Convention on the Law of the Sea (Unclos).

The distinction is important as the status would determine whether the feature is entitled to a 200- nautical-mile exclusive economic zone (EEZ) and continental shelf of its own, a 12-nautical-mile territorial sea, or no maritime zone.

The tribunal said in its ruling that it first undertook a technical evaluation as to whether certain coral reefs claimed by China are or are not above water at high tide. It also relied heavily on archival materials and historical hydrographic surveys.

Pointing out that Unclos classifies features on the basis of their "natural condition", it noted that "many of the reefs in the South China Sea have been heavily modified by recent land reclamation and construction".

Under Articles 13 and 121 of Unclos, features that are above water at high tide generate an entitlement to at least a 12-nautical-mile territorial sea, whereas features that are submerged at high tide generate no entitlement to maritime zones.

Under Unclos, only "a naturally formed area of land above water at high tide" that can support human or economic life - on its own - can be considered an island, entitled to a 200-nautical-mile EEZ and continental shelf of its own.

The tribunal said many of the features in the Spratly Islands are currently controlled by one or another of the littoral states, which have constructed installations and maintain personnel there. The current presence of official personnel on many of the features is dependent on "outside resources and support" and many of the features have been modified to improve their habitability.

As such, it concluded that all of the high-tide features in the Spratlys, including Itu Aba, are legally "rocks", entitled to only a 12-nautical-mile territorial sea. While not referred to in its written submission, the Philippines in an oral argument at the tribunal had said Taiwan-held Itu Aba cannot sustain economic activity and therefore is not entitled to an EEZ. Manila's gambit was that if 48ha Itu Aba - as the largest natural land formation in the Spratlys - cannot be considered an island, then none of the land features in the chain can be considered as one.

The tribunal agreed with the Philippines that Johnson Reef, Cuarteron Reef, and Fiery Cross Reef are high-tide features and that Subi Reef, Mischief Reef, and Second Thomas Shoal were submerged at high tide in their natural condition.

However, it disagreed with the Philippines on Gaven Reef (North) and McKennan Reef and concluded that both are high-tide features.

Tay Hwee Peng


The tribunal on...Philippines' rights to EEZ: Valid

Since none of the land features claimed by China on the Spratly Islands is entitled to exclusive economic zones (EEZ), the Arbitral Tribunal said it could declare that certain sea areas are within the Philippines' EEZ.

An EEZ, which stretches 200 nautical miles from the coast, gives a country the sole right to exploit resources within the zone.

The tribunal's ruling effectively reinforces the Philippines' claims to Mischief Reef and Second Thomas Shoal in the Spratlys, as well as Reed Bank, all of which lie close to the Philippine island of Palawan.

The tribunal found that those three are submerged at high tide and are not overlapped by any possible Chinese territorial entitlement.

Citing four examples of Chinese activities, the tribunal said it has "concluded that China had violated the Philippines' sovereign rights with respect to its exclusive economic zone and continental shelf".

First, it said that China interfered with Philippine petroleum exploration at Reed Bank, which is about 80 nautical miles from Palawan and more than 400 nautical miles from China. The area is known to be rich in oil and gas deposits.

The tribunal said China also sought to prohibit fishing by Philippine vessels within the Philippines' EEZ, and "failed to prevent Chinese fishermen from fishing within the Philippines' EEZ at Mischief Reef and Second Thomas Shoal".

China also "constructed installations and artificial islands at Mischief Reef without the authorisation of the Philippines", it said.

Satellite images show that China has reclaimed land around Mischief and has been building a runway there.

The tribunal also examined traditional fishing at Scarborough Shoal, located north of the Spratlys, which has been under Chinese control since 2012.

In recent years, Chinese coast guards have sought to bar Filipino fishermen from fishing near the Shoal, a chain of reefs and rocks about 120 nautical miles from the Philippine province of Zambales.

Because Scarborough Shoal is above water at high tide, the tribunal said it generates an entitlement to a territorial sea, referring to the 12-nautical-mile territorial border.

However, it is not an island so it does not generate an entitlement to an EEZ.

The tribunal also said fishermen from China were not the only ones with traditional fishing rights there because other countries had long fished in the area.

"Although the tribunal emphasised that it was not deciding sovereignty over Scarborough Shoal, it found that China had violated its duty to respect the traditional fishing rights of Philippine fishermen by halting access to the shoal after May 2012," it said.

The tribunal also held that Chinese law enforcement vessels had unlawfully created "a serious risk of collision" when they physically obstructed Philippine vessels there.

Trixia Enriquez Carungcong


The tribunal on...Chinese activities: Harmful to environment

The Arbitral Tribunal at The Hague had strong words for how China's actions have affected the marine environment.

In the past two years, China has dredged rock and sand to transform seven reefs in the South China Sea's Spratly chain and constructed port facilities, military buildings and airstrips.

The tribunal said three independent experts on coral reef biology assisted it in evaluating the available scientific evidence and the Philippines' expert reports.

It found that China's large-scale land reclamation and construction of artificial islands on seven features in the Spratlys "caused severe harm to the coral reef environment".

According to its ruling, "China has violated its obligation under Articles 192 and 194 of the Convention (United Nations Convention on the Law of the Sea) to preserve and protect the marine environment with respect to fragile ecosystems and the habitat of depleted, threatened, or endangered species".

The tribunal also found that the Chinese authorities were aware that Chinese fishermen have harvested endangered sea turtles, coral and giant clams on a substantial scale in the South China Sea, "and had not fulfilled their obligations to stop such activities".

The marine ecosystems in the region are key to maintaining world fish stocks and biodiversity.

Experts have warned that some fish species are close to extinction due to overfishing.

Source: Straits Times © Singapore Press Holdings Ltd. Permission required for reproduction.

Singapore to toughen laws against unruly air travellers

Straits Times
25 Jul 2016
Karamjit Kaur

Move will give police, courts wider powers ahead of global ruling coming into force

Singapore police and courts will get wider powers to deal with troublemakers on flights when new laws are passed in the next six to 12 months.

The move will come before a global ruling by the United Nations aimed at tackling the growing problem of unruly air passengers, The Straits Times has learnt.

Under current international civil aviation laws stipulated by the Tokyo Convention, Singapore can take action only if the culprit arrives on Singapore Airlines (SIA) or other Singapore carriers.

This means that troublemakers on foreign carriers usually get off scot-free. To plug this loophole, the International Civil Aviation Organisation (ICAO) - the UN's civil aviation arm - aims to replace the Tokyo Convention with the Montreal Protocol.

The new protocol, expected to come into force within two to three years, will give countries more teeth to deal with offences such as travellers refusing to comply with safety instructions and physically or verbally abusing cabin crew.

Singapore, which plans to enact its own laws before the global mandate, has consulted airlines operating at Changi Airport.

All support the initiative, according to a spokesman for the Civil Aviation Authority of Singapore. "The ability to take such law enforcement action would be a strong deterrence against unruly behaviour on board aircraft arriving in Singapore," she said. "This would enhance Singapore's status as a safe and secure air hub."

Mr Tim Colehan, assistant director for member and external relations at the International Air Transport Association (Iata), which represents global carriers, said there has been a rise in unruly behaviour on aircraft in recent years.

In 2014, airlines reported 9,316 incidents of such behaviour, or one for every 1,400 flights. From 2007 to 2014, the average was one per 1,530 flights.

In a survey by Iata, four out of 10 airlines said they have had to divert a flight in the last 12 months because of troublemakers.

Urging the ICAO and countries to move quickly to introduce tougher laws globally, Mr Colehan said that, in the meantime, airlines, ground handlers and even airport restaurants and bars can do their part.

For example, there are instances when bad behaviour is detected at check-in or during screening, and this is where ground handlers and security personnel can alert the airline, so it can make an informed decision on whether or not to accept the passenger for boarding.

SIA spokesman Nicholas Ionides said crew are trained to deal with potential cases of passengers who exhibit unruly behaviour.

"Some of these methods include politely declining drinks if the crew discerns that the passenger has had too much to drink," he said. "In extreme cases where passengers turn violent, our crew are also trained in appropriate ways to handle them."

Ground staff may also refuse boarding to passengers who have already displayed errant behaviour on the ground, in order to not compromise the safety and comfort of other travellers, he added.

Singapore Airlines Staff Union president and steward Alan Tan said: "The aim is always to defuse the situation but this is not always possible, so we do sometimes have to hand passengers to the local police after landing.

"But because of a lack of jurisdiction, police may not always be able to act except to issue a warning. This can be quite frustrating."

Source: Straits Times © Singapore Press Holdings Ltd. Permission required for reproduction.

Put a lid on insurers' excessive agent buyouts through disclosures

Business Times
19 Jul 2016
Claire Huang

THEY say what goes around, comes around, so it is not surprising to witness that some of the insurers who in the past had resorted to poaching insurance agents are now victims of the very same game they had played - perhaps more costly this time.

In recent weeks, the insurance arena has been abuzz with news of a mass resignation at Peter Tan Organisation (PTO), the biggest group of agency units at Prudential Singapore. Since a July 4 BT report on this, it is understood that PTO's founder Peter Tan is himself also leaving. Mr Tan did not respond when approached.

On July 6, Aviva's global chief executive Mark Wilson told investors that 250 agents were joining its new financial advisory (FA) firm in Singapore.

Industry veterans will remember that in 2009, Prudential's aggressive recruitment tactics, including buyout packages that had up-front lump-sum payments, had earned the wrath of rival insurers who then complained to the regulator. It may not be back to square one for Prudential, but it surely has to fill the vacancies in its large agency force.

Poaching hit fever pitch those few years as others like AIA, Great Eastern Life and Manulife also joined the race to expand their agency forces. After all, agents are the key channel for product distribution. This resulted in the Life Insurance Association Singapore (LIA Singapore) having to issue a new code on recruitment to try and stamp out poaching and other shady practices such as churning of insurance policies.

No one knows exactly how rampant the practice of churning insurance policies is but the risk invariably goes up when agents switch employers. This can come in the form of clients being persuaded to surrender policies - to the detriment of the insured - and using the proceeds to buy new plans from the agents' new employers. The problem is not new and there are guiding rules for agents but, given this new round of poaching, the antenna has to be raised.

For several months now, insurers and FA firms here have tried to outbid each other to woo high performers and their teams over by offering higher and more tempting sign-on deals with up-front lump sum payments and bonuses.

Those whose packages don't match current market offers grumble and complain but will, in all likelihood, up the ante when they have the financial resources.

Agents and financial advisers - especially the good performers - will quite understandably welcome bigger buyouts, but their employers' unhealthy obsession with higher offers needs to stop.

And this can be achieved through disclosures.

Those who are poached have inevitably to face the pressure of hitting higher sales targets. It doesn't take a rocket scientist to logically conclude that risks of policy churning, over-selling and even mis-selling go up in tandem.

It is in consumers' interests to know which of these poached agents are under greater pressure to push or even switch products.

To achieve this, regulatory measures have to be found for those whose sign-on packages are more than 150 per cent of their past annual income to disclose this information to policyholders - those who have already bought policies from the individual agent and potential ones. That way, consumers will then know what they're getting themselves into.

Penalties should be handed out to those who breach this.

To increase transparency and safeguard consumers' interests, regulators should also introduce a cooling-off period of, say, one year so that products can only be pushed to those representatives' existing clients after the period ends.

Of course, in cases where policyholders want to purchase another plan during the cooling-off period, they should be able to do so. But this should only be allowed after they acknowledge their agents' disclosures.

The 150 per cent is a reasonable benchmark that takes into account natural industry movements as those who perform should be incentivised and their freedom to go to greener pastures should not be curbed. But agents will be quick to point out there are strict checks when they switch employers. They will also tell you that their new employers monitor policy switching and they can lose their jobs when they are found to have churned policies.

Let's not forget the operative words here are "when they are found" because monitoring and enforcement by employers get more difficult when the migration of agents and advisers is frequent and the numbers large.

Furthermore, to wait until there is a sizable number of policies churned will be too little and too late for policyholders as they will have suffered losses already.

Most agents, according to observers, prefer sourcing for new clients than to attend to the existing ones anyway because it's tougher to sell products to those who've already purchased something. A key reason why insurers and FA firms throw up such high offers is that recruiting talent is difficult and it's only getting harder. More so, as the industry is now packed with a greater number of players while the supply of fresh graduates, experienced agents and advisers willing to take up purely commission-based jobs remain stagnant, which in turn explains the merry-go-round poaching that persists.

But how does pumping in more money to woo agents and advisers contribute to a sustainable industry? Agents and advisers benefit, insurers have to fork out millions and in the end, consumers are worse off.

Granted we are a free market so industry players have to have room to do what needs to be done to stay competitive. However, when weighed against consumer interest, keeping a lid on excessive buyouts through disclosures will send a loud and clear message that toxic and shady practices in the industry is not just frowned upon, it is forbidden.

In the absence of such disclosures, consumers are the ones who are ultimately losing out no matter which way you look at it.

Source: Business Times © Singapore Press Holdings Ltd. Permission required for reproduction.

The Hague ruling: A close look at what the judgment says about key areas of contention

Straits Times
13 Jul 2016
Raul Dancel

The Philippines has sought, among other things, a ruling on whether certain maritime features claimed by both China and the Philippines are islands, rocks or low tide elevations under the United Nations Convention on the Law of the Sea (Unclos).

THE HAGUE: The arbitral tribunal at the Hague has issued its ruling on the Philippines' case against China in the South China Sea, based on the UN Convention on the Law of the Sea (Unclos). Here are the latest on its findings on key areas of contention:

THE NINE-DASH LINE

The ruling: There is no legal basis for China to claim historic rights to resources within the sea areas falling within the ‘nine-dash line’.

What is it: It is a line, first drawn in 1947, that marks the boundaries of China’s claims over two-thirds of the 3.5 million sq km South China Sea.

What was at stake: China’s claims within this nine-dash line overlap with four Asean countries including the Philippines, as well as Taiwan. The “nine-dash line” claim overlaps with the Philippines' 200-nautical mile exclusive economic zone (EEZ).

Manila says China’s claims to sovereign rights and jurisdiction, and “historic rights”, to the areas with the line are contrary to Unclos. If this is the case, then, for the nine-dash line to be legal, the tribunal has to rule that the land forms occupied by China are islands that can sustain human habitation or economic life on their own, thus entitled to EEZs large enough to fill out the areas within the line.

SCARBOROUGH SHOAL

The ruling: The Tribunal rules that Scarborough Shoal is a high-tide feature entitled to a 12-nautical mile territorial sea. It held that fishermen from the Philippines (like those from China) had traditional fishing rights at Scarborough Shoal, and that China had interfered with these rights in restricting access.

What is it: This atoll lies just 230km off the Philippines’ coast and within its 200-nautical mile exclusive economic zone (EEZ).

In 2012, China wrested control of Scarborough and has since then prevented Philippine fishermen from fishing there.

What was at stake: Manila wants the tribunal to rule that: the atoll alone cannot sustain economic activity and so has no right to an EEZ; China has unlawfully prevented Philippine fishermen from pursuing their livelihoods there; China violates its obligations under Unclos to protect and preserve the marine environment.

Manila claims that destructive fishing practices carried out by Chinese fishermen brought about permanent damage on coral reefs and marine life. Under Unclos,  the coastal state has full rights to all natural resources for 200 nautical miles around.

MISCHIEF, SUBI, GAVEN, MCKENNAN REEFS, AND SECOND THOMAS SHOAL

The ruling: The Tribunal rules that Gaven and McKennan Reefs in the Spratlys are high tide features entitled to a 12-nautical mile territorial sea.

It finds that Subi Reef, Mischief Reef, and Second Thomas Shoal in the Spratlys are submerged at high tide in their natural condition, which means they are low-tide elevations not entitled to territorial seas.

What are these: These are reefs and atolls within the Spratly chain of islands. China occupies and has built artificial islands on Mischief and Subi while the Philippines maintains a sentry of Marines on a beached World War II transport ship on Second Thomas. China has blockaded Second Thomas before to prevent supplies from reaching the Philippine troops.

What was at stake: The Philippines contends that these are low-tide elevations, that is, rocks that are not visible at high tide. As such, under Unclos, they are not entitled to a 12-nautical mile territorial sea or EEZ. If these are ruled as low-tide elevations, they will implicitly invalidate the nine-dash line as they will have no maritime zones.

FIERY CROSS, JOHNSON AND CUARTERON REEFS

The ruling: The Tribunal rules that  Johnson Reef, Cuarteron Reef, and Fiery Cross Reef in the Spratlys are high-tide features entitled to a 12-nautical mile territorial water.

What are these: These are reefs occupied by China but also claimed by the Philippines. China has also reclaimed islands on these reefs and built lighthouses on them. There is an airstrip on Fiery Cross. Two other airstrips are near completion on Mischief and Subi.

What was at stake: The Philippines contends that these reefs, while visible at high tide, cannot sustain economic life, and are therefore entitled to only a territorial sea of 12 nautical miles. Again, this would go towards invalidating China’s nine-dash line.

ITU ABA

The ruling: It is legally a “rock” that does not generate an exclusive economic zone or continental shelf.

What is it: A 48ha land mass within the Spratlys that Taiwan occupies and also claimed by China.

What was at stake: While not referred to in its written submission, the Philippines in an oral argument at the tribunal said that Itu Aba cannot sustain economic activity and therefore is not entitled to an EEZ.

Its gambit was that if Itu Aba as the largest natural land formation in the Spratlys cannot be considered an island, then none of the land features in the chain can be considered as one.

Taiwan through a government-linked civil group early this year wrote to the tribunal to argue that Itu Aba is entitled to an EEZ and the tribunal has said it will consider this intervention. Itu Aba’s EEZ will extend all the way to the coast of the Philippines’ Palawan province.

rdancel@sph.com.sg

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Banks’ credit card scheme could help California Fitness clients get refunds

TODAY
25 Jul 2016
Kelly Ng

SINGAPORE — A little-known clause called the chargeback scheme may offer a recourse for some California Fitness customers seeking refunds following the fitness chain’s closure.

Offered by credit card companies like Visa, MasterCard and American Express, the scheme allows cardholders to claim money back if the goods and services they paid for do not arrive or are faulty or if the merchant has gone bust.

Three out of five banks contacted by TODAY said those who have used their credit cards to buy California Fitness packages are entitled to refunds, subject to varying caveats and administrative requirements.

Affected customers holding OCBC Bank credit cards will have to submit a credit card dispute declaration form along with a copy of their membership contract and credit card statement displaying the transaction with California Fitness.

“OCBC Bank will then help them raise a dispute through Visa/MasterCard to the merchant’s bank under ‘services not rendered’,” said a spokesperson.

While the chargeback amount is limited to the time frame of services not yet utilised, those with lifetime memberships are entitled to a full refund, he added, as it is not possible to gauge each customer’s lifetime accurately.

For Citibank cardholders, there is a 120-day limit on claims, starting from the day of transaction. Cardholders requesting chargeback must also satisfy requirements such as providing the bank with “relevant documents”, it said.

DBS said its cardholders are entitled to chargebacks “in most cases”, if less than 18 months have passed since the day they entered into a contract.

DBS customers who have taken up instalment plans, however, are to seek recourse with the Small Claims Tribunal.

In its latest advisory on the episode, the Consumers Association of Singapore (Case) urged affected customers to ask for chargebacks, but said this applied only to those with “month-to-month membership packages”.

“Consumers who have purchased pre-paid or fixed-term membership should note that they may still be liable to make monthly repayments to the bank if the bank had already paid California Fitness in full,” said Case.

There are currently no regulations here governing chargeback protection. The Association of Banks and the Monetary Authority of Singapore do not have guidelines for disputed credit card transactions.

Chargebacks are often “internal arrangements” administered to varying extents by different financial institutions, noted Dr Gary Low from the Singapore Management University’s School of Law. “It all boils down to the allocation of risk,” he said.

“While I believe consumers ought not to bear the risk of liquidation especially when not told to them, I also wonder whether it should instead fall on the shoulders of credit providers.”

He pointed to foreign jurisdictions such as the United Kingdom, which has legislated that both the bank and the merchant are liable if things go south in consumer transactions.

Under the UK’s Consumer Credit Act, the credit provider is jointly liable with the retailer for faulty or undelivered purchases, provided the product or service costs between £100 and £30,000.

Lawyer Daniel Chia from Morgan Lewis Stamford said chargebacks are a “good idea” because they pass risk on to “parties best suited to bear the risk”, such as financial institutions: “That’s what regulators should be looking at to minimise public harm.”

One customer, who wanted to be known only as Jeremy, hopes that more can be done to help customers left in the lurch,

“To say ‘caveat emptor’ isn’t very fair because that depends on whether you have the information needed to assess the risk,” he said.

“Up to the point it closed down, California Fitness was still coming up with all sorts of promotional activities ... And you have banks coming in to offer plans that waive admin fees. That just induces people to sign up.”

Banks have played a “significant role” in offering packages and facilitating California Fitness’ schemes, said the 28-year-old lawyer, who paid around S$4,000 for a year-long membership and physical training sessions at the Novena outlet about one month before it shut.

“(Banks) cannot have their cake and eat it, where you just collect the fees without taking responsibility for the marketing activities,” he said.

“I hope the banks do something that is right and, going forward, that MAS steps in because quite clearly, this forms a significant part of unsecured credit, which it really needs to regulate.”

Copyright 2016 MediaCorp Pte Ltd | All Rights Reserved

Counselling a must for couples before resorting to divorce: Forum

Straits Times
19 Jul 2016

The increasing divorce rates are of concern ("2015 marital break-ups 3rd highest on record"; last Thursday).

We need to consider why marriages fail. Ineffective communication skills, high expectations of each other and insufficient preparation for the journey of marriage are some of the reasons.

Estranged couples should consider seeking professional counselling when they experience marital woes. This will help them to identify the problems, find solutions and work on the marriage.

They can also obtain clarity as to whether their marriage is capable of being saved or has to be ended.

Often, couples whose marriages have broken down hold on to the marriage for the sake of their children, to provide a complete family to them. Sometimes, more harm is done to children in these marriages, as they become badly affected by their parents' disputes.

As a family lawyer, the first question I ask clients is whether they are absolutely sure they want to file for divorce. I have seen many cases where clients have a change of mind after the commencement of divorce proceedings and decide to discontinue them.

This is not only a waste of financial resources for the couple, but the aborted divorce proceedings also have a negative impact on the marriage. This often leads to further problems in the marriage.

To support couples whose marriages break down, the ecosystem must consist of lawyers, counsellors and the court, working together to assist in saving marriages or helping the parties to end the marriage amicably with minimum emotional pain.

Family lawyers have a civic responsibility to assist their clients who are uncertain about divorce in seeking professional help.

Couples must also be given an opportunity to attempt to resolve their marital, child, financial and property matters amicably through mediation or collaborative family practice.

Only when the couple have sought the help of family mediators and collaborative family practitioners, should they consider filing for divorce in court.

Rajan Chettiar

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More banking reform work ahead, says MAS chief

Business Times
13 Jul 2016
Jamie Lee

Ravi Menon also warns that further tightening of regulations in areas such as trade finance could constrain lending and derail economic growth

[Singapore] MORE work remains on putting into practice current banking regulations globally, said managing director of the Monetary Authority of Singapore (MAS) Ravi Menon this week.

He also warned that further tightening of regulations in areas such as trade finance could constrain lending and derail economic growth.

This comes as concerns over regulatory arbitrage remain, with the European Union (EU) found to be "materially non-compliant" in the implementation of Basel III capital standards, Mr Menon pointed out in his keynote address at the symposium on Asian banking and finance in San Francisco.

"The United States and a number of Asian countries - including Singapore, Hong Kong, China and Japan - were assessed to be compliant or largely compliant in their implementation of the Basel III capital standards," said Mr Menon.

"As home to several of the largest global banks as well as important international financial centres, it is crucial that the EU shows leadership in ensuring more complete and consistent implementation of global banking rules."

He noted that with key regulatory reforms put in place, capital requirements have been lifted through Basel III, and banks that are "too big to fail" - or so-dubbed global systemically important banks - are now subjected to more intensive supervision, tougher capital standards, as well as resolution plans, or what are known commonly as living wills.

But besides issues in inconsistent implementation of rules, there remains "significant work" on putting resolution plans for "too big to fail" banks into operation, said Mr Menon.

He noted that regulatory reforms have been, overall, effective. Banks are now stronger, since between 2009 and 2014, large and internationally active banks have doubled their average common equity tier 1, or CET1, ratio from just under 6 per cent to more than 11 per cent. This ratio refers to a bank's core equity capital against its risk-weighted assets.

Banks are now holding more liquid assets, while leverage levels for such financial institutions have dropped from around 22 times of equity, to about 16 times, said Mr Menon.

And against pressure from the prolonged low growth, low-rate environment, sharp volatility and an overall contraction in market liquidity, banks have shown their resilience. Most of the large banks in the US passed the Federal Reserve's latest annual stress test. Singapore's banking system also remains sound when tested against severe economic stress scenarios in the major economies and Asian region, said Mr Menon.

"Bank lending to the real economy has been stable . . . even as banks met higher capital and liquidity requirements."

But he highlighted the falling return on equity of banks that speak to the declining profitability of the industry. While high returns during the pre-crisis period were in part due to excessive risk taking or leverage, banks have to be remain "reasonably profitable" to be sustainable, said Mr Menon. "Banks have to earn a decent return on their credit intermediation role," he said, adding that retained earnings make up the highest quality of capital held by banks.

As the Basel committee works to fine-tune Basel III capital rules, Mr Menon warned against raising overall capital requirements excessively through certain risk calibrations that the Basel committee is weighing.

In particular, he said that regulations should not unduly penalise lending to important segments of the economies, such as trade and small-and-medium enterprises.

He pointed out that a proposed change in the way bank exposures are measured could result in imposing significantly higher capital requirements for trade finance. These would be "more punitive than justifiable by its historical losses", Mr Menon said, noting that trade finance - being short-term and self-liquidating in nature - is probably one of the safer forms of bank lending.

"While the availability and cost of trade finance have so far held up well in the face of Basel III implementation, the latest set of proposals could have the effect of discouraging banks from trade financing. This is not what we need at a time when trade is growing more slowly than income in many parts of the world.

"In trying to get the micro calibrations right, we must not end up getting the macro settings wrong. We must guard against these unintended outcomes."

leejamie@sph.com.sg

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Banks 'unlikely' to pay phone scam victims

Straits Times
25 Jul 2016
Fabian Koh

Victims of phone scams who hand their money over to crooks impersonating bank staff are unlikely to be compensated, lawyers warned yesterday.

Last Monday, OCBC Bank reported a sharp rise in scams involving conmen impersonating its employees; around 30 customers are believed to have been duped, losing tens of thousands of dollars.

However, lawyers told The Straits Times that such victims would be liable for the money they lost due to the voluntary nature of the transactions.

"If they did so fully aware of the advice and warnings, then it becomes their responsibility," said Mr Rajan Supramaniam, a lawyer at Hilborne Law. "In helping with police investigations, the bank will provide all relevant information. But it will not compensate the victims for their losses..."

OCBC has lodged a police report about the scam and advised those who lost money to do the same.

DBS has also been affected, though POSB, Citibank, UOB and Maybank said they were not aware of any phone scams in which their staff were impersonated.

All the banks advised their customers not to reveal personal details or confidential information, such as PIN numbers, over the phone. They also urged customers to check the legitimacy of the caller, by calling the banks' main lines.

Mr Supramaniam explained to customers who have been cheated that the starting point for seeking legal recourse is to make a police report. "They can also pursue the issue with the bank, by going through a lawyer," he added. "I have handled cases involving a wrong transfer of money."

Mr Shashi Nathan, a partner at WithersKhattarWong, said that seeking compensation from the bank depends on the facts of each case. "The bank might have a protocol to check before any transactions are made, usually for larger amounts. Failure to follow such protocol means the bank was negligent to the customer, and the victim can make a claim for negligence."

He also explained that the bank and police both have to trace where the money went, and find the origins of the soliciting of information.

"Criminals these days are very sophisticated, and most of the time they are based outside of Singapore," said Mr Nathan. "It is especially hard to track due to the multitude of transactions."


All the banks advised their customers not to reveal personal details or confidential information, such as PIN numbers, over the phone. They also urged customers to check the legitimacy of the caller, by calling the banks' main lines.

Source: Straits Times © Singapore Press Holdings Ltd. Permission required for reproduction.

Former Sentosa beach-patrol officer convicted of raping drunk woman at Siloso Beach

TODAY
19 Jul 2016
Siau Ming En

SINGAPORE — A man who used to work as a beach-patrol officer in Sentosa was on Monday (July 18) convicted of raping and sexually assaulting a drunk partygoer at Siloso Beach in 2012.

A High Court judge found that the prosecution had, over the 15-day trial from last August to April this year, proved beyond reasonable doubt that Pram Nair, 27, had committed both offences on the resort island. Nair will be sentenced at a later date.

In the prosecution’s closing submissions, they pointed to holes in Nair’s testimony, noting that his evidence was “inconsistent, self-serving and even incredulous at points”.

The court earlier heard that the victim, a relief teacher then, had decided to go with a friend to attend a beach party at Wave House, a surfing and restaurant-bar venue on the island, on May 5 that year. At the party, she drank shots of whisky, Cointreau liquor and juice before Nair approached and chatted with her and her friend.

They also played a drinking game where Nair poured the orange-flavoured Cointreau liquor from the bottle directly into the victim’s mouth for 20 seconds, since she had just turned 20 years old.

Noticing that the victim looked like she was “really drunk”, her friend wanted to leave the party and went to collect the victim’s bag. When she returned, she could not find Nair and the victim.

The victim testified that she remembered waking up on the sand as she felt the pain of Nair raping her and tried to push him away, but was too weak and drunk.

Two eyewitnesses saw the two of them on the beach and one of them called the police after he noticed the victim trying to push Nair away.

The victim’s friend, who had been looking for her, found the victim lying on the sand, the lower half of her body naked. Nair told the friend that he found the victim at that spot, completely naked. He walked away but was later arrested by the police.

One of the inconsistencies highlighted by the prosecution was that Nair had initially put to the victim that she had performed oral sex on him but changed his account during cross-examination. Later, he reverted to his original statement that she did indeed perform oral sex on him.

The prosecution also said that Nair lying about how he found the victim on the beach completely naked was evidence of his guilty conscience.

The defence made the case that even though Nair wanted to have sex with the victim, he could not get an erection. This point was, however, not mentioned to the doctor during examination when it would form a “material aspect” of the defence’s case, the prosecution said.

When asked in court how the incident had affected her life, the victim said that this was a “painful, painful lesson” and she still feels “disgusted” with herself at times. She also mentioned that she was terrified for a time that she might have contracted HIV.

“I’ve never been more sorry to my parents because they raised me up really well,” she said, “and because I was disobedient and went out on that one night... it brought so much pain that there’s a long time after that where I couldn’t even lie in bed without feeling like ripping my own skin off because I just couldn’t remove myself from what happened to me.”

Copyright 2016 MediaCorp Pte Ltd | All Rights Reserved

Public Prosecutor v Pram Nair [2016] SGHC 136

Judge: Why I gave alleged match-fixer's ex only 2 months' jail

Straits Times
13 Jul 2016
K.C. Vijayan

The lies of the former wife of alleged match-fixing czar Dan Tan Seet Eng affected no one but herself. So a judge jailed her for two months instead of the minimum four that prosecutors sought.

Whatever Guan Enmei's intention and motives were, "when she lied, the falsehood did not delay or hinder CPIB's (Corrupt Practices Investigation Bureau's) investigations," said District Judge Lee-Khoo Poh Choo.

The offence was also not "a sophisticated and well-planned deception", she added in written grounds for her decision, released last week.

Guan, 41, who divorced Tan in July last year, was found guilty last month of lying to an anti-graft investigator about two of Tan's laptops, which she tried to hide from the CPIB.

Guan had lied when she said in an interview on June 6, 2013, that she had left her home with only a handbag and had not taken along a paper bag containing the laptops.

But the false answers were not material, given that the CPIB had already seized the laptops from another man who had been nabbed.

Prosecutors Jasmine Kaur and Stacey Fernandez had told the court there were no precedents for offences of this nature where the offender hid the evidence and then lied to obstruct justice.

The district judge said they had "argued arduously" for a jail term of up to six months, but agreed that she was not involved in match-fixing.

However, although Judge Lee-Khoo did not hand down the prosecution's requested punishment, she had harsh words for Guan. She noted that during the trial Guan had cast "baseless aspersions" on the integrity of CPIB officers, insinuating in particular that the officer who had interviewed her had made a false e-diary entry.

She found her to be a savvy, knowledgeable woman of strong will and character, and with a mind of her own. She said Guan's "sharp retorts" when cross-examined during the trial reflected her character.

The judge added that Guan lied when she claimed that she did not know Tan was being probed for international match-fixing, among other things.

Guan's lawyer Foo Cheow Ming had said in mitigation that she had shown remorse by apologising to the CPIB in writing in May last year. But the judge pointed out that there was no mention of what lies she was apologising for, discounting Guan's claim that she had apologised for lying that she had taken a taxi to the CPIB when she had, in fact, been driven there in a limousine. At best, Guan's letter of apology showed that she was not truthful, said the judge.

She said the offence could not be swept aside as a minor offence and that Guan's blatant disregard and disrespect justified a jail term.

"The accused must know the enormity of this international match-fixing saga and the effect on Singapore's repute," she said.

Prosecutors are appealing against the sentence while Guan is appealing against the conviction and sentence.

vijayan@sph.com.sg

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Better guidelines needed for lifting of trading halts

Business Times
25 Jul 2016
R. Sivanithy

WHEN Indonesian coal miner Resources Prima Group (RPG) requested on Thursday last week for its trading halt to be lifted after the company announced it had received two legal letters of demand, the time for trading to resume was seven minutes later.

On June 7, when digital satellite firm AddValue Technologies submitted its request to lift its trading halt after announcing that a major asset sale that had been delayed more than two years looked like it was nearing completion, trading was to resume 14 minutes later.

On July 1, when beauty products maker Best World asked for its trading halt to be lifted after announcing it had been granted a direct selling licence in China, the time for trading to resume was 29 minutes later.

We could present more examples but the point should be obvious - there is no consistency in the timing of the lifting of trading halts. Is seven minutes sufficient, as in the case of RPG's announcement? Or should it be closer to 30 minutes, like Best World?

None of these companies breached any rules, we hasten to add, for the simple reason that there are none to breach. Companies today are free to ask for trading halts to be lifted with little or lengthy notice, creating what many observers feel is unnecessary uncertainty in the market.

When we first wrote about this more than three years ago ("Greater certainty needed when trading halts are lifted", BT, Hock Lock Siew, Jan 24, 2013), the example cited was air-con firm Natural Cool, which had submitted a request to the Singapore Exchange (SGX) to lift its trading halt 28 seconds after the request.

Like the companies mentioned earlier, Natural Cool did nothing wrong, but what if every trading halt is lifted only a few seconds following the filing of requests? If 28 seconds is OK, how about five seconds?

How reasonable is it to expect traders and investors to scan SGX's website every few seconds to see when halts are to be lifted?

Granted, most companies seem to allow an average of 15-30 minutes between the time they request that their halts be lifted and the actual lifting - arguably a reasonable and sufficient amount of time in today's market, given that investors usually would have had a few hours to digest the contents of the announcement that had prompted the halt in the first place.

But the absence of consistency and guidelines is troubling because in extreme cases, it could give an advantage to those lucky enough to have checked SGX's website at the exact time a company puts in its request for its trading halt to be lifted a mere few seconds later.

As we wrote in 2013: "It is much better to make sure all parties have equal opportunity to react to company announcements by coming up with clearer guidelines relating to when trading can resume, even if this means extending the period of the halt''.

One solution is to fix the times at which trading can resume, say, 9am and 2pm. A halt in the morning followed by an announcement that same morning automatically means trading will restart at 2pm; a halt in the afternoon and an announcement that same afternoon means trading will restart at the next available time, which is 9am the next day.

A better system is to require companies to state at the end of their announcements when they want their halts to be lifted. In other words, instead of companies having to put out three releases - a request for a halt, the announcement, then a request for the lifting of the halt - they need only make two: a request for a halt and the announcement which includes the time at which trading will resume.

Not only are two announcements administratively more efficient than three, this arrangement affords greater certainty to the market - everyone reading the announcements will know exactly when the halts are to be lifted. Which is not the case now.

Source: Business Times © Singapore Press Holdings Ltd. Permission required for reproduction.

Hague ruling 'a guide' for maritime disputes

Straits Times
18 Jul 2016
Raul Dancel

Ruling on Beijing-Manila spat offers template for settling other S-E Asian claims: Analysts

One windfall from last week's landmark ruling that struck down Beijing's claims to nearly all of the South China Sea is that it provides a helpful template for resolving disputes among South-east Asia's own littoral states, analysts said.

They said that the ruling by a five-man arbitral tribunal in The Hague, while mainly involving disputes between the Philippines and China, narrows the scope of disputes involving maritime overlaps among the 10 Asean member states.

"The tribunal ruling is not just about the Philippines and China," said Mr David Han, research analyst at the S. Rajaratnam School of International Studies (RSIS), but "has legal and political implications" beyond the South China Sea.

The 479-page verdict handed down on July 12 ruled that China cannot lay claim to over two-thirds of the South China Sea based on historic rights or ancient maps.

Claims of maritime entitlements must instead be defined under the 1982 United Nations Convention on the Law of the Sea, it said.

Under that treaty, adopted by 165 countries including China and the Philippines, land features, not historic rights, determine maritime claims. The tribunal then concluded that there is no "island" in the Spratlys that would have economic rights of up to 200 nautical miles, but just "rocks" with, at most, a 12-nautical mile "territorial sea".

South-east Asia's complex geography of exclusive economic zones (EEZ), territorial seas and archipelagic waters has resulted in a multitude of overlapping claims.

Nine out of the region's 10 states are coastal states, and two - Indonesia and the Philippines - are among the world's largest archipelagic states. From 1969 to 2009, at least 37 arrangements have been made to resolve disputes over sea borders. But many are still unsettled.

Cambodia still has to resolve its boundaries with both Vietnam and Thailand in the Gulf of Thailand.

Indonesia has already concluded several continental shelf boundary agreements, but it has yet to firm up EEZ boundaries with Malaysia in the Northern Malacca Strait, Vietnam in the South China Sea, and Thailand in the Strait of Malacca and in the Andaman Sea.

Malaysia, meanwhile, has disputes to resolve with Indonesia in the Celebes Sea, and with the Philippines in the Celebes Sea, the Sulu Sea and South China Sea.

Analysts said the arbitral court's ruling has made it easier to set ground on settling these disputes, whether through bilateral or multilateral channels. Historic rights as a basis for economic rights at sea, for instance, are out.

"The Asean way encourages flexibility and constructive cooperation. How this would work out... after the Hague ruling remains to be seen," said RSIS' Mr Han.

But he added: "I believe that moving forward, Asean would seek to focus on peaceful cooperation in line with the principles laid down in the 2002 Declaration on the Conduct of Parties in the South China Sea."

Ms Elina Noor, director of foreign policy and security studies at the Institute of Strategic and International Studies in Malaysia, said: "The tribunal ruling clarifying the nature of the features in the Spratlys may make joint development initiatives more palatable, provided claimants do not make acceptance of sovereignty or sovereign rights a precondition".

A couple of countries in South- east Asia have already proceeded with economic arrangements, notwithstanding their competing claims. These include the Thai-Malaysian Joint Development Area agreement, and a standing Malaysia-Vietnam agreement on oil and gas exploration.

For Justice Antonio Carpio, who helped guide the Philippines' case against China, the ruling provides instructions on working out contracts between two states seeking to tap resources inside EEZs.

"We can't have joint development in our EEZ in the sense that we'll share jurisdiction over it with another state," he clarified. "But it doesn't mean foreigners can't help us in exploiting our resources. We can award concessions. Foreigners can be contractors of the state. We can pay them in kind or cash, but there is no joint development."

Thailand's former deputy prime minister Surakiart Sathirathai said "functional cooperation" - efforts to tap resources in overlapping waters while settling claims - is not a solution itself. "But it provides another track to preserve peace and avert future armed confrontations," he said.

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How an ombudsman could benefit Singapore

TODAY
13 Jul 2016
Chirag Agarwal

The ongoing review of the Elected Presidency has led to some commentary on what the appropriate role of the President should be. Meanwhile, recent changes to the Government Proceedings Act allow the courts to determine costs payable to the Government by a losing party, previously capped at that of two legal officers. The Workers’ Party claims this may prohibit people from going into litigation with the Government.

These two issues are at their core about the same thing: Checks and balances.

How should the legislature, comprising Parliament and the President, together with the judiciary, interact with the executive to hold it accountable in a transparent and independent manner?

The traditional separation of power doctrine, consisting of these three institutions, needs to include an ombudsman.

Found in more than 90 countries in various forms, an ombudsman essentially has three key characteristics.

First, it is an independent body led by a public official and reports to Parliament directly.

Second, it receives complaints from aggrieved persons against public agencies.

Third, it has the power to investigate, recommend corrective action and issue reports, all done in the public domain, but does not have the authority to impose its decision.

While the Worldwide Governance Indicators compiled by the World Bank have consistently ranked Singapore close to the top in “effective government”, “rule of law” and “control of corruption”, the Republic is only on the 45th percentile on “voice and accountability”.

This suggests that Singapore needs an ombudsman because the current mechanisms to review a government agency’s decision may have certain limitations or are not independent and transparent enough.

While Singapore’s judiciary is well-respected and independent, it has two limitations.

First, a court case is usually expensive and lengthy, which dissuades average people from suing a public agency over what they might feel is an unjust decision. Second, a judicial review only covers “procedural fairness”, which ensures that all reasonable steps were taken by the public agency in arriving at that decision, but it does not review the merits of the decision itself.

Most recently, in a speech at the American Law Institute, Chief Justice Sundaresh Menon said the judiciary is supposed to serve as only the “last line of defence” against poor governance.

The Auditor-General’s Office (AGO) is another institution that is independent, but whose focus is limited to financial accounting and the effective use of public resources.

MODELS TO FOLLOW

The idea of an independent and transparent oversight body is not entirely new for Singapore. There is already one in the private sector called the Consumer Association of Singapore (Case), which would make a good study for establishing an ombudsman.

Working like an ombudsman for consumers, Case does a good job of balancing its “firefighting” role of mediating individual disputes, with its “fire-watching” role of educating the public and lobbying the Government for legislative reform.

Singapore could also learn from Hong Kong and New Zealand, given their similar population sizes and administrative structures. For instance, the ombudsman in Hong Kong has limited jurisdiction and cannot scrutinise decisions on security, defence and international relations.

An ombudsman in Singapore could begin by focusing on less sensitive but important areas such as public housing. The issue is managed by the Housing and Development Board through a complex set of regulations that are constantly evolving and affect the majority of the population.

New Zealand, like Singapore, does not have an Upper House in Parliament and is another good model to follow. It was one of the early adopters of an ombudsman, establishing it over 50 years ago. Starting with a limited jurisdiction, the New Zealand Ombudsman has since expanded to cover more than 4,000 public entities today.

According to its publicly available annual report, just last year the New Zealand Ombudsman received around 2,500 complaints, of which it resolved 164 (for example, a decision was changed or an explanation or apology was given). Furthermore, it obtained a wider public administration benefit in 14 cases (such as an agency that agreed to review a policy or procedure).

According to former New Zealand Prime Minister Geoffrey Palmer, the key to its ombudsman’s success is its leaders, “who know when to push bureaucracy and when to let go”.

Finally, an ombudsman in Singapore would be similar to the AGO. It would be established as a separate organ of state, publicly funded, and would publish an annual report that would be made public and submitted to Parliament via the President.

Over the years, the delivery of public services has undoubtedly become more complex and citizens have become more demanding. This has bogged down our politicians. They have, at times, had to address in Parliament specific incidents involving government agencies.

An ombudsman should be able to investigate such incidents in the first instance and recommend corrective action where necessary, while the Government focuses on developing sound public policy. The Government could then consider any policy recommendations made by the ombudsman in its annual report.

In a similar vein, an ombudsman could also quash unsubstantiated claims and vicious attacks on the public service by conducting a transparent and independent investigation into any allegation. Ultimately, establishing an ombudsman should improve the effectiveness of the public service. More importantly, however, its transparency and independence will help build trust in the Government.

The call to have an ombudsman in Singapore is not new. It has been made on multiple occasions by current Law and Home Affairs Minister K Shanmugam, when he was a backbencher in 1994, and by current President Tony Tan during his 2012 presidential campaign, as well as by highly regarded Singaporean diplomat and lawyer Tommy Koh, and the Workers’ Party.

Shortly after losing his seat at the 2011 General Election, former Foreign Affairs Minister George Yeo said that regardless of the variety of feedback mechanisms currently available, there was a need to “shake the box” from time to time because any existing system becomes predictable and inefficient.

An ombudsman would certainly shake things up.

ABOUT THE AUTHOR:

Chirag Agarwal was born and brought up in Singapore but only became a Singapore citizen eight years ago after completing his National Service as a second-generation PR and an Indian citizen. He has since worked as a civil servant and is currently pursuing a Master of Public Policy and Management degree at The University of Melbourne.

Copyright 2016 MediaCorp Pte Ltd | All Rights Reserved

A country's size, culture matter in its approach to international law

Straits Times
24 Jul 2016
Lydia Lim

Just as China may distrust Eurocentric rules, smaller states may want the added safety of laws

In September 2003, I found myself in the German city of Hamburg for a significant event in Singapore's legal history - the city state's first appearance before an international court.

Unhappy with Singapore's reclamation works off Tuas and at Pulau Tekong, Malaysia had launched legal proceedings against its neighbour, as provided for by the United Nations Convention on the Law of the Sea, or Unclos. This action, known as compulsory dispute settlement, was similar to that taken by the Philippines against China over the South China Sea. One difference was that while China refused to participate, Singapore took part and took pains to argue its case.

A three-day hearing was scheduled at short notice because Kuala Lumpur sought a stop-work order. I was one of two journalists sent to Hamburg to report on it; the other was from Malaysia.

The court in question was the International Tribunal for the Law of the Sea, also known as Itlos. It has 21 judges. I noticed that when the Singapore delegation arrived at the court, several of those judges greeted Ambassador Tommy Koh, Singapore's agent for the case, with great warmth and shook hands with him as though they were old friends.

I realised later that this might have been due to the important role Ambassador Koh played in the passage of Unclos, a landmark treaty negotiated over nine years to bring law, order and peace to the world's oceans and seas. He had presided over those difficult negotiations in their last three years, from 1980 to 1982, when Unclos finally became international law and set a new record by being signed by 119 countries on the first day it was open for signatures.

Unlike Ambassador Koh, I am not trained in international law. The reclamation hearing was my introduction to it. I would receive a deeper immersion five years later, in 2008, when I would report on Singapore and Malaysia's oral arguments in their territorial dispute over Pedra Branca, which went before the International Court of Justice at The Hague. That hearing took not three days but three weeks.

I saw up close Singapore's leading minds in public international law work flat out with colleagues from various other agencies, to defend, in the first case, Singapore's right to reclaim land in its own waters, and, in the second case, to continue its exercise of sovereignty over Pedra Branca. Ambassador Koh, then Deputy Prime Minister S. Jayakumar, then Chief Justice Chan Sek Keong and Judge of Appeal Chao Hick Tin were passionate about international law, as citizens of a small state have cause to be.

As Ambassador Koh explained in a recent commentary for The Straits Times, international organisations like the United Nations and international law have helped to create a safer and better world governed by laws, rules and principles. "It is a world," he wrote, "in which states, big and small, are held accountable for their actions towards other countries as well as towards their own citizens. It is, of course, true that great powers have often resorted to the use of force to achieve their political objectives. However, even great powers do not want to live in a chaotic and lawless world. They prefer to live in an orderly world.

"At the same time, they claim to have the right to act against the law of nations when their vital interests are at stake. Life is, therefore, a constant struggle between the rule of law and the rule of might. It is the ambition of small countries to strengthen the rule of law and weaken the rule of might. It is the aspiration of small countries to curb the unilateral use of force by the great powers."

Today, the two great powers that almost all small states have to engage with are the United States and China, both of which are active in the waterways around Singapore, namely the South China Sea. The current rules-based world order is largely an American construct, and accords with American norms in areas ranging from free trade to human rights to the use of force. China is, by contrast, a regime taker.

When it opened up to the world, it found that the international community it was joining was already well regulated. It realised it had to learn the rules of the game and play by them, said Professor James Li Zhaojie, for otherwise, there was no way it could communicate, trade or conduct relations with other nations, especially "these Western law-minded countries". The professor of international law at Beijing's Tsinghua University was speaking at a 2011 panel discussion organised by the University of Pennsylvania Law School on the question: Are superpowers above the law?

Still, there is the issue of trust, Prof Li said, as international law originated in the West and was, for a long time, Eurocentric. "And China was the underdog, victimised by this Eurocentric international law for more than a 100 years, ever since the Opium War of 1842. So... should China trust Western-oriented rules of law governing relationships among nations?" he asked, before adding that, by and large, "today China does feel that it is a beneficiary of the present international legal order".

But the differences between the US and China do not end there. The gap in their approach to international law can be seen in, for example, their differing views on military activity in an exclusive economic zone (EEZ), which extends 200 nautical miles out from a state's coast. During negotiations for Unclos, China had proposed that states should exercise some form of national security control over the waters in their EEZ, said Professor James Kraska of the US Naval War College during the panel discussion cited above. China's view was not accepted.

Now, having signed on to Unclos as a package deal, China knows that, by law, the US navy can operate in its EEZ but it nevertheless objects to such activities. Prof Kraska observed that "whereas the United States approach is very legalistic and black letter, the Chinese approach is much more of, it may be lawful but it's just not nice. It's rude and it's akin to a Peeping Tom looking in your window while walking along the sidewalk. There's nothing in the law that says you can't look in somebody's window as you're walking along the sidewalk... but it's just not nice and your neighbour doesn't like it. So I think that it gets to a difference of what global order ought to look like."

That cultural difference may also lie behind China's consistent rejection of the arbitral proceedings which the Philippines launched unilaterally, as allowed under Unclos' framework for compulsory dispute settlement.

It is significant that in the White Paper China issued the day after the arbitral award, it said on dispute settlement: "Based on an in-depth understanding of international practice and its own rich practice, China firmly believes that no matter what mechanism or means is chosen for settling disputes between any countries, the consent of the states concerned should be the basis of that choice." It also reiterated that it had held multiple rounds of consultations with the Philippines on proper management of disputes at sea and reached consensus on resolving them through negotiation and consultation. In other words, the Philippines' unilateral action, even if lawful, was not nice.

But even as China hopes for, and expects, other countries to be sensitive to its feelings, it must also appreciate that smaller states may feel they have no choice but to seek refuge in international law, which levels the playing field between them and a giant neighbour - especially one with a habit of flexing its muscles.


It is significant that in the White Paper China issued the day after the arbitral award, it said on dispute settlement: "Based on an in-depth understanding of international practice and its own rich practice, China firmly believes that no matter what mechanism or means is chosen for settling disputes between any countries, the consent of the states concerned should be the basis of that choice."

Source: Straits Times © Singapore Press Holdings Ltd. Permission required for reproduction.

TalkMed CEO acquitted of 2 charges, found liable on 2 others

Business Times
18 Jul 2016

[Singapore] THE CEO of medical oncology company TalkMed Ang Peng Tiam has been acquitted by a medical disciplinary tribunal of two charges relating to a complaint by a relative of one of his former patients, but found liable of two others, resulting in a fine and a censure, according to a submission by the company to Singapore Exchange. Dr Ang, one of Singapore's prominent oncologists, will appeal the decision.

The charges, the nature of which were not specified, are related to a complaint submitted to the Singapore Medical Council in 2010, which was then referred to a disciplinary tribunal. The tribunal fined the doctor S$25,000, as well as censured and ordered him to provide a written undertaking not to engage in similar conduct, said TalkMed's disclosure.

The company, which was listed on Catalist in 2014, added that "we have full confidence in Dr Ang and the day-to-day operations of the company are not affected". TalkMed will continue to monitor the progress of Dr Ang's appeal and will make further announcements as appropriate, it said.

Source: Business Times © Singapore Press Holdings Ltd. Permission required for reproduction.

More clarity on contempt laws

Straits Times
13 Jul 2016
Chong Zi Liang

With the advent and widespread use of social media, court cases that generate great public interest also produce a large volume of comments. Some of those remarks stray inadvertently into the territory of contempt of court, whether by prejudging facts that are still in contention in court or by insinuating bias on the part of the judiciary.

A proposed law introduced in Parliament on Monday, the Administration of Justice (Protection) Bill, seeks to provide greater clarity on what is permissible to say about an ongoing court proceeding.

Legal experts say it is high time that contempt of court - the only criminal offence based on common law built upon past judgments - is written into the statutes. Such a move will make contempt of court laws more accessible to the man on the street, who does not have the legal training and tools to access and analyse court judgments that now form the basis of the law. And people who have erred on the side of caution so far may feel freer to express comments about legal proceedings because the boundaries are better defined, they add.

Lawyers also say the Bill provides a framework for more effective enforcement of court orders - making it easier to take to task those who flout orders on maintenance payments and access to children.

Another aspect of the Bill seeks to set a limit on the punishments as it is currently entirely at the discretion of the judges. Under the Bill, offenders can be fined up to $100,000 and/or jailed for up to three years for cases involving the High Court or Court of Appeal. For other courts, the punishment is a fine of up to $20,000 and/or jail of up to 12 months.

Beyond that, the Government has emphasised that the Bill does not seek to substantively change the definition of contempt of court.

But any potential statute - whether it establishes new legal positions or simply clarifies the status quo - that sets limits on free speech will generate concern among an increasingly vocal public.

A robust discussion, including when the Bill is debated in Parliament, will go a long way towards assuring people that their rights remain unchanged.

ziliang@sph.com.sg

Source: Straits Times © Singapore Press Holdings Ltd. Permission required for reproduction.

Happily never after - again, proportion of 2nd divorces more than doubles

Straits Times
24 Jul 2016
Theresa Tan

Proportion of adults in S'pore who divorced at least twice more than doubles in past decade

More adults taking a second or even third shot at marriage are finding themselves unable to find happiness, and more of them are choosing to end their latest union in yet another divorce.

The proportion of men and women who divorced under the Women's Charter for at least a second time has more than doubled from 2005 to last year.

Last year, 513 men - who were previously divorced - also ended their latest marriage. This is more than triple the 153 men in similar situations in 2005.

This group of men who divorced for at least the second time comprised 9.5 per cent of the men who divorced last year - more than twice the 3.7 per cent in 2005.

The number of women with at least two ex-husbands is not far behind.

Last year, 463 women who ended their marriage had been divorced before, more than triple the 126 women in such situations in 2005.

These at least twice-divorced women made up 8.5 per cent of the women who divorced last year - almost triple the 3.1 per cent in 2005.

The Sunday Times calculated the numbers from the Statistics of Marriages and Divorces 2015 report, released by the Singapore Department of Statistics on July 13.

The at-least-twice-divorced data in this Sunday Times report refers to non-Muslim divorces. It also refers to those whose previous marital status was known, as there were some who did not state it.

Divorce lawyers and counsellors said the numbers have risen as more people are remarrying after a divorce, but more couples are also less tolerant of a lousy marriage or are reluctant to work through their marital woes.

Lawyer Michelle Woodworth, of RHTLaw Taylor Wessing, said: " It is becoming apparent that people are generally placing a higher premium on their own happiness and are less tolerant in a marriage which is not meeting their needs."

Besides, Singaporeans have become more casual about divorces and less fearful about being judged negatively by others for having had multiple divorces, lawyer Louis Lim of William Poh and Louis Lim said.

Those interviewed said that of their clients who have gone through more than one divorce, most have had two failed marriages. A small number divorced three times.

But one lawyer, who declined to be named, has a client going through his fourth divorce.

The man, a professional in his 50s, has a drug addiction problem and a violent temper and that could be why his marriages kept souring, the lawyer said.

What counsellors say these divorcees have in common is this: the tendency to blame their spouses for the unhappy marriage without realising their part in contributing to the marital breakdown.

So they repeat the same problematic behaviour or take their emotional baggage from their first marriage with them to their subsequent unions, which could lead to another split.

Mrs Juliana Toh, clinical director of the Counselling and Care Centre, said: "A marital breakdown is never due to just one person.

"If you don't make sense of your part in it, chances are you will repeat the same pattern of behaviour in your next marriage. You need to address the losses from your first marriage first."

Those interviewed also point out that some rush into a second marriage for various reasons. For example, they could be lonely and they want a new spouse to help them care for their young children.

After the honeymoon ends, they realise they are not all that compatible or the difficulties of a blended family with stepchildren and ex-spouses to deal with sink in.

The rising numbers also point to the challenges faced by those in second or subsequent marriages, such as the difficulties of step-parenting, sociologist Paulin Straughan noted.

To stem this trend of repeat divorces, counsellor Jonathan Siew of Care Corner Counselling Centre encourages remarrying couples to go for marriage preparation courses that will help them address the baggage from their first marriage and to prepare them for the challenges of the second one.

John (not his real name) is now wary of matrimony as he is going through his second divorce. He has no children.

The manager, 35, separated from his first wife after three years as they had drifted apart.

He put in "200 per cent" into his second marriage to a sales executive as he wanted to have children with her.

But he said she started picking fights with him and insisted on doing things her way after they tied the knot after a six-month courtship.

The final straw came when she insisted on renting out a room in their flat to two female colleagues. He reluctantly agreed.

Then she asked him not to live in their matrimonial flat, claiming it was inconvenient for her female friends to share a flat with a man.

He told her off. She refused to talk to him for over a year and he filed for a divorce.

John said: "I would be very careful about relationships and marriage from now on for all the heartaches and financial impact it involves."

Source: Straits Times © Singapore Press Holdings Ltd. Permission required for reproduction.

So you want to go en bloc...

Straits Times
18 Jul 2016
Lee Liat Yeang

The collective sale market in Singapore had been relatively dormant for years but a major deal in May, one of the largest since 2007, revived the hopes of many owners of older properties across the island. Lee Liat Yeang describes in detail what prospective sellers need to know about the process for selling a property this way

When Chinese developer Qingjian Realty signed a conditional contract to buy the 358-unit Shunfu Ville for $638 million in May, some believed this could herald the dawn of a new wave of collective sales in Singapore.

Under Section 84A of the Land Titles (Strata) Act (LTSA), if the sale en bloc is supported by 80 per cent of the development's owners (in terms of both share value and strata area) and the development is at least 10 years old, owners can receive an order of sale from the Strata Titles Board or the High Court. But owners should be mindful of the salient issues before launching such a sale.

STARTING A COLLECTIVE SALE

The election of responsible collective sale committee (CSC) members is a good starting point.

Owners of developments which had failed to secure a collective sale in an earlier round should note a higher threshold requirement of 50 per cent (by way of the total number of owners or by their total share value) for the signing of a requisition for an extraordinary general meeting (EOGM) to elect a CSC within two years from the relevant event of a failed sale attempt.

Otherwise, the usual requirement for such a requisition is to get the signatures of owners holding 20 per cent of total share value or of owners comprising 25 per cent of the total number of owners.

Owners should aim to appoint CSC members from owners across all types of units in the development so as to ensure better cross-representation of different interests. Candidates for the CSC should, at the time of election and at other relevant times, make full disclosure of any actual or potential conflicts of interest.

APPOINTMENT OF LAWYERS AND PROPERTY CONSULTANTS

The CSC could be empowered at the EOGM to appoint lawyers and property consultants to act for the owners in the sale process. Otherwise, the appointment of lawyers and property consultants should be made at an EOGM.

The experience, track record and commitment level of the lawyers and the property consultants should be fully considered before they are appointed.

RESERVE PRICE IN THE COLLECTIVE SALE AGREEMENT (CSA)

The sale committee should propose a reserve price in the CSA, taking into consideration factors such as development gross plot ratio, development baseline, special height controls (if any), lease top-up premium (if any) and general market conditions.

The committee should be mindful that, while a high reserve price will facilitate the collection of signatures to the CSA from owners, it may turn away potential buyers.

The committee should understand the importance of enticing developers to invest time and money to do feasibility studies on the development's land and of allowing the spirit of competition to take the eventual winning offer above the reserve price.

METHOD OF APPORTIONMENT OF SALE PROCEEDS

The CSC should propose a method that is fair and reasonable to all owners, and that should not disadvantage any particular type of units or class of owners. There is no "one size fits all" method or distribution of sale proceeds for a collective sale.

The Singapore Institute of Surveyor and Valuers recommends that one or a combination of two or more of the following methods or factors for apportionment - namely, valuation, strata area and share value.

Valuation could be made of a typical unit of each type, ignoring the unit's renovation cost, facing or floor level. However, the siting or location of a unit should be taken into consideration during the valuation of retail units.

While valuation is an important factor for commercial or mixed-use developments, it is rarely used for purely residential developments. Strata area is understandably a commonly adopted factor.

Owners of smaller units may argue for weightage to be given to their share value in the management corporation strata title (MCST) since a collective sale relates to unlocking the potential of the land. But they should also appreciate that share value is approved by the Commissioner of Buildings at the onset of the development for the purpose of determining maintenance contributions and the voting rights of owners in the MCST, and not for purpose of apportionment of sale proceeds.

The method of apportionment is often an emotional topic as everyone thinks his unit or unit type is worth more than others.

Practically speaking, the method of apportionment to be adopted must also be able to garner the support of 80 per cent of owners. Otherwise, the sale effort will fail.

GOOD FAITH AND FIDUCIARY DUTIES

It is provided explicitly in the LTSA that the Strata Titles Board or the High Court will not approve a collective sale that is not in good faith, taking into consideration only the sale price, the method of apportionment and the relationship (if any) between the buyer and any of the owners.

The importance of the CSC's role in a collective sale was explained by the Court of Appeal in the landmark case of Horizon Towers. The court decided that CSC members are fiduciaries of all the owners, including those who do not consent to the sale. The duties of CSC members include loyalty, even-handedness, avoiding any conflict of interest, making full disclosure of relevant information and acting with conscientiousness to exercise its powers in the best interest of all owners. The duty to act with consciousness in relation to the sale price requires the CSC to to use all possible diligence to secure the best reasonable price.

FINANCIAL LOSS

Non-consenting owners can raise a valid objection on the grounds of financial loss. The CSC should get the property consultants to check whether any owner will suffer a financial loss, meaning the proposed sale proceeds for his unit, after such deduction as the High Court may allow, will be less than the purchase price. Such deductions include what is stated in the Fourth Schedule of the LTSA, namely stamp duty on the purchase, legal fees for the purchase, costs related to privatisation and costs incurred in the process of the collective sale which are to be shared by owners under the CSA.

INCENTIVE PAYMENTS

Incentive payment arrangements made or participated by CSC members or the property consultants in breach of their fiduciary duties would constitute bad faith in the transaction and are disallowed in law.

SALE BY PUBLIC TENDER OR AUCTION

The need to ensure that the highest market price is achieved is safeguarded by a sale by public tender or auction. This will allow maximum exposure of the development to potential buyers so that there is competition to get the highest offer.

The CSC must obtain a valuation report prepared by an independent property valuer on the date of the close of the tender or auction.

The CSC may, within 10 weeks from the close of the tender or auction, enter into a private treaty contract with a buyer.

• Lee Liat Yeang is a senior partner with real estate practice group Dentons Rodyk & Davidson.

• This article is for general information only and should not be relied upon as legal advice for any specific matter or case.

Source: Straits Times © Singapore Press Holdings Ltd. Permission required for reproduction.

New law of contempt will keep court’s role from being usurped by others: Voices

TODAY
13 Jul 2016

I welcome the news that the Administration of Justice (Protection) Bill was introduced in Parliament and will soon be in our statute books (“New law defines contempt of court, spells out penalties”; July 12).

With the proliferation of online news, when contentious issues have been before the courts, netizens have taken the liberty to assume the role of prosecution or judge.

When the Bill is passed, they will have to be more careful about uttering the first thing that comes to mind.

Of the three types of contempt, however, the offence of scandalising the court is the most controversial.

In the United Kingdom, the offence has not been successfully prosecuted since the 1930s.

In 2012, the Law Commission in England and Wales studied whether the offence was necessary and felt that it should be abolished, and it was.

Still, scandalising the court is a common law offence in other countries such as Australia.

Its High Court has stated: “The authority of the law rests on public confidence, and it is important to the stability of society that the confidence of the public should not be shaken by baseless attacks on the integrity or impartiality of courts or judges.”

Heng Cho Choon

Copyright 2016 MediaCorp Pte Ltd | All Rights Reserved

Contractors seek review of public sector contracts and payment rules

TODAY
23 Jul 2016
Amanda Lee

SINGAPORE — Contractors here want the authorities to review the laws for the industry to ease the settlement of payment disputes and to have a fairer allocation of risks to them.

The issue was raised by industry veteran, Dr Jimmy Koh, during a seminar held by the Singapore Contractors Association Ltd (Scal) on Thursday (July 21) that was attended by some 250 participants.

Industry players pointed to two areas that need review: The Public Sector Standard Conditions of Contract (PSSCOC) and the Security of Payment (SOP) Act.

Dr Koh, who has been a contractor for 52 years, said that there were several legislative requirements that the industry has to face, such as the Building Control Act, Workplace Safety & Health Act, Professional Engineers Act and Architects Act.
Contractors also have to struggle with contractual terms, in particular those listed in the PSSCOC and other conditions of contract in private sector projects.

As it is, the construction industry is “already beset with problems and disputes”, Dr Koh said.

These include “unrealistic contract periods, tight manpower resources, delays, defect, payments and shifting of blame and responsibilities from one party to another”.

The PSSCOC, which was first published in 1995, allows a common contract form to be used in all public sector construction projects, and Dr Koh said it is time that the laws be reviewed because there have been many changes in the industry.

“A lot of developments have taken place and it’s about time we take a relook at them to see how to revise these documents,” he added.

The SOP Act aims to improve cash-flow in the industry by giving parties the right to seek progress payment for work that has been completed, and by providing fast and low-cost adjudication to resolve payment disputes.

Dr Koh said that the Act is drafted in “legalistic language”, which have resulted in contractors engaging lawyers.

“The lawyers (also) make it so legalistic (it) becomes a court hearing for many months, and the purpose to ease cash flow is lost during the process,” he added.

On the PSSCOC, Dr Koh said that under the Building Control Act, for example, the engineer is supposed to carry out soil investigation before designing the building.

owever, the provision also states that the contractor is responsible for the verification of the accuracy of the soil investigation.

Since there is an overlap where two parties are responsible for the soil investigation, it could lead to disputes or delays in projects and litigations, he explained.

“It’s not to the advantage of the owner (of the project) because the owner eventually has to pay for the (soil) investigation and also the changes in the method of construction and the cost of the construction,” he added.

Scal president Kenneth Loo said that the association has set up two working groups comprising industry leaders who would advocate and propose changes to the PSSCOC and SOP Act.

These would then be submitted to the relevant authorities for their consideration.

Copyright 2016 MediaCorp Pte Ltd | All Rights Reserved

Injured worker's long wait for payout

Straits Times
18 Jul 2016
Olivia Ho

Firm has not paid compensation after 2 years as it had not insured worker, says director

A workplace accident left Chinese national Tang Zengshun blind in one eye. But nearly two years later, he has yet to get a cent in compensation from his employer.

Last September, a labour court granted the 51-year-old construction worker $93,000 in compensation over the accident. However, his employer, construction company Yao Xing, did not pay up.

Last Wednesday, the amount was increased to more than $122,800 in injury compensation and lost wages and Yao Xing was given 21 days to stump up the money.

But the construction company's director, Mr Lu Xiuqi, claims he cannot afford the payout because he had not insured the worker.

If he fails to pay up in time, he could be prosecuted by the Manpower Ministry (MOM) and fined up to $10,000, jailed for up to a year, or both.

In October 2014, Mr Tang had been working on the renovation of a terraced house in Jurong West.

Another worker on the scaffolding above him was using a rivet gun, and as Mr Tang looked up, a piece of metal from the gun fell into his left eye, slicing through the cornea.

He underwent surgery at Changi General Hospital and again at Singapore General Hospital. But last January, his left eye became infected and vision was eventually lost.

A spokesman for Healthserve, one of the migrant worker groups supporting Mr Tang, said such a delay is unusual. In most work injury cases its assists with, the employer usually pays up within a couple of months.

An MOM spokesman said investigations revealed that Yao Xing did not have a valid insurance policy to cover its liabilities as Mr Tang's employer under the Work Injury Compensation Act (Wica).

Employers are legally required to buy Wica insurance for foreign workers to secure their work permit. Failure to do so can result in a fine of up to $10,000, up to a year's jail, or both.

Insurance is only scrutinised by the authorities when the work-pass term starts, according to Migrant Workers' Centre (MWC) executive director Bernard Menon. Afterwards, it is managed as a contractual relationship between employer and insurer.

A failure to service the insurance policy or other lapses might go unnoticed until something befalls the worker.

The MOM convicted one employer for not insuring workers last year, down from two in 2014 and four in 2013.

In a letter to MOM's Work Injury Department in January, Yao Xing's Mr Lu said it is beyond the firm's means to pay Mr Tang's compensation or medical fees.

He also claimed Mr Tang's condition was partly due to "possible neglect" on the part of doctors in the hospitals that treated him, and said he had lodged a complaint with the Singapore Medical Council.

The Straits Times was unable to reach Mr Lu for further comment.

Migrant worker groups said they see a handful of cases each year in which an injured worker is uninsured, but this could be just the tip of the iceberg.

Humanitarian Organisation of Migration Economics operations manager Luke Tan has seen 10 such cases this year. He said these are of "serious concern" as the injured workers are likely to end up going home without compensation.

The MWC, which has sheltered Mr Tang for the past nine months, saw one other such case this year. The worker was owed $32,000, but ended up accepting a smaller sum and has since left Singapore.

Mr Tang is not sure he can stay in limbo for how much longer.

Floods hit his village in Jiangsu earlier this month, and he has lost touch with his family. He worries about them, especially his 90-year-old mother and grandson, three. "I can't do the work I used to," he said. "My home is gone. I have nothing left."


DESTITUTE

I can't do the work I used to... My home is gone. I have nothing left.

MR TANG ZENGSHUN, an injured construction worker who is waiting for compensation. His village in Jiangsu, China, was hit by floods earlier this month.

Source: Straits Times © Singapore Press Holdings Ltd. Permission required for reproduction.

ADV: Kaplan - Obtain your Law qualification in 8 months

Singapore Law Watch
13 Jul 2016
Kaplan

MPs, lawyers call for more safeguards for consumers buying prepaid deals

TODAY
23 Jul 2016
Kelly Ng

SINGAPORE — With consumers finding themselves at the losing end time and again when businesses fold — most recently, California Fitness — lawyers and Members of Parliament say more safeguards should be put in place for the sale of prepaid packages, though they acknowledged these safeguards should not go as far as to stifle enterprise.

Suggestions they threw up include making prepaid packages come with insurance coverage and capping the value of these packages, which can be written into the Consumer Protection (Fair Trading) Act (CPFTA).

Given that similar measures have been instituted in certain sectors — such as travel, motor and private education — there can be no argument against safeguards for consumers’ pockets on a pervasive scale, they noted.

Since California Fitness’ abrupt closure on Wednesday (July 21), nearly 400 customers have contacted the Consumers Association of Singapore (Case) to seek advice on getting refunds of membership fees paid to the multinational gym chain.

Noting that the episode shows that it is not just fly-by-night operations that put consumers at risk, lawyer Daniel Chia from Morgan Lewis Stamford said regulators must take on a greater role in mitigating the risks of pre-payment, which can run into thousands of dollars.

Avenues such as Case and the Small Claims Tribunal may not provide the most effective recourse while a class action suit may not make economic or logistical sense “if you are a small-time customer with a S$2,000 to S$3,000 claim”.
He added: “Because of that, I think the impetus is for regulators to come in harder on consumer protection.”

Both Mr Chia and Mr Alfred Lim from Quahe Woo & Palmer suggested requiring merchants to offer consumers the option of insuring themselves against unforeseen circumstances such as insolvency, citing how this was implemented in the travel industry in June last year under a licensing condition implemented by the Singapore Tourism Board.

Another way is to cap the value of prepaid packages, said Mr Chia, since merchants can lure customers into shelling out hefty sums through tie-ups with credit cards that offer instalment payments.

“Initially, the consumer may think it is S$100 a month. One year into the contract, the company goes bust. (This is) not a situation where the bank will stop (collecting) payment. That is when I think a lot of consumers will feel very aggrieved because they continue to pay for these services when they cannot use the gym anymore,” he said.

Member of Parliament (Mountbatten) Lim Biow Chuan, who is Case president, said the association has recommended the Ministry of Trade and Industry (MTI) amend the CPFTA to regulate the collection of prepayments as “we see more and more cases of businesses being liquidated after taking large amounts of deposits”.

“We are of the view that (consumer protection) is inadequate. We are seeing too many businesses failing and too many consumers losing their prepayments,” he added.

In response to TODAY’s queries, MTI said it will review the feedback on prepayment protection.

“There is a need to balance providing consumers with adequate protection and the increased cost for businesses, which may ultimately be passed on to consumers,” said the ministry’s spokesperson.

MP Liang Eng Hwa (Holland-Bukit Timah GRC), who chairs the Finance and Trade and Industry Government Parliamentary Committee, said ways to better protect consumers have to be looked at but he stressed that there is no “foolproof approach”.

“We do not want our business regulations to be so tight that it stifles promising enterprises who can genuinely provide value and good service.”

The argument cuts no ice with Mr Lim, who said: “Of course the balance is that it will make running a business more expensive. But why should businesses use consumers’ deposits to finance their business?”

Singapore Management University law professor Gary Low said that if a merchant knows it is heading towards liquidation, it should not hide this from prospective customers.

“(It) usually takes about five to six weeks for an order for winding up to be made, then, clearly, if (the merchant) does not disclose the fact ... it is pushing the risk of liquidation entirely onto (its customers),” said Dr Low. “Firms that are not unduly aggressive in their sales strategies do not fall afoul of the law ... The situation is somewhat different if the firm knows it is a ship taking in water or heading to choppy seas.”

For lawyer Amolat Singh, the maxim of “caveat emptor” is still the rule. He acknowledged, however, that California Fitness, as a reputed company, proved an “exception”.

“People must be mindful these episodes are part and parcel of life, like when accidents happen on the road ... It is hard to prescribe protection on these things ... Suggestions like insurance or security bonds may not guarantee that consumers get the better deal as costs may be passed on to them,” he said.

Copyright 2016 MediaCorp Pte Ltd | All Rights Reserved

South China Sea ruling: About the arbitral tribunal

Straits Times
17 Jul 2016
Goh Sui Noi

The ruling on the South China Sea dispute has had critics questioning the authority of the tribunal, its source of legitimacy and the strength of its ruling. East Asia Editor Goh Sui Noi examines the processes that led to the findings and legal standing of the arbitration panel.

Q How did the Philippines start the arbitration process?

A The Philippines started the arbitration process against China on Jan 23, 2013, by issuing a Notification and Statement of Claim to the Chinese, in accordance with the dispute settlement provisions of the United Nations Convention on the Law of the Sea (Unclos).

China formally rejected the Notification and Statement of Claim, returning it to the Philippines on Feb 19, 2013. However, under Unclos, the refusal of one party to participate in the arbitration process does not bar it from proceeding.

As neither side has made known which of the four dispute settlement procedures under Unclos it would like to use, it is deemed that they have chosen arbitration by an arbitral tribunal constituted in accordance with Annex VII of Unclos.

The other three are the International Tribunal for the Law of the Sea (Itlos), the International Court of Justice and a special arbitral tribunal constituted in accordance with Annex VIII.

Q What is the five-man arbitral tribunal and what powers does it have?

A Parties to the case choose their arbitrators from a list of arbitrators that is maintained by the secretary-general of the United Nations. Each side picks one arbitrator and the other three are appointed by agreement between the two sides.

As China had decided not to participate in the case, the president of Itlos appointed China's arbitrator on its behalf. Itlos' president also appointed the other three arbitrators.

The tribunal determines its own procedure, with each party given full opportunity to be heard and to present its case. Decision is taken by a majority vote of the tribunal's members, and the award is final and binding and without appeal. It should be complied with by the parties to the dispute.

The expenses of the tribunal, including the remuneration of its members, are borne equally by the parties to the dispute. In this case, as China did not take part in it, the Philippines has paid its and China's shares of the expenses so far, leading the Chinese to question the credibility of the tribunal.

China has also insisted that the tribunal has no jurisdiction over the case as it involves sovereignty over islands in the South China Sea. But the tribunal in its first award in October last year said it had jurisdiction as matters submitted by the Philippines did not concern sovereignty but reflected a dispute that concerns Unclos.

Q What is Unclos?

A Unclos is a treaty concluded in 1982 that came into force in 1994. Ratified by 168 parties, including the Philippines and China, it establishes a legal order for the seas and oceans that promotes the peaceful use of the oceans and facilitates international communication.

It establishes rules for allocating and managing natural resources of the oceans and rules for protection and preservation of the marine environment.

An integral part of Unclos is the dispute settlement regime and when a party signs up to Unclos, it agrees in advance to the system of compulsory dispute settlement that can result in a final and binding decision.

Q What is the Permanent Court of Arbitration?

A The Permanent Court of Arbitration (PCA) is an inter-governmental organisation in The Hague that facilitates arbitration and other forms of dispute resolution between states.

In this arbitration case, it acts as a registry for the arbitral tribunal and provides administrative support to the tribunal.

While there have been frequent, loosely phrased references to the ruling as emanating from the PCA, strictly speaking the arbitration tribunal derives its authority from a body of international laws sanctioned by the UN.

Q Critics say the ruling is rubbish because it touches on sovereignty. Is this the case?

A This case is not about sovereignty but about maritime rights under Unclos. The tribunal did not rule on sovereignty.

In the case of China's claims to historic rights within the nine-dash line, such rights were extinguished when it ratified Unclos if those waters are now within the 200 nautical mile, exclusive economic zones (EEZs) of other coastal states.

Under Unclos, coastal states have rights to explore and exploit all living and non-living resources in their EEZs.

The tribunal also ruled on the status and entitlement of the reefs occupied by China, including whether they were entitled to a territorial sea or an EEZ.

Q Is the ruling invalid because Manila violated the DOC?

A The tribunal established in its October 2015 award that the 2002 China-Asean Declaration on the Conduct of Parties in the South China Sea "is a political agreement and not legally binding, does not provide a mechanism for binding settlement, and does not exclude other means of settlement". It came to the same conclusion with regards to joint statements of China and the Philippines on resolving their disputes through negotiation.

Q Is the ruling enforceable?

A The ruling is not enforceable because Unclos does not have an enforcement mechanism. Some analysts have pointed out that studies have shown that the vast majority of decisions by international courts and tribunals are implemented. However, others have said that where a ruling infringed on a great power's sovereignty or national security interests, it has never been accepted or complied with.


An integral part of Unclos is the dispute settlement regime and when a party signs up to Unclos, it agrees in advance to the system of compulsory dispute settlement that can result in a final and binding decision.

Source: Straits Times © Singapore Press Holdings Ltd. Permission required for reproduction.

Contempt: Codifying laws to make dos and don'ts clearer

Straits Times
12 Jul 2016
Chong Zi Liang

Proposed Bill gives a better understanding of what people cannot do, and the penalties

Those who run afoul of contempt of court laws may face serious criminal sanctions, such as jail.

This is a key reason why these existing laws are being codified, said Law Minister K. Shanmugam, so people are clearer about what they cannot do, and the punishments they could face.

"If you look at criminal law, the general principle is that it should be set out in writing," he told reporters after the Administration of Justice (Protection) Bill was tabled in Parliament yesterday. "The law of contempt has been the exception and, for sometime now, we wanted to crystallise it."

The law of contempt - part of Singapore's case law and developed by judges, covers three main areas: prejudicing court matters, disobeying court orders, and scandalising the courts.

In an earlier interview, Mr Shanmugam highlighted three benefits that the Bill, if passed, will bring.

First, it gives people a better sense of what actions can unduly influence court proceedings, known as sub judice, and what amounts to unfounded allegations of bias in judgments, known as scandalising the courts.

This ensures that every one receives a fair trial, and public confidence in the Singapore's legal system - which stands at 92 per cent according to a survey commissioned by the Government last year - is not eroded by baseless attacks on the courts' integrity.

Second, it provides a framework for punishments, and sets a limit on the fines and prison sentences. Currently, there is no maximum, and the degree of punishments is left entirely to judges.

Third, the Bill spells out specific powers the courts will have to enforce orders, such as in divorce cases, where men have to pay maintenance to their former spouses.

Mr Shanmugam said contempt laws do not affect discussions on policies, and people are free to criticise judgments after a trial is over.

"After the verdict is delivered, there is nothing to prevent people from saying what they think... that the law should be changed, that the punishments are not adequate. But wait for the case to be over."

For instance, arrests in last year's Thaipusam procession led to a public debate over whether music should be allowed. That is fine, said Mr Shanmugam.

What is not right, he added, is the public expressing views on an accused's guilt or innocence, which may influence court proceedings.

"You want an independent party, the judge, to decide on guilt or innocence. You don't want, as it were, a trial by the public," he said.

Mr Shanmugam said the move to put contempt of court laws in writing has been in the works for some years now.

In a 2010 speech at the opening of the legal year, then Chief Justice Chan Sek Keong raised the idea of putting contempt of court laws in statutory form.

When asked why it took six years before it was put forward, Mr Shanmugam yesterday said contempt laws were already part of Singapore's case law, and there were more pressing matters to deal with, such as changes to family law.


JUST NOT DURING TRIAL

After the verdict is delivered, there is nothing to prevent people from saying what they think... that the law should be changed, that the punishments are not adequate. But wait for the case to be over.

LAW MINISTER K. SHANMUGAM


Q What is contempt of court?

A There are three main offences:

• Scandalising the courts: Attacks on the integrity of the courts, for instance, by alleging that judges are biased.

• Sub judice: Prejudicing ongoing court proceedings by commenting on the guilt or innocence of the parties involved, or by commenting on facts that have yet to be established in court.

• Disobedience: Disobeying court orders, such as when a man refuses to pay his former spouse alimony despite a maintenance order from the court.

Other forms of contempt include interfering with proceedings by threatening witnesses, or disruptive and rude behaviour in court. The latter is known as contempt in the face of court.

Q Does this mean judges and judgments can never be criticised?

A No. One can criticise and disagree with the reasoning or merits of a court judgment. If there are concerns about a judge's conduct, a report can be made through appropriate channels such as the Corrupt Practices Investigation Bureau.

Q Does contempt of court stop discussion on the legal system?

A No. Contempt of court laws seek to stop improper influence on court proceedings and outcomes. Comments on the legal system itself, such as whether certain laws should be changed or whether penalties are too lenient, do not run afoul of contempt laws.

Q Are there any examples of what amounts to contempt of court?

A The Bill outlines two examples. In the first, a man is charged with rape and a newspaper publishes an interview with his former girlfriend. She claims in the interview that the man had previously brutally raped her and also been jailed for sexually assaulting other women. The prosecution is not permitted to disclose his previous convictions during his pending rape trial. The publication of the interview poses a real risk of prejudicing the trial.

In the second example, a man is charged with inflicting serious bodily harm on another outside a pub. The victim has difficulty recognising his assailant. An online news site publishes a photo of the accused with fists clenched outside the pub, with the caption "vicious pub bully caught". As the identity of the assailant is an issue in the accused's pending trial, the photo and caption pose real risks of interfering with ongoing proceedings.

Q What are the penalties for contempt of court?

A Currently, there is no limit on the punishments and it is at the discretion of the judges.

Under the proposed Bill, offenders can be fined up to $100,000 and/or jailed for up to three years for cases involving the High Court or Court of Appeal. For cases involving other courts, the punishment is a fine of up to $20,000 and/or jail of up to 12 months.

The heaviest punishment for contempt by way of scandalising the judiciary in Singapore so far is six weeks' jail and a $20,000 fine. This was given to British author Alan Shadrake in 2010, for impugning the impartiality of the courts here in 11 passages of his book, Once A Jolly Hangman: Singapore Justice In The Dock.

Law Minister K. Shanmugam said the new Bill does not set the maximum penalty at this precedent as it would tie the courts' hands in more serious cases. " So you give a broad framework and then you leave it to the courts," he said.

Chong Zi Liang

Source: Straits Times © Singapore Press Holdings Ltd. Permission required for reproduction.

Ex-remisier charged with breach of Securities and Futures Act

Business Times
23 Jul 2016
Claire Huang

[Singapore] AN ex-remisier has been charged with defrauding under the Securities and Futures Act - the first prosecution case by the Monetary Authority of Singapore (MAS) under the MAS-CAD (Commercial Affairs Department) joint investigation regime.

Malaysian Dennis Tey Thean Yan, 32, was on Friday charged with 18 counts under Section 201(a) of the Act.

He allegedly defrauded via market manipulation in 11 stocks provided by IG Asia Pte Ltd between Oct 2012 and Jan 2013.

The 11 securities mentioned in court documents are: Asia Power Corp, China Aviation Oil, China Energy, China Flexible Packaging Holdings, Delong Holdings, Full Apex Holdings, Li Heng Chemical Fibre Tech, Pan Hong Property Group, Sinostar Pec Holdings, Samudera Shipping Line and World Precision Machinery.

Tey is accused of entering fraudulent orders in these securities so as to artifically increase their best bid prices or lowering their best ask prices.

Court documents said this is so he could buy or sell the contracts for difference (CFD) at the artificially raised or lowered prices.

He is also accused of deleting the fraudulent orders in the securities after the purchase or sale of the CFDs.

The remaining seven charges state that Tey allegedly carried out similar market manipulation in seven securities provided by CMC Markets Pte Ltd.

The seven securities are: Bund Center Investment, China XLX Fertilizer, ECS Holdings, Guocoland, Manhattan Resources, Pacific Century and World Precision Machinery.

Tey faces a further five charges under Section 201(b) of the Act where he is accused of deceiving four firms - CMC Markets Singapore, IG Asia, DBS Vickers Securities and DMG & Partners Securities - by using the accounts of four individuals to buy and sell shares without authorisation between Oct 2012 and Jan 2013.

The maximum punishment on each charge is a fine of S$250,000 or jail term of seven years, or both.

Source: Business Times © Singapore Press Holdings Ltd. Permission required for reproduction.

Apex court to hear compensation lawsuit in rare case

Straits Times
16 Jul 2016
K.C. Vijayan

When homeowner Ng Huat Seng won a lawsuit against a contractor and its director who damaged his property during demolition works on a neighbour's unit, it was effectively a " paper judgment".

Esthetix Design failed to pay the $136,796 in damages and costs awarded in the State Courts last year to Mr Ng as it was apparently in financial difficulties and its insurers had repudiated liability for the company.

Mr Ng also obtained a default judgment against the company's owner Steve Lim in 2013 but to no avail as he did not show up in court.

He found it was not practical to pursue enforcement proceedings, such as winding up, as the costs of doing so were not likely to be recovered.

His next move however - seeking compensation from the neighbour for the contractor's negligent acts - is set to get a hearing at the top court after the High Court on Wednesday gave the go-ahead upon hearing the application from Senior Counsel N. Sreenivasan and lawyer Tan Cheow Hin.

The move is rare, as appeals for cases like Mr Ng's end at the High Court and cannot proceed for further appeal unless the judge who heads the case gives permission on grounds that points of law are involved.

The case arose after Esthetix carried out demolition works on a three- storey unit in Jalan Lim Tai See located behind Mr Ng's house in 2011.

Owner Munib Mohammed Madni had hired the company to turn his existing house into a three-storey detached structure with a basement and swimming pool, but debris from demolition works broke window panes, damaged four air-conditioner condenser units and cracked the backyard tiles.

Although successful in his negligence suit in the State Courts against Esthetix, Mr Ng failed in court to make Mr Munib liable for the damage as well.

Mr Ng appealed to the High Court but Judicial Commissioner See Kee Oon last month rejected the move, making clear that property owners cannot be expected to supervise what contractors do.

"It would be intolerable if the law were to hold that all landowners who seek to construct homes on their property would have a duty to look continually over the shoulders of the independent contractors they hire," said the judge then.

But the judge noted this was the first case where "the extra-hazardous" exception was considered at length as to whether the nature of the activity was so dangerous that the duty of care owed could not be delegated to the contractor.

The judge approved the application by Mr Ng's lawyers for the Court of Appeal to review the existing criteria defining an "independent contractor" as well as what makes for "ultra- hazardous activity".

It is understood the questions of law framed for the apex court have important implications for landed home owners here where most are located in very close proximity to each other.

Source: Straits Times © Singapore Press Holdings Ltd. Permission required for reproduction.

Related headlines

Neighbour loses claim against neighbour over damage, ST, 28 Jun

Contempt of Court Bill: Those in matrimonial spats 'may take court orders more seriously'

Straits Times
12 Jul 2016
Selina Lum

Welcoming the proposed statute on contempt of court, family lawyers said it will have a positive impact for those caught in matrimonial disputes with a tardy ex.

After a divorce, it is common for parties to flout court orders when it comes to payment of maintenance, access to children and issues relating to matrimonial assets.

Lawyers interviewed said that having a consolidated piece of written law that sets out the consequences of disobeying court orders will make more people sit up and take court orders more seriously.

RHTLaw Taylor Wessing partner Michelle Woodworth described legislating contempt of court as a "progressive evolution". She said: "Codifying the law sends a clear signal that disobedience of court orders and interference with the administration of justice won't be tolerated."

Ms Malathi Das, director at Joyce A. Tan & Partners, said that while the proposed law provides a clearer framework on what steps can be taken and how, it "doesn't really add anything to already-existing remedies" for maintenance enforcement. In other words, the courts have always had the power to hand down jail terms and fines for disobedience of court orders.

But Harry Elias Partnership partner Ivan Cheong said that with the new Bill, there is greater clarity and it would instil greater confidence in clients that the orders may be effectively enforced. "Increased confidence in the judicial system and the ability to enforce these orders effectively also make clients feel they are not just getting a 'paper' order."

Mr Amolat Singh of Amolat & Partners said that having a "one-stop" piece of legislation that "distils the wisdom" of hundreds of thousands of court judgments and setting out the prescribed punishments will let people know upfront the consequences of non-compliance.

Ms Sharanjit Kaur, a partner at Withers KhattarWong, said some parties may take orders and judgments in family disputes lightly, and taking out proceedings to enforce those orders can be a time- consuming, stressful and sometimes expensive process.

She cited an example of a woman who was ordered to sell the matrimonial home in six months. The woman, who remarried and continued to live in the property with her second husband, made things difficult for her former husband, who was taking steps to sell the property. Three years after the order was made, the property has yet to be sold.

Lawyers said the courts are generally cautious when it comes to punishing parties for contempt in matrimonial disputes. Mr Singh noted that in some cases, access orders are breached as the children themselves do not want to see their parents. "The courts will still take everything into consideration before they send a person off to jail."


SENDING CLEAR SIGNAL

Codifying the law sends a clear signal that disobedience of court orders and interference with the administration of justice won't be tolerated.

MS MICHELLE WOODWORTH, partner at RHTLaw Taylor Wessing

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China Fibretech remains suspended, to engage lawyers to handle claims

Business Times
23 Jul 2016
Angela Tan

[Singapore] CHINA Fibretech, whose shares remain suspended from trading since Nov 30, 2015, said on Friday it will engage a law firm to handle the 466 million yuan (S$94.6 million) damage claims made by its customers.

The S-chip was replying to queries by Singapore Exchange (SGX) over the discrepancies between the 64.3 million yuan revenue generated in FY2015 and claims amounting to 466 million yuan.

Wu Xinhua, executive chairman and CEO of China Fibretech, said that "sales recorded in our books are processing fee only". He added that "the alleged claims amount is based on the costs of the claimants' end-products".

Trading in the company's shares had been suspended after its subsidiary, Shishi Simwa Knitting & Dyeing Co, received the damage claims from three customers in 2015 for products delivered in 2014 and early 2015.

The customers claimed to have suffered "substantial damages and financial losses" as a result of Shishi's products not meeting their specified requirements, causing decolourisation of their end-products.

In reply to SGX's query over why three unrelated customers made the claims on the same day, China Fibretech said two of the companies had been commissioned by another to process its apparels.

Since the claims were made, the company's representatives had visited the claimant's factories to inspect the products, and samples were extracted and sent to independent third parties for testing in March this year. These samples failed to meet the required standard.

On SGX's concerns over how the company's cash is safeguarded, China Fibretech said: "There is no indication that the company's cash is at risk at this point in time. Due to the uncertainty of the claims' outcome, the company will not make any payments in relation to the claims at this point in time."

China Fibretech said due to the uncertainties surrounding these claims, trading of its shares would be suspended until further notice to ensure a fair, orderly and transparent market.

SGX had previously warned investors in its Regulator's Column about China-based companies including those from the textile and sporting goods business, that were announcing adverse and significant changes in their financial positions, and where bank balances were duly affected.

Source: Business Times © Singapore Press Holdings Ltd. Permission required for reproduction.

Tweaks to proposed rules a relief for insurers

Business Times
16 Jul 2016
Claire Huang

[Singapore] INSURERS, especially the life players here, can feel more relieved, now that the Monetary Authority of Singapore (MAS) has further revised the proposed capital-requirement rules.

The latest refinements to RBC 2 - the proposed enhancements to the current risk-based capital framework which have been deemed too onerous for the industry - have been laid out in a consultation paper that was released on Friday.

With the tweaks making the requirements more sensitive to the varied business needs and portfolios of insurers, it means policy holders will benefit from better product pricing and asset-allocation decisions made by insurers, said MAS on Friday.

Consumers can also expect to enjoy access to at least the same wide range of long-term savings participating products (par products), such as endowment policies, whole life plans and universal life products.

The par business is the backbone of quite a few of the major life insurers in Singapore. The capital requirements of the enhancements proposed in 2014 would have required those insurers relying largely on par business to have more capital as buffer, turning them away from providing this class of products.

With the latest revisions requiring a lower capital buffer, the risk of life insurers moving away from such traditional par products is thus reduced.

Chua Kim Leng, assistant managing director of banking and insurance at MAS, noted that insurers here are well-capitalised. "The purpose of the RBC 2 review is therefore not to raise regulatory capital requirements, but to ensure that our framework for assessing capital adequacy better reflects an insurer's activities and risk profile."

A key revision to RBC 2 relates to capital requirements for equity investment, credit spread, counter-party default and operational risk. These have been eased to more accurately reflect the risks they pose to insurers.

Another revision relates to the discounting of life insurance liabilities; this has been adjusted to reduce the impact of short-term volatility on insurers' capital adequacy.

The Business Times had reported in October 2014 that insurers, specifically life insurers' capital adequacy ratios (CARs) could fall by 50 to 60 per cent under the previous version of RBC 2.

An insurer's CAR is a measure of its financial strength.

The amended version of RBC 2 also projects significantly higher credit-risk charges and equity charges.

Woo Shea Leen, insurance leader at PwC Singapore, said: "The new RBC framework is more comprehensive as it takes into consideration items like operational risk and catastrophic risk, which the original RBC framework developed more than 10 years ago did not consider."

The framework is still under consultation, she noted, but added that the revisions will encourage insurers to enhance their risk- and capital-management capabilities to set themselves apart from their competitors; this would in turn benefit policyholders by way of more competitively priced products.

Life Insurance Association Singapore said the life industry was glad that the MAS has taken on board many of the recommendations it had made in the past in this third consultation paper. The association added that it would now work on assessing the impact of the further revisions.

The MAS said it will conduct a second quantitative impact study to assess the impact of the revised proposals.

The consultation paper is available on its website and comments should reach it by Oct 20.

Source: Business Times © Singapore Press Holdings Ltd. Permission required for reproduction.

MAS can make grants to IMF with House's approval

Business Times
12 Jul 2016
Lee U-Wen

PARLIAMENT passed amendments to the Bretton Woods Agreements Act on Monday to allow the Monetary Authority of Singapore (MAS) to participate in the International Monetary Fund's (IMF) Poverty Reduction and Growth Trust (PRGT).

Singapore's central bank can do so through a US$20 million grant paid from Singapore's share of the IMF's gold sales profit. The grant is subject to parliament's approval, and all future grants to the IMF will first need to get the go-ahead from the House.

The PRGT is the IMF's concessional lending vehicle, which provides lending facilities tailored to the diverse needs of low-income countries. IMF members agreed in 2012 to contribute at least 90 per cent of distributed profits from the sales of gold holdings at the IMF to fund the trust.

Speaking in parliament during the debate on the amendment bill, MAS board member Lawrence Wong said that Singapore, as an open economy and global financial centre, has a strong stake in preserving a healthy global economic environment.

"This includes doing our part in the IMF's efforts to assist low-income countries. The PRGT will help support developing countries in Asia such as Cambodia, Laos, Myanmar and Vietnam, whom we share growing economic ties with," he said.

The bill empowers MAS, which previously had powers to provide loans and interest-free deposits to the IMF, to also make grants to the lender with parliament's approval.

The bill also adds several safeguards that apply whenever MAS gives financial assistance to the IMF, including one that requires the Minister-in-charge of the MAS to publish a statement in the Gazette that contains key information about the financial assistance.

"It is in Singapore's interest to continue to support the IMF as a global multilateral institution and its efforts to maintain a stable global financial system," said Mr Wong.

Source: Business Times © Singapore Press Holdings Ltd. Permission required for reproduction.

Come down hard on anti-competitive practices: Forum

Straits Times
23 Jul 2016

The report on July 15 ("Five suppliers of spare parts for HDB lifts under probe") stated that two years ago, the Competition Commission of Singapore (CCS) found EM Services (EMS) guilty of refusing to supply spare parts to third-party contractors.

Thirty years ago, when town councils were first formed and were being managed by EMS, it faced exactly the same problem. Almost all the HDB lifts at the time were installed and maintained by a Japanese firm.

The town councils found themselves at the mercy of the Japanese company, as it quoted high rates for maintenance and repairs. Third-party contractors could not come into the picture, as most of the critical parts were patented by the Japanese company and all spare parts had to be bought from it at high prices.

To break away from this monopoly, HDB started awarding lift contracts to other companies for its new flats, and EMS ventured into being a lift supplier and maintenance contractor.

As more third-party lift maintenance companies came into the picture, the major lift contractors, including EMS, faced competition, so they emulated the spare parts policy of the Japanese company.

It is hoped that CCS will come down hard on the lift contractors, if they are found guilty of creating barriers for competition to enhance their profits.

Ultimately, the ones who suffer the most are the HDB residents, as they would have to pay higher service and conservancy charges.

Ronnie Lim Ah Bee

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Inter-ministerial group looking at ways to cut number of minor violations entering the court system

Straits Times
16 Jul 2016
Selina Lum

Getting more to settle minor offences via fines will save court time, even spare offenders jail

As many as 200,000 cases of people failing to pay their fines for minor violations such as illegal parking and littering land in court each year. Not only does this waste court time and resources, but it also mean costlier fines, and even jail terms, for offenders.

That is why the authorities are trying to fix the problem. An inter-ministerial group is looking at ways to cut the number of regulatory offences entering the court system.

Chief among the proposals is a revamp of the composition fine notices sent to offenders. A composition lets an offence be settled with a fine, without having to be convicted in court.

A survey last year found that 60 per cent of the offenders who were hauled to court did not know that court fines are several times that of composition sums.

Changes will be made to the design, layout and wording of the notices to ensure that they are simple, concise and clearly set out the "likely much higher financial consequences of a court appearance".

The initiative, led by the Attorney-General's Chambers, was disclosed by Deputy Attorney-General Tan Siong Thye yesterday at the third Criminal Law Conference.

In his speech, he said regulatory offences are minor violations but are "heavily represented" in the State Courts. From 2012 to 2015, there were around 180,000 to 200,000 cases each year. This is despite measures to deal with the deluge of regulatory offences, such as the Night Courts and an automated system to settle traffic tickets.

By contrast, more serious criminal cases numbered only about 60,000 annually.

In addition, about 50,000 warrants of arrest are issued each year for the minor offences when the offenders fail to attend court.

Attending court is time-consuming and court fines are generally at least four times that of composition sums. If the fine is not paid, the offender may have to serve a jail term, said Mr Tan.

In April last year, an interior designer who failed to pay parking penalties of $660 over four months, ended up having to fork out $7,000 in court fines. He had ignored three reminders to pay the composition fines for 14 parking offences.

After he was summoned to attend court, he skipped five sessions, which led to five arrest warrants being issued against him.

Court resources spent on regulatory cases could be freed up for more serious criminal offences, said Mr Tan, while employing prosecutors and enforcing warrants of arrest strain the resources of enforcement agencies.

Besides a redesign of the composition notices, other proposals include encouraging offenders who fail to pay their composition fines to plead guilty by letter or electronically, without personally attending court.

He said that the law already allows offenders to plead guilty in these ways, but the process is seldom used as most are ignorant of it.


200,000

Number of minor violation cases such as illegal parking taken to court each year

50,000

Number of arrest warrants issued a year for the offenders when they do not show up in court

60%

Offenders hauled to court who did not know that court fines are several times that of composition fines

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Do more to protect against rogue contractors: Voices

TODAY
12 Jul 2016

I refer to the letter “Changes to consumer law will also better protect against errant contractors” (July 1). It is good that the Government is looking closely into this currently loosely-regulated industry.

However, owing to the various modus operandi and legal loopholes these rogue contractors can undertake and exploit, we need a more holistic and judicious framework to protect consumers better.

Besides the measures the Ministry of Trade and Industry has laid out, I have some suggestions. First, the Building and Construction Authority (BCA) or any other relevant government body should undertake an expanded regulatory, investigative and enforcement role.

The new guidelines could include companies and individual directors needing a valid licence. Companies and directors who have complaints lodged against them would be investigated, and penalties could include rescinding licences and accreditation, et cetera.

Companies should have to put up a performance bond, which would be a percentage of the project value, and adopt a standardised progressive payment schedule and contract terms, the templates of which are to be guided by the BCA.

Second, the BCA should set up a central repository where companies and consumers can both lodge and obtain information. Companies with any existing or previous injunction or legal proceeding taken against them should have to lodge this in the repository.

Company owners and directors should also have to lodge information on companies in similar industries they have been owners and directors of previously, and on any injunctions or legal proceedings against those companies during their tenure.

Third, business owners and/or company directors involved in any lawsuit and injunctions, or who have had a complaint lodged against them, should not be allowed to shut down their companies while these cases are outstanding. Those who do so and set up a new one should be charged with a criminal offence.

This is to safeguard against contractors dissipating assets from the troubled company to a new one in a bid to avoid compensation, should there be an unfavourable judgment against them.

Rogue contractors have abused legal loopholes while hiding behind the proverbial corporate veil, and continuing with their unethical, dishonest and irresponsible behaviour. The Government should hold a public consultation to specifically address this plague in the contractor industry.

Aaron Koh

Copyright 2016 MediaCorp Pte Ltd | All Rights Reserved

Singapore seizes S$240m in assets linked to 1MDB funds

Business Times
22 Jul 2016
Jamie Lee

[Singapore] SOME S$240 million in assets have been seized by the Singapore authorities who are investigating the fund flows related to 1MDB, with about half these assets belonging to the now-infamous Malaysian tycoon Low Taek Jho and his immediate family.

Singapore's Attorney-General's Chambers, the Commercial Affairs Department and the Monetary Authority of Singapore (MAS) said in a joint statement that bank accounts belonging to some individuals have been seized and dealings in properties belonging to some of them, curtailed.

The Penang-born entrepreneur was previously reported to have bought two units at the posh TwentyOne Angullia Park for S$54 million.

The authorities did not identify the owner of the remaining S$120 million in assets that were seized in Singapore's investigations, which began in March 2015.

Meanwhile, the MAS has rapped DBS, Standard Chartered Singapore and UBS Singapore for "control failings" linked to flows from 1MDB, the Malaysian government's strategic development company.

The joint statement by the three agencies came in response to the lawsuit filed this week by the US Department of Justice (DOJ) against the troubled 1MDB, seeking the forfeiture and recovery of more than US$1 billion in assets associated with "an international conspiracy" to launder funds related to the state investment fund.

The DOJ claimed that the 1MDB funds had been used to snap up expensive real estate in New York and Los Angeles, artworks by Vincent Van Gogh and Claude Monet and a jet aircraft. Money also allegedly went into funding the 2013 film, The Wolf of Wall Street; Malaysian Prime Minister Najib Razak's stepson is the chairman of the production house for the film.

The Singapore authorities said the 1MDB fund flows being investigated include those linked to Good Star Ltd (Seychelles), Aabar Investments PJS Ltd (BVI), Aabar Investments PJS Ltd (Seychelles) and Tanore Finance Corp (BVI). Previous reports had said Good Star was owned by Mr Low in its five years as a company. It received about US$1 billion from 1MDB - funds that were apparently meant to be directed to an energy-project investment with PetroSaudi; Good Star had earlier been thought to be a unit of the Saudi firm.

In addition, at least US$1.24 billion raised through a bond issue by a unit of 1MDB was allegedly transferred to a UBS bank account in Singapore held by Aabar Investments PJS. The money was meant for Abu Dhabi's International Petroleum Investment Company (IPIC), but IPIC has denied ownership of this Aabar Investments; IPIC has a subsidiary with the same "Aabar" name. The transfer had been done through BSI Bank in Switzerland; BSI Bank in Singapore has since been ordered to shut down.

As for Tanore Finance Corp, it was the alleged source of the US$681 million deposited into Mr Najib's accounts in 2013, ahead of the Malaysian general election in May that year; the money allegedly came through the Singapore branch of Falcon Private Bank, which is under probe by the Singapore regulators.

The authorities said many other individuals are still under investigation. Prosecutors have already charged ex-BSI banker Yeo Jiawei and ex-remisier Kelvin Ang. Yeo has been charged with, among other things, money laundering, cheating, forgery and obstruction of justice; prosecutors said Ang had, over two years, dealt extensively with Yeo and others implicated in "improper dealings".

The Singapore authorities said they have acceded to requests from several countries for assistance in questionable fund flows allegedly linked to 1MDB. They have also asked for information from countries where the funds originated or were subsequently sent.

Source: Business Times © Singapore Press Holdings Ltd. Permission required for reproduction.

Why a ruling that cannot be enforced still matters

Straits Times
16 Jul 2016
Hao Duy Phan

It shows the Law of the Sea treaty provides a level playing field for states, big and small, to protect their legal rights

On Tuesday, the Arbitral Tribunal in the South China Sea disputes between the Philippines and China issued its long-awaited final award. It rejected China's claim of historic rights within the "Nine-Dash Line". It found that none of the features claimed by China is entitled to a maritime zone of more than 12 nautical miles. It concluded that China violated the Philippines' sovereign rights in its exclusive economic zone (EEZ) and caused severe harm to the marine environment.

The Philippines government welcomed the award, describing the ruling as a milestone decision. It said it would respect the award.

China, on the other hand, claimed that the arbitration was a political farce and the award was illegal, null and void. It insisted that the Arbitral Tribunal did not have jurisdiction. It refused to recognize the ruling or accept any proposal for negotiation based on the ruling.

While the award addresses many important legal issues concerning disputes on the interpretation and application of the United Nations Convention on the Law of the Sea (Unclos) and clarifies several legal aspects of the South China Sea disputes, the reaction from the concerned parties raises important questions about the enforceability of the Arbitral Tribunal's decision and the implications of a failure to comply with the award.

IS THE AWARD BINDING UPON CHINA?

Article 296 of Unclos and Article 11 of Annex VII of the Convention provide that the Tribunal's decision shall be final and binding and shall be complied with by all parties to the dispute. This is a rule inherent in every judicial dispute-settlement system, including Unclos. There is no exception.

A party cannot claim the award is not binding because the arbitration was instituted without its consent. Under Unclos' compulsory dispute-settlement regime, there is no need for the parties to a dispute to give their consent for the dispute to be referred to arbitration or adjudication. Their consent was already given in their ratification of the Convention.

China and the Philippines are both familiar with the compulsory nature of dispute settlement because they are also members of the World Trade Organisation (WTO). Unclos and the WTO deal with different subject matters but they have one thing in common - a compulsory dispute-settlement regime. China, in fact, is one of the most active users of the WTO dispute-settlement system.

A party cannot claim the award is not binding because it challenges the Tribunal's jurisdiction as China has done by insisting that the disputes in question were about sovereignty and not regulated by Unclos, or about maritime delimitation issues it chose to exclude from the Unclos dispute-settlement system.

But Article 288 of Unclos provides that, in the event of a dispute on the Tribunal's jurisdiction, the matter shall be settled by the Tribunal. The Tribunal settled the issue of jurisdiction with its award on jurisdiction in October last year and its final award this week.

A party cannot claim the award is not binding because it didn't participate in the proceedings. Article 9 of Annex VII provides that non-participation of one party would not constitute a bar to the proceedings.

In the Arctic Sunrise case between the Netherlands and Russia, Russia also chose not to participate. The proceedings went on in its absence. More than six months after the International Tribunal for the Law of the Sea (Itlos) ordered provisional measures, Russia released the activists and the ship, even though Russia claimed that it was merely following a domestic decision, not the order of Itlos.

A party cannot claim that the award is not binding because the Tribunal has members from Europe and Africa and not from China or Asia.

China could have appointed an arbitrator of its nationality or an Asian nationality. It didn't. China could have participated in selecting the three remaining arbitrators. It didn't. China could even have challenged the appointment of any arbitrator at any time. It never did. Now it cannot use the nationality of the arbitrators, four of whom are respected Itlos judges, to undermine the credibility of the Arbitral Tribunal's decision.

CAN THE AWARD BE ENFORCED?

Like many international courts and tribunals, Unclos does not have an enforcement mechanism.

The lack of an enforcement mechanism does not mean decisions of international courts and tribunals are generally ignored. On the contrary, studies have shown that the vast majority of decisions by international courts and tribunals are implemented. China itself has a good record in implementing decisions of the WTO's compulsory dispute- settlement system without any external enforcement.

For the South China Sea disputes, failing to comply with the Arbitral Tribunal's decision would damage China's image and reputation. China will be seen as a rising power with little respect for international law or "a legal order for the sea".

Non-compliance by one party means the rights of the other party are violated. Non-compliance also creates an obstacle for the parties to move towards settling the underlying disputes in accordance with international law.

The South China Sea disputes are a matter of concern for many states. If one party's action is inconsistent with the award, other states and major powers might take measures to challenge the action. That will not be in the interest of China, of the Philippines, of peace, stability and security in the region.

The Philippines has said that it would be willing to hold bilateral talks with China based on the ruling. At some point, negotiation will be multilateral because the Spratlys disputes involve other states.

If negotiation does not work, Unclos provides that either party can request the Arbitral Tribunal to rule on issues arising from the implementation of the award. The Philippines might not use this option for now, but it might reconsider in the future.

Even if China does not respect the award and the Philippines does nothing to challenge the non-compliance, the award is still significant in many ways.

First, the award upholds the rule of law in the oceans. It reinforces the compulsory nature of Unclos' dispute-settlement regime and underscores Unclos as a level playing field for all state parties, big or small, to settle their disputes and protect their legal rights.

Second, the award defends the EEZ regime which is essential to the Convention and many coastal states. It confirms that claims of historic rights to the natural resources in the EEZ of other coastal states are incompatible with the EEZ regime provided for in the Convention.

Third, the award clarifies important legal issues concerning the interpretation and application of Unclos, especially the island regime. It contributes to the development of international law of the sea.

Fourth, the award helps to clarify several aspects of the South China Sea disputes. As a result, the scope of the disputes is narrowed. The overlapping areas in the Spratlys are now limited to only 12 nautical miles from the disputed rocks. As the award strengthens the position of the Philippines and other claimants, it will affect their negotiation direction and strategies. Space for compromise in their EEZ will decrease but incentives for them to engage in negotiations on joint development and cooperation in the newly defined overlapping areas will increase.

The award therefore still matters and has significant implications, even in the absence of compliance from one party.

The writer is a senior research fellow at the Centre for International Law, National University of Singapore.

Source: Straits Times © Singapore Press Holdings Ltd. Permission required for reproduction.

The 2009 claims that changed dynamics in the S. China Sea

Straits Times
12 Jul 2016
Navin Rajagobal

Through the 2000s, China's charm offensive towards Asean succeeded. Today, China has tense relations with many of its regional neighbours, causing them to cleave more closely to America. What happened to spark that dramatic turnaround from foreign policy success to failure?

For much of this millennium's first decade, Mr George W. Bush was the president of the United States and his administration was preoccupied with 9/11, the "War on Terror", and actual wars in Afghanistan and Iraq.

The US, for the most part, didn't have much time for Asia and, in particular, Asean. Perhaps not much time was needed. After all, Asean was a relatively safe and secure part of the world with most South-east Asian countries being friendly or at least not antithetical to the US. Meanwhile, Japan was mired in economic stagnation.

Who stepped into this breach? China. In what was then called a "charm offensive", China's leaders made historic trips to Asean countries and concluded historic agreements. The "charm offensive" worked.

By 2008, China's official development assistance (ODA) to Asean countries surpassed Japan's ODA. Between 2003 and 2013, China's foreign direct investment (FDI) in Asean increased from just US$581.1 million to US$35.7 billion. In this period, China's FDI in the Philippines increased from US$9 million to US$692 million and the increase in Vietnam was from US$29 million to US$2.2 billion.

The landmark Asean-China Free Trade Agreement (ACFTA) came into effect in 2010. The ACFTA is the world's largest free trade area in terms of population.

The relationship also improved dramatically on the political-security front.

In the late 1980s, China's then paramount leader Deng Xiaoping called for the setting aside of the South China Sea disputes in favour of joint development of disputed zones. This precipitated an agreement between China and Vietnam in 2000 on maritime delimitation in the Gulf of Tonkin, which included a provision on joint development. The national oil companies of China, Vietnam and the Philippines embarked on a joint marine seismic undertaking of Reed Bank in 2005.

In 2002, the Declaration on the Conduct of Parties in the South China Sea was adopted by China and Asean, which somewhat relegated the overlapping claims in the South China Sea to the status of a diplomatic irritant rather than a diplomatic row.

During this period, many analysts contrasted Beijing's "sensitive" approach to relations with Asean countries with the US' "heavy-handed" approach.

This was not bad for a country, which, until the 1990s, had been viewed with grave suspicion by most Asean governments for backing communist insurgency movements, sympathising with the overseas Chinese diaspora, and forcibly occupying features in the South China Sea (all of the Paracel Islands in 1974, Johnson South Reef in 1988 and Mischief Reef in 1995).

China's foreign policy and diplomacy in the 2000s was clearly triumphant in remediating past tensions and eroding the influence of the US and Japan.

One could even argue that China was on track to becoming a benevolent hegemon on a par with the US. If there was a goal to eventually displace the US and to create China's version of the Monroe Doctrine in South-east Asia, Beijing seemed to be going about this in a subtle and effective way while comfortably holding on to the features it had already occupied in the South China Sea.

TENSIONS TODAY

Let's fast forward to 2016.

The Philippines has unilaterally taken an unwilling China to international arbitration over their South China Sea differences. A tribunal of the Permanent Court of Arbitration (PCA), convened under the auspices of the 1982 United Nations Convention on the Law of the Sea (Unclos), is expected to deliver its decision today.

China has refused to participate in the arbitration and, thus far, refused to accept its decision. Despite Beijing's argument that the tribunal does not have jurisdiction and Manila is "abusing" international law, the fact that a permanent member of the United Nations Security Council (UNSC) has so flatly rejected an international process that could help clarify the overlapping South China Sea claims has dented China's reputation with respect to international citizenship. The UNSC, of course, has primary responsibility for the maintenance of international peace and security.

Manila initiated the arbitration after the Scarborough Shoal stand-off in 2012, when two surveillance vessels from China prevented a Philippines navy ship from arresting Chinese fishermen near the Shoal. The stand-off threatened to escalate into armed conflict, but the US managed to achieve a Philippines withdrawal. China, however, did not reciprocate.

In 2013, in sharp contrast to the "charm offensive" of the previous decade, China was accused of being petty in its response to the Philippines' plight in the wake of a natural disaster. A headline in The Guardian stated, "Typhoon Haiyan: China gives less aid to Philippines than Ikea. World's second largest economy pledges less than $2m to help relief effort, compared to furniture store's $2.7m".

Since 2014, reports have emerged about Beijing's intention to declare an air defence identification zone in the South China Sea as well as China's extensive land reclamation and "militarisation" of features it controls by the building of airstrips and emplacement of missile launchers.

Naturally, this was received with alarm by not just the other claimant states, the Philippines, Vietnam, Malaysia and Brunei, but also by the non-claimant Asean countries Indonesia and Singapore, and regional powers Australia, Japan and the US.

Vietnam had its own stand-off with China in May 2014 when the China National Offshore Oil Corporation deployed an oil drilling platform, the Haiyang Shiyou 981, about 119 nautical miles off Vietnam's central coast and well within its 200 nautical mile Exclusive Economic Zone (EEZ). After ramming and water cannon incidents between Chinese escort vessels and intercepting Vietnamese ships, a series of anti-China protests and riots erupted across Vietnam.

The dispute expedited Vietnam's rapprochement with the US, deepened relations with Japan and prompted cooperation with India.

In March this year, Malaysia's Defence Minister Hishammuddin Hussein intimated a "pushback" against China following reports of China's militarisation of features in the Spratly Islands.

Last month, President Joko Widodo, in what was intended as a "clear signal" to China, conducted a Cabinet meeting on a navy warship in waters off Indonesia's Natuna Islands in the South China Sea.

This followed skirmishes between the Indonesian authorities and Chinese fishermen near the Natuna Islands. China does not claim the Natuna Islands but seemed to advocate in March that the waters off the islands were part of its "traditional fishing grounds".

In 2012, Asean, for the first time, failed to issue a joint statement following a meeting of foreign ministers in Phnom Penh. The statement was stymied by host Cambodia allegedly at the behest of China because it contained language proposed by the Philippines and Vietnam that was critical of Beijing's actions in the South China Sea.

This year, another setback for Asean occurred when Malaysia "issued" a document following the Special Asean-China Foreign Ministers' Meeting in Yunnan which was surprisingly critical of China, only to have the document recalled by the Asean Secretariat soon after.

In any case, a statement by Singapore's Ministry of Foreign Affairs indicated that "Minister (Vivian) Balakrishnan (who co-chaired the meeting with China's Foreign Minister) noted the serious concerns expressed by the Asean foreign ministers over the developments on the ground and called on Asean and China to continue working together to maintain the peace and stability of the South China Sea".

Since 2011, the US, under President Barrack Obama, has famously "pivoted" or "rebalanced" back to Asia after nearly a decade of neglect. The rebalance has involved military as well as diplomatic backing for allies and friends. For instance, in 2014, the US signed an Enhanced Defence Cooperation Agreement with the Philippines.

The US has also nudged old allies Australia and Japan, and new friend, India, to play a more active role in the South China Sea.

Since 2012, a US Marine Rotational Force comprising roughly 1,500 troops has been deployed in Australia's Northern Territory. Last month, a Pentagon-commissioned report proposed the deployment of additional submarines in Guam and an aircraft carrier group in Western Australia.

The US and Australia have also conducted defending "Freedom of Navigation" operations with warships and aircraft in South China Sea zones controlled by China such as at the Fiery Cross Reef, drawing the ire of Beijing and increasing the prospect of an unintended military confrontation.

Having the US, Japan, Australia, the Philippines, Vietnam, Malaysia, Singapore, Indonesia and India arrayed against you over the South China Sea is not a good foreign policy outcome. On the contrary, it is reminiscent of pre-Nixon Cold War dynamics in East Asia.

THEORIES ON CHINA'S ACTIONS

So what happened?

Clearly, something has gone very wrong for China's foreign policy and diplomacy vis-a-vis the South China Sea and, by extension, with Asean since the heyday of the 2000s. Why pursue a course of action that alienates you diplomatically and places you on the defensive for creating insecurity?

There is no shortage of academic elucidations on the matter. Much of it revolves around the "rise" or "restoration" of China as a major economic and military power, and the relative decline of the US.

For instance, Professor John Mearsheimer pointed out that "China cannot rise peacefully" because "it will attempt to dominate Asia the way the US dominates the Western Hemisphere".

In a similar vein, Professor Graham Allison posited that China and the US could be headed for war because when a "rising" power threatens to displace a "ruling" power, a "standard crisis that would otherwise be contained could initiate a cascade of reactions that, in turn, produces outcomes none of the parties would otherwise have chosen". This was labelled as the Thucydides Trap after the Greek general who studied the Peloponnesian War between a "rising" Athens and the "ruling" Sparta.

Another line of inquiry focuses on growing "nationalism" in China fuelled by its rapid economic success and its intensifying military prowess. The best-selling book China Can Say No and its sequel Unhappy China, and the proliferation of jingoistic exchanges in social media in China are reflective of this.

A number of scholars have suggested that the Communist Party of China, facing a crisis of legitimacy due to the dearth of Maoist ideology after Deng's reforms, has cultivated nationalism and the remedying of "historical wrongs" as the new validation for continued one-party rule. Perhaps this has contributed to irredentist thinking vis-a-vis the South China Sea.

A third vein of theorising points to Beijing's aspiration to punch a hole through the US' and its allies' geopolitical encirclement of mainland China by establishing a foothold in the South China Sea, which is characterised either as a weak link in the US' containment of China or as the soft underbelly of China's own defences that needs bolstering by the creation of forward positions in the South China Sea.

For example, the "String of Pearls" description suggests that China's assertiveness in the South China Sea is merely a manifestation of Beijing's overall plan to acquire strategic maritime assets ("pearls") on the sea route from Hong Kong to the Middle East, via Myanmar and South Asia, in order to: secure energy and raw material supply to mainland China; control international trade; magnify China's sway in the Indian Ocean region; or all of the above.

The economic potential of the South China Sea, in terms of oil, gas and minerals, as well as fisheries, is another focus of inquiry. This explanation posits that a rapidly developing and overpopulated China that is hungry for energy, raw material and food (seafood) cannot afford to lose out on the copious resources of the South China Sea.

Some of the aforesaid elucidations are more convincing than others.

Yet, one fact is clear. The growing concern in Asia about Beijing's South China Sea strategy, even among non-claimant Asean states that were hitherto dispassionate such as Indonesia and Singapore, and the compelling of a US pivot back to the region are not good foreign policy outcomes for a resurgent China. If anything, these point to a premature halt to China's subtle ascendancy in the Asean region in the 2000s.

Furthermore, having compulsory arbitration thrust upon it by the Philippines is adding insult to injury for an abysmal foreign policy and diplomacy experience for China in the 2010s.

THE TURNING POINT

So what explains the demise of the "charm offensive" with a grateful Asean in the 2000s to the present- day situation, when editorials the likes of the Global Times declare that China "must be prepared for any military confrontation"?

In my view, the turning point that extinguished the "charm offensive" of the 2000s and catalysed what analysts have referred to as China's renewed "creeping assertiveness" or "salami slicing" tactics in the South China Sea is a little-known occurrence in 2009.

Under Unclos, coastal states are granted 12 nautical miles of territorial sea and a further 200 nautical miles of an EEZ. In addition, if recognised by the Commission on the Limits of the Continental Shelf (CLCS), coastal states can claim up to 360 nautical miles of continental shelf, which is also measured from the territorial sea. To make the claim, a coastal state must submit its continental shelf information to CLCS within 10 years of the entry into force of Unclos for that state.

With a deadline approaching, Vietnam and Malaysia made a joint submission on May 6, 2009 to the CLCS on the "southern part of the South China Sea". In essence, Vietnam and Malaysia had clarified their hitherto competing claims in the South China Sea and brought it in line with Unclos.

However, this seemingly innocuous act shattered the erstwhile "ambiguity" surrounding the overlapping claims of China, Vietnam, Malaysia, the Philippines and Brunei.

The ambiguity had allowed China, a relative latecomer to the "scramble" for the South China Sea, to occupy features that were nearer to Vietnam, the Philippines and Malaysia but far from its nearest coastline, Hainan Island. In addition, the ambiguity allowed for a measure of deferral of the thorny issue of sovereignty as exemplified by Deng's proposal to set aside disputes in favour of joint development.

However, on May 6, 2009, China found itself facing the stark certainty of Unclos and the prospect that the Philippines would follow the lead of Vietnam and Malaysia and bring its claim in line with Unclos.

With respect to Unclos, China is geographically disadvantaged since the features in the central and southern zones of the South China Sea are too far from Hainan for EEZ and continental shelf provisions to be of much benefit.

In addition, the features it controlled in the central and southern zones are minuscule and possibly not "islands" as defined by Unclos when compared with the larger features controlled by the other claimant states.

In effect, China was being "pushed" out from what might be called the "core" of the South China Sea to the northern periphery by the joint submission.

China, perhaps too hastily, submitted a formal rebuttal to the Malaysia-Vietnam CLCS submission the very next day with these words: "China has indisputable sovereignty over the islands in the South China Sea and the adjacent waters, and enjoys sovereign rights and jurisdiction over the relevant waters as well as the seabed and subsoil thereof (see attached map)."

In a move that would have profound consequences, China's rebuttal included the first official publication of its own claim, the now infamous "nine-dash line map", which had been produced by Kuomintang-governed China in the 1940s. The inclusion of the map was probably just intended to bolster China's case vis-a-vis the CLCS. But unfortunately for China, the map and terms such as "adjacent" and "relevant" waters were so out of step with Unclos that almost anyone with an interest in international law and international relations became focused on the South China Sea, with many questioning if China's inclusion of the map was tantamount to the unravelling of Unclos.

Since China's map suggested that it had sovereignty over not just features but also the vast waterbody within the nine-dash line, the dispute morphed into one about the restriction of freedom of navigation, which would be of concern to all major powers and trading nations of the world.

This "internationalisation" of an issue that previously concerned only the five claimant states (and Taiwan) was a foreign policy calamity for Beijing.

However, the die was cast.

There was no turning back from the nine-dash line map especially in view of the rise of nationalist and irredentist sentiment among the Chinese public.

Beijing's strategy, thereafter, has been to enforce an unenforceable map by establishing or augmenting China's presence and activity in the features and waters depicted on the map, short of starting a war with the other claimant states.

This, of course, has resulted in numerous diplomatic protest notes, actual protests and demonstrations in the claimant states, and a series of increasingly risky confrontations at sea.

While China managed to implement large-scale land reclamation and construction on the features it already controlled, the enforcing of the nine-dash line map in zones it didn't previously control, such as Scarborough Shoal, backfired badly when Manila, with the help of savvy international lawyers, managed to justify and initiate the South China Sea arbitration at the PCA.

The arbitral tribunal (and Unclos) does not have authority on disputed sovereignty. However, the tribunal can consider disputes about the interpretation of Unclos itself and so has agreed to look into matters such as what exactly is an "island" that can generate maritime zones such as a territorial sea and an EEZ, and if "historic rights" as exemplified by China's nine-dash line map are justified.

By most accounts, the tribunal's decisions will not be favourable to China's standpoint on the South China Sea as it is expected to use Unclos as a reference. The nine- dash line map, while having some import on China's claim of sovereignty over "islands", has no basis in Unclos for claiming the vast waterbody in the South China Sea which the map envelops.

While the latest phase in South China Sea tensions began in 2009 with the joint submission by Malaysia-Vietnam to the CLCS, an Unclos process, one can only hope that another Unclos process, the compulsory arbitration at the PCA, will provide greater clarity and stability with respect to the overlapping South China Sea claims.

Perhaps a moral victory for the Philippines as well as an internationally mandated justification for China to temper domestic irredentist sentiment will empower the claimant states to move forward by way of bilateral or multilateral negotiations.

•The writer is director, academic affairs, and senior lecturer at Yale-NUS College in Singapore.

Source: Straits Times © Singapore Press Holdings Ltd. Permission required for reproduction.

MAS raps DBS, StanChart, UBS over 1MDB fund flows

Business Times
22 Jul 2016
Jamie Lee

It cites instances of control failings and weaknesses in processes for accepting clients and monitoring transactions

[Singapore] THE Monetary Authority of Singapore (MAS) has criticised DBS, Standard Chartered Singapore, and UBS Singapore for "control failings" linked to flows from Malaysia's embattled state fund 1MDB, and said it will take "decisive actions" against financial institutions used as conduits for these questionable fund flows.

More banks may be fingered in the days ahead as the 1MDB scandal widens its reach into Singapore's financial sector, even as MAS stressed that the lapses at the three major banks in the city-state did not point to pervasive weaknesses in control processes.

The central bank said its supervision of financial institutions with 1MDB-related fund flows revealed "a complex international web of transactions involving multiple entities and individuals operating in several jurisdictions". Its account echoed - and came on the heels of - the United States Department of Justice (DOJ) lawsuit claiming more than US$3 billion was allegedly misappropriated from 1MDB and laundered through US financial institutions.

In its preliminary censure of DBS, StanChart and UBS, MAS said there were instances of control failings and, in some cases, weaknesses in processes for accepting clients and monitoring transactions.

"There was also undue delay in detecting and reporting suspicious transactions," it said.

MAS said the deficiencies at the three banks were due to lapses in "specific processes and by individual officers".

"The lapses were serious in their own right, and will be met by firm regulatory actions against the banks. However, the inspections did not reveal pervasive control weaknesses or staff misconduct within these banks, unlike in the case of BSI Bank."

Swiss bank BSI (which was the custodian bank for some US$4 billion of funds invested by 1MDB) has already had its merchant bank licence stripped by MAS for serious breaches in anti-money laundering controls, poor management oversight, and gross misconduct by some staff.

BSI's clients include 1MDB, related entities, and Malaysian tycoon Low Taek Jho. About S$120 million in assets belonging to Mr Low and his immediate family have been seized by Singapore authorities.

DBS, StanChart and UBS said they are cooperating with the relevant authorities, and that they take anti-money laundering controls seriously. Responding to queries, they said they had voluntarily reported suspicious transactions to the authorities.

A DBS spokeswoman told The Business Times: "Egregious financial crime is highly sophisticated and intentionally designed to evade systems and controls. DBS has previously identified certain questionable activities and voluntarily reported these to the relevant authorities."

Meanwhile, MAS is still investigating Falcon Private Bank, but has (for now) said the Swiss bank failed to "adequately assess irregularities in activities pertaining to customers' accounts and to file suspicious transaction reports". The regulator is waiting for more details from Falcon's head office. Falcon has said it will cooperate with the Singapore authorities.

MAS also censured licensed remittance agent Raffles Money Change Pte Ltd, saying it failed, among other things, to verify the authenticity of remittance instructions.

The statement from MAS confirms earlier reports that top banks here have been rounded up by the regulator for large-scale investigations into the scandal, with global regulators probing the vast web of illicit fund flows. MAS has, until now, mostly sidestepped directly naming 1MDB as the subject of investigations.

1MDB (1Malaysia Development Bhd) was set up by Malaysian Prime Minister Najib Razak in 2009. The Wall Street Journal reported last July that some US$700 million from the investment fund had been allegedly siphoned into Mr Najib's personal bank account - a charge he has consistently denied for the past year.

MAS said it has been examining banks on their exposure to 1MDB-related fund flows since March 2015.

It has conducted detailed onsite inspections, and analysis of information obtained from regulators abroad. And its examinations "revealed extensive layering of transactions and subterfuge aimed at disguising the nature of certain activities and fund flows".

"In some instances, shell or unauthorised companies domiciled in various jurisdictions were used to conceal the true beneficiaries of the funds," it added.

Meanwhile, the US DOJ has claimed that, from 2009 to 2015, 1MDB officials conspired to misappropriate and launder billions of dollars from 1MDB through a "complex web of opaque transactions".

"1MDB was created by the Malaysian government to promote economic development through international partnerships and foreign direct investment, with the ultimate goal of improving the wellbeing of the Malaysian people," it said in its statement. "Unfortunately, a number of corrupt 1MDB officials treated this public trust as a personal bank account."

The DOJ lawsuit referred to fund transfers to a "Malaysian Official 1" - a high-ranking official in the Malaysian government who also held a position of authority in 1MDB.

Source: Business Times © Singapore Press Holdings Ltd. Permission required for reproduction.

CHC questions fresh police report by Chew

Straits Times
16 Jul 2016
Danson Cheong

The City Harvest megachurch (CHC) has questioned a fresh police report by their former fund manager Chew Eng Han alleging fraudulent misrepresentation by eight church members.

CHC executive pastor Bobby Chaw said in a notice posted on the church's website on Thursday that as Chew had not raised any facts to substantiate his allegations, the church's lawyers were of the view that these were "nothing more than 'bare' allegations".

On Monday, Chew, 56, made a report with the Commercial Affairs Department (CAD) alleging eight church leaders - including founding pastor Kong Hee and his wife, singer-pastor Ho Yeow Sun - had conspired to cheat their congregation and misuse church funds.

Chew is one of six former and current CHC leaders convicted last year of financial fraud. He is also involved in a civil suit with CHC, in which the church is alleging he owes them $21 million in unreturned investments.

Chew, Kong and four other leaders were found guilty of misusing around $50 million of church funds to further the music career of Ms Ho. They were jailed between 21 months and eight years.

Appeals by the six against their sentences and convictions will be heard in September.

The police confirmed a fresh report had been lodged by Chew. "As police investigations are confidential, and the complainant Mr Chew also has an appeal against his conviction and sentence pending adjudication by the Supreme Court, it is inappropriate at this juncture for the police to comment further," a spokesman told The Straits Times.

In the new complaint, Chew is alleging that the eight had misrepresented facts to induce church members to donate generously.

Mr Chaw said Chew e-mailed the church's lawyers on June 30, notifying them of his intention to sue CHC for "various fraudulent misrepresentations which had allegedly caused or induced him to give his efforts and money to CHC".

"Mr Chew claimed he had suffered 'financial damage which is recoverable via a civil suit' and that he was also 'seeking advice' on the other possible steps he could take," Mr Chaw said, adding that CHC had not heard further from Chew.

"Given that the CAD complaint seems to arise from the same facts as Mr Chew's allegations, it appears that the matters raised in his latest complaint have already been raised in the ongoing criminal and civil proceedings.

"While we don't know at this point what CAD will decide, the management and employees of CHC will continue to render our fullest cooperation to the authorities, if called upon."

Source: Straits Times © Singapore Press Holdings Ltd. Permission required for reproduction.

Personal liability of directors in the case of corporate insolvency

Business Times
11 Jul 2016
Victor Yeo

The law imposes a duty on a company's directors to look after the interests of its creditors

LAST WEEK, we examined the circumstances in which directors (and sometimes shareholders) can be personally liable for the debts of their company ("When are directors personally liable for corporate debt?" BT, July 4). This week, we look at a company that is insolvent (or nearly so), and how that may also give rise to a director's personal liability.

To start the discussion, it is useful to remember that directors have a fiduciary duty to act in the company's best interests. This is widely understood to mean that companies need to be managed in the interests of its shareholders as a whole.

However, what many may not realise is that when a company is insolvent or is approaching insolvency, the law imposes a duty on a company's directors to look after the interests of its creditors. This requires directors to pay closer attention to the interests of the company's creditors. Failing to do so may result in the directors being personally liable for the debts that the company owes to these creditors.

There are several scenarios in which this principle is applied.

Paying dividends when the company has insufficient profits

Section 403 of the Companies Act allows dividends to be paid to shareholders only out of profits generated by the company. Directors who wilfully contravene this restriction not only commit an offence, they are also personally liable to creditors for the company's debts to the extent that the dividends paid out exceed the amount of the profits.

In Chip Thye Enterprises Pte Ltd (in liquidation) versus Phay Gi Mo and Others (2004), the family-owned company became insolvent. The directors who authorised the payment of interim dividends of S$321,900 to the company's shareholders when there were insufficient profits were held to have breached their duties for making the payment at the expense of the company's creditors. They were also found personally liable for that sum to the company's creditors.

When the company continues to incur debts when insolvent

Directors must also ensure that they do not cause the company to take on debt obligations where there are no reasonable or probable grounds to expect that it will be able to repay the debt; otherwise, they may be prosecuted for an offence under Section 339 (3) of the Companies Act. Should they be convicted, the court may also, under Section 340 (2), declare that they be personally responsible for the payment of the debt.

In addition, if it can be shown that the reckless incurring of debts when a company is insolvent is a breach of a director's fiduciary duties, then the directors can be held accountable without being convicted under the Companies Act in the first place.

Furthermore, if there was an intent to defraud creditors by incurring fresh debts and liabilities after the company was insolvent, the directors who knowingly caused this can be made personally liable to the company's creditors.

This occurred in Lim Teck Cheng versus Wyno Marine Pte Ltd (in liquidation) (1999) where a director of a company which sold ships was made personally liable for expenses that were incurred by the company when he knew that the company was insolvent at that time.

Giving an unfair preference to other creditors when a company is insolvent

Sometimes, the liquidator of an insolvent company can show that the company had paid off specific creditors with the intention of unfairly putting them in a better position than they otherwise would have been in when the company was wound up. In such cases, the liquidator can, under Section 99 of the Bankruptcy Act and Section 329 of the Companies Act, seek a court order that the preferred creditors return the sums so that they can be properly distributed to all the company's creditors.

In Living the Link Pte Ltd (in creditors' voluntary liquidation) and others versus Tan Lay Tin Tina and others (2016), the Singapore High Court held that a director who made preferred payments to related entities of an insolvent company was in breach of her fiduciary duties to protect the interests of the company's creditors.

It was further held that the director can be personally responsible for restoring the company to the position that it would have been in had such an unfair preference not occurred. The director in that case was held to be jointly and severally liable with the related entities and ordered to repay to the company over S$2 million, representing the total value of the undue preference paid out to the preferred creditors.

Creditors' interests

All these cases are clear on one point: It is important that directors understand that creditors are also key stakeholders of the company. The trouble is that creditors' interests tend to come to the fore only when the company is insolvent. When that happens, directors must balance trying to trade out of the company's financial difficulties, and preserving whatever is left in the company's coffers for the benefit of its creditors. In so doing, they should avoid any action that gives preference to shareholders or specific creditors over other creditors.

More crucially, where it becomes clear that the company can no longer survive as a going concern and cannot be rescued, directors have to make the difficult choice of ceasing business and not allowing the company to incur further debts. Otherwise, they face the possibility that they may become personally liable for these fresh debts.

The writer is a member of the Brand and Communications Committee of the Singapore Institute of Directors

Source: Business Times © Singapore Press Holdings Ltd. Permission required for reproduction.

High Court cuts short neighbours' tree dispute

Straits Times
22 Jul 2016
Selina Lum

Judge rejects woman's plea to appeal against lower court's order to trim the tree's branches

The High Court has put a stop to a dispute between affluent neighbours over an old raintree in the posh Astrid Hill district.

"There is no one who wins when neighbours go to war. There is therefore no merit in letting this case incur any more court time when cases with greater social issues are waiting in line," said Justice Choo Han Teck.

The judge said this in a written judgment, published yesterday, as he rejected Ms Shi Ka Yee's request for permission to appeal against a lower court decision ordering her to pay $9,800 in damages to her neighbour and trim the tree's branches.

Ms Shi was sued by Mr Nasrat Lucas Muzayyin and his wife Priscilla Goh, following a conflict over the overhanging branches of the tree on Ms Shi's property.

The couple, who moved into Astrid Hill in 2014 with their young daughter, worried about the dangers of dead branches falling from Ms Shi's tree, which extended into their front yard. Attempts to seek her consent for the overhanging branches to be pruned fell through.

On the morning of Feb 17 last year, workers hired by the couple arrived in a truck with a cherry picker and started work.

Ms Shi drove to the Muzayyins' front gate and blasted the horn of her Porsche before she went into their house and swore at the family. She then took the keys from the truck's ignition, leaving a worker stranded in the cherry picker.

The couple sued her for nuisance, trespass and assault. Last month, District Judge Chiah Kok Khun ruled in favour of the couple. He ordered Ms Shi to trim the branches by June 28, but granted a temporary stay pending her application to the High Court for permission to appeal.

Her lawyer, Senior Counsel Francis Xavier, argued that the tree was protected by law and she cannot be blamed for refusing consent. But the couple's lawyer, Mr Christopher De Souza, argued that the law allows protected trees to be cut if its condition posed an immediate threat to life or property.

Justice Choo found that Ms Shi had not proved that the tree was protected; even if it was, the law must be interpreted sensibly as it is "common knowledge that trees need trimming". This dispute should not have involved so many lawyers and so much time in court, he added.

Source: Straits Times © Singapore Press Holdings Ltd. Permission required for reproduction.

Shi Ka Yee v Nasrat Lucas Muzayyin and another [2016] SGHC 138

Is the practice of packaging cars with insurance legal?

Straits Times
16 Jul 2016
Christopher Tan

Reader Danny Yeo asked about the practice of motor companies packaging their cars with insurance and loans. "It is packaged in such a way that if buyers were to opt for their own insurance and finance companies, they will end up paying more in total. Thus, buyers will have no choice but to accept the recommended insurance and finance companies," Mr Yeo said. "Obviously, the distributors or the car salespersons, especially the latter, will gain something out of the deal. Can you advise if this practice is legal?"

Senior Transport Correspondent Christopher Tan answered.

It is a free-market practice, and I don't think there is anything wrong with it from a legal standpoint.

If a consumer can find a substantially better deal for insurance or car loan, he should forego the packaged deal, or he can switch service provider after the first year.

Think of it as something similar to a packaged holiday. The airfare, transfers, accommodation and, often, meals are provided as a single deal. If you go for an a la carte deal, or a free-and-easy package, you might or might not end up paying more. But the choice is yours.

Yes, the motor company and the car salesperson get a cut from the deal. Again, that is a free-market practice. As long as all the parties concerned openly agree to the commission rate and have written up a contract, it is commerce. It becomes a kickback or bribe only if it is done covertly.

If, however, you feel strongly that this form of business goes against your grain ethically or morally, perhaps it is best that you just refuse the packaged deal - even if you eventually end up paying more.


As long as all the parties concerned openly agree to the commission rate and have written up a contract, it is commerce. It becomes a kickback or bribe only if it is done covertly.

Source: Straits Times © Singapore Press Holdings Ltd. Permission required for reproduction.

Tribunal case is far more than just a matter of rocks and reefs

Straits Times
11 Jul 2016
Raul Dancel

A tribunal convened by the Permanent Court of Arbitration (PCA) in The Hague will hand down its judgment tomorrow in a case the Philippines lodged challenging China's claims in the South China Sea.

The case, seemingly a banal dispute over rocks and reefs, has far-reaching implications.

WHAT'S AT STAKE?

The 3.5 million sq km South China Sea is critical to the world's economy and regional security.

Each year, some US$5 trillion (S$6.7 trillion) in ship-borne goods pass through these waters, also believed to hold oil and gas reserves.

China is claiming "indisputable sovereignty" over two-thirds of the South China Sea, with its claims overlapping those of Asean states Vietnam, the Philippines, Malaysia and Brunei as well as Taiwan.

Two years ago, China began to reclaim land on the reefs it occupies and place military installations on them.

While not the first claimant to do so - the Philippines, Vietnam, Malaysia and Taiwan have air strips and troops on isles they control - it has reclaimed 17 times more land in 20 months than the other claimants have done combined.

The United States is concerned that China is seeking to extend its reach nearer to US military fortifications in the Pacific, while China believes that challenges to its claims are part of the US' policy to contain its rise as a rival power in Asia.

WHAT DOES IT MEAN FOR ASEAN?

In the near term, the outcome of the arbitration case could deepen divisions within Asean.

With some of its members under immense pressure from Beijing, the group has failed twice - in Cambodia in 2012 and last month in Kunming - to issue a joint statement expressing concern over China's actions in the South China Sea.

Asean is unlikely to issue a joint statement pressing China to abide by the ruling.

Instead, the Philippines, Vietnam and Malaysia, which have rival claims, and Indonesia and Singapore, are likely to release individual statements.

Eventually, Asean will have to tackle the issue as a group, analysts say.

WHAT'S THE CASE ALL ABOUT?

While the specifics of the case go into maritime rights conferred by disputed rocks and reefs, in essence, it is about the challenge posed by China's "nine-dash line".

The Philippines brought its case in 2013, not long after China wrested control of an atoll known as Scarborough Shoal from it.

China has refused to take part in the case, saying it involves a determination of who owns what in the South China Sea, that is, sovereignty, which falls under the purview of the International Court of Justice.

Last year, the PCA said it had jurisdiction over seven of the "issues" the Philippines raised.

WHO IS HEARING THE CASE?

Created in 1899, the PCA is the world's oldest inter-governmental body that organises arbitral tribunals to resolve disputes among its 121 member states. These tribunals have rendered more than 70 decisions in past cases and it is currently considering 116 cases.

WHAT'S THE NINE-DASH LINE?

The nine-dash line, on a map drawn in 1947, marks the boundaries of China's claims over the South China Sea, covering nearly the entire sea.

China has refused to clarify what exactly it is claiming within the line.

WHAT'S THE PROBLEM WITH IT?

The nine-dash line overlaps with waters Manila considers part of its exclusive economic zone (EEZ) and extended continental shelf.

An EEZ grants a coastal state exclusive rights to explore for and exploit marine resources inside a band extending 200 nautical miles (370km) from its shore.

The nine-dash line also overlaps with territories claimed by Vietnam, Malaysia, Brunei and Taiwan.

The Philippines contends that the nine-dash line is inconsistent with the United Nations Convention on the Law of the Sea (Unclos).

WHAT IS UNCLOS?

A treaty that the Philippines and China have ratified, it outlines a system of territorial and economic zones that can be claimed from continental shelves, islands, shoals, reefs, atolls, cays, sandbars and other rocky outcrops. It allows a nation to exercise sovereignty over waters 12 nautical miles from its coast and exercise economic rights over waters in its continental shelf and EEZ.

The treaty states that reefs that are entirely submerged at high tide cannot be used to claim maritime rights.

WHY DISPUTE THE LINE?

The Philippines seeks to invalidate China's expansive claims by attempting through the arbitration to invalidate the nine-dash line.

It argues that, under Unclos, the nine-dash line has to emanate from land, not from historic rights or ancient maps.

With no land masses in the South China Sea that are large enough to generate maritime or economic rights that can encompass the 2 million sq km that the nine-dash line spans, the line cannot stand, it says.

WHAT ELSE IS IN THE CASE?

The Philippines has also asked the arbitral tribunal to declare that the seven reefs that China occupies in the Spratlys - Subi, Gaven, Hughes, Johnson, Fiery Cross, Cuarteron and Mischief - as well as Scarborough Shoal, are at most entitled to just 12 nautical miles of territorial waters around each of them, even if some have already been transformed into islands.

Under Unclos, artificial islands are not entitled to maritime rights.

One land feature that is proving problematic for the Philippines is the 48ha Itu Aba, which Taiwan occupies.

Taiwan has filed an intervention in the Philippines' case to argue that Itu Aba, 2,000km south of Taipei but just 416km west of the Philippine island province of Palawan, is an island entitled to a 200-nautical mile EEZ.

Taiwan has mounted a media campaign to prove that Itu Aba has a naturally occurring source of fresh water, the key requirement for an island, under Unclos.

AND AFTER THE RULING?

It is expected that the tribunal will rule largely in favour of the Philippines.

China may respond by declaring an air defence identification zone (ADIZ) over the South China Sea and deploying warplanes to its artificial islands there. An ADIZ will require all aircraft flying over the sea to submit their flight plans to Chinese security officials.

China may also attempt to build an island on Scarborough Shoal, a red line for the US, and reimpose a blockade on Philippine troops stationed at a beached transport ship on Second Thomas Shoal.

The US response will likely be to step up freedom-of-navigation patrols close to Chinese-claimed islands and to rally its allies to compel China to respect the ruling.

Source: Straits Times © Singapore Press Holdings Ltd. Permission required for reproduction.

The great powers and the rule of law

Straits Times
22 Jul 2016
Tommy Koh

It is in the interest of both small states and great powers to abide by international law

Professor Graham Allison is a brilliant scholar. He is currently the director of the Belfer Centre for Science and International Affairs at the Kennedy School of Harvard University. He had served previously as the dean of the Kennedy School. On July 16, this newspaper published an article by him entitled "Heresy to say great powers don't bow to international courts?"

He concluded that: "It is hard to disagree with the realists' claims that the Law of the Sea tribunals, the International Court of Justice and the International Criminal Court are only for small powers. Great powers do not recognise the jurisdiction of these courts - except in particular cases where they believe it is in their interest to do so."

Prof Allison also quoted, with approval, Thucydides' summary of the Melian mantra - "The strong do as they will; the weak suffer as they must..."

NO LONGER THUCYDIDES' WORLD
Thucydides lived in Athens in the 5th century BC or about 2,500 years ago. He wrote masterfully about the Peloponnesian War (431-404BC) between Athens and Sparta. His conclusion that "it was the rise of Athens and the fear that this inspires in Sparta that made war inevitable" is often referred to as the Thucydides Trap.

The first point I want to make in response to Prof Allison is to point out that we do not live in Thucydides' world. We live in the 21st century. The world in which we live is fundamentally different from the world of the ancient Greeks.

My second point is to refer to an event which has brought about revolutionary changes in the world. I refer to the Peace of Westphalia which took place in 1648. The peace treaties concluded in Westphalia brought an end to 30 years of war in the Holy Roman Empire and 80 years of war between Spain and the Dutch Republic.

The historical significance of the Peace of Westphalia is that it created a new political order in central Europe based upon the concept of the coexistence of sovereign states. A norm was also created against interference in the domestic affairs of another state. We can say that the concept of the sovereign state, which is central to international law and the world order, owes its origin to the Peace of Westphalia.

Third, I wish to refer to the founding of the United Nations in 1945 and the revolutionary character of the UN Charter. The UN Charter has created a new and a better world. For example, it recognised the right of people to self-determination and independence from their colonial masters. It created an organisation in which all states, big and small, are entitled to one vote. The Charter's objectives include the development of international law, the protection of human rights, the prevention of war and the promotion of economic and social progress. It prescribed that disputes should be settled peacefully and force can be used only in accordance with the Charter.

The UN is certainly an imperfect organisation. However, it has helped to create a safer and better world. It is a world governed by laws, rules and principles. It is a world in which states, big and small, are held accountable for their actions towards other countries as well as towards their own citizens. Unlike the world of Thucydides, great powers cannot do as they wish and small countries must suffer in silence. It is, of course, true that great powers have often resorted to the use of force to achieve their political objectives. However, even great powers do not want to live in a chaotic and lawless world. They prefer to live in an orderly world. At the same time, they claim to have the right to act against the law of nations when their vital interests are at stake. Life is, therefore, a constant struggle between the rule of law and the rule of might. It is the ambition of small countries to strengthen the rule of law and weaken the rule of might. It is the aspiration of small countries to curb the unilateral use of force by the great powers.

SINGAPORE'S RECORD
Fourth, as a small country, Singapore has worked with other like-minded countries to strengthen the rule of law. At the UN, Singapore has a consistent record of defending the principles of the UN Charter and standing up against countries which have violated them.

Thus, Singapore opposed Indonesia's invasion of Timor Leste in 1975, Vietnam's invasion of Cambodia in 1978, the Soviet Union's invasion of Afghanistan in 1979, the US invasion of Grenada in 1983 and Iraq's invasion of Kuwait in 1990.

Contrary to the realists' belief that power and force will always prevail over law and justice, I would point out that in all the five cases, the aggressor failed to achieve its objective and eventually withdrew.

Fifth, the World Trade Organisation (WTO) is a very important international organisation. It was founded in 1948 as the General Agreement on Tariffs and Trade (Gatt). Under Gatt, dispute settlement was voluntary and not mandatory. In 1995, Gatt was reincarnated as the World Trade Organisation. Unlike Gatt, under the WTO, dispute settlement is mandatory and not voluntary.

The good news from WTO is that in 90 per cent of the cases, including those involving the great powers, including China, the losing parties have complied with its decisions. Why do the great powers choose to comply? Because it is in their enlightened self-interests to do so. I personally chaired a dispute panel in 2000 to consider a complaint brought by Australia and New Zealand against the United States, alleging that the latter had violated its obligations under the WTO's Safeguards Agreement. The panel unanimously found in favour of Australia and New Zealand. The US appealed to the Appellate Body but was unsuccessful. In the end, the US complied with our decision.

GREAT POWERS' RECORD
Sixth, I will now briefly review the records of France, the United Kingdom, Russia and the US on their compliance or non-compliance with the rule of law. Let me begin with France.

In 1953, France and the UK brought their dispute over Minquiers and Erehos to the International Court of Justice (ICJ). France lost the case and complied with the court's decision.

In 1973, Australia and New Zealand brought a case to the ICJ against France to stop its nuclear tests in the South Pacific. The court issued an injunction for France to stop the tests. France carried out two more tests before stopping. In 1974, the court decided that it was unnecessary for it to issue its final judgment as France had agreed to stop further testing in the South Pacific.

In 2000, Seychelles brought a case against France to the International Tribunal for the Law of the Sea (Itlos). The dispute involved the quantum of a bond which France had imposed for the release of a Seychelles-registered ship, Monte Confurco. France had imposed a bond of 56,400 francs. Itlos reduced the amount to 18,000 francs. France complied with the tribunal's decision.

In 2001, Ireland unilaterally initiated arbitral proceedings against the UK regarding a MOX plant. The UK argued that the tribunal had no jurisdiction. The tribunal ruled that it had jurisdiction and the UK did not withdraw from the arbitration. The tribunal ordered the two countries to cooperate, to monitor the risks of the plant to the Irish Sea and to prevent pollution of the marine environment. The two parties agreed to cooperate and Ireland withdrew the case.

Last year, Mauritius instituted arbitral proceedings against the UK regarding the Chagos Marine Protected Area which the British had proclaimed in the Indian Ocean. Prof Allison has misunderstood the award of the arbitral tribunal. The issue in dispute was not the legality of the marine protected area but the failure of the UK to consult with Mauritius. The tribunal required the two parties to enter into negotiations on the protection of the marine environment in the Chagos Archipelago.

In 2007, Japan brought a case against Russia to Itlos for the release of a ship, Hoshinmaru, which had been detained by Russia. Japan complained that the bond imposed by Russia of 22 million roubles was excessive. Itlos ruled that the bond should be reduced to 10 million roubles. Japan paid the amount and Russia released the ship.

In 2013, the Netherlands unilaterally initiated proceedings against Russia concerning the arrest of a ship, Arctic Sunrise, and the detention of its crew. The Netherlands requested Itlos to order Russia to release the ship and the crew. Russia rejected the jurisdiction of Itlos and refused to participate in the proceedings. The tribunal proceeded in the absence of Russia. The tribunal ordered Russia to release the ship and its crew upon the posting by the Netherlands of a bond of €3.6 million. Three months after the ruling, the crew was released and the ship was released after another three months. Russia insisted that it was acting in accordance with its domestic law and not the ruling of Itlos.

U.S. TURNS ITS BACK ON ITS OWN VISION
At the end of World War II, the US had a vision. It wanted to replace a world of chaos and conflict with a new rules-based world order. The US led the way in the development of international law to limit the use of force, to protect human rights, to promote free trade and an open world economy. The world in which we live, the institutions of governance, the laws and rules are largely inspired by that American vision.

In recent decades, however, several US administrations seemed to have turned their back against their own creation. Invoking the mantra of American exceptionalism, the US has refused to ratify treaties it has signed, withdrawn from some others and violated some by which it is bound. Unlike his predecessors, however, President Barack Obama has tried to bring the US back to its historic position of upholding international law.

Prof Allison was right in referring to the Nicaragua Case as an example of how the US had ignored the decisions of international courts and tribunals. He did not, however, mention that President George H. W. Bush changed his administration's policy towards Nicaragua. He instituted an aid package of US$500 million for Nicaragua. Recently, the US paid Iran US$278 million (S$376 million) to settle a claim before the Iran-US Claims Tribunal. In 1996, the US paid US$61.8 million to Iran to compensate for the victims of the downing of Iran Air 655 by the USS Vincennes in 1988.

I shall conclude. We live in an imperfect world. All countries, big or small, wish to live in a peaceful and stable world. We all aspire to live in a world governed by law rather than by force. Do the great powers abide by the rule of law? The record is a mixed one. However, it would not be wrong to say that, most of the time, they do comply with international law and the rule of law. They do so not because of idealism but because it serves their interests.

As great powers, they help to shape our institutions and formulate our rules. Their interests are better served by a world of order rather than a world of anarchy. It is therefore incorrect for Prof Allison to say that the international legal institutions for dispute settlement are only for small powers.


  • The writer is chairman of the Governing Board of the Centre for International Law of NUS.

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Consultancy owner fined for lying about business activities to get cash payout

TODAY
16 Jul 2016
Iliyas Juanda

SINGAPORE — A business and consultancy owner has been ordered to pay a penalty of S$118,665.60 and a fine of S$4,500 for giving false information to the Comptroller of Income Tax in order to get a Productivity and Innovation Credit (PIC) cash payout for his business.

In default of paying the penalty and fine, K H Raja Mohamad Maiden will face 16 weeks and two weeks of imprisonment, respectively.

The 52-year-old had submitted an application for the credit payout on April 8, 2013, following which he incorporated and registered his business, Qaizar Consultancy, with the Accounting and Corporate Regulatory Authority (Acra) two days later.

In registering with Acra, Raja Mohamad had backdated his consultancy’s business commencement date to Oct 20, 2012, to qualify for the PIC claim for the relevant financial period between Oct 12, 2012, and Dec 31, 2012.

Investigations also revealed that Raja Mohamad had not conducted any business under his consultancy even though he had stated a revenue of S$80,000 in the PIC cash payout application form.

Raja Mohamad had also stated an incurred qualifying expenditure of S$98,888, which was purportedly for a software purchase.

Although the software purchase agreement and the purchase invoice was dated Dec 17, 2012, Raja Mohamad had signed the agreement and invoice only in early April 2013, around the same time that he had registered his consultancy with Acra.

As such, the software purchase was not within the relevant financial period.

Raja Mohamad had also agreed with the software vendor to backdate the PIC claim application even when the business, employees and the expenditure were not in existence during the relevant financial period.

Raja Mohamad was also found to have made a Central Provident Fund (CPF) online application for submissions of contributions to three local employees, who did not carry out any work for the consultancy, in May 2013.

He had admitted to backdating payments to CPF to qualify for the PIC cash payout.

The offence was detected when the accused’s application for the PIC cash payout was selected for review, resulting in no cash payout to him.

In a statement, the Inland Revenue Authority of Singapore said it takes a serious view of any attempts by claimants or vendors to defraud the Government.

Offenders convicted of PIC abuse will have to pay a penalty of up to four times the amount of PIC cash payout fraudulently obtained, or which would have been obtained if the offence had not been detected.

They can also be fined up to $50,000, or jailed up to five years, or both.

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Doc cleared over fake certs: Prosecution drops appeal

Straits Times
11 Jul 2016
K.C. Vijayan

She now plans to return to Myanmar to find out why her papers were deemed false

Prosecutors have dropped an appeal against the decision of a district judge to clear a Myanmar doctor of producing fake medical certificates.

The Straits Times understands that the decision was made after prosecutors reviewed the judge's grounds of decision.

For Dr Hnin Wai Hlaing, 40, this meant the end of a two-year ordeal.

"It was time my suffering ended and I am happy. I am really relieved now. I was very worried because I was uncertain about the appeal," she said in an interview with ST.

Dr Hnin had been charged with producing to the Singapore Medical Council two fake certificates of registration and good standing said to be issued by the Myanmar Medical Council (MMC) in order to satisfy practising requirements here.

She could have been fined up to $10,000, or jailed for up to two years, or faced both punishments.

But District Judge Kamala Ponnampalam in judgment grounds released last month said the prosecution had not proven that the two certificates were fraudulent.

She made clear, among other things, that just because Dr Hnin was not on the MMC's registration list did not mean that her certificates from Yangon were counterfeit.

In court, the prosecution's case rested on the strength of the MMC's manual records. The prosecution had invited the court to infer that Dr Hnin's certificates were fraudulent because she was not on the MMC's register of doctors.

But the judge noted that a key witness from the MMC had conceded it was hard to say if Dr Hnin's registration certificate was false as the MMC has many versions ofit.

A graduate from the University of Medicine 1 in Yangon in 2004, Dr Hnin worked as a doctor there before moving to Singapore in 2008.

The judge found no dispute that Dr Hnin had graduated as a doctor, noting she "had no reason not to register herself with the MMC or to subsequently produce fraudulent certificates".

Dr Hnin said she planned to return to Yangon to find out what happened. "I was shocked but I just carry on day to day and try not to think about the case," she said, when asked how she coped.

Her former employer, Singapore General Hospital (SGH), had carried out a verification check with the MMC and terminated her contract in 2014 after a probe.

Dr Hnin thanked her lawyer, Mr Peter Ong, for his efforts and for employing her part-time when she was jobless. She added that she kept the case to herself and did not tell her father in Yangon.

A senior consultant at SGH, where Dr Hnin worked as a clinical associate in the department of internal medicine in 2013, lauded her competence, enthusiasm and compassion in a testimonial to the court.

Her job experience here also included a two-year stint at the National Cancer Centre where she came into contact with cancer patients and their families, she said.

Testimonials about her work performance at the centre were also tendered in court.

She often started at 7am and finished around 8pm, and was described as a very hardworking and pleasant doctor who performed well with colleagues, treated patients compassionately and had the aptitude to become a well-accomplished clinician.

Dr Hnin, a permanent resident here who now works for a pharmacy, furthered her medical training here and is in the final leg of qualifying for a postgraduate degree which leads to membership of the Royal College of Physicians in Britain.

"I am grateful for the training and experience I have received in Singapore and appreciate the fair justice system here," she said.


HAPPY IT'S ENDED

It was time my suffering ended and I am happy. I am really relieved now. I was very worried because I was uncertain about the appeal.

DR HNIN WAI HLAING

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Swab from woman not tested due to mix-up

Straits Times
22 Jul 2016
Selina Lum

Medical examination of alleged victim also did not detect any bleeding or external injuries

A vaginal swab taken from a woman who was allegedly raped by her biological son was never tested for semen because of a mix-up.

The High Court heard this on the sixth day of an ongoing rape trial which, so far, has not thrown up conclusive physical evidence against the accused.

The 33-year-old man is charged with raping and molesting his mother, 56, after he returned home at about 2.30am on Oct 4, 2013.

He is the second of the woman's three sons from her first marriage, and lived with her and his stepfather in a one-bedroom flat.

His lawyer said earlier that his mother and stepfather had conspired to accuse him of rape, in a bid to make him leave the flat.

Yesterday, Singapore General Hospital (SGH) gynaecologist Tan Wei Ching testified about her medical examination of the woman, just hours after the alleged rape.

The issue of the vaginal swab taken from the woman to test for semen arose when Dr Tan was questioned by defence lawyer Andy Lem about an e-mail sent by the Health Sciences Authority (HSA) in May 2014 asking about the whereabouts of the swab.

Dr Tan said that the swab, which was placed in a wet container, was sent from SGH to HSA on Oct 4 - the day of the alleged rape and the day the swab was taken - but was rejected by HSA as it was in an "inappropriate medium".

Three days later, the swab was returned to SGH's accident and emergency (A&E) department. But Dr Tan said she was unaware of this.

Further investigations showed that after receiving the swab, SGH's A&E department forwarded it to the hospital's microbiology laboratory.

Mr Lem said it was "a bit surprising" that Dr Tan was notified by HSA only about six month's later, in May 2014. "I'm surprised too," she replied. Dr Tan was not asked in court why the swab was placed in a wet container.

On the first day of the trial, a DNA analyst from HSA had testified that it was the practice to use dry containers as moisture could contaminate the swab.

Dr Tan was also questioned about her examination of the alleged victim. In her report, Dr Tan said she did not detect any bleeding, open wounds, bruising or lacerations on the woman's body.

Mr Lem suggested that, given the woman's account of the sexual assault, it was more likely than not that she would have suffered physical injuries. Dr Tan said it was possible but said the absence of injuries did not mean that the assault did not take place.

Gynaecologist Tan Wei Ching said that the swab, which was placed in a wet container, was sent from SGH to HSA on Oct 4 - the day of the alleged rape and the day the swab was taken - but was rejected by HSA as it was in an "inappropriate medium".

Source: Straits Times © Singapore Press Holdings Ltd. Permission required for reproduction.

Terror threat a factor in bail system review

TODAY
15 Jul 2016
Valerie Koh

SINGAPORE — In the face of evolving threats, including that of terrorism, the ongoing review of the bail framework will take into account the experiences of other countries, including how they handle terror suspects, said Law and Home Affairs Minister K Shanmugam.

Addressing about 200 local and foreign lawyers at the 3rd Criminal Law Conference on Thursday (July 14), Mr Shanmugam cited how British terror suspect Siddhartha Dhar had been arrested six times for terror-related offences, yet was granted bail in September 2014. Two days later, he and his family of five left London on a coach, and he later resurfaced in Syria.

Dhar was named in January as the narrator in an ISIS film showing the execution of suspected spies against the terror organisation.

“We have not faced such situations but in the context of evolving threats, we’ve decided that we need to relook our framework relating to bail,” said Mr Shanmugam, who had announced a review of the bail framework in December 2014 in the wake of the deadly Sydney siege.

“We have a system on bail which can be quite robust. People get bail when they ought to. When there is potential for them to abscond or interfere with witnesses, of course, the courts generally deny bail,” he added.

Mr Shanmugam called for the review amid revelations that the gunman behind the Sydney siege, Man Haron Monis, was granted bail despite facing charges of being an accessory to the murder of his former wife.

The Ministry of Law had added the review is “to ensure that the regime remains robust and protects public safety, without detaining the accused unnecessarily in remand before trial”.

The last update of the bail framework was made in January 2012 such that a suspect facing charges punishable with life imprisonment or death will be denied bail.

In May this year, a High Court judge revoked former BSI wealth planner Yeo Jiawei’s bail of S$600,000, ruling that he was likely to interfere with investigations and destroy evidence. Yeo, who is currently in remand, is accused of receiving ill-gotten gains linked to scandal-hit Malaysian state investment fund 1MDB.

Details of the current review of the bail framework will be announced later.

The Law Society of Singapore’s criminal practice committee co-chair Wendell Wong hopes the upcoming bail framework reform can be sufficiently targeted and adaptive, given the constant changes to the legal landscape, and take into account new crime trends such as the rise in cybercrime and the threat of terrorism.

Defence lawyer Shashi Nathan said he hoped the review would consider a suspect’s financial standing, when the courts decide on his bail amount.

“We want to avoid those situations where foreign workers are arrested and have to stay inside because they can’t afford to pay bail,” he said.

During his speech, Mr Shanmugam also spoke about other changes to the criminal justice system that are being studied, including to court procedures and the introduction of video recording of interrogations.

He said: “(It’s) timely to review these processes. How many of them are relevant? Do they help in efficiency? And in the context of introducing video recording, what changes do we need to make?”


More flexibility in community-based sentencing possible: Shanmugam

SINGAPORE — Community-based sentencing has proven successful so far, and the courts can be given more flexibility in this aspect, said Law Minister K Shanmugam.

Speaking at the 3rd Criminal Law Conference on Thursday (July 14), Mr Shanmugam cited the case of a sales manager who was nabbed for theft. The judge decided against imprisonment and focused instead on rehabilitation, ordering the man to complete 160 hours of community service. After clocking the hours, the man continued to volunteer together with his wife.

“So it’s possible to reform, change. You don’t always have to send people to prison. You don’t have to send everyone to prison,” said Mr Shanmugam, who is also Home Affairs Minister. “We’ll look at how from a policy perspective, there can be more scope for community-based sentencing and more flexibility.”

During the opening of the legal year in January, Attorney-General V K Rajah had said that his team would consider all possible options — including community sentences — for minor offences. Currently, such sentences are applicable to criminals who have not been jailed before, and have committed petty crimes.

The criminal justice system should focus on “keeping people out” after they serve their term, instead of merely focusing on nabbing criminals.

“I have put in a lot of emphasis in Home Affairs to focus on the post-release phase: Handholding, trying to find jobs for them, working with employers ... we are working on plans for that, to try to get the recidivism rate even lower,” said Mr Shanmugam.

The recidivism rate — or the percentage of local inmates who re-offended within two years from their release — was 25.9 per cent for the cohort released in 2013, and 27.6 per cent in 2012. In other comparable cities, said the minister, this is as high as 60 per cent.

Regardless of the city or country, the reasons were obvious, he added.

“When you come out, you are particularly vulnerable and the very people who got you into trouble in the first place are the people who come looking for you when you come out ... Very soon, you will find yourself back in prison.”

In his speech, Mr Shanmugam also noted that while Singapore has reduced its crime and drug rates, with citizens having trust and confidence in the justice system: “I tell the police not to self-congratulate too much ... as we look forward, we must know why we are here (and) what are the good parts of the system, and make sure we don’t alter them. Keep to the fundamentals and at the same time, evolve.”

Commenting on the emphasis on community-based sentencing at the conference, lawyer Shashi Nathan hopes the courts can be given more discretion. There have been many cases where the court has its “hands tied” because the crime was not on the list of acceptable offences for community-based sentencing, he said.

Lawyer Wendell Wong, co-chair of The Law Society of Singapore’s criminal practice committee, wants to see community-based sentencing become more holistic. “My main hope is that we can consider not just looking at the crime purely ... but also to look at it from the perspectives of the accused, the victim and the society.”

Noting that an offender has a clean record at the end of the sentence, Mr Shashi said: “It sends a correct message but also gives the offender a chance to rebuild his life.”

Copyright 2016 MediaCorp Pte Ltd | All Rights Reserved

Estate of reclusive sisters now open to claims

Straits Times
10 Jul 2016
Tiffany Fumiko Tay

The single-storey terrace house at 17 Jalan Batai, in which the skeletons of two elderly women were discovered - nearly a decade apart - may soon lie empty no more.

In an unprecedented move, the Public Trustee's Office (PTO) is asking interested parties to submit their claims on the estate of the sisters - Pearl and Ruby Tan - which includes the house owned by Pearl, by July 31, a PTO spokesman said.

While there is now one claim on the estate by a cousin on the maternal side, a Sunday Times report on the Tan sisters in May that quoted a cousin on the paternal side "brought up the possibility that there could be more surviving cousins, so this motivated us to reach out to The Straits Times", the PTO spokesman said.

"We thought that it would be better for anyone that has a claim to come forward so that we can assess them all together."

Two nephews and a niece on the paternal side have also expressed interest in claiming the estate following recent media coverage, said the spokesman, though none have done so officially.

Pearl and Ruby Tan would have been 81 and 68 in 2006, when a skeleton was found in the toilet of the house they lived in by National Environment Agency officers.

Last September, a worker clearing rubble from the guest room found a skull and a thigh bone.

An open verdict on the latter set of remains was entered in May, echoing the decision reached in the earlier case. Foul play was ruled out in both cases, and neither set of remains could be identified.

Neighbours and relatives told The Sunday Times in May that the sisters had not been seen in over a decade.

The High Court issued an order last June that both sisters be presumed dead; as they left no known will and have no legal beneficiaries, their assets go to the State under the Intestate Succession Act.

However, under the Civil Law Act, any person can make a "moral or equitable claim" on a bona vacantia - ownerless estate - by demonstrating their link to the deceased.

The PTO, under the Ministry of Law, administers such claims.

Considerations for bona vacantia claims include the length and nature of the relationship between the deceased and claimant, any legal or moral obligations which the deceased had towards the claimant and any contribution made by the claimant to the welfare of the deceased while alive. If the Law Minister is satisfied with the claim made, he can disclaim and release either part or all of the Government's right to the estate to the claimant.

As part of the verification process for the Tan sisters' case, PTO deputy director Tan Yu-Wen spent three weeks searching the National Library Board's digital newspaper archives, and pieced together a family tree that includes Pearl and Ruby's parents, grandparents, aunts and uncles on both sides.

She said: "We don't usually do family trees - this case is unique, as typically the claimants in such cases are foster children who have not been legally adopted by the deceased, so it is quite straightforward."

The PTO could not disclose the value of the Tan sisters' estate or other assets belonging to them, though the spokesman said that typical assets forming an estate include cash and shares.

SLP International Property Consultants' executive director, Mr Nicholas Mak, said that it is hard to estimate the value of 17 Jalan Batai without knowing its land area.

But he noted that a three-storey house on the same street had sold for $3.75 million last month.

While there may be more claims to come, Madam Phyllis Tan, a paternal cousin who was once close to Pearl, will not be one of them.

Said the 84-year-old: "I'm not interested. I just want to keep the memories of Pearl and Ruby."

Source: Straits Times © Singapore Press Holdings Ltd. Permission required for reproduction.

Bankrupt jailed 7 years for cheating duo out of $2.4m

Straits Times
22 Jul 2016
Amir Hussain

A 48-year-old unemployed trickster cheated two men, including his friend of nine years, out of a total of $2.36 million and used the money to pay off his debts to loan sharks and fund a lavish lifestyle, including renting a BMW vehicle for $300 a day.

Yesterday, Don Brendan Robert was jailed for seven years, having earlier pleaded guilty to 25 out of 450 charges of cheating. The remaining 425 counts were taken into account during sentencing.

A district court heard that in August 2011, Robert, an undischarged bankrupt, lied to his friend, Mr Alan Lye Cher Kang, 44, that he was the beneficiary of an inheritance from his late father.

Robert had met Mr Lye in 2002, when they were involved in a gold brokering business. Mr Lye is a contractor in the business of constructing, fabricating and installing aluminium and glass works.

Robert said the inheritance money had, however, been seized by the Government and was frozen by the police's Commercial Affairs Department (CAD). He lied that various processing fees and administrative charges had to be paid in order to release the supposedly frozen funds.

For the next three years, until August 2014, Robert came up with tall tales for his friend. He told Mr Lye various stories about purported dealings with several banks such as DBS, United Overseas Bank, OCBC and Citibank; government agencies such as CAD and the Inland Revenue Authority of Singapore; and other entities such as the Commissioner of Oaths and insurance companies.

Robert asked his friend for help in making payments for various processing fees and administrative charges. In return, he promised Mr Lye a portion of his inheritance when it was released.

Mr Lye transferred about $175,000 to Robert until May 2012, when he ran out of money to help his friend, having already borrowed from other friends and relatives.

In June 2012, Mr Lye turned to his friend Bay Lim Piang, a 65-year-old retiree and former businessman, whom he had known since 2000.

Between that month and August 2014, Mr Lye transferred $2,182,926 - all from Mr Bay - to Robert.

Robert even told Mr Lye to tell Mr Bay, who used to be in property development, that he could manage the inheritance properties left behind by his late father. Robert also said Mr Bay would be paid a token sum, once the frozen funds were released.

Deputy Public Prosecutor Muhamad Imaduddien asked for a stiff sentence for "an unscrupulous trickster", noting that Robert was motivated by greed and all the money he cheated went towards paying his debts and living it up - in addition to renting the car, he rented a room from a friend in Wak Hassan Drive for $1,200 a month.

The prosecutor also noted, among other things, that Robert's crimes were premeditated and deliberate.

Robert has not paid back any money to Mr Lye or Mr Bay.

His sentence was backdated to November 2014, when he was remanded.

He could have been jailed for 10 years and fined for each cheating charge.

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Suit over condo defects settled out of court

Straits Times
15 Jul 2016
Selina Lum

Residents of The Seaview condominium who brought a $32 million lawsuit against four parties involved in the development over alleged defects in the estate have settled the case out of court.

The management corporation (MC) of the Amber Road condo had sued developer Mer Vue Developments, a subsidiary of Wheelock Properties; main contractor Tiong Aik Construction; RSP Architects Planners & Engineers; and engineering firm Squire Mech.

The trial was originally scheduled to start in the High Court last Tuesday, but did not start after the MC settled its case against Squire Mech. Separate settlements with Mer Vue, Tiong Aik and RSP were reached later. The terms are confidential.

The settlements come in the wake of a High Court ruling in March that the developer, main contractor and architect can rely on the independent contractor defence.

The ruling effectively limited the amount of damages the home owners can get if they win the case.

The Seaview, which was completed in 2008, comprises six blocks with a total of 546 units.

In 2011, the MC filed the suit on behalf of homeowners, alleging defects including foul odours, falling concrete blocks and popping swimming pool tiles. The amount of damages sought at the time was $14 million, but later grew to $32 million.

Mr Melvin Chan, who acted for RSP, said yesterday: "Our clients are happy that the case has been settled and can find closure on this chapter."

Source: Straits Times © Singapore Press Holdings Ltd. Permission required for reproduction.

Lawyer struck off rolls for dereliction of duty

Straits Times
09 Jul 2016
Selina Lum

A lawyer had agreed to be the figurehead director of a law firm after he was approached by two fellow practitioners who were not supposed to handle clients' money.

But Mr Krishna Morthy S.V., 61, shirked his management duties and left the running of the firm to the office manager, who allegedly embezzled $108,000.

Yesterday, Mr Morthy, a lawyer for 22 years, was struck off the rolls by a Court of Three Judges.

"This is a tragic and deplorable case where, because of (Mr Morthy's) gross dereliction of duties, a client of his firm has suffered great loss," said Chief Justice Sundaresh Menon.

On the surface, Mr Morthy was the sole director of Frontier Law Corporation and employed the other two lawyers as "legal assistants".

But Frontier was effectively controlled by Mr Mohd Sadique Ibrahim Marican and Mr Anand Kumar Toofani Beldar, who had promised Mr Morthy $7,500 a month for his role. Before Frontier was set up, Mr Sadique and Mr Anand were partners at the same firm as runaway lawyer Zulkifli Mohd Amin, who skipped town in November 2007 after allegedly embezzling $11 million and is still at large.

While investigations were ongoing, the pair each gave an undertaking to the Law Society that they would not handle clients' money.

To circumvent the undertaking, in May 2008, they asked Mr Morthy to be a figurehead director of Frontier. Mr Sadique's elder brother Ebrahim Marican Batcha Sahib, who is not a lawyer, worked at the firm as an office manager.

All three lawyers, including Mr Morthy, eventually left Frontier. Mr Morthy, who never received the promised pay, took on work from another firm.

This allowed Ebrahim to have free rein over the firm and, in 2012, he allegedly siphoned $108,000 which he had told a client to deposit into the firm's account.

Yesterday, the Law Society's counsel, Mr Subramanian Pillai, argued that a striking-off was warranted.

The court agreed, noting Mr Morthy's "egregious breach" in helping Mr Sadique and Mr Anand "beat the system of safeguards that had been put in place to preserve public confidence in the profession and to avoid this very situation".

Source: Straits Times © Singapore Press Holdings Ltd. Permission required for reproduction.

Identity theft by brother lands him in big trouble

Straits Times
22 Jul 2016
Adrian Lim & Seow Bei Yi

Older brother gets more jail time after mix-ups over the years cause younger sibling much grief.

In the last five years, he has been wrongfully arrested while trying to leave Singapore, summoned to court to pay a $15,000 bail he did not put up, and had his identity fraudulently used to apply for jobs.

Mr Mohammad Rizal Mohd Sabri, 27, a delivery rider, has had to explain himself time and again to the authorities - because his older brother had been impersonating him.

While his sibling Muhammad Redzuan Mohd Sabri, 28, had been sentenced to jail last year for the impersonation offences, it did not spell the end of trouble for Mr Rizal.

On Wednesday, Redzuan pleaded guilty in court to three new charges, with three others taken into consideration. The charges include impersonating Mr Rizal to change his SingPass password, and applying for duplicate driving licences.

Redzuan, who was on the same day sentenced to eight months' jail, was also found to have misappropriated $700 from a courier company he worked for - a crime which resulted in Mr Rizal being arrested at the Woodlands checkpoint in January. He was transferred to the Bedok Police Division and questioned before being let off.

Mr Naresh Kumar Maryapan, the director of the courier firm, Saiwah Enterprise, said he verified through police photographs that they had arrested the wrong person. He added: "The man who took the $700 had applied for a job using a photocopy of Mr Rizal's NRIC and a driving licence made in Mr Rizal's name."

While Redzuan will go to jail again - he has already served a 17-month sentence and been fined $700 for various offences - the mix-ups over the years have caused Mr Rizal much grief.

Redzuan has impersonated his younger sibling on over a dozen occasions over four years.

"My reputation was tarnished," said Mr Rizal.

Redzuan began impersonating his younger brother in 2011, lodging a police report to say that he lost a wallet, NRIC and driving licence. Redzuan used this report to identify himself as his brother, to further his "impersonation exploits", court documents read. A year later, he took Mr Rizal's driving licence. Mr Rizal told police that his military identity card and a photocopy of his NRIC also went missing.

Redzuan found employment in 2013 as a delivery driver in two different companies and registered a mobile phone line in Mr Rizal's name - racking up a bill of over $1,300. In 2014, Redzuan used a photocopy of Mr Rizal's NRIC to post a $15,000 bail for an accused person. Mr Rizal said he was shocked to be summoned to court when the accused person, whom he does not know, jumped bail. That year, Redzuan also made his brother take the rap after he was caught driving a lorry without a licence.

The incidents have soured their relationship. Mr Rizal said with a sigh: "We don't talk any more. He has caused me a lot of trouble."

He cannot change his identification number, but Mr Rizal plans to change his name in September to stop his identity from being misused.

Security experts said Mr Rizal's case illustrates the need for individuals to safeguard their personal information, like NRIC numbers and identity cards, which can be misused if they fall into the wrong hands.

Mr T. Mogan, managing director of Dragnet Private Investigation and Security Consultants, said: "If you suspect that you are a victim of identity theft, immediately go to the police and let them know to whom and when you divulged your personal information ."

Mr David Ng, director of DP Quest Investigation Consultancy, said that as a driving licence bears the same identification number as an IC, many banks and authorities accept it as a valid form of identification. "Checks by service providers may not be stringent enough."


MISUSED IDENTITY

My reputation was tarnished... We don't talk any more. He has caused me a lot of trouble.

MR MOHAMMAD RIZAL MOHD SABRI, on how his older brother's impersonation offences have soured their relationship

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Competition watchdog looks into supply of HDB lift spare parts

Business Times
15 Jul 2016
Renald Yeo

Inability of third-party service contractors to source for original parts poses significant operational issues, it says

[Singapore] A SPOTLIGHT has been thrown on proper lift maintenance following a string of high-profile incidents that left one man dead and others injured in recent months.

But within the industry, there have been restrictive practices in the supply of lift spare parts - key for a proper maintenance regime - for public housing estates here, the Competition Commission of Singapore (CCS) said on Thursday.

The competition watchdog, acting on a complaint it received, has begun investigations into an allegation that several companies were refusing to supply spare parts for elevators installed in HDB estates.

The identities of the companies were not disclosed.

In general, a supplier has the freedom to decide who it wants to do business with, the CCS said. "However, a refusal by a dominant or sole supplier to supply certain essential products or services . . . can be illegal and in breach of the Competition Act," it added.

Typically, multiple brands of elevators are installed in each HDB estate.

Town councils, which are required by law to carry out regular maintenance services for lifts in HDB estates, can either appoint the original lift installers from the respective brands or call for a public tender.

Engaging a third-party lift maintenance company to service multiple brands could provide cost savings, as opposed to procuring the services of the original installers, CCS said.

However, contractors who are not able to procure proprietary spare parts from a particular brand may be hamstrung from effectively competing for contracts to service lifts of that brand.

"The inability of third-party . . . contractors to source for original parts . . . poses significant operational issues," said CCS chief executive Toh Han Li.

However, a solution for the affected contractors has been made available. In May, property management firm E M Services voluntarily came forward to supply a brand of lift parts to third-party contractors.

"This will provide more options . . . as town councils can . . . call for a single tender for lift maintenance across various lift brands, in lieu of contracting with multiple parties," Mr Toh said.

Following feedback from a public consultation, the CCS said that it considers competition concerns brought up by firms to be fully addressed.

The watchdog also urged businesses to "proactively put in place competition compliance programmes" to ensure that they meet compliance standards.

Under the Competition Act, a financial penalty of up to 10 per cent of the annual turnover of a business - for up to three years - can be imposed on infringing firms.

Source: Business Times © Singapore Press Holdings Ltd. Permission required for reproduction.

Judge dismisses worker's injury claims

Straits Times
09 Jul 2016
Olivia Ho

His employer had seen to his medical bill and extra surgery, but he still sued for more

A judge has dismissed a case by a construction worker who took his employer to court after he caused himself a minor eye injury at work.

In a judgment on Monday, District Judge Chiah Kok Khun called Chinese national Wang Baoshun "wholly opportunistic" for using the accident to try and get more money from his former employer, B19 Technologies. Even though the firm had paid his medical bill, and picked up the tab for additional surgery to fix a childhood eye condition, Mr Wang sued it for compensation 11/2 years after the accident.

The 36-year-old from Jiangsu province had been nailing a corrugated metal sheet to a timber plank at a Beach Road construction site in May 2013. The nail he was hammering suddenly broke, and a piece of it flew into his left eye.

Mr Wang went to hospital, where he was diagnosed with a slight corneal abrasion and given seven days' medical leave.

According to a medical report from the Singapore National Eye Centre, the wound healed completely in a matter of days. Mr Wang continued working for B19 for a year.

He later asked for surgery to fix the aphakia in his left eye, a condition in which the lens of the eye is absent. He had had aphakia for 25 years, resulting in poor vision.

B19 Technologies footed the $9,000 bill to implant a secondary lens in Mr Wang's eye in May 2014. The firm also continued paying him his monthly salary of $3,000 while he recovered.

In August that year, Mr Wang said he wanted to return to China. B19 bought him an air ticket and also gave him a goodwill sum of $1,500. In September, he returned to Singapore to claim damages from B19 through Hoh Law Corporation. He insisted he had suffered a "serious" eye injury through its negligence.

B19 managing director Kang Choon Boon, 58, told The Straits Times that he had felt "betrayed". The company had spent $13,000 on Mr Wang due to the incident.

When Mr Wang joined it in 2012, Mr Kang found him hard-working and considered grooming him to be a supervisor.

He said: "We treated him with all the kindness and support we could give. We never thought he would turn around and do this."

Mr Wang maintained B19 had failed to provide him with safety goggles while he was working.

But when cross-examined by B19's lawyer, Mr Raymond Lye of Union Law, he admitted that he had been given goggles but had not felt the need to wear them that day.

Judge Chiah wrote in his judgment: "When we hear of a foreign worker injuring himself as a result of an industrial accident, we are instantly moved to sympathy.

"However... not every employer of an injured worker is the callous businessman in relentless pursuit of profits, no more than every injured worker is the hapless victim of an employer's oversight."

The judge concluded that "such a litigious approach should not be encouraged among workers in Singapore", adding that he will hear both parties on the settling of legal costs.

Source: Straits Times © Singapore Press Holdings Ltd. Permission required for reproduction.

Road map for Singapore debt-restructuring hub

Straits Times
21 Jul 2016
Geraldine Goh

Panel hands recommendations to Govt on enhancing framework

Sweeping reforms are on the table as part of moves to strengthen Singapore as a centre for debt restructuring, which involves helping troubled companies renegotiate their debts.

The Government, which wants Singapore to grab a bigger slice of what is a fast-growing business, was handed a road map yesterday in the form of 17 recommendations from a review committee. Its proposals fall into three key areas.

One involves enhancing of Singapore's legal framework for restructuring by creating customised rules and procedures.

This includes a specialist insolvency Bench for restructuring cases comprising both Singapore and international judges.

The committee also recommended that the Singapore International Arbitration Centre and the Singapore Mediation Centre develop rules for insolvency and restructuring. It also proposed increasing the availability of rescue financing and strengthening the insolvency profession through multidisciplinary training.

The 17-member committee, which comprised lawyers, insolvency and other financial professionals, and Monetary Authority of Singapore officials, wants to attract distressed debt financiers and specialists to Singapore.

It also wishes to raise international awareness of Singapore's restructuring regime and capabilities through increased involvement in international insolvency organisations and research.

Committee co-chairman Indranee Rajah said commercial laws would be modernised to implement the recommendations and proposals. New legislation to strengthen the legal framework is likely to be presented to Parliament within the next six to nine months in the form of a new Omnibus Insolvency Act.

Ms Rajah, who is also Senior Minister of State for Law and Finance, said Singapore has a trusted judicial system which gives the country an advantage when offering debt-restructuring services.

"Singapore can be a global debt-restructuring centre like New York or London," she noted during a briefing yesterday.

"International arbitration has been going on for many years. Building Singapore to be a global services hub, we need lawyers, accountants and financiers as well to create a buzz of activity.

"We need to generate a new type of rescue financing with the injection of new money.

"Even though the global economy is sluggish, Asia will be the fast-growing place where more economic activity is going forward with more cross-border activity. We can build an economy that can supply this service to the region."

Ms Rajah said the committee, which started work in May last year, had reviewed Chapter 11 of the United States Bankruptcy Code which prevents creditors from winding up a financially distressed company while it attempts to find ways to restructure its debts.

Committee member Manoj Pillay Sandrasegara believes the introduction of the Omnibus Insolvency Act containing the new recommendations is the right step in establishing Singapore as Asia's pre-eminent debt-restructuring centre.

Mr Sandrasegara, a partner at WongPartnership, said the new regime will provide for an automatic moratorium of 30 days to provide time for the company to undertake restructuring efforts.


Two cases involving insolvency and debt restructuring

CHINA FISHERY GROUP

One of the more complex debt restructuring cases is that of the China Fishery Group, a Singapore-listed company involved in fishmeal and fish oil production. Negotiations on its debt restructuring could take between six months and two years. Discussions have to take place between creditors and the company on cash and company receivables, among other matters.

BERLIAN LAJU TANKER

Berlian Laju Tanker (BLT), a liquid bulk cargo firm listed on the Singapore and Indonesian bourses, sought a moratorium from the Singapore court against creditors while it restructured its debts. Petitions were presented in the US courts seeking recognition of the Singapore proceedings under Chapter 15 of the US Bankruptcy Code. The US courts granted an interim injunction against all enforcement against BLT's vessels by creditors.

Source: Straits Times © Singapore Press Holdings Ltd. Permission required for reproduction.

Lawyer fined $7,000 over blogger case

Straits Times
15 Jul 2016
K.C. Vijayan

M. Ravi admits failing to forward money that activist gave him, denigrating him in video

Lawyer M. Ravi was handed $7,000 in penalties by a disciplinary tribunal after he admitted to denigrating activist blogger Roy Ngerng in a video clip and failing to forward $29,000 from Mr Ngerng to a third party.

A disciplinary tribunal appointed by Chief Justice Sundaresh Menon and comprising Senior Counsel Chan Leng Sun and lawyer Ronald Choo accepted that Mr Ravi was afflicted with bipolar disorder then, noting there was " some evidence" he had been on medication.

But it made clear that such mitigating factors did not "completely exonerate" him. "His conduct was not acceptable," it said in decision grounds released yesterday.

Mr Ravi, 45, had then been acting for Mr Ngerng in a defamation suit by Prime Minister Lee Hsien Loong, represented by Drew & Napier.

He acknowledged that Mr Ngerng had given him $29,000 in January last year to be paid to Drew & Napier in compliance with court orders made in the suit. He failed to do this and, about 10 days later, returned the cash to Mr Ngerng, telling him to pay Drew & Napier himself.

Five days later, Mr Ravi in a video clip spoke against Mr Ngerng, alleging among other things that Mr Ngerng sought to leave the country with monies which belonged to the public in a "legal fund".

His lawyers Eugene Thuraisingam and Suang Wijaya argued that his bipolar disorder relapse should excuse him, adding that there was no dishonesty or deceit on his part.

Lawyers Sean La'Brooy and Michelle Chua prosecuted for the Law Society and psychiatrist Tommy Tan confirmed that Mr Ravi's relapse mitigated his misconduct.

Mr Ravi, currently a non-practising lawyer, was ordered to pay $2,000 for the misconduct charge and $5,000 as penalty for his improper utterances in the video clip.

Separately, three senior lawyers face disciplinary action before the Court of Three Judges for professional misconduct following two separate tribunal probes. The court is the apex body to deal with professional misconduct by lawyers.

Lawyers Sum Chong Mun and Kay Swee Tuan were implicated in a case involving the issue of a certificate for a lasting power of attorney in which the former had not personally witnessed the signature of the donor on the document.

Ms Kay, who retired last year, had asked Mr Sum to sign as witness to the donor's signature, which had already been pre-affixed.

Lawyer S. Udeh Kumar was referred to the three-judge court by a tribunal comprising Senior Counsel Kenneth Tan and lawyer Tan Gee Tuan for being "a serial offender of wasting expense and the Court's time" and ordered to pay $25,000 in relation to two other charges.

Source: Straits Times © Singapore Press Holdings Ltd. Permission required for reproduction.

Cooperate over Punggol East's accounts: Apex court

Straits Times
09 Jul 2016
Lim Yan Liang

CJ Menon tells AHTC and PRPTC to let their accountants work with each other, share data

The Court of Appeal has directed the accountants of two town councils run by rival political parties to work with each other and share documents the other side would need.

"They should communicate directly with one another and afford each other such access as they reasonably will require to safeguard each party's interest," Chief Justice Sundaresh Menon said, referring to KPMG, appointed by the Workers' Party-run Aljunied-Hougang Town Council (AHTC), and Pricewaterhouse Coopers (PwC), appointed by Pasir Ris-Punggol Town Council (PRPTC) which is under the charge of the People's Action Party (PAP).

Yesterday's hearing came after AHTC declined to give PwC documents it had requested. Instead, it asked the Housing Board - which oversees town councils - to seek clarification from the courts.

CJ Menon said both sides agree that PRPTC has an interest in making sure the accounts of Punggol East single-member constituency are in order. Although KPMG is already looking into the accounts, this should not stop PwC from doing the same, he added.

He also noted that Mr Peter Low, AHTC's lawyer, agreed that Punggol East has an interest in the outcome of the accountants' findings.

"The way forward is really to let the professionals - PwC and KPMG - talk to each other and let them work out their issues," said CJ Menon. Should a specific difficulty arise during the discussions of access, "then the affected party may apply to the court for directions".

KPMG was appointed by AHTC to look into its accounts after a long- drawn saga over its predecessor failing to submit clean and complete accounts since 2011. There were also governance and financial lapses.

The appeals court then ordered the appointment of independent accountants last November to see, among other things, if any past payments made were improper.

Following yesterday's hearing, all parties issued statements.

AHTC said PwC's appointment was "a duplication of the work being done by KPMG", and added that it was "funded by the public purse''.

In response, the HDB said it had suggested last December that both town councils jointly appoint accountants precisely "to avoid duplication of effort, competing access to documents, and incurring unnecessary costs".

But AHTC refused. It also refused to attend meetings the HDB had called to coordinate the work of the two accountants, said the HDB.

In separate Facebook posts, Punggol East MP Charles Chong and PRPTC chairman Zainal Sapari said the appointment of PwC was necessary to ensure the constituency's monies had not been misused.

They also said AHTC had dragged its feet for seven months and given excuses for not giving PwC access to the necessary documents.

Mr Chong added: "My question is, what is it they have been afraid of all this while? Our residents' funds are involved and all we are doing is to make sure that our residents' monies haven't been misused."

The latest disagreement arose after Punggol East single-member constituency changed hands at last year's general election. After the PAP took it back, it came under PRPTC again.

Chief Justice Menon, when giving the court's decision, noted "a lot of heat in the long documents that have been filed", and questioned if it was necessary to come to court over what seems largely an operational issue.

Ms Aurill Kam of the Attorney- General's Chambers, acting for the HDB, said KPMG was willing to share the documents with PwC but could not get AHTC's approval.

When the hearing began, CJ Menon noted the absence of PRPTC's lawyers and expressed surprise as the hearing was about safeguarding the interests of Punggol East.

He said: "I find it a little surprising that their response to this is they don't need to attend, that they don't want to attend, and that really raises the question as to why we are here."

Source: Straits Times © Singapore Press Holdings Ltd. Permission required for reproduction.

Courting diversity?

Straits Times
21 Jul 2016
K.C. Vijayan

Singapore has appointed its first woman judge to the Court of Appeal. There are more women judges now. But might the Bench benefit from even more diversity - such as more senior talent from the Bar, rather than the public and academic spheres?

The appointment last month of Singapore's first woman as a permanent judge of the Court of Appeal, Justice Judith Prakash, comes at a time when the United Kingdom is poised for a shake-up to ensure gender equality on the Bench.

In Britain, there appears to be only one woman on the Supreme Court of 12 justices, and just eight out of 38 appeal court judges are women.

Last October, the Lord Chief Justice, Lord Thomas of Cwmgiedd, was reported to have said that "too few" women lawyers reached the top of the UK's judiciary and called for a diverse judiciary that was important to both public confidence and fairness.

Here in Singapore, Justice Prakash's elevation from the High Court to a Judge of Appeal of the Supreme Court comes some 50 years after the late Jenny Lau Buong Bee was made Singapore's first woman district judge.

And it is 25 years after Justice Lai Siu Chiu, now retired and reappointed as a senior judge, became the first female Supreme Court Judge here.

Given that Justice Prakash was first appointed as a judicial commissioner in 1992, and a High Court judge in 1995 - and furthermore, has sat as an occasional judge in the Court of Appeal since 2002 and more frequently for the past two years - it might be argued that she could have been appointed to the Court of Appeal earlier.

MORE WOMEN JUDGES APPOINTED

During her career, Justice Prakash has specialised in complex commercial cases, arbitration, company and trust law. Before becoming a judge, she was in practice for 18 years.

One case that many remember her for was in 2004 involving breach of contract. Justice Prakash, who sat as a judge in the Court of Appeal alongside Justice Chao Hick Tin, together with the latter outvoted then Chief Justice Yong Pung How who had dissented, and allowed the appeal of Asia Hotel Investments against Starwood Asia Pacific Management.

While she is married with grown-up children, the high-flier nevertheless remarked at a 2014 Singapore Management University forum about women and career success, titled Can Women Lawyers Have it All?: "If you don't want to have children, you can go as far as any man can go because the law can be such a demanding mistress, whether you are a litigator or not.

"If you want to have children, then you have to give up a little bit of your career. You might have to move to a different area of practice that makes fewer demands on you, or you limit the number of children that you have."

The issue of representation of women in the judiciary amid the juggling act of family demands has reared its head in Britain, where The Times of London reported that the Supreme Court there is set to overhaul its system of judicial appointments. Women candidates are tipped to fill the post of chief justice and president of the Supreme Court when they are vacant next year.

However, gender equality in the judiciary here, it would seem, is not such a burning issue as in the UK, given that more women judges are now fast emerging. Five female judges have been appointed to the Supreme Court in the last two years - including the latest due next month - compared with only three women judges in the 23 years prior to 2014.

Furthermore, together with last month's announcement of Justice Prakash's rise to the apex court, two new judicial commissioners were named and include a woman: Ms Audrey Lim, who is deputy chief legislative counsel in the Attorney-General's Chambers (AGC). A judicial commissioner has the powers of a High Court judge and is appointed for a specific period determined by the President.

The latest appointments will take effect next month.

BAR'S LIMITED PRESENCE

Justice Prakash's "first woman" achievement, while a landmark in itself, prompts a further question: Is there a need for greater diversity in Singapore's judicial composition?

For example, Ms Lim's fellow appointee is Mr Pang Khang Chau, who is also from the AGC. Is the talent pool from which to select judges, especially from the Bar - practising lawyers who appear in court or are involved in litigation work - too limited?

Since Justice Vinodh Coomaraswamy, then a partner in law firm Shook Lin & Bok, was appointed to the Bench in 2012, out of 12 subsequent Bench appointments, only one hailed from the Bar. This is Judicial Commissioner Kannan Ramesh, previously managing partner at law firm Tan Kok Quan Partnership, where he specialised in dispute resolution, insolvency and restructuring, and international arbitration. Three others, being from the corporate side, are not from the Bar, and one has returned to practice. Two others are from academia and another, Judicial Commissioner Chua Lee Ming, was general counsel at GIC before he joined the Bench. The rest are from the public sector.

Needless to say, all are legal luminaries with distinguished backgrounds. Indeed, Chief Justice Sundaresh Menon, as president of the Legal Service Commission, said in its 2014 annual report issued in July last year that "...the Legal Service now constitutes an unprecedented pool of legal talent, not just in depth but also in diversity".

Still, the UK system, with its learned and long heritage, is clearly troubled by the issue of diversity, going by the recent moves there.

In Singapore's context, however, it is arguable whether judges coming from either the public or private sector makes a difference, and how this background might even manifest itself, such as in the content of the judgments.

Lawyers do point out, though, that many judges in other developed Commonwealth jurisdictions hail from the practising Bar, with the wide-ranging experience it provides.

A practising senior lawyer said: "Of course there is a big difference. A judge from the Bar would be exposed to the humane and commercial realities, instead of (one) from a cloistered environment, intellectual brilliance not withstanding."

Perhaps one perception is that the limited pool of sufficiently senior talent at the Bar may be a constraint, as getting more from there may also weaken its ranks.

The brighter legal minds who thrive on the corporate side of the job, meanwhile, have less incentive to join the Bench than those at the Bar. Compared with the often thrilling cut and thrust of corporate work or litigation, life on the Bench is relatively "cloistered", to use the senior lawyer's term. Also, there are fewer personal opportunities, such as landing board directorships.

If anything, the new appointments should be seen as a challenge to the Bar to strengthen its ranks, as an outstanding roll of practising lawyers with an increased and vigorous membership will mean less reason to look elsewhere for potential candidates.

Source: Straits Times © Singapore Press Holdings Ltd. Permission required for reproduction.

Contempt Bill: Maximum penalty ‘won’t mean harsher sentences’

TODAY
15 Jul 2016
Amanda Lee

Judges will take sentencing precedents, the nature of each case into account

SINGAPORE — While proposed laws on contempt of court set out a maximum penalty that generally exceeds the threshold of previously imposed fines, lawyers interviewed by TODAY did not feel these could lead to harsher sentences being meted out.

Judges will continue to take into account sentencing precedents and the nature of each case, they said.

If the Administration of Justice (Protection) Bill tabled in Parliament on Monday is passed, contempt of court will become a criminal offence. The High Court or Court of Appeal will be able to impose a fine of up to S$100,000 and/or a jail term of up to three years for contempt.

Other courts such as the State Courts will be able to impose fines of up to S$20,000 and/or a jail term of up to 12 months.

No cap is currently stipulated for penalties imposed by the High Court and the Court of Appeal for contempt of court.

At the State Courts, the maximum penalty is a jail term of up to six months, a fine of up to S$2,000 or both.

Previous penalties dealt by the High Court have ranged from the S$8,000 imposed on blogger Alex Au last year, over an article deemed to have suggested judicial partiality, to S$25,000 for Dow Jones Publishing (Asia) in 2008, over articles in The Wall Street Journal Asia that implied that the judiciary was biased, partial and lacked independence.

And in 2010, British author and journalist Alan Shadrake was sentenced to six weeks in jail and an extra two weeks for failing to pay a S$20,000 fine, after the High Court found that his book Once A Jolly Hangman: Singapore Justice In The Dock impugned the judiciary’s integrity.

Lawyer Choo Zheng Xi, who had said in a Facebook post that the proposed penalties appeared “very harsh”, told TODAY the maximum sentence “should be pegged to the historical” maximum sentence.

“(The) Parliament should not be more zealous to guard (the) administration of justice than the judges have been,” he added.

But lawyer Tania Chin, a partner at law firm Withers KhattarWong, pointed out that there may be situations where higher penalties than those handed out so far are warranted, such as for repeat offenders.

“In the event contempt of court cases become more rampant, the courts may also wish to impose higher sentences to send a deterrent message to the public as is usually the case when certain offences become more prevalent,” she said.

“Going forward, this Bill would give our judges wider powers to calibrate the appropriate sentence for each fact scenario that comes before the courts,” she added.

Lawyer Sunil Sudheesan, acting head of the Association of Criminal Lawyers of Singapore, said a maximum punishment was set so the courts “can decide how to calibrate”.

“The court will weigh sentencing precedents before deciding the appropriate punishment. I do not think there are contempt cases which have reached the S$100,000 mark but we cannot discount the possibility of that in the future,” he added.

Copyright 2016 MediaCorp Pte Ltd | All Rights Reserved

In trouble? We can be your friend for hire

Straits Times
09 Jul 2016
Adrian Tan

A lawyer will listen to you, agree totally with your point of view, and never, ever cheat on you with a rival. All for a fee, of course

I am a litigator.

This is what I do: I am your friend for hire.

Some people will never need my friendship. They will never be accused of wrongdoing. They will never be hurt. They will never be betrayed. They will never be asked to give up something they treasure. They will live their lives free of conflict.

But there are other people, people who are seized by disputes. Such people will do three things. First, they will ignore the dispute. Second, they will wrestle with it. Third, they will search for a friend.

Ignoring a dispute is a good strategy. I recommend it. The vast majority of disputes that we encounter can be safely ignored. Most arguments are won by the first person to walk away.

Some disputes are difficult to ignore. So, people try to resolve them on their own. I am all for self-help. If a dispute can be resolved with an apology, then apologise. Apologies are opportunities for us to turn back the clock, and start again. And who among us has never wished for time travel?

But some disputes cannot be ignored or resolved on your own. That is when you will need a friend.

One of life's greatest ironies is that it is easiest to find a friend when you are carefree and want for nothing. When you are in the grip of conflict, that is when you will be least likely to attract friends.

There is a saying: A friend in need is a friend indeed. That saying was coined by a litigator.

Litigators are professional friends. We specialise in befriending those who are weary, heavy-laden and in need of rest.

For a fee, we will do all those things that friends are supposed to - but never - do for you.

We listen to you. You have never had anyone listen to you until you have had a litigator take down your statement, ask you questions, think about your answers, and then ask you more questions.

We are your secret diary. We will pay attention to you. We will not brush aside your problems. We will acknowledge your conflict. We will sit with you to understand your dispute better than you will yourself. And you can tell us anything. We will never tell anyone else. We will resist any power on earth to make us break your trust in us.

We take your side. We will see everything from your perspective. If you feel guilt, we will make excuses for you. If you have behaved badly, we will put your behaviour in context so that it will be understood. If you have been persecuted, cheated, oppressed or exploited, we will feel upset.

We will stick up for you. We will plead, crave, petition and complain for you. When you are brought to court, we will be the only friend standing by you. We will be your champion.

We are loyal. We will not be friends with your enemies. If you choose us as your friend, we will forsake all others.

We will be true to you, so long as you pay us.

There are many benefits in having a hired friend.

For starters, it is hard to find "real" friends. A person who can count three friends is a fortunate person. Those who are friendless cannot be faulted - they may not be unpleasant people, merely unlucky ones. In such circumstances, it is reasonable to hire a friend.

Another benefit is this. Although we must be your friend, you don't have to be ours. You don't have to remember our birthdays, or watch movies with us, or even attempt to get to know us. We are all about you.

You do not have to take us home to meet your family. You do not have to dine with us (but if you do, you will pay for it). You do not have to bond with us. We will not be hurt.

We are good substitutes for unpaid (or "real") friends. We are reasonably smart. We have basic social skills. We can feign interest in your conversation. We will often laugh at your jokes. We will not tease you. We will be your enabler, your cheerleader and your therapist.

The best part about having a hired friend is this: It is all one-way. You can break off our friendship. You do not need to give us a reason. We will not take it personally, and even if we do, you do not have to care. We do not expect you to consider our welfare. We have thick skins. We are durable.

We do not want your love, only your money. We know that is a bargain. Real friends are an imposition. They require regular emotional investment. We are not demanding. We need only to be paid, regularly. It upsets us greatly when you forget to do this. We will feel let down. After all, it is our very reason for existence.

Every year, many hired friends are trained in universities. When we graduate, we join other hired friends in something called a "law firm". Firms of friends are set up to do battle against other firms in court.

When we meet in court, we call each other "learned friends". We then call each other many other different names. We always disagree. We are a friendly but disagreeable profession.

We suffer for you. Many hired friends will tell you that we do not have friends of our own. We have difficulty keeping long-term relationships. We find it hard to be friends with someone who does not pay us. We are not used to being with people who want us to open up, to talk about ourselves and our work, to reveal our feelings. We find it suspicious if people want to get to know us. We do not need such attention.

We also believe that hired friends have higher divorce rates. We spend our lives gearing up for dissent. We are bred for brawling, and cultivated for confrontation. Our professional lives have skewed us to look askance at every statement made, and ask: Is there a double meaning, a hidden insult, a trap of some sort?

And if, or perhaps when, hired friends have arguments with their spouses, there is no quarter given, and no prisoners taken. That is because hired friends look at relationships as a zero-sum game.

Every argument ends with one winner and one loser - if there isn't a loser, then the argument isn't over. Naturally, we abhor intimacy and exploit vulnerability. That is good for winning arguments, but bad for personal relationships.

The result is that hired friends end up friendless. That is because we do not feel accepted. If society functioned perfectly, there would never be any need for us. Our existence is an embarrassment. It shows that people are not doing their job to be good friends to other people. It shows that people are not getting what they need from their "real" friends. Why else would they turn to us?

Some people think that hired friends are necessary because we know the law, and the law is necessary to settle disputes.

That is untrue. Any dispute may be settled out of court, without recourse to the law. People resolve conflicts every day, by giving concessions and sacrificing principles. The solution is always in their own hands. When they go to court, they take that solution out of their own hands, and place it in the hands of a stranger - a judge. The judge makes a binary decision. Someone wins and someone loses.

The winner thanks the judge, the loser blames the lawyer.

We know the cost of being your hired friend, and because we are associated with conflict and defeat, society stigmatises us. It makes us the butt of jokes, and the villains in stories. But in denouncing us, society is doing no more than to admit that human beings have conflicts, and they need help resolving them.

That has been the way throughout history. Humanity has always known conflict, since the Garden of Eden.

Adam could have won his argument with God, if only he had a hired friend by his side.

You need not repeat his mistake.


One of life's greatest ironies is that it is easiest to find a friend when you are carefree and want for nothing. When you are in the grip of conflict, that is when you will be least likely to attract friends.


ADRIAN TAN

Adrian Tan is a litigator with Morgan Lewis Stamford LLC. He is a product of post-Independence Singapore.

He grew up in a three-room Housing Board flat in Commonwealth Close, began his education at the neighbourhood PAP kindergarten, studied at the Anglo-Chinese School and Hwa Chong Junior College, underwent national service and then obtained his law degree from the National University of Singapore.

He is the lawyer for the Singapore Association of the Visually Handicapped and treasurer of The Law Society of Singapore.

THREE NOTABLE WORKS

The Teenage Textbook (Landmark Books/Hotspot Books, 1988)

A humourous novel reflecting the experience of adolescence in Singapore. It was the best-selling novel in Singapore in 1988, and was a National Book Development Council award winner.

The Teenage Workbook (Landmark Books/Hotspot Books, 1989)

The sequel to The Teenage Textbook topped The Straits Times bestseller list for more than a year. The two novels were developed by Monster Films into The Teenage Textbook Movie, which was a 1998 box-office success.

Dear Adam, Help! (Landmark Books/Hotspot Books, 1990)

For years, Adrian Tan wrote an advice column, Dear Adam, for the now-defunct GO magazine, offering impractical, biased and flat-out wrong advice to its readers on matters of the heart. This is a compilation of those columns.

All books are available for loan at the National Library, and for purchase at Books Kinokuniya.

Source: Straits Times © Singapore Press Holdings Ltd. Permission required for reproduction.

California Fitness: Refunds unlikely after gym's closure, say lawyers

Straits Times
21 Jul 2016
Goh Yan Han & Nicole Weers

There may not be enough money to repay members, say lawyers

Her contract was due to expire this month, so she signed a new two-year contract with California Fitness last month, just weeks before the closure of all its outlets.

Now, Ms Esther Lim, 26, is in limbo as she has not even started using her new membership card nor finished the personal training sessions she previously paid for. Her potential losses? About $4,000.

The customer service executive is but one of many California Fitness members who are angry and disappointed in the gym's abrupt closure. But getting their money back could be an uphill task, according to lawyers.

After the club's Republic Plaza branch closed on Saturday, it was announced at 12.03am yesterday that California Fitness had shut down its other outlets in Novena and Bugis until further notice.

Recovery firm Ferrier Hodgson was appointed as the provisional liquidators of the club's owner, J.V. Fitness, as the latter had insufficient resources to continue operations.

Neither Ferrier Hodgson nor California Fitness replied to queries from The Straits Times by press time. A J.V. Fitness representative declined to comment.

California Fitness opened in Singapore in 1998 with its famed floor-to-ceiling glass windows at Orchard Road, allowing onlookers to see gym members work out.

Many members are now hoping to get back thousands of dollars worth of gym packages.

For Ms Lim, the $4,000 she stands to lose in unused packages is equivalent to two months of her pay. "(The gym) shouldn't have asked us to recontract if it had problems with money," she said.

A 27-year-old loan officer, who wanted to be known only as Mr Tan, could lose about $5,000.

He signed for a 30-month membership in May and paid for 30 personal training sessions, totalling $2,471.70. But due to some changes in payment, he paid California Fitness twice but the gym did not void his first payment.

"I am very angry. It is a huge sum of money," said Mr Tan, adding that he was very upset the club was still selling packages shortly before closing.

Some fitness clubs are trying to help affected members. True Fitness is extending a discounted sign-up rate to California Fitness members and a one-month free trial.

Since the closure of the gym's Republic Plaza outlet on Saturday, the Consumers Association of Singapore (Case) has received 331 complaints against the club.

Mr Seah Seng Choon, Case's executive director, said that "purchasing membership packages may be cheaper in the long run, but (consumers) will face the risk of losing their prepayment in the event that the company closes down".

Consumers who recently joined as members could argue they were misled into believing the club would still be in operation for a number of years. This might be an unfair practice under the Consumer Protection (Fair Trading) Act, he said.

To get their money back, members have lodged complaints with Case or the Small Claims Tribunal, while others have lodged police reports.

But lawyers The Straits Times contacted were pessimistic on the odds of getting refunds. Said lawyer Amolat Singh, referring to firms like Ferrier Hodgson: "A liquidator is like an undertaker of a company - it suggests a company's funeral.

"While (club) members can register their claims with the liquidator, there may not be any money to give to them." Once a company goes into liquidation, one cannot take legal action against it, he said.

Other channels, such as Case, the Small Claims Tribunal or the police, are worth a try, but the chances of successful refunds are remote, said lawyer Rajan Supramaniam.

Source: Straits Times © Singapore Press Holdings Ltd. Permission required for reproduction.

World's top private bank dragged into 1MDB probe

Business Times
15 Jul 2016
Anita Gabriel

Sources say UBS is only one of several financial institutions whose client bank accounts have been scrutinised by MAS

[Singapore] UBS Group, the world's largest private bank, has been drawn into Malaysia's 1Malaysia Development Bhd (1MDB) scandal and Singapore's ongoing money-laundering probe into the case.

According to sources, UBS Singapore (the first Swiss bank to set up shop here) is one of several financial institutions whose client bank accounts have been scrutinised by the Monetary Authority of Singapore (MAS) for suspicious transactions in an ongoing probe by the authorities into troubled 1MDB.

"UBS has been assisting in MAS's investigations as have several other banks. It's a pretty complicated case," said a source, adding however that "this is not another BSI situation; it's nowhere close".

According to a UK-based whistleblower site Sarawak Report, at least US$1.24 billion of monies raised by 1MDB Global, a subsidiary of the state-controlled firm, through a bond issue was transferred through BSI Bank in Lugano to a UBS bank account in Singapore held by Aabar Investments PJS Ltd (Aabar BVI).

This is the company into which 1MDB said it had paid billions of dollars and which is at the centre of a bitter feud between 1MDB and Abu Dhabi's International Petroleum Investment Co (IPIC). Aabar BVI's name is nearly identical to that of IPIC's subsidiary Aabar Investments PJS, which IPIC says is not a connected entity.

When asked to comment on the report by the investigative news portal, a UBS spokesman declined comment, citing banking confidentiality rules. An MAS spokesman also declined comment.

This is the first time that UBS - Asia's largest private bank, with over US$270 billion of assets under management (AUM) - has surfaced in the complex cross-border transactions of 1MDB's funds that turned into a full-blown scandal in Malaysia last year. The 1MDB money trail is being probed in at least seven other jurisdictions, including Switzerland, the UK, and the US.

The scandal has already embroiled US banking giant Goldman Sachs and Australia's third biggest bank ANZ - it owns a quarter of Malaysian bank AmBank, which was slapped with a RM54 million (S$18.3 million) fine by the central bank for breaches of certain financial rules.

In March, MAS said that it had asked a number of financial institutions to furnish information amid a "thorough review" of various transactions and cross-border fund flows through the banking system as part of its investigations into possible money laundering and other offences here.

"MAS will not hesitate to take regulatory actions against financial institutions should they be found to have breached our banking rules," it said in a statement.

The regulator walked the talk on that stern warning in May when it ordered the local branch of Swiss bank BSI SA to shut its 11-year operations after it discovered multiple breaches of anti-money-laundering rules and oversight failures, sending shock waves across private banking circles here.

MAS also disclosed the names of six people - most were formerly with RBS Coutts in Singapore before joining BSI about five years ago - whom it had referred to the public prosecutor for criminal offence assessment.

RBS Coutts is also understood to be one of the other banks involved in MAS's supervisory review in connection with 1MDB. Singapore prosecutors have charged ex-BSI banker Yeo Jiawei, whom they say played a key role in the 1MDB transactions, with nine offences ranging from money laundering, cheating, forgery, and obstruction of justice in the 1MDB probe. The criminal case disclosure conference in Yeo's case is fixed for July 28.

The dispute over the ownership of Aabar BVI between the state entities of Malaysia and the Gulf emirates escalated with 1MDB defaulting on the interest payments on its bonds after IPIC claimed that both 1MDB and its sole owner, the Ministry of Finance, had reneged on a June 2015 debt restructuring deal.

IPIC has resorted to the London Court of International Arbitration to claim US$6.5 billion from Malaysia. 1MDB agreed to the arbitration this week, saying that it has submitted a formal and "robust response" through its legal counsel.

Source: Business Times © Singapore Press Holdings Ltd. Permission required for reproduction.

Yang Yin trial: Accused pleads guilty 'in unusual twist'

Straits Times
09 Jul 2016
Carolyn Khew & Toh Yong Chuan

Lawyer tells court his client admits to misappropriating $1.1m from elderly widow

In a mid-trial twist that caught both the prosecution and defence by surprise, Yang Yin yesterday told the court he wanted to plead guilty to misappropriating $1.1 million from an elderly widow.

His change of heart came on the trial's fifth day, which was also the first day that his 89-year-old alleged victim was in the court gallery for this trial.

By then, the prosecution had already presented a number of witnesses, including an art expert who testified that a painting Yang claims to have bought for $500,000 for Madam Chung Khin Chun at a flea market in China was nothing more than a fake worth $200.

Yang's decision to plead guilty came after the court took a 15- minute mid-morning break. Just before the trial was set to recommence, his lawyer, Mr Irving Choh, asked the court clerk for more time. Mr Choh was overheard asking him: "You will not change your mind?"

Yang nodded. Mr Choh then told the court: "My client, in an unusual twist, has decided to plead guilty to two charges."

Yang had in May pleaded guilty to 120 other charges, which involve falsification of receipts to make it appear that a business he set up was real, and offences involving his permanent residency.

He had decided to fight charges that he misappropriated $500,000 and $600,000 from Madam Chung, who was diagnosed with dementia in 2014 and has no children, on two separate occasions.

One key piece of evidence presented by the prosecution was a painting of a horse, which was folded repeatedly and stuffed into an envelope found in Yang's luggage.

He first told police it was by renowned Chinese artist Xu Beihong and that he had bought the painting for $500,000 at the request of Madam Chung. He later told police that the $500,000 was actually a "gift" to him from the widow.

The sum of $500,000 was transferred from Madam Chung's OCBC Bank account to Yang's account, then back to hers before ending up in a China account belonging to Yang's father.

On the second sum of $600,000, an OCBC Bank relationship manager told the court Yang had asked for the sum in cash in 2012, claiming it was needed as collateral, among other things, for an art gallery in Hong Kong.

On the witness stand yesterday, Deputy Superintendent of Police (DSP) Jane Lim told the court that Yang gave a different account. He claimed he withdrew the $600,000 to buy five paintings. But DSP Lim said Yang could not provide details of the paintings, including how much each cost. He also could not produce receipts of these purchases.

The Straits Times had first reported on Yang's relationship with Madam Chung in 2014. Yang got to know Madam Chung when he served as her private tour guide during a trip to Beijing in 2008. A year later, he moved in to stay with her in her Gerald Crescent bungalow.

In 2014, Madam Chung's niece, Madam Hedy Mok, began a series of civil actions, claiming her aunt had been unduly influenced by Yang.

Yesterday, Madam Mok took her aunt to court for Yang's trial.

Mr Choh told reporters that Yang decided to plead guilty after he saw Madam Chung. He said Yang had tried to make eye contact with her, but "his heart ached when he saw that she did not recognise him".

Reacting to Yang's decision to plead guilty, Madam Mok said it would bring some "closure" to her and her aunt. The case is scheduled to be heard next on July 27.

Source: Straits Times © Singapore Press Holdings Ltd. Permission required for reproduction.

Curbing contempt for due process

Straits Times
21 Jul 2016

Its colonial roots and vague boundaries have made the law of contempt of court the subject of criticism and review in countries that have adopted its judge-made principles articulated in English casebooks. In India, for example, resentment arose over restraints on comment. While in Australia, a law reform commission made recommendations a decade ago relating to the no-limit sentences a judge can impose for contempt. Such issues have to be addressed here as well, which is what the Administration of Justice (Protection) Bill aims to do. Introduced in Parliament recently, the Bill's effort to codify the law is welcome as a lack of clarity is unsettling for those who fear finding themselves on the wrong side of the law when commenting on pending cases, especially those rousing much public interest.

Few would argue against the need for forms of contempt such as imputing improper motives to a court, interfering with trial witnesses, obstructing court proceedings, or disobeying court orders. But on sub judice, or "prejudging" a pending issue, in chatter via social media or opinions expressed elsewhere, is a more debatable matter. Those seeking more leeway to comment on cases argue that influence is not an issue as juries are no longer used here and a judge is impervious to outside talk. Some legal commentators believe it would take compelling circumstances to establish that a trial has been prejudiced or public confidence has been undermined in the due administration of justice. Even if there's a suspicion that loose comments from various quarters influenced potential witnesses, it would not be easy to attribute blame or make out a case beyond reasonable doubt.

Yet, it should be cause for concern when comments flout one's sense of natural justice. An example would be raising the past convictions of the accused, even though these are not related to present charges. Once a thief, always a thief is a presumption that a judge would spurn in the absence of sufficient evidence. But the court of public opinion might have no qualms about tarring and feathering someone rashly. Runaway sentiments should not punish those who ought to be presumed innocent instead, for example, by causing others to shun or harass a suspect while a case is pending. Nor should innocent people be put on trial by self-appointed social media vigilantes with neither accountability to anyone nor sense of social restraint.

In seeking to codify existing practices, the proposed law has specific purposes, as stated in the Bill. It also helps by spelling out what penalties might follow for failure to comply with its provisions. Making clear that the law elucidates rather than expands the scope of what might constitute contempt would help to reassure those who fear that fair comment will be unduly fettered.

Source: Straits Times © Singapore Press Holdings Ltd. Permission required for reproduction.

Ombudsman acts as mirror to reflect flaws in system of governance: Voices

TODAY
15 Jul 2016

I refer to the commentary, “How an ombudsman could benefit Singapore” (July 13). The Singapore of today is not like that of the past. As people become more educated, the systems of governance that run this country must keep pace.

We find it more meaningful to understand the steps taken to arrive at certain conclusions, and are not just satisfied with the conclusion of procedures, including judicial procedures.

Thus the commentary echoes my belief that a neutral third-party balances the procedures in any system and acts as a middleman to relay information and to find the facts of cases between a government body and the public.

While an ombudsman has no power to impose its decisions on the agency involved in the investigation, it acts as a mirror, reflecting flaws in the system and thus encouraging the respective agencies to take corrective measures and fine-tune efficiencies.

Let us consider, however, that an ombudsman is basically a public administrative entity and, as with other such services, can suffer from inefficiency-related matters such as red tape, which may take years to resolve.

Outcomes could be delayed and resources such as manpower and time would be consumed.

Investigations may uncover more issues requiring attention and potentially open a floodgate of complaints about other failures in the system.

In addition, while we would have every reason to believe that the head of the ombudsman’s office would be professional in his duties, there is always a possibility that he may display some bias in the course of an investigation.

While these flaws seem to indicate that an ombudsman is nothing more than adding another level of bureaucracy, we must understand the nature of an ombudsman: To create transparency in public procedures, which Singaporeans are demanding more of.

An ombudsman acts as a judge who balances government policies and public opinion. This would create public trust in the administrative capabilities of our public agencies, which I believe is a common goal of both parties.

Regarding the issue of bias, there are possibly members of the private sector with legal experience who could be appointed to contribute to the objectivity of investigations.

I do not think the costs of having an ombudsman in our system outweigh the potential benefits. Change is needed, and what better way than to include an ombudsman as part of heralding this change.

Louis Lau Yi Hang

Copyright 2016 MediaCorp Pte Ltd | All Rights Reserved

Feedback wanted on allowing double tax deduction for costs

Straits Times
09 Jul 2016
Chia Yan Min

Proposed law related to retail bonds part of effort to broaden range of investment options

Companies could soon benefit from double tax deduction for costs associated with issuing retail bonds, if proposed legislation is passed.

The initiative is part of efforts to broaden the range of investment options available to retail investors, the Finance Ministry (MOF) said yesterday.

The move is outlined in a draft Bill, which also contains a suite of other proposed changes and refinements to the Income Tax Act.

The MOF is holding a public consultation on the Bill until July 29, and is inviting feedback.

If passed into law, the double tax deduction for issuing retail bonds will take effect from May 19.

Companies which have recently issued retail bonds include Aspial Corp, Frasers Centrepoint, Perennial Real Estate Holdings and Oxley Holdings.

Other amendments outlined in the Bill include changes announced in this year's Budget, such as increasing the corporate income tax rebate, and capping total personal income tax relief at $80,000 per year of assessment.

The Bill also includes an amendment requiring country-by-country tax reporting for multinational corporations.

Singapore-headquartered multinationals with global revenues exceeding $1.125 billion will have to submit an annual country-by-country report containing the income, taxes paid, and other indicators of level of economic activities in every tax jurisdiction where they operate.

This will take effect from enterprises' financial years starting on or after Jan 1, 2017.

Singapore has entered into bilateral agreements for automatic exchange of country-by-country reports with some tax jurisdictions.

The Inland Revenue Authority of Singapore will conduct these exchanges. These jurisdictions have to meet certain conditions such as having strong rule of law to ensure the confidentiality of the information exchanged.

Tax experts said this requirement is part of a global move towards greater tax transparency.

Mr Chris Woo, tax leader at PwC Singapore, said the new rules will subject multinationals to additional compliance requirements and also open their operations up to greater scrutiny from the tax authorities.

Still, given that the proposed legislation will apply only to Singapore- headquartered companies with global revenues in excess of $1.125 billion, the number of firms affected will not be large, said Mr Geoffrey Soh, head of transfer pricing at KPMG in Singapore.

The public can access the detailed consultation documents for the draft Bill on MOF's website and on government feedback portal Reach.

Respondents may send their comments to the Ministry of Finance directly via the website, e-mail, fax or post.


SOME COMPANIES WHICH HAVE ISSUED RETAIL BONDS

FRASERS CENTREPOINT

AMOUNT RAISED: $500 million

COUPON: 3.65%

EXPIRES: 2022


ASPIAL CORP

AMOUNT RAISED: $200 million

COUPON: 5.3%

EXPIRES: 2020


PERENNIAL REAL ESTATE HOLDINGS

AMOUNT RAISED: $200 million

COUPON: 4.55%

EXPIRES: 2020


OXLEY HOLDINGS

AMOUNT RAISED: $150 million

COUPON: 5.15%

EXPIRES: 2020

Source: Straits Times © Singapore Press Holdings Ltd. Permission required for reproduction.

California Fitness gym closures: Get firms to insure packages over $500 – Forum

Straits Times
21 Jul 2016

The California Fitness closure highlights the need for better consumer protection and business practices ("California Fitness shuts remaining outlets"; yesterday).

The failure of the gym chain and other health and spa-related businesses shows how customers are not being protected.

I call for a ban on package payments of more than three months or $500.

I also call for a ban on tie-in packages involving banks, where the full payment is made to the company and the debt transferred to the bank.

A Facebook group of victims that has been set up is replete with examples of customers who signed up or renewed with California Fitness just last week and must now continue paying the bank.

Such bank packages lead to salesmen sometimes fraudulently and exclusively promoting such payment methods, withholding information on the consequences as well as about other payment modes.

Christopher Low Kin Siong

Source: Straits Times © Singapore Press Holdings Ltd. Permission required for reproduction.

Former BSI Asia chief exec sues bank over bonus

Business Times
14 Jul 2016
Andrea Tan

This Bloomberg article was first published on 14 July 2016 in the Singapore English broadsheet The Business Times.
SLW obtained permission to reproduce the article to give the legal community a broader view of legal reports from various news syndicates.

[Singapore] HANS Peter Brunner, BSI SA's former Asia chief executive who is under scrutiny from Singapore prosecutors over the bank's ties with a Malaysian state firm, has sued the Swiss private bank after his bonus was frozen.

Mr Brunner's lawsuit alleges that BSI's Singapore unit breached bonus agreements and a separation pact with him, according to documents filed on July 4 in the Singapore High Court. There is no legal basis for BSI to suspend the payment for deferred bonuses due last month, Mr Brunner said in his complaint.

Mr Brunner is among six BSI bankers referred to prosecutors in Singapore after its regulator said in May the bank would lose its licence in "the worst case of control lapses and gross misconduct" in the city-state's financial sector.

Among BSI's major clients was 1Malaysia Development Bhd (1MDB), a subject of money-laundering and embezzlement investigations in at least half a dozen countries. A former BSI wealth planner in Singapore became the first banker to be charged in the global probes. 1MDB has denied any wrongdoing. Mr Brunner hasn't been charged.

BSI spokesman Luciano Crobu declined to comment on the lawsuit, as did Mr Brunner's lawyers Ng Lip Chih and Jennifer Sia.

BSI and Mr Brunner, a Swiss national, "mutually agreed" in September that he would retire from the bank, according to court papers. In March, a separation agreement laying out his entitled payments, including deferred bonuses for 2012-2014, was inked and the bank announced his retirement.

Mr Brunner sued after BSI wrote to the 64-year-old on June 24, saying that it would freeze a payment of S$722,800. He said in court papers the bank is also "intending to renege on all of its other payment obligations" totalling US$1 million, scheduled to be paid through June 2018.

Mr Brunner joined BSI in 2009 from RBS Coutts with about 70 colleagues. Coutts and Mr Brunner traded lawsuits after his departure, the bank suing in Singapore for the return of an advance bonus while Mr Brunner claimed in a Zurich complaint that he was wrongfully fired. The firm later settled its lawsuit, according to Singapore court records.

The case is Hans Peter Brunner v BSI Bank Ltd, S702/2016. Singapore High Court.

Used with permission of Bloomberg L.P. Copyright © 2016. All rights reserved.

Robbery 'a serious offence even if no weapons used'

Straits Times
09 Jul 2016
Ng Huiwen

Even if he did not show or use a weapon, the Holland Village bank robber could still face serious charges that attract a severe punishment under the Penal Code, criminal lawyers here say.

They note that a robbery is a serious offence in Singapore, even if no weapons were used.

What remains crucial are the elements of threat and fear, which they say were both present when a man robbed $30,000 from a Standard Chartered Bank branch in Holland Village on Thursday.

The suspect, who is still at large and believed to be a Caucasian man, had passed a slip of paper to the female teller with his demands and she complied. No weapons were seen during the robbery, which lasted minutes.

"Even if he did not show a gun or knife, it must have been something that he said or wrote on the note that instilled enough fear in the teller for her to hand over the money," said criminal lawyer Shashi Nathan.

"This would be an extortion, even if there was no one hurt," he said, adding that the suspect would face up to 10 years' jail and at least six strokes of the cane if convicted.

Agreeing, criminal lawyer Amolat Singh said: "A person would not ordinarily hand over the money unless there was some reasonable form of fear."

Another criminal lawyer, Mr Sunil Sudheesan, believes that a lesser charge of theft is unlikely, as there was interaction between the teller and the suspect.

If the threat had been made using a deadly weapon, such as a knife or gun, the offender would get at least 12 strokes of the cane for armed robbery, Mr Singh said.

For unlawful possession of firearms or offensive weapons, he may also face possible charges under the Arms Offences Act and Corrosive and Explosive Substances and Offensive Weapons Act.

If found guilty of carrying any offensive weapon in public places, he could be jailed for up to three years and caned.

Mr Singh said using a fake weapon to commit a crime would not be treated lightly under the law. "The law does not tolerate fake weapons, because the intention is still to instil fear with violence," he said.

A 22-year-old Kazakhstan national was jailed for 15 months in June 2014 for using criminal force to steal from a Japanese woman in Claymore Hill.

Using a toy gun, he threatened to kill her if she did not give him her money.

Unlike a case of snatch theft, robberies are more severe as they involve "more planning and premeditation, with an approach to rob an institution", Mr Nathan said.

In December 2004, a man armed with a fruit knife walked into a POSB branch in West Coast Drive and made off with $37,000. The suspect remains at large.

Source: Straits Times © Singapore Press Holdings Ltd. Permission required for reproduction.

Tighten rules against firms collecting advance payments: Forum

Straits Times
21 Jul 2016

There must be tougher laws against those who offer services with payment collected in advance ("California Fitness shuts remaining outlets"; yesterday).

The ease of starting any new business here must not become an easy tool to cheat people.

In 2012, a car workshop which sold warranty and servicing packages went bust, with devastating effect ("Police probe closure of car workshop"; March 28, 2012).

Several hundred thousand dollars in premiums and advance payments had been collected by the time it abruptly shut down.

Car dealers who bought the cover for their customers were left with no cover.

Because of the huge repair claims, some dealers eventually went bust, and the car owners eventually found themselves forking out money to pay for their repairs.

Why are businesses which collect cash upfront free to do what they want? The authorities should tighten this loophole.

A business that needs to collect money upfront must be made to obtain a separate licence to do so.

Because they are handling so much money upfront, they will also have to go through training on money laundering activities.

The laws, too, need to be changed so that if fraud is proven, there are provisions for jail sentences to be meted out to directors of such failed businesses.

Only with these efforts can consumers' rights be protected.

Chua Boon Hou

Source: Straits Times © Singapore Press Holdings Ltd. Permission required for reproduction.

Tribunal ruling a game changer South China Sea

Straits Times
14 Jul 2016
Robert Beckman

What the tribunal did not rule on is as significant as what it did. It doesn't say whose territorial claims are superior, or that China's nine-dash line claim is illegal per se, or that China's construction of artificial islands is in principle unlawful.

The final award in the Philippines versus China arbitration was the most anticipated decision of any international court or tribunal in the area of the law of the sea since the entry into force of the 1982 United Nations Convention on the Law of the Sea (Unclos) in 1994.

THE CONTEXT: 1982 UNCLOS

To understand the significance of the award, it must be viewed in the context of the 1982 Unclos. Unclos is generally regarded as one of the major achievements of the United Nations system. It purports to establish in one complex treaty a legal order for the seas and oceans that takes into account the needs and interests of all states by promoting the peaceful uses of the oceans, facilitating international communication through navigation and overflight, establishing rules for allocating and managing the natural resources of the oceans, and establishing rules for protecting and preserving the marine environment.

The 1982 Unclos was negotiated as a "package deal". To obtain rights to explore and exploit resources, coastal states had to accept obligations to protect and preserve the marine environment, and to cooperate to sustainably manage the living resources.

The representatives of states negotiating the Unclos understood that disputes would inevitably arise between state parties on the interpretation and application of its provisions. This is especially so since the negotiators were able to reach a consensus on some controversial issues only by agreeing to "deliberately ambiguous" language.

Also, the negotiators were aware that states would inevitably interpret the provisions in Unclos to maximise their national interests and in the light of their particular cultural and historical circumstances.

Consequently, the drafters included as an integral part of the "package deal" the most complex dispute settlement regime ever devised in an international convention.

When a state becomes a party to Unclos, it agrees in advance to a system of compulsory dispute settlement that can result in a final and binding decision by an international court or arbitral tribunal. In essence, Unclos provides that if a dispute arises between two state parties that cannot be resolved by negotiation and exchange of views, either of the parties to the dispute can unilaterally institute proceedings before an international court or arbitral tribunal without obtaining the consent of the other party.

BRIEF SUMMARY OF THE PROCEEDINGS

The Philippines initiated the arbitration proceedings on Jan 22, 2013. Although China decided that it would not appear or participate in the proceedings, the arbitration proceeded in its absence in accordance with the provisions of Unclos. After almost three years of proceedings, the five-member tribunal issued its award on jurisdiction on Oct 29 last year. A hearing on the merits of the case was held late last November. The award on the merits was issued on Tuesday. The awards on both jurisdiction and the merits were by a unanimous decision of the five members of the tribunal.

THE ROOT OF THE DISPUTES AT ISSUE BETWEEN THE PARTIES

The tribunal found that some of China's actions in the South China Sea were contrary to its obligations under Unclos and, in some cases, were an infringement of the rights of the Philippines. However, the tribunal noted that as a matter of principle, both China and the Philippines have accepted Unclos and the general obligation to comply with its provisions in good faith.

The tribunal stated that the root of the disputes at issue between the Philippines and China lies in fundamentally different understandings of their respective rights under Unclos in the waters in the South China Sea, and not in any intention by one of the parties to infringe the rights of the other.

It can be argued that this has indeed been the essence of the problem. Although China participated in the nine years of negotiations leading to the adoption of Unclos, and became a party to Unclos in 1996, China has interpreted and applied the provisions of the Unclos in the light of its own historical and cultural traditions.

China seems to have been unable to understand that Unclos was intended to establish a universal body of rules that is to be interpreted and applied by all state parties in the same manner, notwithstanding their historical and cultural traditions.

For example, China did not seem to understand that Unclos provides that coastal states have the sovereign right to explore and exploit all of the living and non-living resources in the 200-nautical-mile exclusive economic zone (EEZ) measured from their mainland coast, and that it was not compatible with the Unclos for China to assert "historic rights" to resources in the EEZ of other states based on its "nine-dash line" map.

HISTORIC RIGHTS AND THE NINE-DASH LINE

China's claim to historic rights within the nine-dash line, within the EEZ of the Philippines, was the major reason the Philippines instituted proceedings. Therefore, it was a major victory for the Philippines when the tribunal ruled that, to the extent that China claimed historic rights to resources in the waters inside its nine-dash line, such rights were extinguished when it ratified Unclos if those waters are now within the EEZs of other coastal states.

DISPUTES ON TERRITORIAL SOVEREIGNTY

The Philippines did not raise any issue with respect to which state had a superior claim to sovereignty over the islands in the South China Sea. This is because an arbitral tribunal established under Unclos can only consider disputes on the interpretation or application of Unclos, and Unclos contains no provisions on how to resolve sovereignty issues.

Therefore, the award of the tribunal does not address the underlying dispute in the South China Sea - the competing claims to sovereignty over the islands.

Further, although the tribunal found that China's claim to historic rights in the nine-dash line is not compatible with Unclos, it did not rule that the nine-dash line per se is illegal or invalid. China is under no obligation to formally denounce the nine-dash line.

The nine-dash line is still relevant because it shows the location of the various islands in the South China Sea over which China claims sovereignty. The difference is that as a party to Unclos, China can claim sovereignty only over those islands that meet the definition of an island in Article 121 of Unclos, that is, naturally formed areas of land surrounded by and above water at high tide.

DISPUTES ON THE STATUS OF REEFS AND THEIR ENTITLEMENT TO MARITIME ZONES

What the Philippines did assert was that there were disputes between China and the Philippines on the status and entitlement to maritime zones of the reefs occupied by China. In its award on jurisdiction, the tribunal held that it could consider these issues without considering who had the better claim to sovereignty over the reefs in question.

The Philippines admitted that several of the reefs occupied by China were "islands" as defined in Article 121 of Unclos because they were naturally formed areas of land surrounded by and above water at high tide. This meant that they were subject to a claim of sovereignty and entitled in principle to maritime zones.

ROCKS VERSUS ISLANDS

However, the Philippines further asserted that none of the islands in Spratlys that were occupied by China was entitled to more than a 12-nautical-mile territorial sea. The Philippines maintained that the islands occupied by China fell within the exception in Paragraph 3 of Article 121, which provides that "rocks which cannot sustain human habitation or economic life of their own are not entitled to an EEZ or continental shelf".

Most observers believed that this was the most difficult issue facing the tribunal. The tribunal examined the language of Article 121(3) in great detail, and in what is perhaps the boldest part of its decision, it ruled that none of the disputed islands in the Spratly Islands is an island entitled to an EEZ and continental shelf of its own.

The tribunal held that even Taiping, the largest natural island that is occupied by Taiwan, is a "rock" that is not entitled to an EEZ or continental shelf of its own because it cannot sustain human habitation or economic life.

SIGNIFICANCE OF DECISION THAT NO ISLANDS ARE ENTITLED TO AN EEZ

The impact of the decision that all of the islands in the Spratlys are rocks entitled to no more than a 12-nautical-mile territorial sea should not be underestimated.

It means that there are no areas of overlapping EEZ claims in the EEZ of the Philippines.

Consequently, the Philippines has the exclusive right to develop the oil and gas resources in Reed Bank, the area off its coast which has the greatest potential for hydrocarbon resources. Exploitation of this area has been held up because China claimed a right to the resources because the area is within its nine-dash line.

This decision of the tribunal is also of great significance to Vietnam, Malaysia, Brunei and Indonesia. Given that the tribunal has ruled that China has no historic rights to resources in the EEZs of other states within the nine-dash line, and that none of the disputed islands is entitled to an EEZ of its own, it means that China has no legal basis under Unclos to claim that it has a right to share the fishing or hydrocarbon resources in the EEZs of the Asean claimants bordering the South China Sea.

LOW-TIDE ELEVATIONS

The tribunal also agreed with the submission of the Philippines that several of the reefs occupied by China were low-tide elevations rather than islands. Consequently, they are not subject to a sovereignty claim unless they are within 12 nautical miles of an island, and they are not entitled to any maritime zones of their own.

The tribunal's decision on Mischief Reef is particularly troublesome for China.

The tribunal ruled that Mischief Reef is a low-tide elevation, not an island, and that it is located within the EEZ of the Philippines. Therefore, under Unclos, the Philippines has jurisdiction and control over the Mischief Reef, and it has the exclusive right to authorise and regulate the construction, operation and use of installations and structures on the reef. Consequently, the tribunal ruled that the installations and structures built by China on Mischief Reef are legally under the jurisdiction and control of the Philippines.

The tribunal also held that the Second Thomas Shoal is a low-tide elevation within the EEZ of the Philippines. This is the reef on which the Philippines intentionally stranded a vessel in order to try to prevent China from occupying it. As a result of the award, this reef is legally under the exclusive jurisdiction of the Philippines, and any actions by China to interfere with the resupply of the vessel would be unlawful.

ISLAND BUILDING AND CONSTRUCTION ACTIVITIES

The award of the tribunal is also important for what it says and does not say regarding China's construction activities (island building) in the Spratly Islands.

First, the tribunal made it clear that China's land reclamation activities were in violation of its obligations to protect and preserve the marine environment, including its obligations to conduct an environmental impact assessment (EIA) for planned activities in accordance with international standards, and to make the results of the EIA available.

Second, the tribunal held that the construction activities were unlawful because they aggravated and extended the ongoing dispute that was before the international tribunal. In addition, China's construction activities destroyed evidence of the natural condition of the features in question, even though the status of such features was a matter pending before the tribunal.

Third, it should be noted that the tribunal did not rule that it was unlawful in principle for China to undertake construction activities on the disputed islands that it occupies.

Also, the tribunal did not discuss whether it was lawful for China to change the status quo in the South China Sea by building airstrips and other facilities on the islands it occupies. There are no provisions in Unclos on these issues, and the Philippines made no argument that the construction activities were in principle contrary to the provisions of Unclos.

Fourth, there is nothing in the decision which would make it unlawful for China to construct military installations on the islands it occupies, with the exception of Mischief Reef.

CONSEQUENCES OF THE AWARD TO STATES BORDERING THE SOUTH CHINA SEA

China's initial reaction to the award has not been unexpected. It has stated that it does not recognise the legitimacy of the award and that the award will be treated as null and void.

In practice, however, the award will be a "game changer". The award has not only clarified in several ways how Unclos applies to the complex disputes in the South China Sea, but it has has also brought home to all concerned the importance of Unclos in establishing a rules-based order for the oceans and seas, including the South China Sea.

The Asean claimants and Indonesia can be expected to strongly support the decision as its reasoning applies equally to their EEZ claims. They will strongly oppose any attempt by China to assert a right to the natural resources within their EEZs on the basis that it has historic rights within the nine-dash line.

CONSEQUENCES FOR THE INTERNATIONAL COMMUNITY

The award ensures that the waters in the South China Sea outside the 12-nautical-mile territorial sea from the islands will be open to all states to exercise freedoms of the high seas, including overflight, navigation and military activities. This will be welcomed in particular by the United States and its allies in the region.

States concerned with the importance of a rules-based order for the oceans will point out that the award is final and binding, and call on China to carry out its activities in accordance with the award. However, such calls will appear hypocritical if those same states do not first reflect on the implications of the award on their own claims and activities.

Observers will be quick to point out that states such as Japan and the United States currently claim an EEZ from islands which according to the tribunal's interpretation of Article 121(3), are rocks entitled to no more than a 12-nautical-mile territorial sea. Also, the United States should refrain from criticising China for not participating in the case and implementing the award until it becomes a party to Unclos and is itself subject to the system of compulsory binding dispute settlement set out in the Unclos.

CONSEQUENCES FOR THE DEVELOPMENT OF THE RULES-BASED LEGAL ORDER IN UNCLOS

Finally, the reasoning in this case is likely to have an impact on the development of a rules-based order for the oceans whether or not it is strictly complied with by the parties in the case. As an authoritative interpretation of Unclos by eminent law of the sea experts, the award will be studied by law students and government legal advisers for years to come.

Robert Beckman is the Head of the Ocean Law & Policy Programme at the NUS Centre for International Law as well as an Associate Professor at the NUS Faculty of Law.

Source: Straits Times © Singapore Press Holdings Ltd. Permission required for reproduction.

Arbitration Centre praised for innovative changes made to rules

Business Times
08 Jul 2016
Michelle Quah

[Singapore] SINGAPORE'S aspiration to be the seat of choice for international arbitration has received a firm boost, with recent revisions to its international arbitration rules.

The changes, unveiled by the Singapore International Arbitration Centre (SIAC) and which take effect in August, have been praised by international law firms as being truly innovative.

The sixth edition of the rules are the result of an extensive review, which included a public consultation.

The SIAC said it undertook the review almost a year ago to take into account recent developments in international-arbitration practice and procedure, and to better serve the needs of the businesses, financial institutions and governments that use the SIAC.

The review resulted in the introduction of new features and refinements of existing ones; many changes are geared towards meeting expectations for more expedient, efficient processes.

White & Case, an international law firms with a Qualifying Foreign Law Practice (QFLP) status in Singapore, said: "In recent years, the SIAC has emerged as one of the most popular options for international disputes in Asia and more broadly. However, parties have increasingly flagged delay and inefficiency as key concerns in international arbitration."

The revised rules have attempted to address these concerns.

Gary Born, president of the Court of Arbitration of SIAC, said: "These rules provide a state-of-the-art procedural framework for efficient, expert and enforceable resolution of international disputes of all kinds, in all parts of the world."

Singled out for particular acclaim was the SIAC's decision to allow for the early dismissal of claims or defences that are manifestly without legal merit or are outside its jurisdiction.

White & Case Singapore partner Matthew Secomb and associate Adam Tahsin said: "The SIAC is the first major arbitral institution to include this type of provision in its rules.

"This has long been an option for parties before certain national courts. However, it has not been on offer in international arbitration. Instead, parties have had to argue cases to their final conclusion, regardless of the strength of the parties' claims. This can be a frustrating and costly experience. This is especially so when a party is faced with defending against a weak or speculative claim. The procedure will likely be an important differentiator for the SIAC and may well increase its popularity as the forum of choice for commercial parties."

Morgan Lewis Stamford's Singapore partner Timothy Cooke and associate Daniel Steel said: "Such a procedure is welcome because it has the potential to save parties that face hopeless claims or defences substantial time and cost."

Morgan Lewis Stamford is part of global law practice, Morgan Lewis. Morgan Lewis joined forces with Singapore law firm, Stamford Law Corporation, to create an integrated firm here last year.

Another significant change announced by the SIAC is the introduction of provisions for multi-contract, multi-party arbitrations. For example, parties may apply to consolidate arbitral proceedings that arise out of multiple contracts; third parties may also be joined to an arbitration, even if they are not a party to the same arbitration agreement.

Emergency Arbitration proceedings have also been streamlined, paving the way for quicker relief. The SIAC will appoint an emergency arbitrator within one day, rather than one business day, after an application for emergency interim relief is filed. The Emergency Arbitrator must also issue an award of interim relief within 14 days of his appointment.

As White & Case's lawyers noted: "One complaint about emergency arbitrators has been that they sometimes do not act with the urgency that their titles imply."

The SIAC has also improved on its Expedited Procedure, such that the tribunal will have the discretion to determine, in consultation with the parties, whether a case conducted under the expedited procedure may be decided on the basis of documentary evidence only, that is, without a hearing.

Morgan Lewis Stamford's lawyers said: "This change has the potential to bring significant cost savings in matters where the value in dispute is relatively modest."

Of the changes as a whole, global law firm Clyde & Co said the revisions show the SIAC's resolve to remain at the forefront of international arbitration, and that it has made "considerable efforts through the amendment of its rules to address the practical problems in arbitration today".

"It remains to be seen whether the solutions provided in the SIAC Rules 2016 are effective in addressing these problems," it added.

White & Case said the changes reflect "an incremental approach, aimed at promoting efficiency where possible and keeping up to date with current arbitral practice".

"While delay and cost will likely remain a concern for parties, the revised rules go some significant way to addressing those problems," it said.

Earlier this year, the 25-year-old SIAC was reported to have hit new highs in terms of the number of new cases filed, the number of cases administered, as well as the overall quantum in dispute.

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PDPC calls on firms to better protect data

Business Times
21 Jul 2016
Jamie Lee

[Singapore] THE Personal Data Protection Commission (PDPC) on Wednesday called on organisations here to improve how they protect personal data.

This comes shortly after the Monetary Authority of Singapore (MAS) and the PDPC said they would investigate a case involving United Overseas Bank (UOB), which had its clients' unshredded documents found in a trashbag under a tree at Boat Quay.

PDPC said "physical media" should be properly disposed of through shredding, pulping, or incineration.

"Do not leave physical media unattended in common areas if they contain personal data, even if they are meant to be discarded," it said.

It also said the shredder should be maintained regularly, "otherwise, employees may be tempted to opt for less secure methods of disposal".

A report from The Middle Ground, an online news website, revealed last week that an entire trash bag filled with UOB documents was found in June behind the bank's headquarters at Raffles Place. The reporters' "dumpster dive" unearthed several corporate statements, loan applications, and internal reports from the bank.

The news portal put up pictures of the documents - with the sensitive information redacted - that had the personal details of at least one guarantor behind a loan, such as his NRIC number and date of birth, in full view, it said.

UOB did not deny the report and its findings. It told The Business Times that it has concluded its investigation in the matter.

BT approached UOB again on Tuesday for further comment, and asked about the result of the internal investigation, the remedial actions taken, whether this is a systemic issue, and whether the bank has since contacted customers whose data may have been found in the trashbag.

"We have nothing further to add," a spokeswoman told BT.

MAS said it is looking into the matter. Its spokeswoman told BT that the regulator expects banks to have in place measures to safeguard the confidentiality of customer information, and will not hesitate to take action against banks which fail to do so.

Businesses can be fined up to S$1 million per breach under the Personal Data Protection Act (PDPA), which came into full effect in July 2014. The biggest fine so far was a S$50,000 penalty levied on the karaoke chain K Box Entertainment Group for a data breach. Details of more than 300,000 of its customers were leaked onto a file sharing website.


SMEs must make greater effort to protect personal data: commission head

[Singapore] COMPANIES - small and medium- sized enterprises (SMEs) in particular - can do a better job of protecting personal data, the Personal Data Protection Seminar concluded on Wednesday.

Leong Keng Thai, chairman of the PDPC (Personal Data Protection Commission), cited in his welcome address a growing awareness among organisations of the importance of personal data protection. But some, such as SMEs, can "do with more guidance in adopting good practices".

Among several new initiatives to help SMEs boost their data management capabilities, the PDPC will facilitate their tapping of Spring Singapore's Capability Development Grant. This will let them defray up to 70 per cent of qualifying costs, such as for consultancy and training, assessment and audit, and the adoption of data protection software solutions.

The PDPC is also partnering the Workforce Development Agency (WDA) to enhance the current two- day course for data protection officers (DPOs) with a focus on developing their practical skills through data-handling assessments and in-class participation.

Under the Personal Data Protection Act 2012 (PDPA), all organisations in Singapore are required to appoint one or more DPOs to be responsible for ensuring the organisation's compliance with the PDPA.

Mr Leong added that the PDPC has issued three new guides that offer practical advice on building websites, managing IT vendors, and safely disposing of personal data in a physical medium. These are available online.

The PDPC has also updated the existing guide on securing personal data in an electronic medium to include new chapters on cloud computing, IT outsourcing and security patching, as well as revised several advisory guidelines to provide greater clarity on common scenarios relating to access requests and withdrawal of consent.

Mr Leong said that the guides and guidelines are meant to drive a mindset shift from "compliance to accountability", and for organisations to take it upon themselves to foster a "trustworthy data ecosystem" that is conducive to innovation and data use.

Minister for Communications and Information Yaacob Ibrahim added in his opening address at Wednesday's seminar that trust and innovation must go hand in hand.

To an audience of C-level executives, corporate governance heads and data protection officers, Dr Yaacob reiterated how leveraging data - the "new oil of the 21st century" - can make businesses smarter and the economy more competitive, and called for the collection and use of data to "rest upon a foundation of trust".

"It is no longer an option to treat data protection as an afterthought. Businesses who do this have learnt the hard way . . . trying to win back customer trust is far more challenging than trying to win a new customer."

In April, 11 organisations - among them household names Challenger Technologies, Metro, K Box Entertainment Group - were fined or warned for breaching data protection obligations under the PDPA, in what was the PDPC's first tranche of enforcement decisions since the PDPA came into full effect in July 2014.

At the seminar, Dr Yaacob also praised a number of Singapore companies for their data protection practices. One of them was RedMart, a homegrown online grocer startup.

"More people are shopping online. But there are customers who continue to be cautious of online shopping and of how their personal data will be used. To assure its customers, RedMart has designed its operations around personal data protection."

For instance, RedMart's mobile app for its delivery drivers discloses only relevant personal data that allows them to carry out their task. This includes the customer's name and address - but not their email address or contact number. To notify customers of the arrival of their delivery, the app triggers an SMS notification to them via a RedMart secured server, but does not unnecessarily reveal their phone number.

Dr Yaacob pointed out that the Committee on Future Economy is also looking into how big data can be used more effectively by businesses, and "what structures and systems we need to put in place to harness economic value from data". Minister of State for Communications and Information Janil Puthucheary will lead a group to study this matter more deeply, he said.

Jacqueline Cheok

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Hague ruling shows how seas, oceans are global commons

Business Times
14 Jul 2016

TO no one's surprise, the Permanent Court of Arbitration in The Hague has put paid to any assertion that Beijing's claims in the South China Sea had a legal, or for that matter historical, basis. The tribunal has accepted 14 of the 15 claims put forward by the Philippines in a unanimous award.

Most importantly, on Beijing's infamous nine-dash line on its maps, the coordinates of which China has never revealed, the tribunal has ruled that it has no validity whatsoever under the 1982 United Nations Convention on the Law of the Sea . The Hague tribunal has found that China never had exclusive use of the disputed region. This is a hugely important ruling to every trading nation; the seas and oceans are a global commons and available for everyone's use. Hopefully, it will be the last time any nation tries to lay claim to any patch of the sea far from its shores as its sovereign territory.

As well, the tribunal has ruled that none of the maritime features in the Spratly Islands claimed by Beijing could be considered islands in their natural state for the purposes of the law of the sea. Consequently, these outcrops do not generate entitlements to that all-important 200-nautical mile exclusive economic zone. China is a signatory to the convention as is the Philippines. So are Malaysia and Vietnam, the other claimants to the disputed shoals.

Of course, Beijing long ago realised that its position was extremely tenuous and decided to boycott the proceedings. Now the country's state media is in full cry in rejecting the ruling and calling it "null and void". Everyone involved in this issue expected this initial reaction; anything else would have been construed as a loss of face for China's leaders and would have diminished the ruling Communist Party's standing in the eyes of its citizens. Given that the Chinese economy is slowing at this time as well, it must be expected that Beijing will indulge in an extended period of chest thumping to shore up its nationalist credentials.

Clearly, Chinese President Xi Jinping knows that while the decision is final and binding, there is no global police force to enforce the judgment. Recent reports suggest that Mr Xi's latest modus operandi is to provide basic military training and subsidies to young fishermen to get them out in the disputed waters. This way, any encounter of his maritime militia with other claimants will remain below the threshold of a military clash even as it reinforces its claim to be working "traditional" fishing grounds. It seems that Mr Xi's salami-slicing technique of advancing China's territorial claims against its neighbours remain intact.

So what happens next? Unfortunately, Asean is unlikely to be able to leverage this ruling to push for a binding Code of Conduct on this issue. The divisions within the group are too wide as was evident when its statement of concern last month had to be withdrawn after a meeting of Asean foreign ministers and their Chinese counterpart. It is obvious that Beijing is able to get Cambodia and Laos to do its bidding in the forum.

If his past statements are any guide, the new Philippine president, Rodrigo Duterte, may seek to play down the territorial issue so as not to jeopardise economic ties with China. But it is also clear that most Filipinos are elated by the ruling and it would be hard for Mr Duterte to ignore his voters' feelings. So it is likely that both Beijing and Manila, each for its own reason, will attempt to deal with the matter through back channels, away from the public gaze, for a while.

Whether Mr Duterte will be able to perform that kind of balancing act that will keep China onside without disappointing Filipinos remains to be seen. Malaysia, Vietnam and Manila's treaty ally, the US, as well as Japan, will also be watching to see how Beijing handles the situation after the shouting is over.

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Food Empire unit loses fight over trademark

Straits Times
08 Jul 2016
Grace Leong

McDonald's keeps exclusive rights to use Mc, Mac trademarks in EU

A unit of Singapore food and beverage maker Food Empire Holdings has lost yet another battle with McDonald's over its "MacCoffee" trademark.

Europe's second-highest court has ruled that the American fast-food giant has exclusive rights to use "Mc" or "Mac" for foodstuffs and beverages in the European Union (EU).

A court in Luxembourg upheld the EU Intellectual Property Office's rejection of an application by Food Empire unit Future Enterprises to register "MacCoffee" as an EU trademark for foodstuffs and beverages.

Food Empire's directors said they were "disappointed" with the latest defeat but said the firm plans to appeal.

In 2007, the Singapore Court of Appeal upheld a lower court's decision to block Future Enterprises from dropping an eagle design from its MacCoffee mark.

McDonald's had objected when Future Enterprises attempted to change it, saying the MacCoffee trademark would become too similar to McCafe, the name of its coffee and dessert bar, if the eagle was dropped.

Food Empire said it sells very little MacCoffee products in the EU.

"Definitely the potential is there, but we are not relying solely on this mark as our biggest sales in the EU is frozen food," Mr Tan Wang Cheow, Food Empire's executive chairman, told The Straits Times yesterday.

The group had challenged the EU Intellectual Property office's decision because it wanted its mark to be protected there.

"MacCoffee instant beverages are sold in retail markets and our packaging design is unique. Consumers of MacCoffee have to purchase and prepare the beverages themselves so there is no confusion with McDonald's restaurants, where consumers are served with ready-to- consume food," Mr Tan said.

The group's flagship MacCoffee is a leading three-in-one instant coffee brand in its core markets of Russia, Ukraine and Kazakhstan. Its products are also sold in Central Asia, China, the Middle East, and the United States.

But the Luxembourg court ruled on Tuesday that the MacCoffee and McDonald's trademarks have "a certain degree of phonetic and conceptual similarity".

"The structure of the MacCoffee trade mark is very similar to that of the Mc family of trade marks, which combines the prefix 'Mc' with the name of a foodstuff," it said in the decision. "It is highly probable that MacCoffee rides on the coat-tails of McDonald's in order to benefit from its power of attraction... and exploits without paying any financial compensation, the marketing effort made by McDonald's to maintain its image."

Food Empire said the decision will have no material impact on its performance this financial year.

Mr Tan said it has "very strong positions in many key markets, and in most of these countries, it already has its trademarks registered".


RIDING ON COAT-TAILS

It is highly probable that MacCoffee rides on the coat-tails of McDonald's in order to benefit from its power of attraction... and exploits without paying any financial compensation, the marketing effort made by McDonald's to maintain its image.

EUROPE'S SECOND-HIGHEST COURT, explained in its ruling on Tuesday.

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The 'Constitution for the oceans' at stake

Straits Times
20 Jul 2016
Kentaro Nishimoto

On July 12, the Arbitral Tribunal under Annex VII to the United Nations Convention on the Law of the Sea (Unclos) rendered its award on the South China Sea Arbitration. The award expressly ruled that China's claims in the South China Sea, based on its so-called nine-dash line, are contrary to Unclos. The tribunal also decided on the legal status of certain maritime features in the South China Sea and found that no feature in the central part of the South China Sea is entitled to an exclusive economic zone (EEZ) or a continental shelf.

It clearly held that the various activities of China in the South China Sea, such as interference with the activities of the Philippines, large-scale land reclamation and the construction of artificial islands, violate international law.

This arbitration proceeding was initiated by the Philippines in January 2013, against China's claims and activities in the South China Sea. China has denied the jurisdiction of the tribunal to deal with this case, and has completely refused to take part in the proceedings. It has only made its position known through informal means.

However, Annex VII of Unclos, which provides for the procedural rules for the arbitration, expressly states that the absence of a party to the proceedings does not bar its progress. It also stipulates that the award is final and without appeal, and that the parties to the dispute must comply with the award. In other words, as a State party to the Convention, China is legally obliged to comply with the decision.

The South China Sea dispute is a complex one, with a number of countries in dispute with each other, both with respect to sovereignty over islands and maritime areas. We should not expect the award to bring an end to the overall South China Sea dispute.

The territorial dispute over the islands in the South China Sea is outside the scope of the arbitration, and remains unsolved. Quite apart from this issue, however, the maritime aspect of the dispute was complex enough in its own right, due to China's unique claim of historic rights to the waters within the nine-dash line, and also because it was unclear which maritime features in the South China Sea would be entitled to a 200-nautical-mile EEZ and a continental shelf.

The tribunal removed these two uncertain elements from the overall South China Sea dispute by clarifying that the nine-dash line cannot be justified under international law and that no island in the central part of the South China Sea is entitled to a 200-nautical-mile EEZ and a continental shelf.

This resulted in a clear picture in which China is not entitled to make any kind of claim to most of the maritime area of the South China Sea.

The tribunal ruled almost entirely in favour of the Philippines and also found that a number of activities by China were in breach of various provisions of Unclos.

However, as the award itself points out, it is more about building common understandings about entitlement to maritime areas than condemning the unlawful acts by China. Its significance lies in the fact that it addressed the fundamentally different views by the parties of their rights to maritime areas, and indicated what must be commonly accepted in the light of Unclos.

It is indispensable to have such common understandings, if the parties in the South China Sea dispute are to proceed on a path towards its resolution.

In this sense, the award is a major step forward towards the resolution of this entangled dispute. However, this also means that the prospects for the resolution of the dispute will be further diminished if China insists on its one-sided claim and refuses to comply with the award.

The award of the Arbitral Tribunal also has significant implications beyond the South China Sea dispute for the maintenance of the international order at sea.

Ambassador Tommy Koh of Singapore, who presided over the Third United Nations Conference on the Law of the Sea which gave birth to Unclos, referred to this convention as a "Constitution for the oceans".

Worthy of such description, Unclos prescribes the fundamentals of the present maritime order in a manner that balances the rights of coastal states and the navigational rights of other states. Claims to maritime areas not based on the convention may lead to the destruction of that balance, and are a challenge to the international order of the oceans. From this viewpoint, countries should unite to persuade China to comply with the award.

Ever since the Philippines lodged its case, China has been criticising the move as aggravating the dispute in the South China Sea. Recently, China has also begun to claim that many countries actually support its position.

However, such efforts towards justifying non-compliance with the award wholly miss the point. The reason Unclos provides for a compulsory dispute-settlement procedure is to prevent the balance embodied in the convention from being undermined by one-sided interpretation of its provisions.

The use of the mechanism by the Philippines was very much in line with what was intended under the convention. By signing and ratifying Unclos, the parties to the convention have committed themselves to resolve disputes based on international law through the dispute-settlement mechanism.

Even if there is political support from other countries, this cannot justify a departure from the existing legal framework. Whether China complies with the award is directly connected to the question of whether or not it intends to act within the existing legal framework as a responsible global power.

• The writer is Associate Professor at the School of Law, Tohoku University, Japan.

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Force of law or law of force? The ball is in China's court

Business Times
14 Jul 2016
Derwin Pereira

THE Permanent Court of Arbitration's ruling on the South China Sea marks a watershed in Asian maritime history. The decision by the Hague-based international tribunal could ignite tensions leading to war if Beijing responds by behaving as if international law does not matter. It is in China's own interests to act otherwise, as a mature rising power which has a stake in the peaceful evolution of the Asian security order.

On Tuesday, the tribunal concluded that China has no legal basis to claim "historic rights" to islands in the South China Sea and that it has violated the sovereign rights of the Philippines, which had lodged a suit against it in 2013. The tribunal repudiated China's claim to most of the South China Sea as its sovereign territory on the basis of Chinese maps dating back to the 1940s that carry the ubiquitous "nine-dash line".

The Hague ruling is historic because it opposes privileging the past over advances in law. If that were not to be the case, many countries would employ the easy expedient of historical precedent, which often is difficult to counteract empirically, to establish claims in the present. That would be a recipe for disaster.

Beijing had indicated its stance on a judicial outcome to the dispute by refusing to participate in the case and arguing that the tribunal had "no jurisdiction" over the issue. A country which believes that its case is sound hardly would have abstained from arguing its position vigorously.

Instead, Beijing sought to make a virtue out of necessity by boycotting the court, whose judgements are binding but which has no means of enforcing them. Unlike national laws, which are backed by the coercive authority of the police, international law has no global police force at its command.

This gap - between the agency of international law and its actual implementation - will be filled now by strategic displays of might by China, other contestants, and finally the only power that can stare it down militarily: the United States. In a nutshell, the South China Sea issue will pass from the remit of international law to the ambit of force.

To be fair, in choosing that option, China would do no more than what other powers have done when rulings under international law have gone against them: They simply ignore those decisions when the balance of strength is in their favour.

The Harvard strategic thinker, Graham Allison, underlines this point in noting that when Nicaragua sued the United States in the 1980s for having mined its harbours, Washington argued that the International Court of Justice did not have the authority to hear the case. Similarly, Russia was dismissive when the Netherlands sued it in 2013. Britain disregarded an arbitral ruling that it had violated the Law of the Sea by unilaterally establishing a Marine Protected Area in the Chagos Islands.

As Mr Allison points out, the US never has been sued under the Law of the Sea because it has not signed the agreement, and therefore is not bound by its rules. At least, China has, but it might well choose to follow the American model and withdraw from the Law of the Sea Treaty altogether.

Thus, it will not do to blame China for actions that its critics today accuse it of - actions that some of those critics themselves are guilty of. If national laws are based on the premise that right is might, international law is powerless to stand in the way of the timeless jungle dictum that might is right. Thus, China simply might follow its predecessor Western great powers in subverting the authority of international law when it does not serve its national interest.

LAW OF THE JUNGLE

At the moment, it appears that Beijing will do just this. However, even if the claims of international law were to be dismissed, the law of the jungle cannot. Unlike Nicaragua, whose legal action against the United States failed to elicit a degree of international support sufficient to make Washington rethink its position; unlike the Netherlands' grievance, which was not serious enough to build a coalition of the willing against Russia; unlike the Chagos issue, which did not rouse the ire of international opinion against Britain - unlike all these precedents, the South China Sea is home to a different kettle of fish.

There, China's dismissal of international law will draw in the countervailing intervention of the United States, with Japan, South Korea, Australia, India and some countries of South-east Asia forming a ring of containment around a China whose maritime ambitions are running up against their shores, strategically if not physically.

If the Chinese believe that might is right, they will discover that greater might produces greater right. And not even China, lulled apparently into a sense of infallible greatness by its economic successes, will believe that it can prevail against the combined military prowess of its rivals.

Then, whatever the successes of its assertions of "sovereignty" in the South China Sea, Beijing will find out that it has thrown out the interests of the mainland Chinese baby with the bathwater of that sea. This realisation should encourage a spirit of caution in the Beijing leadership.

At stake is its reputation among fellow-Asian nations. Smaller countries will be looking to see how China deals with this setback to its maritime ambitions. A measured diplomatic response would be welcome; the flexing of military muscles would confirm their fears of a Chinese hegemon.

In particular, smaller countries look to international law to protect their interests. When the great powers share that respect for the law, their stature and acceptance grow among their weaker neighbours. When a great power defies international law, it is not long before another one comes along to try and settle matters by force.

China has an excellent opportunity to break that sordid logic of international relations, and put its relations with the rest of Asia and beyond on a new footing.

The writer heads Pereira International, a Singapore-based political consultancy. He is also a member of Harvard University's Belfer Center for Science and International Affairs.

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AmFraser goes to trial over $1.88m suit against former client

Straits Times
08 Jul 2016
Selina Lum

In a High Court trial that started yesterday, stockbroking firm AmFraser Securities is seeking to recover $1.88 million, with interest, from a former customer who racked up the trading losses in the October 2013 penny stock crash.

Mr Goh Chengyu, 32, has refused to pay the debt, alleging that he is not liable as the trades in question were carried out without his authorisation.

The bone of contention in the case is whether Mr Goh had a private arrangement with his trading representative, in which he authorised his cousin and the cousin's friend to trade on his behalf.

AmFraser, which has been renamed KGI Fraser Securities following an acquisition by Tai- wan's KGI Securities, contends that such an arrangement had been in place since Mr Goh set up his trading account.

Mr Goh - a project executive at a subsidiary of Wee Hur Holdings, a listed property developer substantially controlled by his father and other family members - disagrees.

He contends that he personally gave trading instructions to trading representative Heng Gim Teoh on all trades - except for the four disputed trades executed in early October 2013.

Setting out AmFraser's case yesterday, the firm's lawyer, Mr Danny Ong, said that Mr Goh first met Mr Heng in January 2013 "at the instigation" of his cousin, Mr Adrian Goh, then a corporate dealer with CIMB-GK Securities.

From February to September 2013, more than 90 trades worth over $45 million were made in Mr Goh's accounts, mainly in four counters, namely Asiasons, Blumont, LionGold and IHC.

AmFraser contends that these trades, as well as four trades in October, were all executed by Mr Adrian Goh or his friend Lincoln Lee.

Mr Heng, who took the stand yesterday, testified that Mr Goh had not called him "since Day 1".

After the penny stock crash, Mr Heng said that Mr Goh and his uncle - Mr Adrian Goh's father - tried to put pressure on him to be the "scapegoat" and to accept personal liability for the losses.

Mr Heng alleged that the Gohs offered him a job in Vietnam in exchange for admitting that the October trades were unauthorised.

He disagreed when Mr Goh's lawyer Philip Fong put it to him that he had told his client that he would take responsibility for the losses in his account.

However, Mr Heng agreed with Mr Fong that there was no written authorisation from Mr Goh for him to take instructions from Mr Adrian Goh or Mr Lee to trade with his account.

The trial continues.

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Mother falsely accused son of raping her: Lawyer

Straits Times
20 Jul 2016
Selina Lum

Defence counsel says accused's stepfather, mother lied in order to get him out of house

The lawyer for a 33-year-old man accused of raping his biological mother at their home told the High Court yesterday in his ongoing trial that the accusations were a "complete collusion" to get his client "out of the house".

Senior Counsel Harry Elias revealed the defence's case while cross-examining the accused's stepfather, who testified that the accused drank alcohol, smoked cannabis and created disturbances at home.

The lawyer suggested that the 54-year-old stepfather and the accused's 56-year-old mother went to the police to accuse him of rape in order to "get rid of him".

Speaking in an agitated tone, the stepfather firmly denied the suggestion, pointing out that he could have called the police to arrest the accused for taking drugs.

"We did not lie, this is what happened. We are not using this as a reason to make him leave the house. This is a shameful act," he said through a Tamil interpreter.

He said that the accused became a "nuisance" a few months before the alleged rape. He said he expressed his annoyance to his wife as he was not on talking terms with the accused.

The accused faces one count each of rape, molestation and aggravated molestation. He is contesting all the charges.

The second of three sons, he worked as a safety coordinator and lived with his mother and stepfather in the one-bedroom flat.

Known to his family as "Boy", he is accused of sexually attacking his mother after he returned home at about 2.30am on Oct 4, 2013.

Yesterday, his stepfather, two brothers and sister-in-law took the stand to give their accounts of what happened when they met the alleged victim hours after the alleged attack.

A six-minute recording in the Malay language of a conversation between the woman and the accused was played when each brother took the stand, to confirm it was the same one she had played for them after the incident.

The woman had made the recording using two mobile phones while she was on her way to her eldest son's home after fleeing her flat at about 6am.

The transcript and translation of the conversation are expected to be tendered in court today.

Yesterday, the court heard the woman was crying when she arrived at her eldest son's flat at about 7am. She was shaking as she told her daughter-in-law in simple English what Boy had done to her.

Her husband, alerted by the daughter-in-law, arrived at the flat soon after. They then went down to a nearby playground to wait for the two sons, aged 36 and 32.

At the playground, she cried as she played the audio recording and said that she wanted to make a police report. However, she did not go into details of what had happened between her and the accused.

The youngest son testified that after the report was made, his mother told him that the accused returned home drunk and climbed on top of her but she could not push him away as he was too heavy.

Her husband said he had gathered that she was raped but it was only one week later, when they were in a "more relaxed mode" that she told him directly.

The two brothers also painted a picture of the accused as a filial son who helped to support the family financially. From time to time, he lent money to them as well as to their stepfather, they said.

The stepfather, a cook, rejected contentions by the defence counsel that he was embarrassed when the accused went to his hawker stall to chase him for repayment.

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The Hague ruling: 'Absurd award that contravenes procedural justice'

Straits Times
14 Jul 2016
Wang Wen & Chen Xiaochen

China views the Arbitral Tribunal as wrongly conceived, lacking jurisdiction to rule on territorial matters. But it remains open to negotiations.

On July 12, a temporarily established Arbitral Tribunal located in The Hague, sharing office service with the Permanent Court of Arbitration but not a part of that, released a unanimous award over the South China Sea Arbitration.

The award was in favour of almost all the Philippines' claims. However, no matter how sophisticated the 500-page award may appear, it comes from an arbitration that is flawed in procedure, and is not in accordance with its jurisdiction. In short, with the arbitration's lack of legitimacy and jurisdiction, the award is not legal, and thus not binding.

While the award categorically denied China's historic rights in its nine-dash-line map, in fact it does not even have authority and jurisdiction over territorial disputes, as stated in the United Nations Convention on the Law of the Sea (Unclos).

Then there is the fact that the arbitration case was unilaterally initiated by the Philippines without any diplomatic consultation with China.

This is inconsistent with the Philippines' own commitment, in the Declaration on the Conduct of Parties in South China Sea, to resolve the dispute through consultations and negotiations. According to the Equitable Estoppel, its words should be its bond. That is why we see the unilateral arbitration as an act of bad faith of the Aquino government of the Philippines.

Thus, the lawfulness of the arbitration itself is doubtful from the very beginning.

Fundamentally, therefore, we cannot expect any objective judgment to emerge from the tribunal. It simply does not accord with procedural justice.

Merits of the case When it comes to the actual merits of the case and the subject matter of the arbitration, the tribunal's ruling cannot be justified as well.

The essence of the subject matter of the arbitration is the territorial disputes over the maritime features in the South China Sea.

Territorial disputes are beyond the scope of the Unclos and does not concern the interpretation or application of the Convention. As far as the present arbitration is concerned, without first having determined China's territorial sovereignty over the maritime features in the South China Sea, the tribunal will not be in a position to determine the extent to which China may claim maritime rights in the South China Sea pursuant to the Convention, not to mention whether China's claims exceed the extent allowed under the Convention. In essence, the sovereignty issue falls beyond the purview of the Convention.

That is why it is so surprising to many observers, even to those who are inclined to the Philippine side, that the tribunal boldly claimed jurisdiction and then directly denied China's historic rights in the "nine-dash line".

That China has historic rights over the areas within the nine-dotted line has been the subject of much historical and academic writings, so we will not go into them here.

What we want to emphasise here is that, without clear jurisdiction, the tribunal simply has no rights to even arbitrate the case, let alone fundamentally deny China's rights.

Second, the Philippines, by requesting the tribunal to determine the maritime features "occupied or controlled by China", has in effect dissected the Nansha Islands as a whole. It deliberately makes no mention of the rest of the Nansha Islands, including those illegally captured or claimed by the Philippines.

Its real intention is to gainsay China's sovereignty over the whole of the Nansha Islands, to deny the fact of its own illegal seizure of or claim on several maritime features of the Nansha Islands, and to distort the nature and scope of the China- Philippines disputes in the South China Sea.

It sounds even more ridiculous for the award to claim that the largest island in the Nansha Islands, Taiping Dao (Taiping Island), currently controlled by the Taiwan authorities of China, is not an island. In fact, this section has triggered more ridicule than anger among scholars.

Third, the tribunal also alleges that China's claim to and exercises of maritime rights in the South China Sea have unlawfully interfered with the sovereign rights, jurisdiction and rights and freedom of navigation which the Philippines is entitled to enjoy and exercise under the Convention.

The premise for this claim must be that the spatial extent of the Philippines' maritime jurisdiction is defined and undisputed, and that China's actions have encroached upon such defined areas. The fact is, however, to the contrary.

China and the Philippines have not delimited the maritime space between them. Until and unless the sovereignty over the relevant maritime features is ascertained and maritime delimitation completed, this category of claims of the Philippines cannot be decided upon.

To decide upon any of the Philippines' claims, the tribunal would inevitably have to determine, directly or indirectly, sovereignty over the maritime features, which is beyond its legitimacy and jurisdiction. That is why China does not participate in the arbitration, nor accept, recognise or implement the award.

But it does not mean China refuses to talk. In fact, China has always been committed to settling disputes over territorial sovereignty and maritime rights through consultation and negotiation between the sovereign states directly concerned.

Regardless of the award and the arbitration, China will continue to work closely with Asean countries, including the Philippines, to safeguard the peace and stability and uphold the freedom of navigation in the South China Sea, so as to eventually turn it into a "sea of peace, friendship and cooperation".

Wang Wen is the Executive Dean of Chongyang Institute for Financial Studies, Renmin University of China; Chen Xiaochen is a researcher at the institute. Chang Yudi, intern researcher at the institute, also contributed to the article.

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Ex-wife to get $76k as court rejects bid to void divorce

Straits Times
08 Jul 2016
K.C. Vijayan

A woman will get $76,000 in matrimonial assets following her divorce instead of the $1,000 willed to her by her late former husband, after the top court here refused a bid to void the divorce.

Madam Hou Wa Yi, 52, a Chinese national based in Shanghai, had obtained a provisional divorce order, or decree nisi, in 2006 against her then spouse Yap Kiat Cheong. But Mr Yap, a Singaporean, died in 2011 at age 78 before the decree could be made absolute.

A decree nisi is issued by the court to signify there are no obstacles to the divorce and to enable all ancillary matters such as maintenance issues and how to apportion the couple's assets to be settled before a decree absolute is made.

Two years after Mr Yap died, the executors of his estate applied for the decree nisi to be cancelled, claiming that the marriage had been dissolved in Shanghai a year before divorce proceedings started in Singapore in 2005.

If the court ruled in their favour, Madam Hou would lose the $62,176 granted as her share of the couple's matrimonial assets and a lump sum maintenance payout of $14,400. These were granted in 2010 in ancillary proceedings on the back of the decree nisi granted by the district judge in 2006.

Under Mr Yap's will, Madam Hou was to get $1,000 while the bulk of the estate was left to his niece and nephew Yap Chai Ling and Yap Swee Jit, who were his executors.

The High Court rejected the executors' application last year.

The duo's lawyer Koh Tien Hua appealed to the apex court while Madam Hou, represented by lawyer Dorothy Chai, contested the claims. The top court, comprising Judges of Appeal Chao Hick Tin, Andrew Phang and Justice Quentin Loh dismissed the application.

In judgment grounds released yesterday, Judge of Appeal Phang said it is "incongruous if a decree nisi cannot be made absolute once death of a party to the marriage intervenes, but can be set aside by all and sundry, except the parties".

Describing the case as "unfortunate and unusual" involving an "important point of law", the court noted that "there appears to be a high degree of animosity and acrimony between the parties".

Source: Straits Times © Singapore Press Holdings Ltd. Permission required for reproduction.

Accountants play a vital role in money laundering war

Business Times
20 Jul 2016
Kang Wai Geat

RECENTLY, the Monetary Authority of Singapore (MAS) closed down BSI Bank as a result of severe infringements of anti-money laundering regulations. BSI Bank was also slapped with a S$13.3 million penalty for 41 breaches of anti-money laundering regulations. Weeks after shutting down BSI Bank, MAS announced plans to set up a dedicated anti-money laundering department to combat illicit financial activities.

The message is clear - there is a hefty price to pay for taking anti-money laundering regulations lightly. The ubiquitous threat of money laundering has become more serious worldwide and companies are treating this as no laughing matter.

In a Global Economic Crime Survey 2016 by professional services firm PricewaterhouseCoopers of more than 6,300 respondents in 115 countries, 74 per cent indicated that their organisations have performed an anti-money laundering/counter terrorist financing risk assessment for their businesses.

As a nation, Singapore is not spared from the risk of criminals on the hunt for opportunities to wash their dirty monies clean. In the same survey, 26 per cent of the respondents from Singapore reported money laundering incidents, a marked increase from a low 5 per cent in 2014. This is a timely reminder that the menace of money laundering cannot be underestimated.

Money laundering has dire consequences. Socially, it can implicate innocent people who would not have otherwise committed illegal acts. Individuals have been convicted for acting as money mules. There are also reports of Singaporeans being found guilty of money laundering offences in other countries such as Australia, where the real estate sector has been widely reported to be a hotspot for money launderers.

Economically, like a wrecking ball, money laundering can effortlessly demolish Singapore's hard-earned reputation as a trusted, sound and vibrant global financial centre established over the years. But fighting money laundering is no walk in the park. It calls for a nationwide effort and every individual will have to chip in.

SPOTTING MONEY LAUNDERING

Accountants can contribute to the anti-money laundering cause in a big way. Arising from the financial nature of the work, accountants may have a higher chance of crossing paths with money launderers or dealing with illicit funds from money laundering.

Besides, money launderers covet the expertise of accountants, which they could exploit to facilitate money laundering via avenues such as transferring funds across numerous jurisdictions, setting up shell entities as facade for money laundering activities, and structuring complicated transactions which are difficult to comprehend, just to name a few.

Accountants have to be eagle-eyed to spot any suspicious transactions during their work. They need to possess an inquisitive mind when encountering any shady dealings, to uncover the underlying reasons for their occurrences. Hence, it is vital that accountants keep a watchful eye for indicators of suspicious transactions. For example, if the company receives unusual payments from unlikely sources inconsistent with the company's business, this should immediately trigger an alarm bell.

Also, there should be cause for concern if the company makes huge payments for no apparent reason, even if they are made to related entities. Another telltale sign is when the company engages organisations located in jurisdictions identified by the Financial Action Task Force as "high-risk and non-cooperative". These include countries such as North Korea, Iran, Laos, Bosnia and Herzegovina, Iraq, and so on.

In addition, cash transactions of large amounts should be scrutinised. It is not uncommon for money launderers to purchase big ticket items such as cars, antiques, property, gold and diamonds with their ill-gotten gains.

While the existence of one, or even a combination, of the indicators may not be conclusive evidence that money laundering is taking place, accountants should nevertheless err on the side of caution and remain vigilant, especially when money laundering is involved.

WHAT TO DO NEXT

Next, what should accountants do after they have identified suspicious transactions? Accountants should not confront the suspected perpetrators at the first instance. If they do so, they run the risk of disclosing information which may prejudice any impending or ongoing investigation. Under the law, the accountants would have committed a tipping-off offence, albeit inadvertently.

Instead, accountants should lodge a suspicious transactions report with the Suspicious Transactions Reporting Office under the Commercial Affairs Department of the Singapore Police Force and let the relevant authorities handle the matter thereafter. In fact, this is a statutory requirement imposed on any employee or business owner, not just accountants.

It is reassuring and noteworthy that the law protects the informer in that if the reporting is done in good faith, it will not be treated as a breach of law, contract or professional conduct. Moreover, the identity of the informer is withheld and not disclosed unless required by the court.

Therefore, accountants (or for that matter, anyone) should have no qualms about lodging suspicious transaction reports since it is an obligation and there is adequate legal protection accorded.

Furthermore, accountants should note that the threshold for reporting suspicious transactions is low. They need not have actual knowledge of money laundering activities having taken place to lodge a suspicious transaction report.

Although the term "suspicious" is subjective, there should be some objective evidence underlying the basis for the suspicion. As long as accountants are of the view that something is amiss, they should lodge a suspicious transaction report.

BENEFICIAL OWNERS

Another significant area is the customer due diligence that accountants should perform on their clients. One critical aspect of the process is the identification of the person who ultimately owns or controls the client, also known as the beneficial owner. This is of paramount importance as it may shed light on any high-risk personnel who may be more liable to committing money laundering crimes.

But the step poses one key challenge which accountants not just in Singapore but all over the world have to surmount - the lack of information collated and published on beneficial owners. In the absence of any legal obligations on companies to disclose beneficial owners, accountants are being hung out to dry in terms of getting hold of reliable information on beneficial owners.

As the world develops and improves, so do criminals who are capable of devising the most innovative and clandestine way to hide information. More needs to be done to help accountants.

One proposal championed in the European Union (EU) is to have centralised registers containing information about beneficial owners. Law enforcement agencies should have unrestricted access to the information. The public may also obtain the information if cogent arguments can be put forward for such requests.

According to information released by the EU Office of Transparency International in May 2015, four out of five EU citizens support imposing requirements on companies to reveal information about their beneficial owners.

At the Anti-Corruption Summit 2016 held in May in London, the former United Kingdom Prime Minister David Cameron announced that Britain will set up public registers of the true owners of companies. France and the Netherlands will take similar action.

The efforts of one person alone cannot eradicate money laundering. To effectively combat money laundering, everyone needs to contribute, including accountants. The last thing we need is another BSI Bank. As long as we stay committed in our endeavours to fight money laundering, we can keep the evildoers away from this place we call home.

  • The writer is assistant director of technical advisory and professional standards, and learning and development at the Institute of Singapore Chartered Accountants.

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Chew Eng Han in fresh dispute with City Harvest Church

TODAY
14 Jul 2016
Amanda Lee

SINGAPORE — Even as the six current and former City Harvest Church (CHC) leaders await the outcome of their appeals against their convictions and jail sentences, one of them — Chew Eng Han — has filed a police report embroiling more members of the church into a dispute.

Chew, who is facing jail after being convicted alongside church founder Kong Hee and four others of criminal breach of trust and falsification of accounts, said he has lodged a police report against eight people linked to the church, alleging “fraudulent misrepresentation” of facts about the church.

He also claimed funds were misused. His accusations were denied by lawyers acting for CHC in a letter to Chew on July 7, with the firm, JLC Advisors LLP, calling them “bare allegations”. “Further, these allegations are misconceived and/or erroneous as a matter of law,” said the letter.

Aside from Kong and his wife Ho Yeow Sun, the eight named by Chew include CHC Kuala Lumpur founder Kevin Loo, former CHC executive pastor Derek Dunn and CHC executive pastor Aries Zulkarnain.

Responding to TODAY’s queries, the police confirmed that a report has been made. “As police investigations are confidential, and the complainant Mr Chew also has an appeal against his conviction and sentence pending adjudication by the Supreme Court, it is inappropriate at this juncture for the police to comment further,” they said.

Chew, Kong, the church’s former second-in command Tan Ye Peng, former church board member John Lam, former church finance manager Serina Wee and Sharon Tan were convicted in November and sentenced to jail terms ranging from 21 months to eight years.

The following month, they filed notices of appeal against their conviction and sentences. Their appeal will be heard in the High Court in September.

The church also launched a civil suit against Chew and his firm AMAC Capital Partners in 2014. The suit, involves about S$21 million in unreturned investments, including S$4.6 million in accrued interest, that Chew and firm allegedly owe the church.

Copyright 2016 MediaCorp Pte Ltd | All Rights Reserved

SSC files bankruptcy petition against ex-head Freddie Koh

Straits Times
08 Jul 2016
Elena Chong

The Singapore Swimming Club (SSC) has filed a creditor's bankruptcy application against its former president Freddie Koh Sin Chong, 70, who had used club funds to defend a defamation suit.

To date, he owes a total of $1.85 million to the club, including interest. But this sum excludes the costs of the trial and appeal, which are yet to be assessed. He has offered to pay $180,000, which the club has rejected. The hearing of the petition is on Aug 4.

Mr Koh owed $1.52 million to SSC after the Court of Appeal overturned a High Court decision last year, which rejected the club's bid to recover the money utilised by him in his unsuccessful defence of a 2009 defamation suit.

The apex court ruled that the club was entitled to a refund on grounds that it had paid Mr Koh's legal bills under a mistaken belief he was properly discharging his duties to SSC, among other things.

Mr Koh, who became club president in May 2008, was ousted at an extraordinary general meeting in March 2012.

Shortly after Mr Koh was sued for defamation, the management committee headed by him passed a resolution stating that SSC will assume liability for legal actions brought against office bearers as a result of them discharging their duties to the club. Following this resolution, the club bore Mr Koh's legal costs. In 2011, Mr Koh lost the defamation suit. After the ruling, SSC continued to pay his legal bills.

In March 2012, club members voted to remove Mr Koh, to recover the legal costs paid for him and to stop further payment. He then sued the club, arguing that it has to indemnify him for the costs.

The club counter-sued him for the return of the money.

The High Court dismissed both claims in 2014. The club appealed.

Senior Counsel Tan Chee Meng and Ms Chang Man Phing of WongPartnership acted for SSC while Mr Paul Seah of Tan Kok Quan Partnership represented Mr Koh.

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Upset over Swiber Holdings' disclosures ... or lack of

Business Times
20 Jul 2016
Tan Hwee Hwee

IF the intent of the underlying tone of Swiber Holdings' adverse announcements following its July 4 share trading halt was to reassure the market, the offshore and marine group could not have veered further off the mark.

BT has received letters from readers appealing for the paper to air their misgivings relating to its announcements on July 8 and July 11. The crux of their concerns is late announcements and lack of details in what they perceive as material disclosures.

The first announcement they refer to is that on July 8 when Swiber said that a US$710 million offshore field development off West Africa that was first announced as a project award to the company on Dec 15, 2014 was deferred due to "weakness in the oil and gas sector".

On the same day, the O&M player announced "outstanding letters of demand" relating to trade claims totalling US$4.76 million, of which it said it has sufficient resources to satisfy. It also said that it would "vigorously defending any claims that are without proper basis".

Then on July 11, Swiber said that it was pursuing legal recourse against AMTC Ltd for non-payment of a US$200 million subscription for preference shares in a Swiber subsidiary. The share subscription was to have been completed on June 29.

It would have been even obvious to anyone new to this listed company that it has been going through a very rough patch. For others more familiar with Swiber, the disclosures raised more questions than answers.

Back in December 2014, Swiber touted the US$710 million project award as its first breakthrough into West Africa and laid claim to having clinched contracts totalling to US$1.03 billion for that year-to-date. The value of that so-called first project in West Africa was notably one of the highest the company has secured since oil prices collapsed in the second half of 2014. It said that the project was to be executed from the first quarter of 2015 through to the middle of 2017. Yet, it chose to disclose only this July that the project delivery has been delayed. The July 8 disclosure ("Update on offshore field development project") also neither identified nor disclosed further details of the client. It also didn't elaborate on the reason behind the deferment.

To be fair, Swiber is not the first listed O&M player here to blame non-performance (of contracts or corporate developments) on the industry weakness. Historically, listed O&M firms have also cited confidentiality as justification for non-disclosure of either of three key parameters of the strength of a contract - client, name of project or field development and the value of the award. But every bit of information counts during times when even oil majors have been cancelling or deferring projects. So why should Swiber - for that matter any listed O&M company - withhold details that would have helped the investors assess the sanctity of a material contract?

In Swiber's case, it could be further argued the market should be regularly updated on the progress of the US$710 million project because the highly-geared listed company has a series of bond deadlines from 2016 through to 2017.

Likewise, as a reader calling himself a market practitioner pointed out in a letter to BT, it is reasonable to expect the listed company to have kept the market informed of AMTC's US$200 million preference share subscription. The deal was signed on June 9 and Swiber said that it did not announce this as the subscriber had requested completion to be postponed. Instead, it disclosed the subscription deal on July 11, about two weeks after the transaction was due to have been completed and only after it turned sour. Again, the July 11 announcement did not provide details on the counter-party AMTC Ltd. This led BT readers resorting to their own research and offering two possible clues to AMTC's identity - that this could be a hedge fund with links to Rawabi Holdings, Swiber's erstwhile partner in Saudi Arabia. Swiber subsequently denied in response to BT's query that Rawabi has anything to do with the preference share subscription deal.

Swiber's net debt-to-equity ratio stood at 1.57 times as at March 31, with S$310 million notes and certificates and another 450 million yuan (S$90.8 million) bond due for redemption through to 2017.

As one investor pointed out, given Swiber's stretched financial position, the circumstances surrounding the US$4.76 million trade claims would have also been considered material information for shareholders and bondholders.

Stakeholder confidence reigns supreme and it is in Swiber's interest to respond to calls for greater transparency.

READ MORE: Swiber downplays retrenchment talk

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Ombudsman for S’pore not only beneficial but necessary: Voices

TODAY
14 Jul 2016

The average Singaporean would think twice before seeking legal redress, owing to the financial strain and other constraints. Many might give up, get on with life and lick their wounds in silence.

Perhaps the call for an ombudsman is timely and not unfounded (“How an ombudsman could benefit Singapore”; July 13).

An ombudsman could establish whether there is a genuine transgression, take up the cudgels for the ordinary man and bring justice to bear on big corporations and the Government.

This would also give the man in the street another avenue for his or her grievances to be heard. The Government and legal circles should give it some thought. An ombudsman for Singapore is not only beneficial but necessary.

Yeow Hwee Ming

Copyright 2016 MediaCorp Pte Ltd | All Rights Reserved

Yang Yin trial: Accused told police officer he 'forgot' $500k was a gift

Straits Times
08 Jul 2016
Toh Yong Chuan & Carolyn Khew

Asked by prosecution if this made sense, police investigator told court: 'It did not'

How could anyone "forget" being given a $500,000 sum as a gift?

Yang Yin did, claiming this was why he first told police that the money had been entrusted to him to buy a painting for an elderly widow, before changing his story.

Asked by Deputy Public Prosecutor Nicholas Tan if this made sense, the police officer who questioned the 42-year-old former China tour guide - who is fighting charges that he misappropriated $1.1 million from the widow - told the court yesterday: "It did not."

On the fourth day of the trial, Deputy Superintendent of Police (DSP) Jane Lim took the stand and was asked about the differing accounts Yang gave about a $500,000 sum that was moved from the widow's bank account to his, then back to her account before landing in his father's account in China.

DSP Lim, a Commercial Affairs Department senior investigation officer, said Yang first told police the 89-year-old widow had given him $500,000 to buy a painting of a horse - which in earlier testimony was dismissed as a fake that would cost only $200. But he later claimed the money was a gift. When asked to clarify, DSP Lim said Yang replied: "I forgot that she gave me the money as a gift. That was why I did not state so earlier."

DSP Lim said she then asked him why he would use the money to buy a painting of unknown origin for the widow, Madam Chung Khin Chun. "My grandmother, Madam Chung, likes the painting," he replied.

The painting is one of the key pieces of evidence in the prosecution's case. DSP Lim yesterday also recounted how Yang came to purchase Horse Drinking Water, which Yang claims is by renowned Chinese artist Xu Beihong.

Yang told police he met the seller, a Mr Zhu, at a flea market in Hangzhou in 2010. He then took a photo of the painting and showed it to Madam Chung, whom he was living with then in her Gerald Crescent bungalow. He claimed she then asked him to buy it.

He told police that he bought the painting for $500,000 and brought it back to Singapore in 2010. Madam Chung then wanted him to frame the painting, so he brought it to China. He did nothing to it until September 2014, when Madam Chung's niece sued him.

As he was ordered to declare his assets, he needed take an inventory and asked a friend to take the painting from Hangzhou to Japan where he was on a business trip. The painting was later found in Yang's suitcase and seized by police during a raid at a Fernview flat on Sept 17, 2014. It had been folded repeatedly and stuffed in an envelope.

Mr Huang Yi Yao, who was Madam Chung's OCBC bank relationship manager from 2009 to 2010, yesterday told the court how the $500,000 finally ended in the bank account of Yang's father, Mr Yang Sannan, in China in February 2010. Mr Huang did not know who Mr Yang Sannan was at that time.

"The accused explained that the monies were for his mother in China and Madam Chung who sat in front of me confirmed that," said Mr Huang.

The roundabout transfer - from Yang to Madam Chung and then to China - had avoided "red flags" that would arise had Yang made the transfer directly as he was unemployed then, said Mr Huang.

Accountant Ong Sok Hun, who also took the stand yesterday, testified that the accused had sought her help to prepare accounts for his company Young Music and Dance Studio, based on receipts and other documents he provided to her.

Yang had in May pleaded guilty to 120 charges, including offences involving his permanent residency and falsification of receipts.

Meanwhile, Madam Chung, who was diagnosed with dementia in 2014, will not be taking the stand. Doctors appointed separately by the prosecution and defence had examined her last week and found that she was mentally unfit.

The hearing continues today.


$500k: Gift or for buying painting?

Extracts of police statement by Yang Yin (above) read out in court

Q: Madam Chung believed that the painting was a real work of Xu Beihong's and entrusted you with $500,000 to buy the painting. Is this correct?
A: Yes. We discussed and felt that the painting was not bad.

Q: You stated that Madam Chung transferred $504,000 into your bank account for the purpose of buying Xu Beihong's "Yin Ma Tu". Then... you stated that Madam Chung gave you $500,000 as a gift. Can you clarify if the $500,000 was entrusted to you to buy a painting or was it a gift to you?
A: It was a gift to me.

Q: If it was a gift to you, then can you tell me why you did not state so earlier when asked about it?
A: I forgot that she gave me the money as a gift. That was why I did not state so earlier.

Q: Since it was a gift to you, why did you choose to buy a painting of unknown origin for $500,000?
A: My grandmother, Madam Chung, likes the painting.

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Well-known cancer doctor fined $25,000 to appeal against ruling

Straits Times
20 Jul 2016

Dr Ang Peng Tiam, a prominent cancer doctor in private practice, has been fined $25,000 by the Singapore Medical Council (SMC) following complaints by a patient in 2010.

Dr Ang's company, TalkMed Group, issued a release on Sunday to say that Dr Ang has "been strongly advised to appeal against the decision" and that he has decided to do so.

TalkMed is publicly listed, and the release by Mr Lee Boon Yong, its chief financial officer, is in compliance with rules of the Singapore Exchange.

A spokesman for TalkMed told The Straits Times: "We have not yet communicated with the SMC as the formal and full grounds of appeal are still being prepared."

In 2010, a family member of a patient who had been treated by Dr Ang filed four complaints against the oncologist with the SMC, the professional watchdog.

When asked what the complaints were, the company spokesman said: "We are unable to release the information requested as the matter is currently under appeal."

It was one of 152 complaints against doctors that the SMC received that year.

All the complaints are seen by the Complaints Committee. If there is merit, the case is heard by a disciplinary tribunal.

The tribunal heard the complaints against Dr Ang, who is also the medical director at the Parkway Cancer Centre. It cleared Dr Ang of two charges, but found him guilty of the other two and imposed a $25,000 fine on him.

Doctors found guilty by the SMC are told of the findings and are usually given a month to decide if they would like to file an appeal.

Such appeals are heard by the High Court.

If there is no appeal, the decision of the tribunal, and the reasons for the decision, would be made public after a month.

TalkMed's release added: "We have full confidence in Dr Ang and the day-to-day operations of the company are not affected." facebook.com/ST.Salma

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Expand avenues for redress, but not via ombudsman: Voices

TODAY
14 Jul 2016

I refer to Mr Chirag Agarwal’s commentary “How an ombudsman could benefit Singapore” (July 13).

Commonwealth jurisdictions have had mixed experiences with an ombudsman. Several commentators are critical of its ability to bring significant change in individual relationships with the government without support from Members of Parliament.

Moreover, the Singapore legislature is traditionally conservative about having checks and balances outside of government. The General Election is often cited as the report card of the party in power.

I agree, however, with the author’s premise that there is now a stronger case for establishing such a mechanism to facilitate the Government’s work, and that the responsibility should not fall on the President or the judiciary.

Even the Chief Justice has recognised the need for checks and balances in the context of a judge’s work.

Alongside the codification of contempt of court proceedings, the State Courts and Supreme Court websites now provide lawyers and litigants with avenues to make complaints about judicial conduct.

The Chief Justice sees this as a matter of improving our judiciary’s work and considers each complaint directly and independently. Our Parliament could follow his example in this regard.

Singapore could adopt the Australian model of the Administrative Appeals Tribunal, which was established in 1976.

The tribunal does not sit outside of government. Rather, it falls within the portfolio of the government’s chief legal officer, the Attorney-General.

Where legislation provides, the tribunal undertakes an independent merits review of administrative decisions.

Many Australian studies highlight its benefits of improving the relationship between the government and the individual, and of being an effective avenue of redress for a person aggrieved at an administrative decision.

More importantly, it has taken pressure off the civil service in handling difficult or even abusive appellants. Any substantial initial reservations Australian civil servants had about the tribunal have passed, with more welcoming its work in improving administrators’ jobs.

In Singapore today, it is easy to find posters in government departments reminding users of a public service to be respectful in their dealings with a civil servant. This underscores the existence of some dissatisfaction with public decision-making.

As we introduce legislation such as the Administration of Justice (Protection) Bill to manage the adverse effects of a more expressive society, we also need to expand avenues for individuals to seek redress for their grievances.

As the Australian experience shows, the Attorney-General has the potential to evolve as a face of humanity in Singapore, and not only be the adversarial state prosecutor.

Dharmendra Yadav

Copyright 2016 MediaCorp Pte Ltd | All Rights Reserved

Strengthen Unclos to clear up ambiguity over South China Sea: Forum

Straits Times
08 Jul 2016

The recent editorial on the South China Sea disputes alleged that China is attempting to "subvert the very treaty it signed onto" ("Abiding by global maritime order"; June 27).

However, one can also argue that Beijing has indeed acted in accordance with the United Nations Convention on the Law of the Sea (Unclos).

As the Chinese Foreign Ministry has reiterated, China made a declaration on Optional Exemptions in 2006, in accordance with Article 298 of Unclos, excluding itself from the compulsory dispute-settlement proceedings in Part XV of Unclos in terms of maritime disputes over delimitation, military activities, among others ("China's non-participation lawful"; March 5).

Clearly, the issue here stems from structural weaknesses in Unclos.

Some of its clauses and terms are rather vague, creating the potential for misunderstanding and contradiction.

This has often occurred where countries have made competing claims for Exclusive Economic Zones.

For instance, the 200 nautical mile rule has given rise to differing interpretations.

Moreover, when a single dispute falls under the ambit of multiple legal documents, there is no clear order of precedence.

Let us remember that China's actions are also regulated by the China-Asean 2002 Declaration on the Code of Conduct of Parties in the South China Sea, a document that is just as relevant and no less legitimate.

It is, of course, a fundamentally good idea to establish clear guidelines on the maritime interactions of nation states.

Therefore, it is in the interest of the international community that Unclos be clarified and strengthened.

In addition to correcting instances of ambiguity and inconsistency, Unclos could stand to benefit from more concrete dispute-resolution mechanisms, perhaps in the form of legally binding instruments.

As is the case in so many aspects of international affairs, there is always the danger of stakeholders with a vested interest attempting to obstruct such reforms, or bending terms to serve their own needs.

It is thus necessary for neutral or impartial parties - states such as Singapore - to step up and assume a balancing role in the international community.

Paul Chan Poh Hoi

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Laws being reviewed to further curb family violence: Tan Chuan-Jin

TODAY
20 Jul 2016
Kelly Ng

SINGAPORE — In light of recent high-profile cases of child abuse, the laws are being reviewed to enhance deterrence of family violence and to ensure that those responsible are appropriately dealt with, said Minister for Social and Family Development Tan Chuan-Jin yesterday.

“(We) need to look at our laws in terms of whether there is sufficient deterrence, whether the way consequences are meted out is the way we want to go,” said Mr Tan, who added that the Home Affairs Ministry and Law Ministry are looking into the issue.

Two weeks ago, a couple were jailed for their ruthless torture of a two-year-old toddler, Mohamad Daniel Mohamad Nasser, which led to his death last November.

The toddler’s mother, Zaidah, 41, was sentenced to 11 years’ jail for voluntarily causing grievous hurt and child abuse.

Her boyfriend Zaini Jamari, 46, was given a 10-year jail term and 12 strokes of the cane for voluntarily causing grievous hurt to, and ill-treating, the boy.

Two days after the verdict, Law and Home Affairs Minister K Shanmugam posted on his Facebook page: “For cases like this, we need to see whether the current legal framework is adequate. They ruthlessly tortured the child for more than a month, and effectively killed him.”

He also said people must be encouraged to make a report “immediately” when they are aware of cases of abuse.

Expressing similar sentiments yesterday, Mr Tan said cases of family violence, including child and elderly abuse, often persist because bystanders have kept silent.

“We always wonder, ‘Why did it happen?’ ... You look at the rest of the people involved, you will always ask, ‘Why did you not say something? Why did you not step in, if you knew that something was amiss?’,” said Mr Tan, who was speaking on the sidelines of an inaugural social service summit at Mandarin Orchard hotel.

Enhancements in detection and reporting of child abuse cases by a host of agencies — ranging from schools to hospitals — have led to more cases being investigated by the Ministry of Social and Family Development’s Child Protection Service (CPS).

Last year, the CPS looked into 551 serious abuse cases, almost half of which — 47.7 per cent — were instances of physical abuse, 37 per cent involved neglect, while the remaining involved sexual abuse.

Between 2012 and 2014, the CPS investigated between 380 and 400 cases of serious abuse per year.

In September last year, two former employees at Pertapis Children’s Home — a welfare and religious teacher, and a social service assistant — were convicted of abusing children under their charge.

Copyright 2016 MediaCorp Pte Ltd | All Rights Reserved

ITE slasher has rehabilitative potential, says judge who overturned jail sentence

TODAY
14 Jul 2016
Kelly Ng

SINGAPORE — In dealing with young offenders, their rehabilitation will be the priority if they demonstrate good prospects for turning over a new leaf, a High Court judge said yesterday.

Explaining why he overturned a district court’s decision to sentence a 17-year-old to 18 months’ jail and six strokes of the cane for slashing another teenager, Justice Chan Seng Onn said that as young offenders are in their formative years, the chances for successful rehabilitation are better.

In his written grounds issued yesterday, he added: “Compassion is thus shown to them on the basis that the young ‘don’t know any better’, and to keep them away from the ‘corrupt influence of a prison environment and the bad effects of labelling and stigmatisation’.”

Muhammad Zuhairie Adely Zulkifli, who slashed another teenager at ITE College West early last year, is such a case, but the lower courts had given his rehabilitative potential insufficient weight, said Justice Chan.

While agreeing with the prosecution that Zuhairie’s offences were “serious and egregious”, Justice Chan — who commuted the sentence to reformative training in April — found that Zuhairie had demonstrated genuine remorse and was not a “hardened and recalcitrant” offender. Reformative training is a structured regime aimed at rehabilitating young offenders behind bars that can last between 18 months and three years.

In March last year, Zuhairie had slashed Ahmad Nurthaqif at ITE College West with a 35cm-long bread knife over a dispute involving the latter’s girlfriend. The incident, which happened in front of other students, was caught on video and widely circulated over social media.

Apart from having knife wounds across his back, the 18-year-old victim, a part-time cook, also suffered fractures on his forearm and three fingers, and a cut behind his ear.

Justice Chan said that since the offence, Zuhairie had taken active steps towards changing his lifestyle, such as by keeping away from late night activities and peers of bad influence.

“Notably, (Zuhairie) had also indicated that he wanted to start his life afresh after serving his sentence, and wanted to continue his education, hoping that it would help him lead a pro-social lifestyle in the future,” said the judge, noting that Zuhairie had surrendered himself to the police.

In his 28-page written judgment, Justice Chan cited portions of various positive testimonies by Zuhairie’s former principal, staff from the Muhammadiyah Welfare Home (MWH), and a senior probation officer, who had assessed him to be a “resilient, mature, and intelligent youth who accepted responsibility for his actions”.

The judge also considered Zuhairie’s troubled family background, a point highlighted by defence lawyers on appeal.

Zuhairie grew up in an unstable home witnessing domestic violence between his parents, who were in and out of jail numerous times for drug and property offences.

“Consideration had to be given to (Zuhairie’s) unfortunate background which had resulted in his ... antisocial behaviour, and had led him to understand relationships through hostile attribution and physical aggression,” said Justice Chan.

Due to his “high-risk” family background and lack of proper supervision, Zuhairie was placed in the care of the Salvation Army Gracehaven in 2011 and MWH in 2012.

The judge also noted Zuhairie’s good academic performance and regular attendance in school despite his troubled family background.

With programmes to help him overcome his underlying violent behaviour, strengthen his family network and employment skills, reformative training was the most appropriate option for Zuhairie, ruled Justice Chan. The “corrupt” and “potentially unsettling” influence of a prison environment would thus not be desirable for Zuhairie to realise his reformative potential, he added.

Copyright 2016 MediaCorp Pte Ltd | All Rights Reserved

Muhammad Zuhairie Adely Bin Zulkifli v Public Prosecutor [2016] SGHC 134

Number of clients under legal advice scheme doubles in 2 years since launch

TODAY
07 Jul 2016
Kelly Ng

Offering free legal advice, it is aimed at helping those with no financial means to seek counsel

SINGAPORE — Efforts by the Community Justice Centre (CJC) to help those representing themselves in court with some legal support is seeing a good response, with its on-site legal advice scheme seeing the average number of beneficiaries doubling to 300 a month, compared to when it was launched nearly two years ago.

The centre, which offers free legal advice at the State Courts, even extended its operations by an hour last November to cater to the growing pool of those who sought its help.

Aimed at helping those who do not have financial means to seek legal counsel, the On-Site Legal Advice Scheme (OSLAS) introduced by the CJC ensures that at least one lawyer is on hand at the centre five days a week to help self-represented litigants who lack understanding of the legal system here.

Those who drop by the “one-stop centre” between 10am to 5pm will get a 20-minute consultation on a range of issues — from civil disputes and matrimonial cases, to criminal offences — with a lawyer who has at least three years’ experience in legal practice.

Lawyers who volunteer at the centre say the sessions, though brief, help individuals size up the issues confronting them, and offer a “road map” of the options available.

“People who turn up are usually looking for sign posts. Many don’t know where to start, many perceive the law as a ‘big mountain’ ... This scheme demystifies the law for them,” said volunteer lawyer Amolat Singh, the founding member of law firm Amolat & Partners. “It resolves anxieties but at the same time, gives people a reality check on whether to take their case forward.”

Among the most heart-wrenching cases lawyer Harold Seet has seen involve foreign brides who have been “abandoned” by their Singaporean husbands. “Many are left in the lurch with young kids, they cannot work and have nobody to turn to in a foreign land. Even language can be an issue for some,” said Mr Seet.

Lawyers on duty may refer such cases to agencies that can provide financial aid or immediate relief, such as food supplements, bringing their roles beyond that of giving legal advice.

“For this time to be effective, the lawyers must not only be well-versed in a spectrum of legal issues, but also be acquainted with the myriad of social assistance schemes available,” said Mr Seet.

These sessions are also good opportunities to address misconceptions people have about the legal process, said Mr Singh, citing enforcement of small claims as an example.

“Some involved in civil matters think the Government and the police must help them realise the fruits of the judgment. We have to correct that impression, advise them on various methods of enforcement … Tell them, you have to take steps to actively chase and get paid,” he said.

In the next year, the CJC aims to amass cases addressed by OSLAS into a digital database.

“(This platform) will aim to provide easy and instant access to legal issues that even the man in the street can understand … Information collected can help the CJC identify trends so that more targeted services can be created to serve the public’s needs,” said the centre’s executive director Leonard Lee.

While the scheme has gained traction among litigants, Mr Seet felt that the eligibility of such free legal assistance should be clarified.

“How can we encourage those who can afford legal advice to seek it elsewhere, so that this avenue can be reserved for those who are really needy,” he mused, adding that he had come across help-seekers who have already engaged legal counsel but “wanted a second opinion”.

As of March this year, about half (48 per cent) of those who get help at the centre earn a monthly salary of less than S$1,800, according to the CJC.

Mr Singh also suggested matching litigants to lawyers specialising in the areas of concern, although there could be “practical difficulties” in realising this: “The nature of this centre is to offer immediate advice, so we don’t always get the heads-up on what issues each person who walks in faces.”

Other CJC programmes which have seen a surge in take-up include the Primary Justice Project — which offers basic legal services like early dispute resolutions in family and criminal matters for a fixed fee — and the Enhanced Guidance for Plea Scheme, which helps self-represented accused persons clarify the viability of their defences and in some cases, make their pleas of guilt earlier.

Pro bono lawyers appointed under the enhanced scheme helped resolve 91 cases last year, up from 37 in 2014.

The centre is also piloting a support programme for family members of the incarcerated.

With a network of more than 70 social service agencies, such as family service centres, the Singapore After-Care Association, Migrant Workers’ Centre and various religious agencies, the CJC hopes to play the middleman in referring families to relevant avenues of help.

Copyright 2016 MediaCorp Pte Ltd | All Rights Reserved

Serving court papers electronically ‘needs more safeguards’

TODAY
19 Jul 2016
Valerie Koh

SINGAPORE — While a recent landmark judgment allowing court papers to be served on individuals through new media — Skype, Facebook or Internet message boards — ensures that the law keeps pace with technological advancements, more safeguards may be needed to make sure a defendant is not disadvantaged as a result, wrote two law graduates.

In a commentary posted last Saturday on Singapore Law Blog, an online platform for legal news discussions, co-authors Benjamin Tham and Yuen Kit Kuan cautioned against being swept away by the “brave new world” of social media and instant messaging applications, despite how cost-effective, convenient and efficient they could be for serving claims on defendants.

They were commenting on a High Court judgment in May, which ruled that a freelance software developer could serve notice via electronic means for alleged copyright and contract breaches. Mr David Ian Andrew Storey had sued local computer games developer Planet Arkadia, its managing director David Michael Dobson and its director Peter Laurence Dobson for using his works “promotionally and in-game” without permission.

Noting the failed attempts to reach Mr David Dobson at his last-known Australian address, assistant registrar Zhuang Wenxiong allowed substituted service through Facebook and WhatsApp.

If a claimant wants to serve papers through such methods, he has to meet several conditions, including making sure physical copies of the court papers are posted on the front door of a defendant’s last-known address or through registered mail, and he will have to prove that the electronic platform was used by the defendant recently. While the commentary authors lauded the general parameters the court set out for such methods, they listed several areas that needed safeguarding, such as the defendant’s literacy level and age.

“It is commonplace for people of all ages to own a Skype or Facebook account. However, not all may be conversant with all of the functions of these platforms,” they said. Citing the example of an elderly woman, Mr Tham and Ms Yuen questioned whether she would know how to read messages on Facebook or access the legal documents online.

“The Court should be vigilant and scrutinise in greater detail applications for substituted service via electronic means on the parties to be served, who are prima facie vulnerable in this regard,” they added.

Fake accounts could also be a problem, said the authors. One way to circumvent this would be to require substituted service to be carried out via a minimum of two electronic platforms.

And while the judgment stated that the defendant has to be active online within a “reasonable time frame”, the authors felt that this duration would differ according to each case. “The courts can consider the following factors: The personal characteristics of the party to be served (e.g. age), the frequency of usage of the relevant electronic means, any ‘downtime’ or other forms of technical difficulties which render the relevant electronic mean inaccessible prior to the application for substituted service,” they said.

Mr Tham and Ms Yuen noted that the use of electronic means to serve court documents was still in its infancy, and further refinement of the safeguards will “invariably occur” over time.

But they stressed the need to “balance the rights between two competing interests — on one hand, a claimant ‘should be entitled to bring before the court any subject-matter in respect of which he wishes to sue, and on the other hand, that every one sued should have a full opportunity of defending himself against the claim made against him’”.

Copyright 2016 MediaCorp Pte Ltd | All Rights Reserved

Man jailed 12 1/2 years, gets 11 strokes of cane

Straits Times
14 Jul 2016
Selina Lum

Court finds accused's version of events 'completely unbelievable, incredible and inconsistent'

A former pizza delivery man, who posed as a policeman and raped a 16-year-old girl after catching her having sex with her boyfriend in a HDB stairwell, was yesterday sentenced to 121/2 years' jail and 11 strokes of the cane.

Muhammad Firman Jumali Chew, 30, looked dejected as he was first found guilty of, then sentenced for, three charges of rape, sexual assault and impersonating a police officer.

His wife and two-year-old daughter were present in the High Court.

During his trial, Firman gave a version of events that was at odds with the accounts of the prosecution witnesses.

He presented himself as a victim of the girl's sexual advances, accused a good Samaritan who had confronted him of being a pervert, and alleged police brutality.

Yesterday, Judicial Commissioner Hoo Sheau Peng rejected Firman's version, saying it was "completely unbelievable, incredible and inconsistent" with objective evidence and the testimony of other witnesses. On the other hand, the victim's testimony was "clear, coherent and consistent".

The victim and her then-boyfriend testified that Firman told them he was a policeman and asked for their identity cards after he saw them having sex at Block 362, Woodlands Avenue 5 on Oct 9, 2013. He then told the boy to leave before taking the girl to Block 359, where he raped her.

A passer-by, lift technician Tung Shue Kiong, said he sensed that something was amiss when he saw Firman and the girl.

After getting the story from the boyfriend, Mr Tung searched five blocks of flats and eventually confronted Firman at Woodlands bus interchange.

The girl made a police report that night. Firman's identity was established from semen on her clothes.

It emerged yesterday that he has past convictions for housebreaking, theft and fraudulent possession of property.

During his rape trial, Firman claimed that he had tailed Mr Tung to Block 362 and caught him crouching at the stairwell, touching himself while peeping at the couple.

Firman claimed that at Block 359, it was the girl who led him up the stairs, pulled down his zipper and violated him against his will.

Yesterday, the judicial commissioner dismissed Firman's allegations against Mr Tung as "unsubstantiated" and said his claims of being tortured by the police after his arrest were "unfounded".

Deputy Public Prosecutor Sharmila Sripathy-Shanaz sought 131/2 years' jail and 11 strokes of the cane. She argued that he had acted with "methodical, cold and calculated premeditation", noting how he had walked backwards into a lift to evade the surveillance camera.

"The evidence reveals a guile and cunning sexual predator who manipulated an innocent teenager into satisfying his depraved lust," said the DPP.

Despite overwhelming evidence against him, said the DPP, Firman made the victim relive her ordeal in a trial and made "preposterous assertions" against her.

"That the accused had no reservations concocting a defence that scandalised the very girl he had so cruelly and callously assaulted, demonstrates a complete and utter lack of remorse," said the DPP.

Firman's lawyer, Mr Ravinderpal Singh, asked for 10 years' jail, noting his low IQ and his delusional beliefs of persecution and jealousy.

After the sentencing, Firman's wife, Madam Marivic Advincula Manlapaz, 32, had tears in her eyes. She declined to comment.

Source: Straits Times © Singapore Press Holdings Ltd. Permission required for reproduction.

Lawyer's software comes in handy for SMEs

Straits Times
07 Jul 2016
Ng Huiwen

Corporate lawyer Mark Goh was looking to hire a secretary when starting his practice in 1994, but chanced upon what he jokingly termed as a "secretary in a box" instead.

With the help of what was in fact word-processing software, he successfully ran a "one-man show" on his personal computer in the 1990s.

The 49-year-old said it was his first brush with technology at a time when most law firms typically kept a large pool of typists and legal clerks who worked on typewriters.

Now the director of boutique law firm MG/Chambers, which serves mainly small and medium-sized enterprises (SMEs) hopes to put yet another spin to the traditional law practice.

In late February, he launched Vanilla Law - interactive software that gives clients a hand in drafting their own legal documents, such as employment agreements.

It aims to help SMEs that often cannot afford in-house lawyers and instead, replicate templates or contracts found online to save on legal fees.

Mr Andrew Sng, managing director of management consultancy firm DPI Asia, said: "Agreements are drafted to prepare you for the worse-case scenario. If that happens, you become vulnerable. And for a typical SME like us, this could potentially ruin the business."

The software contains preset basic clauses and an interactive clause selector allowing users to customise legal documents for an annual subscription fee of $250.

The first draft can be done in the client's own time, after which a lawyer will help to refine it.

Mr Goh added: "It reduces the need for multiple exchanges between a lawyer and client during the drafting stages, which is where the bulk of time and money are spent."

For instance, writing up a simple tenancy agreement with a junior lawyer can take at least six hours and cost around $1,800.

Shareholders' agreements, which are more complex and require senior lawyers with more than 20 years of experience, can total around $14,000, with the process lasting between 20 and 30 hours.

Vanilla Law aims to reduce both time and money spent by more than 50 per cent. "Generating an agreement at the lowest tier would now cost the client about $800," Mr Goh said.

Currently, Vanilla Law has 12 companies subscribed to the software and is working to tie up with various trade associations, such as the Singapore Precision Engineering and Technology Association, to introduce the software to other SMEs.

Declining to reveal his target market share, Mr Goh said: "I just want to grow it as much as I can."

And while there has been other software entering the market in recent years, such as Singapore's Law Canvas and Hong Kong's Dragon Law, these are mainly template-driven with a fixed set of clauses.

Instead, Vanilla Law runs on complex algorithms allowing for more flexibility for clients.

Mr Goh had to pick up coding during the two years he spent developing the platform.

He believes that the push towards using technology in legal practice will help rather than harm lawyers and businesses.

Last year, Mr Goh was part of a focus group set up by the Singapore judiciary to look at how information technology could shape the courts of the future.

Chief Justice Sundaresh Menon had stressed at the opening of Legal Year 2016 in January that the legal community would have to embrace technology to be "future-ready".

A task force to explore the possibilities of using artificial intelligence and technology in Singapore courts is expected to complete its work by this year.

"What technology has done is to give David the strength to go after Goliath," Mr Goh said. "It gives small companies that are lean on resources the power to compete with the big guys."

Mr Goh has launched Vanilla Law - interactive software that helps clients to draft their own legal documents. It is aimed at helping SMEs, which often cannot afford in-house lawyers. ST PHOTO: KUA CHEE SIONG

Source: Straits Times © Singapore Press Holdings Ltd. Permission required for reproduction.

SGX to hive off regulatory functions

Business Times
19 Jul 2016
Cai Haoxiang

MAS must approve and can also appoint members to board of new independent unit; some say move may sieve out lower-quality listings initially

[Singapore] IN a move welcomed by market watchers as long overdue, the Singapore Exchange (SGX) said on Monday that it is hiving off its regulatory arm from its commercial activities.

A new company temporarily dubbed RegCo will be set up as an SGX subsidiary by the second half of next year. It will house SGX's current regulatory team of around 100 people.

RegCo will be run by current SGX chief regulatory officer Tan Boon Gin, who reports directly to a board separate from the exchange. Central bank and regulator Monetary Authority of Singapore (MAS) will ensure SGX gives RegCo adequate resources for its duties.

Asked about the timing and rationale behind the move, an SGX spokeswoman said the exchange regularly considers developments in the industry and possible enhancements.

"Any change comes only after careful and thorough deliberation, including discussions with MAS. Today's announcement was no different," she said.

SGX CEO Loh Boon Chye said in a statement that together with its introduction of independent listings committees last October, the exchange has demonstrated its commitment "to do all that we can within the self-regulatory organisation framework to address potential conflicts between our commercial objectives and our regulatory responsibilities".

Market players hailed SGX's move as a crucial one to resolve the long-running perception that the exchange was conflicted in having to regulate its clients, which include China-related S-chips and penny stocks that had been the focus of extreme speculative activity.

David Smith, head of corporate governance at Aberdeen Asset Management Asia, said the move resolves a "damned-if-they-don't" situation for the exchange.

Otherwise, SGX will continue to draw flak for corporate governance failures in spite of the improvements it has made to its regulatory framework. "The direction is positive, but we have to wait and see the details," he said.

Ernest Kan, chief of operations for clients and markets at Deloitte Singapore, said: "You always enhance regulations to make sure they are up to date. So from the reputation point of view, certainly, you'll score."

While some might still gripe that the regulatory unit is not totally independent of the SGX, others countered that RegCo's board, at least, will be separate and the majority of its members independent of SGX.

David Gerald, president of investor lobby group Securities Investors Association (Singapore), said: "The devil is in the details and it is better for MAS to be the appointing body of this new regulatory body to give it complete independence."

In response, the SGX spokeswoman said the exchange can only appoint members of the RegCo board subject to MAS approval, and MAS can also directly appoint members of the board. In a statement on Monday, MAS said the independence of the subsidiary will be an important factor for its success. It requires the chairman of RegCo as well as a majority of its directors to be independent of SGX and its subsidiaries. All directors also have to be independent of SGX-listed companies.

The central bank added that it will continue to directly regulate SGX in terms of its obligations as a listed company and market operator. It will also maintain oversight of RegCo's responsibilities.

SGX might improve market perception with the move, but on the flip side, observers wondered if there will be more and unnecessary regulation.

Stefanie Yuen Thio, joint managing director of TSMP Law Corporation, said the crux of the matter for the Singapore market was not the quality of SGX's regulation, but whether the exchange can attract new listings. SGX continues to face difficult challenges of companies trading at low price-earnings ratios, along with a slew of ongoing privatisations, she said.

The exchange must thus take a "holistic and commercial" approach to regulation and avoid over-regulating. "It needs to assure the market that the new RegCo will not increase compliance costs and submission time," she said.

For its part, SGX said the move will "not add to the requirements of the current initial public offering listing process".

Corporate governance advocate Mak Yuen Teen, an associate professor at the National University of Singapore Business School, said that in the short term, the move might lead to lower-quality listings shunning the market.

"This is not a bad thing. In the long term, this should improve the quality of listings and will improve investor confidence," he said.

Looking ahead, the next big change in the offing might be around quarterly reporting, said Deloitte's Dr Kan.

"I believe something will come. Exactly in what form or shape, I do not know. It has become a time and cost burden especially for smaller counters."

SGX closed at S$7.80, up six cents or 0.8 per cent.


Spinning off SGX's regulatory role: seeds sowed after penny stock saga

[Singapore] EVEN from before its listing at the end of 2000, the Singapore Exchange (SGX) has been dogged by much criticism - from readers, analysts and writers of The Business Times - that commercial considerations will lead to a lighter regulatory touch, harming investors and the reputation of the stock market.

In reply, the establishment position was that there was no conflict, as a well-regulated exchange will lead to a vibrant market that attracts new listings. As a market operator, SGX was also deemed to be in the best position to regulate according to what the market needed.

Through the years, criticism of the exchange's dual roles flared up whenever market interests were perceived to be harmed, be it a corporate governance scandal, higher fees imposed by the exchange, stock manipulation or takeover issues.

In the meantime, SGX operated under rules set by the Monetary Authority of Singapore (MAS), the ultimate regulator. These rules were gradually tweaked over the years, even as SGX also made improvements to its regulatory framework.

And thus for many years, people understood the position of MAS to be that there was no need for a separate market regulator.

An MAS-SGX consultation paper reviewing securities market structure and practices in February 2014 summed up the existing arguments.

The paper noted there were statutory and internal safeguards to mitigate conflicts of interest. SGX's regulatory functions are supervised by MAS, and the exchange has statutory obligations to maintain a fair, orderly and transparent market. Internally, potential conflicts are referred to a regulatory conflicts committee comprised of independent directors.

Yet the February 2014 paper, which came out in the wake of the 2013 penny stock crash, gave a signal that bigger changes were coming.

Among other stock market reforms such as a minimum trading price, it proposed additional checks and balances, such as the setting up of three independent committees on listing, disciplinary and appeal matters.

The proposals came after MAS and SGX studied the regulatory models of exchanges around the world.

The three committees were set up in September 2015. A listings disciplinary committee, for instance, was empowered to impose sanctions. This was meant to separate the judgement process from the SGX-led investigatory function.

Meanwhile, MAS also hinted that further changes could be on the way to separate SGX's regulatory functions from its commercial mandate.

MAS deputy managing director of financial supervision Ong Chong Tee said in an opinion piece last June that there "could be scope to reduce any overlaps between the oversight functions of the MAS and the exchanges".

This was given a more competitive multi-exchange landscape, he said.

With the latest developments, the debate over SGX's dual roles in the past 16 years is now being settled in favour of a bigger separation.

Cai Haoxiang


Forming RegCo should be only the start

[Singapore] THERE'S little doubt that the market will welcome the Singapore Exchange's move to set up a separate subsidiary to house and discharge its regulatory functions as, to quote from the SGX press statement, it will make "more explicit the segregation of its regulatory functions from its commercial and operating activities".

Granted, it is a move that is overdue and should go some way towards satisfying critics of the present arrangement as it is explicit acknowledgement that greater independence means better regulation, a point which has been repeatedly raised since 2000 when SGX was listed.

Furthermore, the exchange itself would very likely be privately relieved that it can focus its energies on its primary goals of profit maximisation and shareholder wealth enhancement - after all, 16 years of having to juggle money making with surveillance/regulation and then having to answer to a sceptical public constantly criticising and asking questions about conflicts of interest must have been extremely taxing and tiresome, to say the least.

It is important, however, that regulation of the Singapore stock market does not end with the establishment of the new unit, currently referred to as RegCo. Instead, it should be seen as a first step -- albeit significant - in a developmental process that ideally will culminate with RegCo evolving into a fully independent and adequately empowered entity that has no ties whatsoever to the exchange.

The endgame in this development has to be a market where a competing exchange could easily enter if ever another licence was to be granted, without any one operator being perceived as having an unfair advantage because it enjoys a regulatory edge.

In this connection, Australia's experience is instructive. In early 2010, Canberra passed legislation stripping the Australian Securities Exchange (ASX) of its market surveillance responsibilities and transferred that role to the independent Commonwealth-funded, non-profit Australian Securities and Investments Commission (ASIC).

According to The Australian Financial Review on Feb 10 2010, "the shake-up of market supervision was driven largely by allegations of a conflict of interest against the ASX in its role as both markets supervisor and profit-driven listed company, as well as the onset of competition".

The competition in question was dark pool operator Chi-X, which had applied for an exchange licence in 2008 but had to wait two years to allow ASX time to get its act together and for the necessary laws to be amended.

Once all these formalities were completed, Chi-X started operations in November 2011 with just eight listed stocks. In less than five years, it now offers a full suite of 2,100 listed companies, accounts for 20 per cent of daily volume and has also last year launched its own warrants market.

So far, the question of a competing exchange here has not been fully aired, received wisdom being that Singapore's market is too small to accommodate another exchange. Maybe so, but the same was claimed of the telecommunications sector before it was deregulated.

That RegCo may eventually not be perceived to be fully independent of SGX was raised by some observers who, in response to Monday's announcement, quite validly pointed out that even though the company will have an independent board to be manned by directors who are not on the boards of any listed company, it will still derive its resources from SGX.

David Gerald, president and founder of shareholder activist organisation Securities and Investors' Association (Singapore) has also pointed out that "the devil is in the details and it is better for MAS (Monetary Authority of Singapore) to be the appointing body of this new regulatory body to give it complete independence".

"It is crucial as this new regulatory body will have to deal also with SGX as a listed company."

Clearly then, ensuring independence, both actual and perceived, is an ongoing process that should have in mind the entry of possible competition. RegCo's incorporation is undoubtedly a step in the right direction - but hopefully it is only the first of more to come.

R Sivanithy

Source: Business Times © Singapore Press Holdings Ltd. Permission required for reproduction.