Brunei's legal landscape

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					184   Brunei


      Brunei
      Chamber of commerce:                               Professional body:
      Brunei International Chamber of                    The Law Society Of Brunei Darussalam
      Commerce and Industry                              PO Box 66
      PO Box 2285                                        Seri Complex BA 1779
      1922 Bandar Seri Begawan                           Brunei Darussalam
      Brunei Darussalam                                  Email: secretary@bruneilawsociety.org
      Tel:      +673 2 236 601                           Web:     bruneilawsociety.wordpress.com
      Fax:      +673 2 228 389



      Brunei’s legal landscape                          Islamic courts                                    Main legislation applicable to financial and
                                                        There is a separate and independent system of     related institutions
      Muhd Jamil Abas bin Abdul ‘Ali and James          courts in Brunei Darussalam known as the         The main legislations which affect and regu-
      Chiew                                             Syariah Courts, which have jurisdiction on       late financial and related institutions are: (i)
      Abrahams Davidson & Co                            respect of Islamic laws and are governed by      the Banking Order 2006; (ii) the Islamic
      Bandar Seri Begawan                               the Syariah Courts Order. However, the           Banking Act Cap 168; (iii) the Insurance
                                                        Syariah Courts’ jurisdiction extends only to     Order 2006; (iv) the Syariah Financial
      Form of government                                matters pertaining to the Islamic faith such as  Supervisory Board Order 2006; (v) the
      The government of His Majesty the Sultan          marriage, divorce, family and Islamic gifts and  Securities Order 2001; (vi) the Mutual Funds
      and Yang Di-Pertuan of Brunei Darussalam          the succession to the estate of deceased         Order 2001; (vii) the International Banking
      governs by and in accordance with the Articles    Muslim persons.                                  Order 2000; (viii) the International Insurance
      of a written constitution proclaimed in 1959                                                       and Takaful Order 2002; (ix) the
      and amended in 2004. Under the constitu-          Main financial institutions                       International Business Companies Order
      tion, the supreme executive authority vests in    Presently, there are eight commercial banks 2000; (x) the International Limited
      His Majesty The Sultan and Yang Di-Pertuan.       providing the full range of modern banking Partnerships Order 2000; and (xi) the
                                                        and investment products and services. There Companies Act Cap 39.
      Sources of law                                    are also a number of (both domestic and
      The sources of the law of Brunei Darussalam       international) financial institutions and insur- Preventive legislation
      consist of local statute law, common law and      ance companies. Added to this institutional To maintain the integrity and reputation of
      principles of equity as applied in England        landscape are a number of international banks Brunei Darussalam and to encourage major
      before April 25 1951. It is administered by       that have been granted licences for both inter- participants in the financial markets to use
      and in the civil courts. The common law of        national banking, investment banking, invest- Brunei Darussalam for their financial busi-
      England, and its doctrines of equity and          ment related services and investment advisory nesses, laws have been enacted to combat
      statutes of general application, with certain     services. There were two Islamic banks in financial crimes and related offences. These
      exceptions, apply to Brunei Darussalam by         Brunei Darussalam, but in 2007 the Islamic include: (i) the Money Laundering Order
      virtue of The Application of Laws Act Cap 2       Development Bank of Brunei and the Islamic 2000; (ii) the Criminal Conduct (Recovery of
      of April 25 1951. Legal precedents from           Bank of Brunei were merged under a new Proceeds) Order 2000; (iii) the Anti-
      English courts continue to be more persuasive     entity (the Bank Islam Brunei Darussalam) to Terrorism (Financial & Other Measures)
      than those from other Commonwealth coun-          consolidate their assets, products and services. Order 2002; and (iv) the Emergency (Drug
      tries.                                                The Tabung Amanah Islam Brunei Trafficking) (Recovery of Proceeds) Order
                                                        (Brunei Islamic Trust Fund) is a financial 1996.
      Civil courts and legal practitioners              institution providing a limited range of
      The majority of private lawyers and judges in     Islamic banking and investment products. Exchange controls
      Brunei Darussalam were educated and               Conventional banks are licensed under and There is currently no exchange control
      obtained their professional qualifications in      regulated by the recently enacted Banking imposed on currencies.
      England, while a number of former Hong            Order 2006, while Islamic banks and trust
      Kong judges continue to sit in the Brunei         funds are licensed and regulated by the Restricted financial activities in Brunei
      Darussalam courts. The current Chief Justice      Islamic Banking Act and the Tabung Amanah Certain financial and related activities are reg-
      of the High Court of Brunei Darussalam was        Islam Brunei Act respectively.                   ulated by laws and can only be carried out if
      a former judge of the High Court of Hong                                                           appropriately licensed. These activities
      Kong. The President of the Court of Appeal is     Supervision of financial institutions             include: (i) the marketing and/or offer to the
      a citizen of Australia. A substantial number of   Financial, banking and investment activities public of interests in a collective investment
      local judges sitting in the High Court of         are supervised and regulated by the financial- scheme; (ii) the giving of investment advice;
      Brunei Darussalam were educated and               institutions division of the Ministry of (iii) offers of shares and debentures in a limit-
      obtained their professional qualifications in      Finance. The Ministry of Finance is also ed company to the public; (iv) the conducting
      England.                                          responsible for the issuance of licences for of insurance business; and (v) the carrying on
                                                        restricted financial, banking and investment of banking business which includes the receiv-
                                                        businesses.

      www.iflr1000.com                                                                                                                  2009 EDITION
                                                                                               Financial and corporate | Brunei                           185


ing, taking or accepting of advertising for        Financial and corporate                             occasions I have asked Abrahams to speak
deposits under the Banking Order.                                                                      with our industry’s investors who were very
    The term public is not defined by legisla-      Recommended firms                                    impressed that they operated and thought as
tion. What does or does not constitute an          Tier 1                                              they did. I can not speak highly enough of
offer to the public will depend on circum-         Abrahams Davidson & Co                              them as Abrahams made us look good too.”
stances. The courts of Brunei Darussalam will      CCW Partnership                                         James Chiew and Bernard Tan are widely
be guided by the decisions of England and          Dr Colin Ong Legal Services                         acknowledged for their expertise. “James
other Commonwealth countries with similar                                                              Chiew is excellent with land matters and has a
legislations.                                      Tier 2                                              great mind,” says one client. Bernard Tan also
                                                   Ahmad Isa & Partners                                comes in for client praise: “He is extremely
Corporate legislation                              Daud Ismail & Co                                    thorough and very knowledgeable. I have
The legal framework regulating the setting up      DF Abang Zen                                        worked with him for a few years now and have
and administration of private limited compa-       Hale Zainidi Ong                                    complete confidence in his abilities.”
nies are provided for in Companies Act Cap         K Lim & Company                                         The firm is highly regarded for advice on
39. Foreign companies seeking to conduct           Pengiran Izad & Lee                                 the establishment of joint ventures as well as
business in Brunei may either incorporate a        YC Lee & Lee                                        securitisation, private placement of funds and
local subsidiary company or register as a                                                              Islamic banking.
branch office, as is the case of all well-known     The start of Brunei’s programme in 2006 to              One of the biggest deals Abrahams
international banks operating in Brunei at         issue short-term sovereign sukuk al-ijarah          Davidson & Co worked on this year was
present.                                           (Islamic sale-and-leaseback bonds) was a bold       advising foreign lawyers on local compliance
    The Brunei Companies Act is modelled on        move to signal that the sultanate is serious in     issues and the transfer of securities from a
the English Companies Act 1929, although           its intent to join the ranks of Bahrain and         local subsidiary in connection with a $135
changes have been made to it from time to          Kuala Lumpur as an Islamic-finance heavy-            million murabaha (Islamic deferred sale) facil-
time. In this respect, provisions for the regis-   weight. The programme has since seen 13 fur-        ity between an international bank and a petro-
tration, incorporation, formation, member-         ther issuances, despite the lack of a conven-       leum company in the Gulf. The firm also
ship, management and administration, direc-        tional domestic capital market.                     advised on legal compliance in setting up a
tors’ duties and obligations, meetings and             2008 saw another move towards building          $70 million investment fund and joint ven-
winding-up are similar to those found in           Brunei as a centre for Islamic finance. In           ture between a state entity and foreign partic-
England.                                           response to King Abdullah’s $2.64 billion           ipants.
                                                   reforms to the Saudi shariah judicial system,
International business companies                   including the upgrading and training of             Leading lawyers
In its effort to promote Brunei as an interna-     judges, the Government of Brunei is now also        Muhd Jamil Abas bin Abdul ‘Ali
tional financial centre, the International         said to be planning to follow suit. It has start-   James Chiew
Business Companies Order 2000 was intro-           ed to entertain calls from Muslim scholars for      Bernard Tan
duced for the setting up of an international       an overhaul of shariah colleges and is looking
business company (IBC) or offshore company         at codifying shariah laws. Ultimately, the
whose primary purpose is to conduct business       jurisdiction hopes to train more scholars in        CCW Partnership
with non-residents. An IBC is not permitted        Islamic bank supervision to keep up with            CCW Partnership has been promoted to the
to conduct business with persons resident in       global demand.                                      top tier after universal praise from clients and
the country and may not own an interest in             With Brunei’s Islamic-finance industry          peers, one of whom describes it as “definitely
land save for a lease. An IBC is exempted from     starting to mature, the country’s lawyers are       a key player with a loyal following of bank
corporate tax, income tax, tax on capital gains    see an increasing demand from international         clientele”.
or other direct or indirect tax in connection      banks and law firms for advice on local com-             “Andrew Ong has depth and understand-
with any activity, business or investment with     pliance as well as work from local banks who        ing that is unmatched,” says a client of the
respect to dividends, earnings, interests or       are introducing new Islamic investment prod-        firm. “As a seasoned legal veteran he under-
other returns from shares, debts or securities.    ucts to their clients.                              stands our needs and offers clear legal counsel
Stamp duty is also not chargeable on the               These developments, and the increasing          and excellent personal service,” says a client.
instruments of transfer of any property to or      price of oil, the fiscal surplus and the expan-      Dunstan Sim is also widely recognised and
by an IBC or in relation to shares, debt or        sion of trade, make this an exciting era for        respected in the Brunei legal market.
other securities.                                  Brunei’s financial sector.                               The reputation of CCW’s corporate and
                                                                                                       banking departments as one of the best in the
                                                                                                       country is reinforced by the firm’s commercial
                                                   Abrahams Davidson & Co                              litigation department. For example, CCW
                                                   “Why did we originally choose Abrahams?             Partnership acted for a bank in a judicial man-
                                                   Purely for their reputation,” says a client.        agement case under the new provisions of the
                                                   “When we require local legal counsel we             Companies Act in the High Court and Court
                                                   always use Abrahams Davidson & Co as they           of Appeal. The case, handled by Andrew Ong
                                                   prove to be consistently reliable, professional     and Linda Lee, was an important precedent
                                                   and easy to deal with.” Clients also empha-         because it established the limits of a judicial
                                                   sized that as one of Brunei’s largest firms the      managers’ statutory powers against the propri-
                                                   practice has greater exposure to, and an in-        etary rights of secured creditors.
                                                   depth understanding of, a wide range of                 CCW Partnership has advised clients
                                                   industries. Says a client: “On a number of          including       HSBC,       Crédit     Agricole,

2009 EDITION                                                                                                                     www.iflr1000.com
186   Brunei | Financial and corporate

      Halliburton, Maersk Contractors and Brunei       sulted Ahmad Isa & Partners on local law         Hale and Zainidi & Associates. All three
      National Petroleum on a range issues from        aspects of cross-border financing and refi-        name partners, Muhammad Zainidi Abdul
      establishing their presences in the market to    nancing deals.                                   Hamid (the president of Brunei’s law society),
      private placements of funds. Its counsel is also     The firm is perceived as having strong gov-   Sue Fen Ong and Damien Francis Hale are
      sought by numerous international law firms        ernment ties, which were evident when it         well known and respected in Brunei’s legal
      such as Blake Dawson & Waldon and                acted as counsel to the Government of Brunei     community. “With Ong and Hale you can
      Thommessen Krefting Greve Lund. Recently         when the sultanate issued its first sukuk al-     always be sure of sound legal advice with
      US law firm Baker & Daniels retained the          ijarah in 2006. On the back of this ground-      quick execution,” observes one rival while a
      firm’s services on a high-profile deal involving   breaking project - which created a local         client praises Hale for providing “the kind of
      the acquisition of an international company.     Islamic capital market even though the juris-    service one would expect from a first-rate
                                                       diction had no conventional non-Islamic cap-     firm”.
      Leading lawyers                                  ital market - Ahmad Isa & Partners is often          Hale Zainidi Ong has experience in vari-
      Andrew Ong                                       sought after for Islamic-financing issues, with   ous commercial and financing mandates on
      Dunstan Sim                                      shariah bank Tabung Amanah Islam Brunei as       behalf of clients such as TM Asia Insurance
                                                       one of its many clients.                         Singapore, the TSL Group (responsible for
                                                           The firm also excels in corporate, banking    some of the largest construction projects in
      Dr Colin Ong Legal Services                      and insurance law. To sum up, one client says:   Brunei, including the recently-opened
      The firm retains its first tier ranking, thanks “Ahmad Isa & Partners provides good quality         Parliament Building) and Islamic banking
      to managing partner Colin Ong’s reputation service [and is] sensibly priced.”                     institutions such as Tabung Amanah Islam
      with clients. Says one: “He is the go-to person                                                   Brunei and BIBD At-Tamwil. The firm is also
      for strategic legal counsel, particularly stand- Leading lawyers                                  considered one of the leading law firms for
      ing out when it comes to more complicated Aisha Alkaff                                            large-scale liquidations in Brunei.
      issues, as he knows everything about every- Ahmad bin Isa
      thing that matters.” This reputation has won                                                      Leading lawyers
      the firm a client base spanning several quasi-                                                     Damien Hale
      governmental bodies, international banks, law Daud Ismail & Co
      firms, high net-worth individuals and multi- Daud Ismail & Co is known for being
      national companies across Asean and domes- engaged by local and international parties in          K Lim & Company
      tically.                                         large commercial and financial transactions.      The recent departure of Adrian Chan to
          Ong, who is a member of two UK barris-           Managing partner Mohamad Daud Ismail,        Veerasamy Associates arguably weakens K
      ters’ chambers, is often retained for his exper- a former mayor of Malaysia’s Limbang Town,       Lim & Company but the market’s opinion is
      tise on projects such as the $100 million is well-regarded by both clients and peers:             that this will not necessarily have a long-term
      restructuring of the main-listed parent entity “For a two-man show they are actually really       effect on the firm’s reputation or work flow.
      of Macquarie Bank under English and Brunei good, especially in shariah-compliant finance,          Name partner Kelvin Lim has an excellent
      laws.                                            and they do well with property,” says one.       reputation with a number of clients, one of
          In the past year, one of the most significant “Ismail provides answers and solutions, not      which describes him as “savvy and knowl-
      deals Dr Colin Ong Legal Services advised on, problems. I would not hesitate to recommend         edgeable”. Competitors comment that K Lim
      and drafted all legal documentation for, was them.”                                               & Company is a “respectable firm with great
      RHB Banks $15 million financing deal for the                                                       talent”, while one says of the name partner:
      Giant group of hypermarkets, which will see Leading lawyers                                       “Kelvin has a very sharp mind and provides
      the construction of Brunei’s largest supermar- Mohamad Daud Ismail                                outstanding legal counsel.”
      ket. The firm also advised Tenaga Cable                                                                Although K Lim & Company is a relative-
      Industries (a subsidiary of Malaysia’s largest                                                    ly young firm, the legal team has more than
      power company) on a joint venture in Brunei. DF Abang Zen                                         35 years of collective legal experience covering
          With the lateral hire of lawyers Irene DF Abang Zen is built on the reputation of             jurisdictions including Australia, Brunei, the
      Appaduray, Charles Lim from Abrahams Ferida Abang Zen, one of Brunei’s undisputed                 UK, Malaysia and New Zealand. The firm’s
      Davidson & Co and Lim Chin Wah from leading lawyers and best known for her exper-                 experience spans banking and finance, corpo-
      Kamarudin & Partners (a Malaysian firm), tise in shariah-compliant financial and com-               rate law, insurance, and shipping and securi-
      the firm gains further expertise across the mercial law. One interviewee sums up the               ties.
      board.                                           general consensus: “Ferida always delivers.”         Clients include domestic and international
                                                           The firm has worked with Baiduri Bank,        banks, international trust companies, foreign
      Leading lawyers                                  Maybank and RHB Bank as well as a number         missions, property developers, law firms and
      Colin Ong                                        of international law firms including Drew &       motor vehicle distributors. The firm has
                                                       Napier, Mayer Brown JSM and Allens Arthur        advised      industrial       clients    Dowell
                                                       Robinson.                                        Schlumberger Eastern, BAG Networks,
      Ahmad Isa & Partners                                                                              Brunei National Petroleum and San Hing
      Ahmad Isa & Partners is a long-established         Leading lawyers                                Developers, and was instrumental in the Hua
      firm with a good reputation among both com-         Ferida Abang Zen                               Ho Group’s $60 million capital-raising and
      petitors and clients. “They do some excellent                                                     management of two large shopping malls in
      work and have advised on a lot of cross border                                                    Brunei.
      financings,” says a rival. “It is one of the        Hale Zainidi Ong
      favourites for foreign law firms to work with.”     The law firm of Hale Zainidi Ong was formed Leading lawyers
      Norton Rose is one such firm, and has con-          by the merger of established firms S Ong & Kelvin Lim

      www.iflr1000.com                                                                                                                 2009 EDITION
                                                  Financial and corporate | Brunei     187

Pengiran Izad & Lee
According to a rival: “Pengiran Izad & Lee is
a trusted name in the market that is getting
stronger.” The firm plays an important role in
advising companies that the Brunei Economic
Development Board has attracted into the
country. Senior Partner Ronnie Lee is the
firm’s most visible and respected lawyer, and
draws particular praise: “He always did a great
job and I would say he lives up to his reputa-
tion,” says a recent client.
    Though Pengiran Izad & Lee is renowned
for its banking work and advising on oil-and-
gas-related matters (for clients such as Shell,
Total and Brunei Petroleum), it also has a
strong practice in Islamic finance and foreign
investment. The firm acts for the Brunei
Association of Banks, which often seeks its
advice on new legislation. Pengiran Izad &
Lee also serves on a number of banking pan-
els such as HSBC, Standard Chartered Bank,
RHB Bank and Tabung Amanah Islam
Brunei.

Leading lawyers
Ronnie Lee


YC Lee & Lee
Best known as the legal advisor to Brunei’s
French and German embassies and the British
High Commission, YC Lee & Lee also advis-
es numerous banks and insurance companies
in Brunei. The firm has been very active this
year according to market commentators, par-
ticularly with mutual fund transactions. “YC
Lee makes this firm stand out. He is always in
demand,” says one rival. Clients agree, prais-
ing name partner Yew Choh Lee as “an excel-
lent legal adviser” who “excels at contentious
work and has a very strategic mind”.
    Representative clients include Standard
Chartered Bank, HSBC, Bank Islam Brunei
Darussalam, Malayan Banking, Baiduri Bank,
Tabung Amanah Islam Brunei, United
Overseas Bank, Aiva Insurance, National
Insurance Company and Takaful BIBD.

Leading lawyers
Yew Choh Lee




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