Legal Updates

Legal Updates for Mar - 2020

Covid-19 Response: Between Lockdown, Quarantine and Massive Social Restriction

For the last couple of weeks, the term 'lockdown' has been frequently mentioned both in official media, as well as social media. Some argue that it will be the most pressing and effective action to prevent viruses spread; others appeal to take a closer look as it may adversely affect state economy and livelihood of workers in the informal economy.

Perhaps unknown by many, the government had issued a law on health quarantine (Law No. 6 of 2018 on Health Quarantine) in 2018. This law regulates various types of actions, including massive social restriction and quarantines that can be taken by the government in preventing the spread of a disease and/or any health risk.

31 Mar 2020 | Indonesia

COVID-19 Resilience Budget and MOM Relief Measures: Additional Support for Businesses
Since the announcement of Budget 2020 (also known as the Unity Budget) a bare five weeks ago, the Deputy Prime Minister and Minister of Finance, Mr Heng Swee Keat, has unveiled the S$48 billion Resilience Budget on 26 March 2020 to help Singapore weather the "mighty storm" of COVID-19. In a mark of the extraordinary times, this is only the second time that Singapore's reserves have been drawn on in her history.

Apart from the relief measures that directly assist households, the Resilience Budget sets aside funds to implement new schemes and enhance existing ones to support businesses in these crippling times. Key measures are elaborated on below, together with a consolidation of recent non-Budget measures implemented by the Ministry of Manpower ("MOM") to provide relief to employers to cope with manpower issues.
31 Mar 2020 | Singapore

R&T Asia (Thailand) Limited Update: COVID-19 & Employment Issues in Thailand

On 25 March 2020, the Prime Minister announced a state of emergency under the Emergency Decree, which gives authority to the Prime Minister to announce further implementing notifications and measures to combat the COVID-19 outbreak in Thailand. Such notifications and measures will affect entrepreneurs or employers directly and indirectly. In light of the COVID-19 situation, we set out below our legal comments concerning employment issues affecting employers and employees. Thailand's response to COVID-19 must be monitored on a daily basis; however, we have set out below the status as at 31 March 2020.

31 Mar 2020 | Thailand

Singapore High Court Approves of General Distributions by Judicial Managers
It was traditionally understood in England and Singapore that judicial managers had no power to distribute funds to creditors to pay existing debts. However, in February 2020, the High Court in Standard Chartered Bank v Ryobi Kiso (S) Pte Ltd and another (unreported) granted leave for judicial managers (“JMs”) to distribute up to S$27 million to all unsecured creditors of two debtor companies, in the same priorities as that in liquidation. This marks the first known instance where the Singapore High Court has granted general distributive powers to JMs. Wilson Zhu and Lye Yu Min of Rajah & Tann Singapore LLP successfully represented the JMs in this novel application.
30 Mar 2020 | Singapore

Singapore Court Grants Rare Instance of Super Priority Rescue Financing
Under section 211E of Singapore's Companies Act, the Court is empowered to grant super priority status for rescue financing. Since the introduction of these provisions in 2017, the Singapore courts have only granted super priority on one previous occasion. On 7 February 2020, the Singapore High Court granted its second successful application for super priority rescue financing in Re Swee Hong Limited (unreported). It is also the first instance where super priority was granted over assets not otherwise subject to a security interest in respect of rescue financing to be obtained, as well as separately granted super priority over all preferential and unsecured debt in respect of rescue financing that had already been provided to the applicant company. Patrick Ang, Sheila Ng, Priscilla Soh and Celine Kee of Rajah & Tann Singapore LLP represented the applicant company.
27 Mar 2020 | Singapore

Another Setback for Secured Creditors: A New Supreme Court Decree on Bankruptcy/PKPU

Following the disappointing 2019 decision by the Constitutional Court declaring certain articles in Law No. 42 of 1999 on Fiduciary Security ("Fiducia Law") on creditor's power to enforce security to be conditionally unconstitutional, secured creditors suffer another setback as a result of a decree issued by the Chairman of the Supreme Court. The decree provides a detailed guideline and procedure for bankruptcy and suspension of debt payment (Penundaan Kewajiban Pembayaran Utang or "PKPU") proceedings, starting from the registration of petition, to the process post-issuance of the court decision.

While this decree is neither a law nor a regulation, it still serves as an instruction and guidance for all judges and registrars in Indonesia's commercial courts. Further, as it is not a part of the regulatory hierarchy in Indonesia, it should not introduce any new norms and contains only implementing or technical provisions for existing laws and regulations. But while it refers to, and generally does not deviate from, the procedures stipulated under the Bankruptcy Law (Law No. 37 of 2004), this decree introduces new norms that are not in the Bankruptcy Law, specifically on limitation of secured creditors' right to file a PKPU petition.

26 Mar 2020 | Indonesia

Singapore Court Decides on Jurisdiction in SFA-Related Dispute
In CA Investment (Brazil) S.A. v Joesley Mendonca Batista and others (unreported), the Singapore apex court and High Court issued a series of decisions relating to service out of Singapore and the jurisdiction of the court in the context of an unusual dispute relating to claims under the Singapore Securities and Futures Act ("SFA"), whereby the proposed bond issuance alleged to be in breach of the SFA had already been abandoned. The Defendants successfully set aside the service out of jurisdiction, with the court ruling that it did not have jurisdiction over the dispute. The 3rd to 8th Defendants in this matter were represented by Gregory Vijayendran SC, Leow Jiamin, Devathas Satianathan and Mark Teo of Rajah & Tann Singapore LLP.
26 Mar 2020 | Singapore

Requirement to Update Employees' Phone Numbers

The Ministry of Labour and Vocational Training (“MLVT”) has issued Notification No. 009/20 MLVT/NOTIF.CBN dated 23 March 2020 on the requirement to update employees’ phone numbers.

25 Mar 2020 | Cambodia

Movement Control Order - Construction Industry: Update on "Critical Works"

On 23 March 2020, the Malaysian Ministry of Works (“KKR”) issued an update to its list of Frequently Asked Questions (“FAQ2”) in efforts to provide clarity and clear communication to address the queries affecting the construction industry arising from the implementation of the Malaysian Movement Control Order. A key highlight of the FAQ2 is that, in acknowledgment of the importance of ensuring the safety and cleanliness at the construction site during Restriction Period, KKR has revised the examples of “critical works” previously listed in its Frequently Asked Questions issued on 18 March 2020 (FAQ1).

24 Mar 2020 | Malaysia

Movement Control Order – Update on Employment Issues

Since the issuance of the Movement Control Order by the Government of Malaysia (“MCO”), business has slowed substantially for essential services providers and come to a standstill for others. The prospect of the MCO being extended beyond the initial restriction period, i.e. 18 March 2020 to 31 March 2020, is weighing heavily on the minds of business owners. The need to minimise expenses and conserve cash at a time when revenue has fallen substantially has given rise to questions of what employers can do to secure their business and at the same time support their employees.

In this Update, we examine various laws and pronouncements and explain their effects on the employer-employee relationship. We analyse in particular the two FAQs issued by the Ministry of Human Resources on 19 March 2020 and 20 March 2020.

23 Mar 2020 | Malaysia

Holding AGMs Amid COVID-19: Guidance from SGX RegCo
On 19 March 2020, the Singapore Exchange Regulation ("SGX RegCo") provided guidance on the holding of general meetings amid the COVID-19 situation, in furtherance of the latest advisories from the Ministry of Health. The SGX RegCo's guidance was developed in consultation with the Accounting and Corporate Regulatory Authority and the Monetary Authority of Singapore.

This guidance is a welcome complement to SGX RegCo's previous announcement providing issuers listed on the SGX-ST Mainboard and Catalist which meet certain criteria two more months to hold their annual general meetings ("AGMs") to approve their 31 December 2019 financial results.

This Update sets out further guidance by SGX RegCo on the holding of AGMs/general meetings amid the challenges posed by the COVID-19 situation.
23 Mar 2020 | Singapore

Indonesian Government Begins Easing Rules in Light of COVID-19

In light of the spread of  the Covid-19 outbreak, on 18 March 2020, the OJK, Indonesia's Financial Services Authority, relaxed the rules on submission of reports and holding of general meeting of shareholders for public companies. Under OJK Letter No. S-92/D.04/2020 ("Letter"), OJK not only extends the deadline for the submission of several reports, including annual reports and financial statements, but also touches upon the holding of a general meeting of shareholders ("GMS") via an e-proxy.

20 Mar 2020 | Indonesia

Indonesian Government Begins Easing Rules in Light of COVID-19

In light of the spread of  the Covid-19 outbreak, on 18 March 2020, the OJK, Indonesia's Financial Services Authority, relaxed the rules on submission of reports and holding of general meeting of shareholders for public companies. Under OJK Letter No. S-92/D.04/2020 ("Letter"), OJK not only extends the deadline for the submission of several reports, including annual reports and financial statements, but also extends the holding of a general meeting of shareholders ("GMS") .

20 Mar 2020 | Indonesia

Movement Control Order - How Does It Affect the Manufacturing Sector?

Manufacturing was not explicitly named as one of the essential services under the Prevention and Control of Infectious Diseases (Measures within the Infected Local Areas) Regulations 2020. However, the essential services list does provide for "any services or works determined by the Minister as essential or critical to public health or safety" to continue to operate during the Movement Control Order period between 18 March 2020 to 31 March 2020 ("Restriction Period"). On 18 March 2020, the National Security Council and the Ministry of International Trade and Industry issued corresponding press statement and circular to allow certain manufacturing companies to operate during the Restriction Period if such companies are producing critical products.

20 Mar 2020 | Malaysia

Movement Control Order – How Does It Affect the Construction Sector?

Since 16 March 2020, Malaysia has been abuzz following the announcement by the Prime Minister of the implementation of a Movement Control Order ("MCO"). The MCO restricts the movement of anyone to, fro and within an infected area. Following the announcement, the Government of Malaysia has gazetted the Prevention and Control (Measures Within the Infected Areas) Regulations 2020 ("Regulations") which shall take effect from 18 March 2020 to 31 March 2020 ("Restriction Period"). Under the Regulations, the whole of Malaysia has been defined as an infected area.

Following the Prime Minister’s announcement, the different sectors of the construction industry have sought clarification and guidance as to whether the type of construction, operation and/or maintenance work that they perform are classified or may be construed within the purview of Essential Services and/or be considered as critical works. To provide clarity, the Ministry of Works has made a further announcement that all construction work shall be subject to the MCO. Accordingly, all construction and maintenance work must stop. Only critical works are allowed to continue.

This FAQ strives to provide answers to the pertinent questions, addressing the perspective from both the public and private sectors, of the construction industry in general and a brief commentary on specific industry(ies) consequent upon the MCO, its impact and what steps need to be taken by these sectors during the Restriction Period.

20 Mar 2020 | Malaysia

The Prevention and Control (Measures Within the Infected Areas) Regulations 2020 – Containing the COVID-19 Outbreak in Malaysia

Following a sharp increase in the number of persons infected by the COVID-19 virus, the Malaysian Government has gazetted the Prevention and Control (Measures Within the Infected Areas) Regulations 2020 (“Regulations”). The Regulations are to have effect from 18 March 2020 to 31 March 2020. This followed the announcement by the Prime Minister’s Office on 16 March 2020 of a Movement Control Order, which according to the announcement, will be enforced under the Prevention and Control of Infectious Diseases Act 1988 and the Police Act 1967. The Regulations were issued subsequent to the Prevention and Control of Infectious Diseases (Declaration of Infected Local Areas) Order 2020 which declared all states and federal territories of Malaysia as infected local areas.

19 Mar 2020 | Malaysia

Latest - Tripartite Advisory on Managing Excess Manpower and Responsible Retrenchment in View of COVID-19
In view of COVID-19, the Ministry of Manpower, the National Trade Union Congress and Singapore National Employers Federation issued an update to their Advisory on Managing Excess Manpower and Responsible Retrenchment ("Advisory") on 11 March 2020. The Advisory sets out possible measures to manage excess manpower and is intended to help employees continue to retain a job amidst a likely prolonged difficult period even as employers work towards keeping their businesses and employees' jobs viable. We highlight some of these updates below.
17 Mar 2020 | Singapore

Averting Director Disqualification when Struck Off Company Restored
In Bijynath s/o Ram Nawal v Innovationz Pte Ltd (Accounting and Corporate Regulatory Authority, intervener) [2019] SGHC 218, the Singapore High Court was faced with a contested application for relief from disqualification as director. The case involved novel questions of law of restoration of companies and concomitant reinstatement of directors under Companies Act amendments that came into force in January 2016. The Applicant in this case was successfully represented by Gregory Vijayendran SC and Leow Jiamin of Rajah & Tann Singapore LLP.
13 Mar 2020 | Singapore

Market Condition Pushes the OJK to Relax Buyback Procedures

Indonesia's financial services authority, Otoritas Jasa Keuangan or “OJK”, recently issued a circular that allows all issuers or public companies to conduct a buyback of shares without convening a general meeting of shareholders. 

In OJK Circular Letter No. 3/SEOJK.04/2020 on Other Conditions as Significantly Fluctuating Market Conditions in the Implementation of Shares Buyback by Issuers or Public Companies ("Circular"), the OJK states that the trading condition in the Indonesia Stock Exchange (IDX) has experienced significant pressure as evidenced by the decline in the Composite Stock Price Index (IHSG) by 18.46% from the beginning of 2020 until the date of the Circular. The economy is also slowing down due to regional and national pressure, including as a result of the COVID-19 outbreak. 

The revision to the buyback procedure is an attempt by the government to provide economic stimulus to the market and at the same time reducing the adverse impact from the current market condition.

12 Mar 2020 | Indonesia

In Containing COVID-19 and Complying with the PDPA: Practical Tips
As part of the DORSCON Orange risk assessment, organisations have started implementing precautionary measures to minimise the risk of further transmission of COVID-19, including requiring visitors and employees to fill in health declaration forms to enable ease of contract tracing. When implementing these measures, organisations should be aware that large amounts of personal data may be amassed, and hence should pay particular attention in complying with the Personal Data Protection Act 2012 ("PDPA"). The Personal Data Protection Commission has released an "Advisory on Collection of Personal Data for COVID-19 Contact Tracing" on 13 February 2020 ("Advisory") to provide some guidance in this regard. In this Update, we look at the key aspects of the Advisory and how organisations can ensure compliance with the PDPA.
12 Mar 2020 | Singapore

Customs Office Seized Goods based on Alleged IP Infringement

The Customs Office recently seized suspected fake pens from entering the territory of the Republic of Indonesia. The pens are counterfeit goods allegedly infringing the Standard AE7 trademark owned by PT Standardpen Industries ("PT SI"), which is recorded at the Customs Office. The Customs Office seized 858,240 pens bearing the Standard AE7 trademark which were imported by PT Putra Alka Mandiri ("PT PAM") from China. 

A judge from the Surabaya Commercial Court examined the suspicious pens jointly with representatives from the Customs Office, Directorate General of Intellectual Property ("DGIP"), PT SI and PT PAM. According to the DGIP's expert statement, there is similarity in principal between the trademark embedded on the imported pens and PT SI's trademark. The inspection of the pens resulted in a decision by the Surabaya Commercial Court to reinforce the seizure. PT SI can take further legal action by filing a criminal and /or civil lawsuit against the other party.

11 Mar 2020 | Indonesia

Anti-Corruption Efforts Intensify at the Stock Exchange

Bursa Malaysia Berhad announced anti-corruption and whistleblowing measures as additional corporate governance requirements under Chapter 15 of the Main Market and ACE Market Listing Requirements, respectively, at the end of last year. The requirements are slated to come into effect on 1 June 2020, complementing the new section 17A corporate liability provision under the Malaysian Anti-Corruption Commission Act 2009. The requirements aim to promote a culture of better governance and hold businesses to greater accountability to stakeholders.

10 Mar 2020 | Malaysia

Can Trade Debts with a Company in Receivership be Set Off against Pre-receivership Claims?
When a company in receivership is wound up, can its trading partners set off debts they incurred to the company against unsecured debts the company incurred to them before entering into receivership? Is there mutuality between the trading partners' indebtedness and the company's pre-receivership indebtedness to justify a set-off which would effectively reduce the value of the company's secured assets? In BP Singapore Pte Ltd v Jurong Aromatics Corp Pte Ltd (receivers and managers appointed) and others and another appeal) [2020] SGCA 09, the Singapore Court of Appeal answered in the negative, agreeing with the receivers of the company in question that there was no mutuality and therefore no set-off available, because the debts were at all material times subject to the secured creditors' fixed security. The receivers were successfully represented by Lee Eng Beng SC, Disa Sim and Torsten Cheong of Rajah & Tann Singapore LLP.
10 Mar 2020 | Singapore

Amendments to the Malaysian Franchise Act 1998

The Franchise (Amendment) Bill 2019 ("Bill") was passed by the House of Representatives (Dewan Rakyat) and the Senate (Dewan Negara) on 3 December 2019 and 19 December 2019 respectively to amend the Franchise Act 1998 ("Act"). To date, the Bill is not yet in force pending Royal Assent and a date to be appointed by the Ministry of Domestic Trade and Consumer Affairs for the Bill to come into operation by notification in the Gazette.
As an overview, the main amendments under the Bill are as follows:

  1. it will be an offence for not including the terms prescribed under the Act in a franchise agreement;
  2. a foreign person who has obtained an approval under section 54 of the Act to sell a franchise in Malaysia or to any Malaysian citizen must also register the franchise under section 6 of the Act before he can operate a franchise business or make an offer to sell the franchise;
  3. the period in which a registered franchise will be effective will be limited, thereby requiring periodic renewal of registrations; and
  4. a franchisee who is not registered will commit an offence. 
06 Mar 2020 | Malaysia

Deadline for Holding AGMs for SGX-ST Listed Issuers Extended to 30 June 2020 Due to Covid-19 Outbreak
Issuers listed on the SGX-ST Mainboard and Catalist are given two more months to hold their annual general meetings ("AGMs") to approve their 31 December 2019 financial results. Under the Listing Rules of the SGX-ST Mainboard and Catalist, issuers are required to hold their AGMs within four months from the end of their financial years. However, in response to feedback by shareholders who want to participate in and vote at AGMs but may be concerned about attending large-group meetings amid the COVID-19 outbreak, on 27 February 2020, Singapore Exchange Regulation (SGX RegCo) announced that a waiver from the foregoing requirement will be granted to issuers which satisfy the prescribed criteria ("Waiver"). Issuers which are granted the Waiver have up to 30 June 2020 to hold their AGMs.

This Update provides a brief overview of the relevant requirements and the steps issuers can take to obtain the Waiver.
06 Mar 2020 | Singapore

Legal Analysis of COVID-19 Outbreak: What Businesses Should Be Aware Of

On 30 January 2019, the World Health Organisation declared the coronavirus disease 2019 (“COVID-19”) a public health emergency of international concern. More than 90,000 people globally have been infected in a short span of two months, sending shockwaves through the global economy. Every business has been affected in some way or the other by COVID-19 and the measures taken by governments and authorities to contain its outbreak.

The first part of this guide provides a legal analysis on the potential impact of COVID-19 on seven crucial Malaysian economic sectors, namely, Building & Construction, Energy & Power, Events & Sports, Hospitality & Tourism, Oil & Gas, Real Estate & Retail, and Shipping & Trade. In the second section of this guide, we examine the general legal implications on contracts, employment, personal data protection, financing, mergers & acquisitions, and social media.

05 Mar 2020 | Malaysia

National Automotive Policy 2020

Launched on 21 February 2020, the National Automotive Policy ("NAP") 2020 aims to enhance the automotive industry in the era of digital industrial transformation by focusing on Next-Generation Vehicles, Industrial Revolution 4.0, and Mobility-as-a-Service to make Malaysia a regional leader in manufacturing, engineering, and technology. The NAP 2020 is an enhancement of the NAP 2014 that focused on developing Malaysia as the hub for Energy Efficient Vehicles through development of research and development capabilities for right-hand drive vehicles and related technologies such as fuel efficiency, light material, telematics, tooling, and component design. The NAP 2020 sets out five additional objectives to the NAP 2014, as well as three directions, three strategies, four roadmaps, three blueprints, and 12 targets. Analysts have predicted that Malaysia's new Government will continue to adopt business-friendly measures. Assuming the Government implements the NAP 2020, this should boost Malaysia’s automotive industry given the variety of initiatives aimed at taking the industry to the next level.

02 Mar 2020 | Malaysia