The Hague Convention on the Civil Aspects of International Child Abduction (1980) (the “Convention”) is an international treaty between Contracting States that governs issues of international child abduction. Where a child under 16 years has been wrongfully removed or retained overseas, the Convention secures protection for parental rights of custody and access, and facilitates the prompt return of the child to his or her habitual residence. The return of the child is based on the underlying agreement that the child’s welfare is best served by swiftly returning the child to his or her habitual residence where the courts there will decide all issues of custody and care.
Singapore acceded to the Convention on 28 December 2010 and implemented its obligations on 1 March 2011 with the enactment of the International Child Abduction Act (the “ICAA”). Singapore has a Convention relationship with countries including Australia, Hong Kong, France, Germany, United Kingdom and the United States of America.
Where a child has been removed or retained from his or her habitual residence to Singapore, the parent seeking the return of the child (the “requesting parent”) has two options in Singapore under the ICAA. The parent may either apply to the Central Authority of Singapore (i.e. the Ministry of Social and Family Development at the date of this publication) or apply to the Court in Singapore for an order that the child be returned.
The Central Authority of Singapore can take measures to, amongst others, discover the whereabouts of the child, prevent further harm to the child and facilitate a voluntary return or bring about an amicable resolution.
In the event that the Central Authority’s efforts are unsuccessful, the requesting parent may apply to the Court for a return order of the child. Unless the parent who removed the child (the “abducting parent”) has a defence, the Court must order the return of a child if the following requirements are satisfied:
It is imperative that the requesting parent acts swiftly under the ICAA. Where proceedings under the ICAA are commenced in Singapore after one year from the date of the child’s wrongful removal or retention, the Court is no longer duty-bound to order the return of the child if it is demonstrated that the child is now settled in his or her new environment.
The Court is also not duty-bound to order the return of the child if other exceptions are satisfied. The burden of proving the exceptions falls on the abducting parent and the Court has held that it is a stringent burden to discharge. First, if the child objects to being returned and has attained an age and degree of maturity at which it is appropriate to take account of his or her views, the Court may refuse to make the return order. The Court may also refuse to make the return order where there is a grave risk that the child’s return would expose the child to physical or psychological harm or otherwise place the child in an intolerable situation. Lastly, if it is shown that the requesting parent had consented to or subsequently acquiesced in the removal or retention, the Court may refuse to make the return order.
The Court may order that the return of the child is conditional on undertakings that the Court thinks fit and the requesting parent should be prepared to make such undertakings. The Court has emphasised that undertakings are not only a sign of the requesting parent’s good faith, they are also a temporary protective measure to ensure that the return of the child will not (as far as possible) adversely impact the child and/or the abducting parent. The requesting parent may be required to undertake that the abducting parent would receive legal representation for the custody and care hearings in the child’s habitual residence, and making arrangements for the child’s and abducting parent’s travel, reasonable accommodation, maintenance and health care in the child’s returning country.
Given the nature of this particular sphere of law, the Court has emphasised that the facts in each case are not only the first port of call but are also of the first importance. The Court will make its decision based on a close and granular analysis of the precise facts. Applicants and respondents are therefore well advised to present their respective cases in extensive detail.
Foo Soon Yien
Director, Bernard & Rada Law Corporation
Fraudulent directors, rogue businessmen and delinquent corporate partners. The modern commercial world is a minefield and these are but a few of the landmines within it. With a pinch of wise business strategy, a sprinkle of solid due diligence and a generous helping of good fortune, the modern corporation seeks to navigate this minefield.
However, sooner or later the modern corporation will stumble onto and inevitably set off a landmine, be it a fraudulent director, rogue businessman or delinquent corporate partner. If the resulting explosion does not result in a fatality, the wounded modern corporation will likely attempt to protect its interests and that of its shareholders by suing the offending landmine.
This course of action sounds good in theory, but given the characterisation of the offending landmine (read “fraudulent”, “rogue” and “delinquent”), the lawsuit may lead to a “paper judgment”, two words which strike fear into the hearts of lawyers and plaintiffs alike.
Here’s an analogy. When a corporation (plaintiff) sues a fraudulent director (defendant), they are like two boxers about to battle over the fight purse (fraudulent director’s assets) in a boxing ring. However, either before or during the fight, the fraudulent director surreptitiously empties the fight purse and removes its contents (dissipation of assets). Therefore, no matter how hard or how well the corporation fights in its triumph over the fraudulent director, its only prize is an empty fight purse.
What then, can a corporation do to protect its interests and that of its shareholders? Enter the Mareva (or freezing) injunction.
Mareva injunctions are one of law’s “two nuclear weapons” (Lord Justice Donaldson in Bank Mellat v Nikpour  FSR 87 at 92), best described as a hard-hitting remedy through which a plaintiff or potential plaintiff may obtain some measure of protection against a defendant who undermines or intends to undermine any judgment by dissipating his/her/its assets.
By obtaining a Mareva injunction against the defendant’s assets, the plaintiff “freezes” the defendant’s assets by: (a) preventing the defendant from dealing with his assets; and (b) preventing any third party from assisting or allowing the defendant to do so. Any person or entity served with the Mareva Order who does not comply with its terms may be fined or imprisoned.
That being said, the effectiveness of a Mareva injunction as a “nuclear weapon” will very much depend on its wielder, as the timing and precision in its delivery is key to unlocking its full effectiveness.
The case study (reported in The Business Times on 27 September 2017)* below of how we helped one of our clients best exemplifies a timeous and effective use of a Mareva injunction.
Shanghai Turbo Enterprises Ltd. (“STE”) is an SGX mainboard-listed company which is a producer and supplier of precision components for power plants, which are manufactured at its factory in Changzhou City, China (the “Factory”). STE owns the Factory through its wholly owned Chinese subsidiary, Changzhou 3D Technological Complete Set Equipment (“CZ3D”).
In April 2017, shareholders of STE voted not to re-elect its then-CEO and executive director, Liu Ming. Instead of a smooth handover, Liu Ming, who was also a director and the chairman of CZ3D, allegedly instigated his relatives and other CZ3D workers loyal to him to seize control of the Factory in a hostile takeover.
There was even a hostage situation: members of CZ3D’s new incoming management team arrived at the Factory to take control of CZ3D and its operations, but were instead held hostage by the Liu Ming’s loyalists.
To protect its interests and that of its shareholders, STE, through Bernard & Rada Law Corporation (“B&R”), filed a lawsuit against Liu Ming in Singapore for various breaches of his service agreement with STE, including a failure to deliver the Factory to CZ3D’s new management team. STE sought, amongst other things, an order for Liu Ming to return the Factory and to compensate STE for the losses it suffered as a result of Liu Ming’s actions.
Soon after, STE were informed of certain developments which resulted in there being a real risk that Liu Ming would dissipate his only known asset within the jurisdiction of Singapore’s Courts: his nearly 30% shareholding in STE.
After receiving counsel from B&R, STE immediately filed an urgent application for a Mareva injunction to “freeze” Liu Ming’s assets in Singapore. Represented by Ms Foo Soon Yien (Director), the Head of B&R’s Litigation Department, STE successfully obtained the Mareva injunction it sought, thereby protecting itself and its shareholders from a “paper judgment” conclusion to its legal proceedings against Liu Ming.
STE’s litigation against Liu Ming is still ongoing. However, its success with the freezing of Liu Ming’s assets is a good example of how decisiveness and timing are key to the effective use of a Mareva injunction and the protection of commercial and shareholder interests where litigation is concerned.
If you would like to discuss how we can help your corporation protect your business and its shareholders, please contact:
Managing Director, Bernard & Rada Law Corporation
DID: 6394 7850
Foo Soon Yien
Director, Bernard & Rada Law Corporation
DID: 6394 7688
Foo Soon Yien
Director, Bernard & Rada Law Corporation
Associate, Bernard & Rada Law Corporation
Link to The Business Times article (login required): http://bt.sg/WHW
In a commercialised economy such as Singapore, there are a plenty of large scale construction project opportunities available. The most common method of awarding such projects is through the process of competitive tenders. This generally refers to the process of governmental organisations or other institutions inviting bids for projects within a specified time-limit.
The awarding of projects is generally seen as positive for the successful tenderer. However, one must consider the potential pitfalls in dealing with such contracts.
Tender Offer and Acceptance
For the sake of completeness, it is important to first understand the process leading to the award of a successful contract.
Generally, a request for inviting tenders is no more than an invitation to treat and should not be considered as an offer. The submission of a tender bid in response to the request would typically amount to an offer by the tenderer. A binding contract would thus arise when the tender bid is accepted by the party inviting tenders.
Issue 1: Possible Withdrawal Scenarios
Generally, a party’s failure to follow through on an accepted tender bid would be seen as a breach of contract.
There are various reasons why a party may be unable to follow through with a successful bid. Examples include monetary issues, tenderers losing necessary licences, or the occurrence of negative allegations which causes one party to lose confidence in the other.
However, the most common reason of withdrawals arises from the hastiness of submitting a bid. The limited response period of typical tenders means that there is always a possibility of mistakes, or making early decisions which may lead to negative consequences. For example, a tenderer could make a mistake in the calculation of costs and only realise after submitting their bids that it would not be advantageous to the company to carry out the contract. More often than not, it may already be too late to withdraw the tender bid by that time.
Remedies for Breach of Contract
In the event of a breach, the aggrieved party is generally entitled to damages, with the main objective being monetary compensation for the loss suffered, but not to provide any gain above or beyond such loss. However, the aggrieved party must take reasonable steps in order to minimise its losses in such a breach.
Another important remedy for the aggrieved party is the option to terminate the contract. Termination is available under common law where the breach is fundamental or where it amounts to a repudiatory breach. Additional grounds of termination may be provided for in the contract. Typical grounds for termination include a default or bankruptcy of a party, failure to start, continue or complete the contracted work, and non-compliance with the contract in general.
Issue 2: Obtaining Payment
The most common concern faced in construction contracts is the difficulty in obtaining remuneration for work done and services rendered.
In order to address difficulties surrounding payments, the Building and Construction Industry Security of Payment Act 2004 (“BCISPA”) was introduced by the Parliament of Singapore and came into effect on 1 April 2005. Crucially, the BCISPA provides a right to payment and includes provisions prohibiting the avoidance of payments.
Dispute Resolution: Adjudication
In the event where a right to payment has been breached, the BCISPA also provides a mechanism for parties to obtain payment through adjudication.
Adjudication is a method of dispute resolution which is generally cheaper and quicker, with fixed and tighter deadlines as compared with litigation. For example, after a party receives notice of the adjudication application, there is a 7-day deadline to make a response. A failure to meet the deadlines may result in an adjudication determination against the errant party.
Applicants should note that the fees charged by the adjudicators and the Singapore Mediation Centre will be in accordance with the fee schedule of adjudication under the BCISPA.
In order to be entitled to make a claim under the adjudication process, payment has to become due to a contracting party. These payments may be in the form of progress payment schedules or when a payment claim is served on a party. Where such payment disputes arise, the party seeking payment may be eligible to make an application for adjudication.
One should also note that under Section 36 of the BCISPA, it is clear that parties are unable to insert contractual clauses to ‘opt out’ of the statutory provisions of the Act. Therefore, the option of adjudication will always be open to a party seeking resolution to his or her dispute over payments.
Dispute Resolution: Arbitration
Another option to resolve such disputes is arbitration, which involves a tribunal consisting of one or more arbitrators judging the matter privately. Even though arbitration is slower than the adjudication process, it has advantages over litigation such as privacy and a finality of award arising from a limited scope for appeal.
Consequently, arbitration has also become a popular alternative to resolving disputes.
Solution: “Preventive Lawyering”
The issues discussed above are some common pitfalls which may lead to disputes between parties. The nature of such disputes is similar to healthcare, whereby litigation is akin to an expensive surgical operation to treat a serious disease.
In a tough economic environment, the possibility of litigation increases. Therefore, consulting a solicitor for the preparation and implementation of preventive measures is recommended in order to ensure that your day-to-day processes allow for automatic documentation. Doing so may place you in a better position to emerge victorious in the event of a dispute, or better yet, prevent litigation altogether. As with healthcare, “prevention is better than cure”.
Associate Director, Bernard & Rada Law Corporation
The posts found in this Law Blog are not legal advice, nor are they given for the purpose of providing legal advice.
You should contact your lawyer for legal advice if you need legal assistance.