Worldwide: South & Southeast Asia M&A Newsletter - January 2017

Last Updated: January 18 2017
Article by Saori Nakamura, Adam Summerly, Jake M. Robson and Shirin Tang


Following a public consultation process, the CCS has:

  • issued a revised set of guidelines on the provisions of the Singapore Competition Act of Singapore (being the first comprehensive revision to the guidelines since they were first issued in 2007) which, it is hoped, will make it easier for businesses, consumers and other stakeholders to understand how the CCS will administer and enforce the Singapore Competition Act; and
  • introduced a new Fast Track Procedure to incentivize parties to admit liability and settle competition investigations quickly.

The revised Guidelines and Fast Track Procedure came into effect on 1 December 2016. Some of the key changes introduced include:

  • New Fast Track Procedure ("FTP") for shorter investigation process: The aim of the FTP is to increase the efficiency of the CCS' investigation and enforcement process by, in appropriate cases, offering parties that are subject to investigations by the CCS the opportunity to enter into an agreement with the CCS where they admit liability for their anti-competitive activity in return for a reduced financial penalty. To allow parties under investigation to determine whether they wish to use the FTP, the CCS will discuss the scope and gravity of the infringing conduct being investigated and likely resulting penalties applying a 10% discount if liability is admitted. To take advantage of the FTP all parties under investigation by the CCS must agree to use the FTP.

    The FTP is similar to the cartel settlements policy introduced by the European Commission but unlike the policy of the European Commission the FTP is available in relation to all infringements of Section 34 (anti-competitive arrangements) and Section 47 (abuse of a dominant position) of the Singapore Competition Act rather than just cartels. Currently, the level of discount offered to admit liability early (10%) is relatively low and so parties subject to investigation will need to consider whether the benefit offered by a reduction in financial penalties arising from an early admission of liability through the FTP is great enough to outweigh any potential risk of other parties claiming loss or damage as a result of the infringing conduct for which liability has been admitted.
  • Increased predictability and certainty in relation to the calculation of financial penalties: Previously the financial penalty for infringement was calculated by reference to the turnover of the infringing party in the year before the issuance of the CCS's decision (which meant that it was not always clear until after the decision had been issued by the CCS which financial year would be used to calculate penalties). Under the new penalty guidelines the financial penalty is calculated by reference to turnover in the financial year preceding the date on which the relevant party's participation in the infringement ended (which is more aligned to the approach adopted by competition authorities in the UK and the European Union). As a result, the size of the financial penalty should be more predictable and directly linked to the turnover earned by the infringing party at the time of the infringing actions.
  • Processes simplified: Various changes have also been made to simplify processes and clarify the CCS's approach in assessing conduct including the simplification of various notification forms and procedures. There is also increased clarity on the investigation processes and steps to be adopted by the CCS during their investigation process.

The changes and new Guidelines are being welcomed as a positive step towards increased certainty and clarity in Singapore's competition regime but only time will tell how useful the FTP will be in achieving a more streamlined approach to investigation and enforcement action.


After a whirlwind consultation, the Singaporean legislature looks set to move forward with a number of insolvency law reforms. A draft Bill, the Companies (Amendment) Bill 2017 (the "Bill"), was recently published and it is expected that the Bill will be written into law in the first half of 2017.

Some of these reforms bear a striking resemblance to the recommendations put forth by the UK government's Insolvency Service earlier last year and both sets of proposals can be said to have the common aim of moving two of the world's most favoured restructuring regimes closer to the ever-dominant Chapter 11 process deployed in the United States.

The Bill envisages reforms that can broadly be split into three key areas:

  1. Reforms aimed at revamping the Scheme of Arrangement and making it the vehicle of choice for debt restructuring;
  2. Reforms aimed at increasing the extra-territorial reach of Singapore's insolvency laws; and
  3. Reforms aimed at improving the efficiency and effectiveness of judicial management ("JM").

The main reforms in relation to the Scheme of Arrangement include a new moratorium for companies that apply to the courts for a Scheme. The moratorium will last for just 30 days and will take effect on satisfaction of various conditions. More interestingly however, this moratorium will purport to restrict the enforcement of security over assets outside of Singapore, therefore mimicking the extra-territorial effect of the Chapter 11 stay. In relation to the Scheme of Arrangement, the Bill also introduces provisions aimed at enabling super-priority debtor-in-possession financing, along with a cram-down mechanism to bypass the challenges posed by a dissenting creditor minority.

One of the key reforms aimed at increasing the extra-territorial reach of Singaporean insolvency laws is the enactment of the UNCITRAL Model Law on Cross-Border Insolvency, which has been part of the UK regime for some time now. JM will also be made available to foreign companies and the ring-fencing of assets to repay debts of foreign companies in Singapore will be restricted to specific financial institutions.

Finally, the changes to the JM regime include super-priority debtor-in-possession financing (as introduced for Schemes), a more relaxed insolvency test to make it easier for companies to enter JM and new powers for the courts preventing persons entitled to appoint a receiver from blocking a company from entering into JM.


The Choice of Court Agreements Act 2016 ("CCAA") came into force on 1 October 2016, implementing the Convention of 30 June 2005 on Choice of Court Agreements agreed at The Hague (the "Hague Convention"). The aim of the Hague Convention was to promote international trade and investment through enhanced judicial co-operation by having uniform rules on jurisdiction and on recognition and enforcement of foreign judgments in civil or commercial matters.

In essence, a signatory State to the Hague Convention (a Signatory State) is required to (a) uphold exclusive choice of courts agreements choosing the courts of Signatory States in international civil or commercial disputes; and (b) recognise and enforce judgments of the courts of other Signatory States chosen in exclusive choice of court agreements.

In the M&A context, this means that if Singapore courts are designated by the parties to an agreement as having the exclusive jurisdiction for disputes arising out of or in connection with the agreement: (a) the courts of other Signatory States must decline to hear parallel proceedings to which the exclusive choice of court agreement is applicable; and (b) the Singapore court judgment must be recognized and enforced in other Signatory States. There are also reciprocal obligations on Singapore under the Hague Convention which have been transposed by the CCAA.

The upside of this international legal regime is that there is certainty that the exclusive jurisdiction clause in agreements will be respected and effective and judgments will be recognised and enforced at least in the Signatory States, which currently include 27 member states of the European Union (Denmark opted out), Mexico and Singapore. Ukraine and the United States have signed but have yet to ratify.

To read this Newsletter in full, please click here.

Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Morrison & Foerster LLP. All rights reserved

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