Singapore-Australia Free Trade Agreement (SAFTA)

Trade between Singapore and Australia is strong as the value of two-way goods trade was AUD 16.2 billion  in 2015.  Both countries took steps to make it even stronger when they completed the 3rd review and signed updates to the Singapore-Australia Free Trade Agreement (SAFTA) on 13 October 2016.


The new agreement captures the most recent developments in trade rules and includes provisions from the ASEAN-Australia-New Zealand Free Trade Agreement (AANZFTA) and the Trans-Pacific Partnership (TPP).  It enters into force in 2017, once Singapore and Australia have completed their domestic treaty processes.

How will this agreement help your business?

The updates create new trade rules for goods, increase opportunities for government contracts, provide greater access to the services sector, facilitate investments, improve mobility for business persons and create rules to facilitate trade in a digital economy. How will this agreement help your business?

·         easier claims for preferential treatment by way of clarifying and simplifying the rules of origin and origin certification;

·         full schedule of product specific rules of origin including products such as certain electronic machinery, equipment and parts thereof, and certain beverages;

·         allows for self-certification and sets origin verification procedures including written requests for information, requests for customs administrations to assist in verification and verification visits;

·         new rules and special annexes for the trade of cosmetics, medical devices, and wine and distilled spirits, which are consistent with the TPP.

Updates in the services sector include:

·         includes telecommunications and e-commerce TPP provisions to ensure consistency between the trade agreements;

·         recognizes Juris Doctor degrees of universities currently listed in SAFTA;

·         provides for new access for universities with a graduate model of legal education;

·         recognizes the health degrees in physiotherapy, occupation therapy and speech therapy;

·         establishes a framework under SAFTA to support mutual recognition of professional qualifications. Priority will be given to arrangements for engineers and accountants;

·         provides for cross-border services in investment advice and portfolio management services, and brokerage services for insurance of maritime, aviation and transportation related risk;

·         extends the length of stay from 3 months to two years for independent executives and contractual service suppliers;

·         extends the length of stay for intra-corporate transferees up to a new maximum stay of 15 years;

·         extends the length of stay for individuals offering services relating to installation and servicing of machinery and equipment for up to 3 months;

·         allows for spouses and dependents of Singaporeans and Australians to enter as intra-corporate transferees, independent executives and contractual service suppliers.

Updates for investments include:

·         updates the existing investor-state dispute settlement (ISDS) and establishes more explicit safeguards that protect the Government’s right to regulate in the public interest including public welfare, health, environment;

·         establishes rules to protect government action that may be inconsistent with an investor’s expectations, which is not a breach of the minimum standard of treatment obligation;

·         excludes tobacco control measures from ISDS;

·         carves out certain government functions from being challenged under ISDS including pharmaceutical and medicare schemes, Therapeutic Goods Administration and Office of the Gene Technology Regulator, foreign investment policy, decisions of the Foreign Investment Review Board, social services including social welfare, public education, health and public utilities and policies related to creative arts, indigenous traditional cultural expressions and other cultural heritage;

·         harmonizes investment screening thresholds and rules with the TPP.

Updates for government procurement include:

·         modernizes and updates procurement practices including but not limited to establishing transparency for the procurement process and rules for technical specifications so as to avoid unnecessary obstacles to trade;

·         facilitates the participation of small and medium enterprises (SME) in government contracts by providing comprehensive procurement-related information in a single electronic portal, making tender documentation available free of charge, conducting procurement by electronic means and consideration of SME subcontracting.


For further information, please contact:

Eugene Lim, Partner, Baker & McKenzie.Wong & Leow 


indian flag

Acquisition Transactions And The Limits Of Labour Laws In India.

Global investors with aggressive expansion plans often acquire businesses in the host country or buy out units of existing entities which fit in with their strategic ambitions. Such cross border transactions are being increasingly undertaken in India as foreign direct investment is freed from almost all limits, and investors are drawn to India by the availability of skilled low cost resources, and to enter an emerging market with growing demand for goods and services. Among the key issues which an investing company is confronted with, is the tangle of labour and employment laws in India which govern employee rights. Provisions for termination of employment are contained in the Industrial Disputes Act, Shops & Establishment Act of the State in which the establishment is located, Standing Orders Act, and the Service Contracts of employees.


Labour laws referred to above contain restrictions on transfer of employees, redeployment, redesigning employee roles and responsibilities, recalibrating head count numbers and costs. In short, restructuring which involves merger of one unit with another where the original unit loses its identity or becomes part of another entity, or one unit acquires another but the existing unit retains its status as an entity, are all events which lead to change of owner for the employees, or reallocating (transfer) employees between the existing and acquired units, or termination of employment contract, and designing settlement packages, or even re-writing employment agreements within the permissible limits under the local laws.

Divestment of a Unit or Undertaking.

This is a situation in which a running business undertaking is acquired by another company and the ownership of the business changes from the old company to a new company. This may entail simply a sale of assets and purchase by a new company with or without the employees (assuming these to be “workman”) of the transferred undertaking. Where such workmen are not taken over by the new buyer, the old company may continue their service contracts but any redeployment of roles and terms would require consent to be obtained in terms of the ID Act, notices to be given regarding changes in their terms, etc. On the other hand, if the workmen are transferred to the buyer entity, this involves a change of ownership and a new employer for such workers. As judicial norms go, the Supreme Court in India has held that the old employer has to obtain the consent of the affected workers even if there is no change in their terms of service and they are transferred on no less favourable terms.

More significantly, the employee transfer would have to be accompanied by an agreement between the transferor (seller) and the transferee (buyer) under which the seniority or period of service may have to be taken over by the buyer so that there is no interruption of employment for purpose of social security benefits. This will also involve transfer of gratuity funds to the buyer entity and transfer of provident fund accounts of the employees to the new entity.


If the workers do not wish to move over, and the existing employer does not wish to retain them then the workers have to be “retrenched” as redundant under the ID Act and have to be paid compensation, given notice of termination with reason recorded therein, and all their termination benefits have to be paid under appropriate settlement agreements.

There may also be a situation where the transfer of undertaking may involve transfer of workmen on terms less favourable. In this case the workmen who agree to resign from the old employer (seller), and accept to move to the new employer (buyer), would have to be paid retrenchment compensation as provided under the ID Act, and if they have done five years of continuous employment in the seller company, they would have to be paid their gratuity benefits, though the provident fund accounts and balances would have to be transferred to the new employer (buyer). Here a note of caution needs to be sounded for the benefit of the buyer/new employer, as the courts have held that the doctrine of continuing employer mandates that the new employer must take over the service seniority of the employees. Thus, new employers must undertake due diligence to ensure that the appropriate deductions of statutory contributions were made by the old employer and only then take over the accounts. In most cases of mergers (involving sale or transfer of shares), the courts now insist that the buyer would incur the social security obligations as a successor employer.

Determination of the status of employees

Before the separations or transfers as discussed above are carried out or negotiated, it is absolutely necessary to determine the exact status of an employee and whether he/she is a “workman” in terms of the law. There are a number of statutory and judicially defined criteria that have to be applied to the employment agreements or appointment letters to determine the exact status in each case. Further the procedures are also provided for in these statutes. Both the ID Act and the S & E Act of the State concerned provide for notices, grounds of termination simpliciter where permitted, though in most cases only ‘with cause’ termination are permitted. Then, depending upon the industry and strength of the total numbers employed, there are legal requirements of giving simple notice to the government or applying for prior permission to the government in case of large undertakings in certain industrial establishments. Under the ID Act, the procedure to be followed depends on a case to case fact situation of the industry, whether it is in the service sector or in the manufacturing sector.

Where the employees are external resources or “consultants” who were hired for providing services as independent contractors, the procedural requirements and legal conditions for termination are different from those mandated for “workmen”. If these resources have to be terminated as surplus or redundant, their settlement packages, and payment of statutory benefits, if applicable, hinge on the determination of their status.

Redeployment of resources

Acquisitions or mergers also entail redeployment of resources or redesigning of roles. This could involve playing with job titles, descriptions and duties, and service conditions. Often, transfers and relocations may also look inevitable given the need to support some functions and reduce head count in other service verticals. Here again some of the considerations and issues which must be examined prior to implementation are discussed below:-

I. The employees who fall in the category of “workmen” may pose a stickier challenge as the requirements provided for in the legislation would have to be examined and complied with before any program for redesigning or change in terms of service can be implemented. Under the ID Act, the conditions of service of any workman, particularly of any matter specified in the Fourth Schedule, shall not be changed without giving a notice to the workmen likely to be affected by such change. The purpose of this requirement is essentially to ensure that the concerned workmen are notified of the proposed change and if they object to the notice for change, then the employers have to either obtain their consent or negotiate a way out of the workmen’s opposition. Schedule Four contains matters like wages, (reduction of wages would be a bone of contention), contribution paid by the employer to their provident fund or pension fund under any law, compensatory and other allowances, hours of work, leave with wages and holidays, withdrawal of any customary concession or privilege, introduction of new rules of discipline, or alteration of existing rules, etc. The courts in India have ruled that these service conditions cannot be changed without the consent of the affected worker. If the two sides do not agree on a way out, then litigation proceedings can be long and contentious.

II. Consultants and independent contractors or service providers may have to be moved around with reference to their contracts and terms of engagement. Managerial or supervisory employees who may not be “workmen”, may be a simpler category of resources to redesign, depending on the type of employment contract, its duration, and provisions for termination or renewal. However, even under the law of contract in India, the employer may be required to seek the consent of the affected employee, and may have to consider renegotiation during term, with consent, or where possible look at termination clauses and even voluntary exit provisions in the contract. Providing reasonable settlement packages and statutory benefits as per the law also facilitate exits and separation.

The intention behind the Notice prescribed under Section 9-A appears to be that the “workman”, if aggrieved by the proposed change, are provided an opportunity to raise an Industrial Dispute and approach the appropriate forum/ labour authorities, so that the dispute may be made a reference by the appropriate government (State government) if the “workman” and the employer fail to arrive at an amicable settlement. Section 9A is designed to protect the interests of the “workman”. Where a reference is made at the instance of the employer pursuant to an industrial dispute arising out of a Notice under Section 9A to the detriment of the “workman”, the burden to justify the change lies on the employer. The Supreme Court has observed that a benefit prevailing for long, making it a condition of service, should not be allowed to be interfered with lightly to the prejudice of the workmen in the absence of compelling material. At a practical level, employers may follow the requirements of the Proviso to Section 9A, with a view to securing a settlement with the affected workmen, or the concerned employees, so that they voluntarily agree and subscribe to the proposed changes.

Alternative Strategy

Given that termination of employment poses a host of legal challenges, it is better sometimes to consider softer options like negotiating voluntary exits (instead of terminations), or gradual separation of smaller numbers of employees rather than executing bulk discharge of employees. This option is preferable to more drastic measures but also requires careful drafting of settlement agreements and termination letters which must work around the delicate issue of grounds of removal such that employees are not left feeling aggrieved that the terms of their employment were violated or they were treated unfairly. Separation agreements are more often a work of art than a legal challenge and require adroitly worded documents to protect interests of both the parties. 


The complexity of the terrain described above, though daunting, does not mean that the law does not permit restructuring of businesses or optimum employee arrangements, but these have to be devised or worked around given the protection of employee rights under the law. 


hong kong

Hong Kong – Chiann Bao Appointed To HKIAC Council Board

Skadden is delighted to announce that Chiann Bao, Asia Pacific Counsel in the Skadden Hong Kong office, has been appointed to the Council of the Hong Kong International Arbitration Centre (HKIAC).  Chiann previously served as the Secretary-General of HKIAC from 2010 until 2016 before joining Skadden on 30 August 2016.


“We’re delighted that Chiann has been appointed to the HKIAC Council, and will be using her fund of knowledge and experience to assist an institution with which she has such a long association and to which she has given such distinguished service” said Rory McAlpine,  Skadden’s Head of Asia Disputes.

HKIAC also announced three other new members to its Council Board, in addition to Chiann: Danny Mok, an arbitrator; Anthony Houghton SC, Barrister and Senior Counsel; and Briana Young of Herbert Smith Freehills.


Brexit legal challenge makes ground in the High Court

A historic legal challenge over whether UK Prime Minister Theresa May has the power to start the country’s withdrawal from the European Union (EU) appears to have succeeded, with a government lawyer saying that it is now “very likely” that the procedure will be subject to a parliamentary vote.


Speaking in London’s High Court yesterday, James Eadie QC, one of the government’s lead advocates in civil litigation, suggested that politicians would now be able to vote on the Brexit process. “The view within government is that it is very likely that this treaty will be subject to ratification process in the usual way,” he said.

A group of claimants led by investment manager Gina Miller and hairdresser Deir Dos Santos initiated the legal proceedings to demand that all elected politicians – and not just the Prime Minister – decide on the triggering of Article 50, which starts a two-year deadline for an EU member to complete its exit from the political bloc.

The three judges presiding over the four-day judicial review, which finished yesterday, have not yet made a formal ruling. The judges reserved their decision in order to “consider the matter” more fully, but said they would deliver their judgment “as quickly as possible”. A decision is expected by the end of the month and would be open to appeal.

David Greene, senior partner and head of group action litigation at London law firm Edwin Coe, which is representing Dos Santos, dismissed Eadie’s comments as a “sop to the judges”, however. Greene told that giving parliament a say on the final Brexit deal does not go far enough. “It is correct that the government may not have [changed its stance] had we not pursued the case, so it is a form of victory,” he said. “The proposal from Eadie means however that parliament will be faced with a fait accompli. Even if they get a vote at the end [of Brexit negotiations], if they do not approve the deal, exit will happen in any event at the end of the two-year period [as set out by Article 50].”

It still represents a significant concession by the government, however, with Prime Minister May previously announcing that she would trigger Article 50 by March 2017. Miller’s skeleton argument [PDF] said that triggering Article 50 without an act of parliament would “substantially undermine” constitutional rights, and added that May’s statement put her on a “collision course” with the courts by effectively “pre-empting the outcome of the case”.

May had softened her approach recently by agreeing to demands from rival parties for parliament to hold a “full and transparent debate” of the government’s Brexit plans before the formal exit process begins, but stopped short of pledging a parliamentary vote on EU negotiations or the triggering of Article 50.

Parliament now appears set for what will be a challenging decision, with large numbers of politicians likely to be conflicted between voting based on their own personal beliefs and upholding the result of a democratic referendum, as the majority of UK politicians wanted the country to remain within the EU.

Miller was represented in the case by London-based Mishcon de Reya. The firm instructed a group of heavy-hitting barristers – specialist UK advocates who represent clients in court, typically operating independently from standalone “chambers” instead of law firms – including David Pannick QC of Blackstone Chambers, widely regarded as one of the country’s leading experts on constitutional law. Mishcon’s London headquarters have been targeted by protesters opposed to the legal action.

Eadie was representing the government alongside UK attorney general Jeremy Wright QC.

Miller and Dos Santos were joined in the action by a number of interested parties and interveners, including The People’s Challenge, which has used crowdfunding to finance the case, raising almost £160,000 ($195,000) from around 4,500 supporters.

The People’s Challenge was represented by John Halford, co-head of public law at London law firm Bindmans, which is known for its work on civil liberties and human rights, and Helen Mountfield QC of Matrix Chambers. The crowdfunding was organised by Grahame Pigney, a British expat living in France who is part of the pro-EU campaign group, Say Yes 2 Europe. “The enforced removal of citizenship rights from 65 million people is completely unprecedented in a modern democracy,” Pigney states on the fundraising page.

A separate crowdfunding by Jolyon Maugham QC raised more than £10,000 ($12,000) to pay for legal advice from public law experts.

The claimants secured an early win a fortnight ago, with a High Court judge ruling that the government release its private legal arguments for not consulting parliament on the triggering of Article 50. The documents revealed that government lawyers will argue it is “constitutionally impermissible” for parliament to be given a vote on the Brexit process. “It is a polycentric decision based upon a multitude of domestic and foreign policy and political concerns, for which the expertise of ministers and their officials are particularly well-suited and the courts ill-suited,” the documents state.

The requirement for the UK’s withdrawal from the EU to be subject to an act of parliament has widespread support within the legal industry. More than 1,000 UK attorneys previously wrote to then Prime Minister David Cameron to demand that MPs vote on the triggering of Article 50.

The news that parliament is now likely to vote on the process has led to a rally in the value of UK currency, which rose 1% to $1.23 – its biggest gain in two months. The British pound hit $1.50 immediately before the EU referendum but its value has plummeted since the Brexit vote. It suffered another steep fall earlier this month, when May indicated that the country would withdraw from the European single market as part of a so-called “hard Brexit”.

There are fears that a loss of single market access could result in banks and other companies – including global law firms – shifting business away from London to other European cities. Last week, Russia’s VTB Bank became the first major financial institution to announce that it will relocate its European headquarters from London due to the UK’s decision to leave the EU.

But it emerged on Monday that the government is now considering plans to continue paying billions of pounds into the European Union budget even after the country leaves the political bloc in order to maintain access to the single market for key industries.


Osborne Clarke hires Addleshaws incentives head

Addleshaw Goddard employment incentives head Michael Carter has left the firm for Osborne Clarke.


Carter joined Addleshaws as a partner in 2008 from KPMG, where he worked for 12 years, also leading the accountant’s executive compensation practice.

Prior to joining KPMG, Carter was a solicitor at Pinsent Masons in Leeds.

The hire follows a number of new recruits to Osborne Clarke’s London office, including two Irwin Mitchell corporate partners Edward Persse and Paul Smith.

Irwin Mitchell real estate partners Jo Footitt and Louise Cartwright also joined over the summer.

Carter will sit in Osborne Clarke’s incentives and wider tax practice. The employment team is currently made up of seven partners in the UK.


Hogan Lovells seals tie-up in Shanghai Free Trade Zone

Hogan Lovells has entered into a formal association with 170-lawyer Fujian Fidelity in the Shanghai Free Trade Zone.


It follows a similar move by Baker & McKenzie and FenXun Partners last year, which became the first international and PRC law firms to enter into a joint operation in the trade zone.

Hogan Lovells already has offices in Beijing, Hong Kong and Shanghai. The latest association adds seven offices to its Asia network.

Hogan Lovells partners Andrew McGinty and Zhen Feng will be responsible for managing the relationship with the Chinese firm.

The Shanghai Free Trade Zone was set up as part of new rules that allow foreign law firms in China to team up with local firms.

Asia remains a key part of Hogan Lovells’ strategy, with the firm entering into an association with Indonesia firm Dewi Negara Fachi & Partners (DNFP) in June, eight months after ending its previous alliance in the region.        

hong kong

Sidley Austin pulls off three-strong team hire in Hong Kong

Sidley Austin hired three arbitration lawyers from O’Melveny & Myers, including partner Friven Yeoh, who was most recently the head of the latter firm’s Hong Kong office.


Yeoh, who joined O’Melveny in 2009, was appointed Hong Kong managing partner last year. Following his departure, the firm has appointed Denis Brock to head his Hong Kong office. Brock joined from King & Wood Mallesons in 2014.

Joining Yeoh are counsel Desmond Ang and Yan Zhang.

This bolstering of Sidley’s litigation and dispute resolution department follows litigation head Charles Allen’s recent move from Sidley to Orrick, Herrington & Sutcliffe.

In June, O’Melveny lost another Asia-based managing partner, this time in Shanghai. DLA Piper hired Li Qiang as well as counsel Stewart Wang.


Multiple hires for Ince JLV in Singapore

Ince Law Alliance, the Singapore joint law venture (JLV) between Ince & Co and local firm Incisive Law, has bolstered its ranks by hiring from Allen & Gledhill and Bond Dickinson.


Last year, Ince lost Richard Lovell, managing partner of its Singapore office, and Mohan Subbaraman, head of Incisive Law, to Reed Smith. Martin David, previously Ince’s Asia-Pacific energy head, has also left, joining Baker & McKenzie.Wong & Leow.

The new hires include Felicia Tan, who joins from A&G as the director of the JLV’s litigation team, as well as litigation and arbitration lawyer Moses Lin, who joins as a partner from Hill Dickinson.

Additionally, Edgar Chin has been promoted to joint managing director at Incisive Law. He will be working alongside shipping specialist Bill Ricquier.

Incisive Law has also hired Justin Seet and Samantha Ch’ng as junior associates.

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CMS, Nabarro and Olswang to merge to make UK’s sixth-biggest firm

One of the largest tie-ups in the UK legal services industry is being planned by law firms CMS UK, Nabarro and Olswang to create an international group better able to challenge the elite “magic circle” of five leading British rivals.


The merger of the three firms, which will trade as CMS, will create the sixth-largest law firm in the UK by revenue, and will employ a team of 4,500 lawyers in 36 countries. The merger is expected to complete in May next year.

The deal comes as more law firms are seeking revenue growth outside the UK, and in particular are trying to broaden businesses in fast growing markets such as Asia rather than being reliant on the UK economy.

In recent years, “magic circle” law firms such as Clifford Chance have pulled away from smaller rivals by opening international offices to serve global corporate clients that require access to English courts and law that is used to underpin business contracts.

Penelope Warne, senior partner for CMS UK, said the deal was a sign of confidence in the City of London, adding that the three firms had been in talks before the Brexit vote.

“We didn’t feel that Brexit was a reason for us not to do this,” said Ms Warne. “It’s a sign of confidence in the City.”

She said that the three-way tie-up would create an enlarged law firm with greater expertise in six key sectors, including energy, financial services and technology. The firm will have offices in 36 countries, including a greater presence in fast growing markets in Latin America.

The firm will also invest more in new technology, including artificial intelligence, which is increasingly allowing greater automation of routine work in law firms.

“The legal sector is no different from the general business sector in facing disruption from technology,” Ms Warne said. “It was important to combine all three firms all of whom have different sector expertise … we want to drive technology through our business for the benefit of clients.”

The new firm will employ 2,500 lawyers in the UK. Combined revenues will be £450m in the UK but well in excess of €1.2bn globally.

Industry experts warned that many UK-focused law firms were struggling to compete as the legal market became more global, and as new technology is used to automate work.

“It’s a symptom of the weakness of these smaller English firms that don’t have an international presence. It’s part of the evolutionary process,” said Nick Cherryman, partner at King & Spalding, the US law firm. “If you look at the law firms with greater profitability, it’s those who have a large international footprint.”

He added: “The domestic London firms have not just stayed still but they’ve gone backwards. The talent is going to the big law firms. They have less of the talent and less market share.”

Law firms are also facing new competitors. The UK’s Legal Services Act 2007, which was designed to make the purchase of legal services more accessible, has paved the way for professional services firms — such as PwC — to expand into the legal sector.



Simmons & Simmons nabs White & Case partner duo for Milan team

Simmons & Simmons has poached two partners from White & Case in Italy, a year after the firm closed its Rome office.


Capital markets partners Paola Leocani and Nicholas Lasagna have both joined Simmons’ Milan office.

The hires come a year after Simmons’ consolidated its Italian offices by closing its doors in Rome and relocating its partners to Milan. The firm’s nine Rome partners were moved to Milan while its associates were offered the opportunity to relocate rather than lose their jobs.

At the time Simmons’ senior partner Colin Passmore said that the firm was still committed to the Italian market but added that the majority of its clients were located in Milan.

Leocani’s practice focuses on debt and securitised derivatives as well as liability management transactions and equity capital markets. She joined White & Case in 2013 after working as a partner at Allen & Overy (A&O) for seven years.

Lasagna advises clients on bank finance and capital market transactions. He specialises in leverage finance, acquisition finance, bond private placements, syndicated loans and debt restructuring finance matters. He worked as a partner at White & Case after joining the firm in 2011 from Latham & Watkins. Prior to that he worked as a senior associate at Clifford Chance.

Simmons’ international financial markets head Jonathan Hammond said: “Their arrival emphasises our continued commitment to developing our international capital markets offering and brings the number of partners who have joined our international financial markets practice so far this year to 10.”

Simmons recently lost four intellectual property partners in London to A&O after the magic circle firm pulled off a string of successful raids on the firm. A&O poached Simmons head of IP Marc Döring and partner Marjan Noor earlier in the year before picking up partners Mark Heaney and David Stone last month.