Legal Business. Risk Management. Memoranda on legal and business issues and concerns for multiple industry and business communities

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1 Memoranda on legal and business issues and concerns for multiple industry and business communities Risk Management 1 Rajah & Tann 4 Battery Road #26-01 Bank of China Building Singapore Tel: Fax: eoasis@sg.rajahandtann.com Website:

2 Risk Management TRADING THE SHIP Introduction It is common to hear of ships being chartered under a charterparty. A charterparty is essentially a contract for the employment of a ship. Charterparties can be divided into the following broad categories: Voyage charters; Time charters; and Bareboat charters. Voyage Charters Under a voyage charter, the charterer employs the ship to carry cargo between ports. The ship owner earns remuneration in the form of freight. Under a voyage charter, freight is usually calculated based on the quantity of cargo loaded. The usual features of a voyage charter are as follows: a spec ific ship is usually identified to perform the charter; the ship owner will supply the crew, bunkers and other consumables necessary to perform the charter; there are usually clauses in the charterparty specifying the rate of demurrage payable by the charterer in the event of delays in loading or discharging of cargo (which would otherwise have to be borne by the ship owner); and freight, although traditionally payable only at the conclusion of the voyage, is now usually specified to be payable (in full or in part) in advance. There are variations to the basic voyage charterparty. These include: Consecutive voyage charters Under consecutive voyage charters, a ship owner essentially agrees to carry cargo for a number of voyages instead of a single voyage. The period of the contract may be defined by reference to a fixed number of voyages, or by reference to a time period. Page 1

3 Contracts of affreightment A contract of affreightment is also a contract to carry cargo for a number of voyages, except that it usually specifies the quantity of cargo to be carried per voyage between specified ports over a certain period of time, and by any combination of vessels. Contracts of affreightment are commonly used where pooling arrangements are involved. Time Charters In a time charter, the ship owner charters the vessel to the charterer for a fixed time period, sometimes with the option given to the charterer to extend the period of the charter. The remuneration paid to the ship owner is known as hire and is usually paid either monthly, or semimonthly in advance. The usual features of a time charter are as follows: During the period when the vessel is on time charter, the ship owner will supply the crew and all consumables except fuel which is usually supplied by the charterer. The charterer is usually also responsible for paying all port charges, pilotage expenses etc. The ship owner is responsible for maintaining and insuring the ship during the charter. The charter will also define certain events, known as off-hire events, during which the ship will be off-hire when the charterer is not required to pay hire. Off-hire events include breakdown of machinery, damage to the ship s hull and drydocking. Time for payment of hire is strict and it is usually provided in the charterparty that failure to pay hire on time gives the ship owner the right to withdraw the vessel from the charter. Bareboat Charters In a bareboat charter, the ship owner charters the entire ship to the charterer for a specified period of time. The difference between a bareboat charter and time charter is that in a bareboat charter, in addition to having to supply fuel, the charterer has to supply the crew and all other consumables. The charterer is usually also responsible for maintaining the ship during the charter and for insuring her. The usual features of a bareboat charter are: The ship owner supplies only the vessel itself. During the charter period, everything else required for the operation of the ship, such as the crew, fuel and other consumables are supplied by the charterer. The charterer is also usually responsible for maintaining the ship during the charter period and for keeping her insured. Page 2

4 Because the charterer hires the crew of the ship, during the charter period, the charterer is in full possession of the ship. As such, it is the charterer, and not the ship owner, who is liable for any loss or damage to cargo carried during the charter period. Pooling Arrangements These are arrangements where ship owners essentially pool their ships together in order to provide a fleet of ships to a charterer who may require many ships to carry cargo on a regular basis between ports under a contract of affreightment. There are several ways in which the pool can be formed. One way is for a company to be set up to enter into a contract of affreightment with the charterer as ship owner. The ship owners then charter their ships to the company, for e.g. by way of time charters, so that the company can then nominate them to perform the contract of affreightment. Ship Management Instead of managing their own ships, ship owners sometimes entrust the management of their ship to professional ship managers. Where a ship owner has organized the ownership of his fleet such that they are all owned by one-ship companies, he may set up a ship management company to be the ship manager for all the ships in the fleet. A ship owner can either entrust all ship management functions to a ship manager, or he can delegate only some of the ship management functions. Ship management functions can be divided into the following categories described below. Crew management This includes selecting and hiring properly certified crew; ensuring that the correct manning levels are maintained; arranging for crew transportation and repatriation; and arranging for crew training. Technical management This includes provision of competent superintendents; arrangement and supervision of dry docking and repairs; arrangement of all classification requirements; arrangement of the supply of all necessary stores, bunkers, equipment etc; developing and maintaining safety systems such as ISM. Commercial management This includes seeking and negotiating employment for the ship; collecting all freight, demurrage and hire and/or arranging for them to be paid to the ship owners or their nominees; providing voyage accounts and calculating freight, demurrage etc; appointing port agents and stevedores; and arranging surveys associated with the employment e.g. cargo surveys. Page 3

5 TYPES OF SECURITY Introduction In this section, the main features of some of the following types of security will be dealt with: mortgage on ships; assignment of ships earnings and insurances; personal and corporate guarantees; and pledge of shares. Mortgages Introduction A ship, being a form of personal property, can be mortgaged by the shipowner to a lender as security for loans. A mortgage over a ship can either be a common law mortgage or a statutory mortgage. Common law mortgage Assuming a shipowner (borrower) mortgages his ship to a lender as security for a loan. Under the common law, the mortgage over the ship is created by way of transfer of the legal title in the ship by the shipowner to the lender subject to the shipowner having the right to the legal title in the ship being transferred back to him by the lender upon repayment of the loan. For the duration of a common law mortgage, the shipowner remains in possession of the ship. However, if a default occurs, the lender has the right to take possession of and sell the ship. The lender can then apply the proceeds of the sale in payment of the outstanding debt owed by the shipowner. Statutory m ortgage In Singapore, the Merchant Shipping Act, Chapter 179 ('Merchant Shipping Act') not only provides for the registration of ships, but also the creation of statutory mortgages for Singapore registered ships. Sections 25 to 32 of the Merchant Shipping Act deal with mortgages over Singapore registered ships. Under section 25 of the Merchant Shipping Act, it is provided that the instrument creating Page 4

6 the mortgage must be in the prescribed form. In other words, it must be in one of the forms specified in the Merchant Shipping (Registration of Ships) Regulations, Chapter 179 Regulation 7 ('Merchant Shipping (Registration of Ships) Regulations'). The statutory mortgage can be recorded on the ship s register upon presentation of the statutory mortgage in the prescribed form to the Registrar of Ships. The significance of recording the statutory mortgage on the ship s register is also discussed below. If a mortgage on a ship is not recorded on the ship s register, it can still take effect as an equitable mortgage. Further, if a ship is not registered at all or incapable of registration under the Merchant Shipping Act (eg fishing trawlers), any mortgage over such a ship can still take effect as a common law mortgage. Powers of the mortgagee The most important powers of a mortgagee of a ship, whether under a common law mortgage or a statutory mortgage, are the powers to take possession of the ship and if necessary, to sell the ship, in order to realize his security. These are dealt with in greater detail in the paper on 'Problems Relating To Mortgage Enforcement.' Documentation No particular form of documentation is required for a common law mortgage so long as it is evident that the mortgagor is granting a mortgage over the ship to the mortgagee. Under the M erchant Shipping Act, the statutory mortgage must in a form prescribed in the Schedule of the Merchant Shipping (Registration of Ships) Regulations. The different forms are as follows: Form 4 and 4A Mortgage by body corporate and individual(s) (respectively) to secure principal sum and interest. Form 4B and 4C - Mortgage by body corporate and individual(s) to secure account current. Under section 26 of the M erchant Shipping Act, a mortgagor must disclose in writing to the mortgagee the existence of any maritime lien, prior mortgage, or other liability in respect of the ship which is known to the mortgagor. If the mortgagor fails to do so, the mortgage debt shall, at the election of the mortgagee, become immediately due and payable notwithstanding anything to the contrary in the mortgage. It is usual for statutory mortgages to be accompanied by a deed of covenants containing the detailed terms governing the mortgage. The deed of covenants is usually expressly incorporated into statutory mortgages by reference. The terms in the deed of covenants usually include the following: Page 5

7 (a) Representations and warranties usually relating to mortgagor s ownership of the ship; its power to create the mortgage; the absence of any prior charges or encumbrances over the ship and the condition of the ship. (b) Declaration of mortgage declaration by mortgagor that the ship is mortgaged to the mortgagee as security for the loan. (c) Payment provisions on repayment of loan and interest. (d) Insurance covenants covenants to take out hull & machinery, P & I and war risks insurances; to assign the mortgagors rights under suc h insurances and give notices of such assignments; to pay all insurance premiums; to renew insurances on time; to procure brokers to retain insurance documents and to give the brokers letter of undertaking; not to do anything which would result in the ins urances being cancelled or avoided and procure that all insurance payments are made in accordance with the loss payable clauses. (e) Earnings covenants These would include covenants to assign ship s earnings to mortgagee and give notice of assignment; to refrain from entering into certain types of charters or employment (in particular demise charters); and not to use the ship for unlawful trades. (f) Covenants relating to ship Ownership covenants to maintain the registry of the ship and ship s name; to maintain the existence of the shipowning company; to refrain from selling, charging or encumbering the ship; to execute a bill of sale required for any mortgagee sale of the ship. Maintenance covenants to maintain the ship in seaworthy condition; to maintain ship s classification; to arrange class inspections and surveys; to give mortgagee s surveyors access to ship; not to make any material alteration to ship; to comply with ISM code and other requirements for maintenance and safety of ship; to employ competent Master, officers and crew and pay their wages; to pay all taxes, dues etc on the ship; and to engage only such ship managers as may be approved by the mortgagee. Liens covenants not to allow any liens, charges or other encumbrances to be created over ship; to discharge all debts and liabilities relating to ship; to notify mortgagee in event of any arrest or threat of arrest of ship; to provide security to procure release ship from arrest; and to put up notice that ship is mortgaged. (g) Default and enforcement provisions Events of default This would usually include failure by mortgagor to pay loan amounts when due; failure by mortgagor to pay debt due to other creditors apart Page 6

8 from the mortgagee; failure by mortgagor to keep any of the covenants or perform any of its obligations under the deed of covenants or loan agreement; total or constructive total loss of the ship; failure to obtain or withdrawl of government or regulatory approval for mortgagor to perform any of its covenants or obligations; the making of any order or passing of any resolution to wind -up, dissolve or liquidate mortgagor; the appointment of any administrator, receiver or judicial manager; the enforcement of any execution or distress against the mortgagor; the failure to procure the release of the ship from any arrest or detention; any material change in the financial position of the mortgagor; and any cross-default. Powers of enforcement These would usually include the power to take possession and/or sell the ship; to commence judicial proceedings against the ship; the power to manage, operate and maintain the ship; to prosecute, defend or compromise claims in respect of the ship; to combine and set-off accounts of mortgagor with mortgagee; and the manner of application of proceeds of sale of the ship. (h) Miscellaneous provisions These usually include provisions giving the mortgagee a power of attorney to do all acts which the mortgagor can do in relation to the ship; to give the mortgagee the power to appoint receivers, to indemnify the mortgagees against all liability, costs and expenses. Registration Under the Merchant Shipping Act Statutory mortgages on Singapore ships can be registered under section 25(1) of the Merchant Shipping Act. The effect of registration of the mortgage is to confer priority on the mortgage. Under section 28 of the Merchant Shipping Act, if there is more than one mortgage registered in respect of a ship, the mortgages will have priority according to their date and time of registration notwithstanding any express or implied notice, and not according to the date of each mortgage. As mentioned above, if a mortgage over a Singapore ship in the prescribed form is not registered, it can still operate as a common law mortgage or as an equitable mortgage. Under the Companies Act Under section 131 of the Companies Act, Chapter 50 ('Companies Act') a charge created by a company has to be registered with the Registrar of Companies within 30 days after its creation failing which any security created by the charge shall be void against the liquidator or any other creditor of the company. A mortgage over a ship falls within the definition of a charge under section 131 of the Companies Act and must thus be registered with the Registrar of Companies within 30 days of creation. Page 7

9 Assignments Introduction An assignment is essentially a transfer of the benefit of a contract by one party to another. Assuming a shipowner, whose ship is on time charter, has borrowed money from a lender. As security for the loan, the shipowner can assign some or all of his rights under the time charter to the lender. The time charterer, although a party to the time charterparty, is not a party to the assignment and the time charterer s consent need not be obtained for the assignment to be valid. In such a transaction, the shipowner is known as the assignor, the lender is known as the assignee, and for convenience, the time charterer can be referred to as the debtor. The result of such an assignment is that the lender can enforce the shipowner s rights under the time charter directly against the time charterer. Requirements of a valid assignment The requirements for a valid assignment are specified in section 4(8) of the Civil Law Act, Chapter 43 ('Civil Law Act'). To be valid, an assignment must satisfy the following requirements: it must be in writing and must be signed or executed by the assignor; it must be absolute and not purport to be by way of charge; and express notice of the assignment must be given in writing to the debtor. The effect of a valid assignment under the Civil Law Act is that the assignee not only has transferred to himself all the assigned rights of the assignor against the debtor, but also all legal remedies which the assignor has against the debtor in respect of the assigned rights. Further, the assignee will have the power to give good discharge of the assigned rights without the concurrence of the assignor. The giving of written notice of the assignment to the debtor is an important formality. If notice is not given, the debtor is entitled to treat the assignor as his creditor and to discharge his debt by payment to the creditor. Taking the above example, if notice of assignment is not given to the time charterer, he can continue to pay charter hire to the shipowner in discharge of his obligations under the time charterparty. The risk to the lender in this case is that if there is de fault by the shipowner, he cannot claim against the time charterer for the hire payments previously made by the time charterer to the shipowner since the time charterer was perfectly entitled to discharge his debt by paying to the shipowner. The giving of notice of assignment also determines the priorities of successive assignees. The assignee who gives notice to the debtor first has the prior right, unless he knew of the earlier assignment when his own assignment was created. However, if he did not know of the earlier assignment when his own assignment was created, the fact that the assignee subsequently knew of the earlier assignment before he gave notice does not affect his priority. Page 8

10 Assignment of earnings In addition to assignment of insurances (discussed below), it is usual for lenders to take an assignment of a ship s earnings as security for the shipowners indebtedness. Assignment of earnings can take various forms, depending on how the ship is being employed. If the ship is on charter, it can take the form of assignment of all of the shipowner s rights under the charterparty or it can be limited to assignment of the freight or charter hire only. Once notice of the assignment is given to the charterer, he is obliged to pay the freight or hire in accordance with the lender s instructions. Registration under the Companies Act An assignment may be intended to operate by way of a security if it is on terms that the assigned right will be re-assigned back to the assignor at some future time. If this is the case, then the assignment would be registrable as a charge under Section 131 of the Companies Act within 30 days of its creation, failing which it will be void against the liquidator or other creditor of the company. Guarantees Introduction A guarantee is essentially a contract by which a person (the guarantor ) agrees to answer for some liability of a another person (the principal debtor ) to a third person (the creditor ). Using the example of the shipowner who has borrowed from a lender and is thus indebted to the lender, the debt of the shipowner can be secured by a guarantee whereby another person (the guarantor) agrees to answer to the lender (the creditor) for the debt of the shipowner (the principal debtor). Formalities A guarantee must be evidenced in writing and signed by the guarantor. This requirement can be found in section 6A(b) of the Civil Law Act. Failure to satisfy this requirement renders the guarantee unenforceable. In a properly documented financing transaction, this requirement will inevitably be met. Registration under the Companies Act A guarantee not being a charge under section 131 of the Companies Act, need not be registered under that provision. Page 9

11 Pledge Of Shares This traditionally involved depositing the share certificates of a company (usually the shares of the shipowning company if it is a one -ship company) with the lender together with executed blank share transfer forms. This was to enable the lender to sell the shares in the company in the event of default by the borrower. Alternatively, if it is agreed between borrower and lender that the lender can transfer the shares to himself in the event of default, this would essentially amount to a mortgage of the shares to the lender. The advantage of this is to give the lender control over the operations of the company. It should be borne in mind that where there is an electronic securities trading system (such as Singapore s CDP) as compared to a paper based trading system, the traditional method of pledging shares mentioned above may not be available. For e.g. under the CDP system, the only means by which shares can be used as security is either by way of a charge or assignment. In the case of shares not held by depositary agents, the charge or assignment will have to be by way of instruments in the prescribed statutory form which have to lodged with CDP. INSURANCE ARRANGEMENTS Introduction The usual insurances relevant in ship financing transactions are as follows: There is a basic marine cover consisting of: Hull and machinery insurance. War risk insurance. Protection and Indemnity (P&I) insurance. Additional insurances consist of: Mortgage interest insurance. Loss of earnings insurance. Standard Insurance Cover Hull and machinery insurance ( H&M insurance ) This is essentially insurance over the vessel under which the insurer agrees to pay for loss of or damage to the vessel caused by one of the insured perils stated in the policy. Most H&M insurance operates on a insured perils basis ie the insurer is only liable to pay if the loss or damage is caused by one of the specified perils enumerated in the policy. If loss or damage is not caused by one of the specified perils, the insurer is not liable to pay. Page 10

12 Most H&M insurance is subject to the Institute Time Clauses ( ITC ) which are a standard set of insurance terms governing H&M insurance over a vessel for a fixed period of time (usually 12 months). There are essentially 2 classes of perils under the ITC: The first class consists of the basic marine perils, namely perils of the seas, fire and explosion, violent theft by persons outside the vessel, jettison, piracy, breakdown of or accident to nuclear installations etc. The second class consists of what is known as the Inchmaree perils ie accidents in loading, discharging or shifting of cargo or fuel; bursting of boilers; breakage of shafts or any latent defect in the machinery or hull; negligence of the Master Officers Crew or Pilots; negligence of repairers or charterers. The difference between the first and second class is that in the case of the Inchmaree perils, the insurer is only liable to pay if the loss was not the result of want of due diligence by the Assured, Owners or Managers of the vessel. No such condition attaches to the liability of the insurer for the first class of perils. War risk insurance This essentially covers loss or damage due to war or the incidents of war including capture, seizure, arrest, requisition, confiscation and detention. Certain risks are usually also excluded including detonation of nuclear weapons of war; the outbreak of war between countries which are permanent members of the UN Security Council; arrest, detention, confiscation or requisition by the flag state of the vessel; loss or damage due to judicial process including failure to provide security after arrest of the vessel etc. P&I insurance P&I insurance covers the liability of shipowners to third parties. P&I insurance is usually provided by P&I clubs which insure on a mutual basis. The liabilities of shipowners insured by P&I insurance usually include: loss of life and personal injury to crew and passengers on board the ship; loss of or damage to cargo; collision damage caused to other ships or objects (such as wharfs, submarine cables etc); wreck removal expenses; and pollution liability including fines. An important reason for taking out P&I insurance is that P&I clubs (although not obliged to) will usually provide security for claims against their members ships to prevent their arrest or to Page 11

13 procure their release from arrest. The security is usually in the form of the P&I club s letter of undertaking. The provision of security by a P&I club can prevent arrest of a ship thus allowing the ship to continue trading. Alternatively, if the ship is arrested, the provision of security by the P&I club can procure the release of the ship thus preventing her from being subject to judicial sale by the courts. Application of insurance proceeds Although all insurance proceeds are payable to the lender where there is an assignment of insurances, it is recognized that in certain cases, it is more feasible for some or all insurance monies to be paid directly by the insurer to other parties. For example in the case of insurance monies payable for damage to a ship under a H&M insurance, it may be desirable if the insurance monies are paid directly by the insurer to the shipowner if he has paid for the costs of the repairs first. Similarly, in the case of P&I insurance, the proceeds are usually either paid directly to third party claimants in settlement of their claims, or paid to shipowners for them to pay to such third party claimants. Accordingly, there are usually provisions in the deed of covenants providing how insurance monies are to be applied. Loss payable clause and letter of undertaking In addition to an assignment of the mortgagor s rights under the various insurances, the assignment of insurances will usually also contain covenants by the mortgagor to procure that: A loss payable and notice of cancellation in a prescribed form is endorsed on the H&M, war risks and P&I insurance policies; and A letter of undertaking in a prescribed form is given by the brokers and P&I insurers. The loss payable clause and letter of undertaking are required to ensure the proceeds of any insurance payable to the lender under the assignment of insurances are in fact paid to the insurer. The loss payable and notice of cancellation clause usually provides that the insurance proceeds will be paid in the manner provided in the assignment of insurances and that notice of cancellation or alteration of the insurances will be given to the lenders at least 14 days before such cancellation or alteration. The letter of undertaking usually contains undertakings by the broker (in the case of H&M insurance) and the P&I club (in the case of P&I insurance) to pay the insurance proceeds in accordance with the terms of the loss payable clause/terms of the assignment of insurances. In the case of H&M insurance, the letter of undertaking is usually obtained from the broker because insurance proceeds are usually paid by the insurer to the shipowner through the broker. Page 12

14 Mortgagee interest insurance The purpose of this insurance is to insure the lender as mortgagee and / or assignee of a H&M insurance against the risk that there is no payment under the H&M insurance for prescribed reasons. The main reasons are material non-disclosure by the shipowner or breach of warranty by the shipowner under the H&M insurance. There can be additional cover for loss or damage caused by a peril not covered under the H&M policy, but which is a peril that underwriters are prepared to insure. The Norwegian insurance market From the perspective of shipping finance, the main difference in the Norwegian insurance market is that under the terms of the Norwegian Marine Insurance Plan, the interest of the mortgagee of a ship is automatically covered under the same cover afforded to the shipowner. However, if the shipowner commits a breach which entitles the insurer to avoid cover, the cover of the mortgagee under the insurance will also be avoided. CLOSINGS Introduction Completion of the financing transaction usually coincides with the closing of the purchase of the ship under the Memorandum of Agreement for the purchase of the ship from the seller. The closing usually takes place by way of a closing meeting. The funds are usually not disbursed until all the conditions precedent in the loan agreement are satisfied. Conditions Precedent The loan agreement usually spells out various conditions that have to be met before the funds can be disbursed to the lender. In ship financing transactions, these conditions precedent usually include: (a) The condition that various documents are received before the drawdown of the loan. These documents include: opinions from lawyers that the legal documentation relating to the transaction, ie the loan agreement, mortgage, deed of covenants, assignments etc are valid and enforceable; duly executed originals of all documents related to the transaction including the loan agreement, the mortgage, deed of covenants, letters of undertaking, and any assignments and guarantees; Page 13

15 certificates of incorporation of the borrower and any other party providing securities, such as guarantors, to show that they are in existence; documents to show that all the documents connected with the transaction such as the loan agreement, mortgage and deed of covenants, have been executed with the authorization of the company. Such documents usually include Board resolutions authorizing the execution of the transaction documents, and Memorandum and Articles of Association of the Company; certificate of registration of the ship showing that it is registered in the name of the borrower; certification from the ship registry that the mortgage is registered; documents showing that the ship is insured in accordance with the requirements of the deed of covenants e.g. hull and machinery policy and P & I certificate of entry; and class certificate showing that the ship is classed. (b) (c) No event of default as defined in the loan agreement, mortgage or deed of covenants has occurred. All representations and warranties are true and correct. Closings in different jurisdictions It is not uncommon for closings to take place in several countries. For example the closing meeting may be in one country, the ship may be in another country, with the place where the ship to be de-registered from the name of her sellers and registered in the name of the borrowers in different countries. The closing meeting usually has to be timed to coincide with the working hours of the ship registries involved so that the ship can be de-registered from the name of the sellers and any previous mortgage deleted, and registered in the name of the borrower and the new mortgage registered. Closing meetings sometimes last for several hours because of logistical problems involved in deleting the ship from her previous registry and/or registering the ship and the mortgage in the new registry. During closings, the situation usually involves the seller wanting to be paid in cash, the lender not prepared to disburse the funds until his mortgage is registered, and the borrower being unable to provide the mortgage until the seller gives him clean unencumbered title to the ship. This problem is usually overcome, in part, by payment to the seller being made by way of payment letter issued by the lender. The payment letter usually contains an irrevocable confirmation by the lender that he will pay the price of the ship to the seller and is an accepted Page 14

16 mode of payment in ship sale and purchase transactions. Once the payment letter is sighted, the seller can proceed to instruct his representatives at the ship registry to proceed with deleting the ship from the register and any previous mortgage so as to give the borrower clean title to enable the lender s mortgage to be registered. Rajah & Tann is one of the largest law firms in Singapore. It is a full service firm and given its alliances, including US premier firm Weil, Gotshal & Manges, is able to tap into a number of countries. Rajah & Tann is firmly committed to the provision of high quality legal services. It places strong emphasis on promptness, accessibility and reliability in dealings with clients. At the same time, the firm strives towards a practical yet creative approach in dealing with business and commercial problems. The information contained in this newsletter is correct to the best of our knowledge and belief at the time of writing. Specific professional advice should be sought before any action is taken. In this regard, you may call the lawyer you normally deal with in Rajah & Tann or the Knowledge Management team at eoasis@sg.rajahandtann.com Rajah & Tann Knowledge Management. All rights reserved. Page 15