Category: Supreme Court Case Summary Initiative

Directors have a legal fiduciary duty to act in the “best interests of the company”. However, it is not always clear what this means, especially when a company approaches insolvency. When a company is insolvent, the interests of the company’s creditors come to the fore, as the directors are effectively running the business with the creditors’ money. In Foo Kian Beng v OP3 International Pte Ltd (in liquidation) [2024] 1 SLR 361, the Court of Appeal (CA) clarified the nature, scope, and content of the fiduciary duty owed by a director to the company under these circumstances.

In Ascentra Holdings, Inc (in official liquidation) and others v SPGK Pte Ltd [2023] 2 SLR 421, the Court of Appeal (“CA”) considered whether winding-up proceedings involving foreign solvent companies can be recognised in Singapore under the Singapore Model Law (modelled after the UNCITRAL Model Law). Ascentra Holdings, Inc, a solvent company, was undergoing voluntary liquidation in the Cayman Islands. The appointed liquidators sought recognition of this liquidation in Singapore. The CA granted such recognition, holding that there was no requirement under the Singapore Model Law that a company be insolvent or in severe financial distress before a proceeding concerning that company may be recognised in Singapore.

A letter of credit is a payment mechanism used in international trade to provide an economic guarantee from an issuing bank to an exporter of goods. Sometimes, letters of credit may also be backed by another confirming bank through a letter of confirmation, to ensure payment. In Kuvera Resources Pte Ltd v JPMorgan Chase Bank, NA [2023] 2 SLR 389, the Court of Appeal ("CA") held that absent fraud, letters of credit operated independently from letters of confirmation. Hence, a confirming bank’s liability to pay under a letter of confirmation could be subject to conditions that were not reflected in the underlying letter of credit (including, as here, a sanctions clause). However, in this case the CA held that the confirming bank could not refuse payment, under the specific circumstances.

In Consorzio di Tutela della Denominazone di Origine Controllata Prosecco v Australian Grape and Wine Incorporated [2023] 2 SLR 509, Consorzio applied to register “Prosecco” as a Geographical Indication (GI) in respect of wines in Singapore originating from the “North East region of Italy”. GIs identify and connect a food with the landscape of the producing region. Consorzio’s application was opposed under the Geographical Indications Act 2014 (Act 19 of 2014). The Court of Appeal laid out the two requirements to establish an opposition under the Act; as the two requirements were not met here, the CA allowed Consorzio's application.

In Muhammad Hamir B Laka v Public Prosecutor [2023] SGCA 5, the Court of Appeal ("CA") clarified the principles governing the defence of necessity. In this case, the offender argued that he had trafficked drugs in necessity, to pay for his wife’s medical treatment. The CA rejected this argument, clarifying that the defence of necessity may only be invoked if the accused acted to avoid a much greater harm, which he reasonably believes is imminent, more likely and serious, and where there is no reasonable legal alternative. It cannot be invoked where there is premeditated criminal conduct.

In a criminal case, issues that may arise include that of: (a) whether there was inadequate and improper legal assistance by the accused’s counsel; b) whether an accused’s statement is inadmissible due to a threat, inducement or promise given to the accused or the accused’s refusal to sign the statement; and (c) whether the accused’s charge can be altered, owing to insufficient evidence to prove it. In Abdoll Mutaleb bin Raffik v Public Prosecutor and another appeal, the Court of Appeal (“CA”) dealt with all three issues. For an allegation of inadequate and improper legal assistance to succeed, there must have been flagrant or egregious incompetence or indifference by the accused’s counsel, resulting in a real possibility of a miscarriage of justice. Regarding questions of admissibility, a statement will be deemed inadmissible only if it has been made involuntarily. The fact that a statement-maker has refused to sign a statement will not bar its admissibility so long as it has been made voluntarily. Lastly, the court can frame an altered charge if there is sufficient evidence (based on the records before it) to constitute a case against the accused.