Hong Kong Court of Appeal embraces modern test for penalty clauses following UK Supreme Court in Cavendish when considering employer’s right to enforce termination notice provision

In a notable judgment (Law Ting Pong Secondary School v Chen Wai Wah [2021] CA 873), the Hong Kong Court of Appeal (CA) has adopted the modern approach to penalty clauses handed down in the UK Supreme Court in Cavendish Square Holding BV v Talal El Makdessi [2016] AC 1172. The recent appellate decision has … Read more

KEY JUDGMENT ON ARBITRATION CLAUSES AFFECTING THOUSANDS OF COMMERCIAL CONTRACTS

Herbert Smith Freehills has secured an important victory in Hong Kong proceedings with far-reaching consequences for arbitration disputes around the world. Many commercial contracts contain “escalation clauses” requiring parties to take certain steps before formal arbitration begins – such as a requirement to “negotiate in good faith” before starting arbitration. Previously, failure to comply with … Read more

English High Court finds alleged frustration of contract due to COVID-19 pandemic is not sufficiently arguable to grant injunction restraining demand under letter of credit

The English High Court has dismissed an application for an injunction to prevent an airline group from making demands under bank-confirmed standby letters of credit (SBLCs), securing aircraft leases granted to the claimant (a budget passenger airline), on the basis that it was not sufficiently arguable that the leases were frustrated due to the effects … Read more

Rule against penalties: Singapore Court of Appeal affirms Dunlop test

The decision of the Singapore Court of Appeal on 15 December 2020 in Denka Advantech Pte Ltd & another v Seraya Energy Pte Ltd & another [2020] SGCA 119, has affirmed that, under Singapore law, the rule against penalties remains as stated by Lord Dunedin in Dunlop Pneumatic Tyre Company, Ltd v New Garage and … Read more

LATEST EDITION OF ASIA PACIFIC DISPUTE RESOLUTION GUIDE NOW AVAILABLE

Disruption, downturn and recovery tend to generate more disputes – and in Asia Pacific cross-jurisdiction operations and investments increase that risk. Our 2021 Guide to Dispute Resolution in Asia Pacific is your roadmap to potential problems in these fast-changing times, especially for those new to the region’s complex legal landscape. From the basics of each … Read more

COVID-19 Governance: New legislation provides temporary relief from performance for selected Singapore-related contracts (Singapore)

On 7 April 2020, the Singapore Parliament passed the COVID-19 (Temporary Measures) Bill (the COVID Act), which, amongst others, offers temporary reprieve to qualifying parties or qualifying contracts: found here. The COVID Act is a bold move by the Singapore government to pre-emptively manage the foreseeable increase in legal proceedings for enforcement of contractual rights. … Read more