UK: England and Wales: the construction of commercial contracts - the importance of business common sense

The Supreme Court gave judgment today in Rainy Sky S.A. v Kookmin Bank [2011] UKSC 50 (on appeal from [2010] EWCA Civ 582). A single, composite opinion was given by Lord Clarke, with whom the other justices agreed: see here or here (pdf). A summary of the opinion is available here (pdf). The appeal concerned the construction of shipbuilder's refund guarantees and required the court to consider the role played by considerations of business common sense in determining what the parties meant. In this regard, Lord Clarke stated (at para. [21]):

The language used by the parties will often have more than one potential meaning. I would accept ... that the exercise of construction is essentially one unitary exercise in which the court must consider the language used and ascertain what a reasonable person, that is a person who has all the background knowledge which would reasonably have been available to the parties in the situation in which they were at the time of the contract, would have understood the parties to have meant. In doing so, the court must have regard to all the relevant surrounding circumstances. If there are two possible constructions, the court is entitled to prefer the construction which is consistent with business common sense and to reject the other."

UK: the ONS share ownership survey - due in February 2012

The Office for National Statistics has announced several changes to the methodology it employs to produce its survey of the ownership of ordinary shares of UK quoted companies, which was last published in 2010 in respect of ownership on 31 December 2008. ONS has also announced that its next survey will be published in February 2012 in respect of the ownership of shares on 31 December 2010: see here.

Singapore: proposed changes to the takeover code

The Securities Industry Council has published a consultation paper setting out proposed changes to the Singapore Takeovers and Mergers Code: see here (pdf). A copy of the code, with the proposed amendments highlighted, is available here (pdf). Amongst the amendments proposed is one which seeks to clarify the sanctions available to the SIC in respect of breaches of the Code and which makes explicit that the SIC may, where there has been what it describes as a 'flagrant' breach of the code, deprive the offender (to use the SIC's words again) from enjoying the facilities of the securities market either temporarily or permanently.

UK: first use of the Special Administration Regime

MF Global UK Limited has become the first investment bank to enter the Special Administration Regime (SAR) introduced by the Investment Bank Special Administration Regulations 2011, under Section 233 of the Banking Act (2009). The SAR was introduced in response to the weaknesses revealed in the UK's insolvency regime following the collapse of Lehman Bros. One of the duties of the administrator under the SAR is to ensure the return of client assets as soon as is reasonably practicable. See here for further background information and here for a statement from the Financial Services Authority.

The G20 High-Level Principles on Financial Consumer Protection

The G20 Finance Ministers and Central Bank Governors, at their meeting last month, endorsed the High Level Principles on Financial Consumer Protection developed by the OECD Committee on Financial Markets in collaboration with others. The Principles are available here (pdf).