Singapore's temporary relief provisions for Covid-19 kick in April 20

THE new law providing temporary relief regarding certain contractual obligations amid the Covid-19 outbreak has kicked in on April 20, the Law Ministry (MinLaw) said in a statement on Monday, giving more details of how to serve a notification for relief on contracting parties, and what to do in case of a dispute.

The law provides protection from certain legal actions against those unable to fulfill certain obligations due to the outbreak, such as tenants being unable to pay rent or events at hired venues being unable to proceed.

This relief will be for six months, from April 20 to Oct 19, in the first instance, but may later be extended for another six months. The law applies to contractual obligations to be performed on or after Feb 1, 2020, for contracts that were entered into before March 25, 2020.

"Those who are unable to perform their contracts because of Covid-19 are encouraged to negotiate with the other party to resolve the matter," said MinLaw. If parties need protection from legal proceedings under the Act, they will have to serve a notification for relief on the other contracting party.

First, parties should confirm that they are eligible for relief, and can visit the ministry's website for more information.

Then, they must serve the notification for relief. They can do so electronically using SingPass or CorpPass, or by using a form letter provided by MinLaw on its website.

The notification for relief must also be served on any guarantor or surety for the obligation in the contract, and/or the issuer of any related performance bond, if any.

Under the Act, the parties which have received this notification will be prohibited from taking certain enforcement actions during the relief period, including starting or continuing legal action, and evicting tenants.

In the case of disagreements about whether there is an inability to perform the contract, or whether such inability is "materially caused" by the outbreak, "parties should first discuss, understand each other's positions, and try to reach a mutual agreement", said MinLaw.

But if parties cannot reach a compromise after the notification for relief is served, either party can apply to the panel of assessors for Covid-19 temporary relief for a determination.

This can be done online at no cost. Hearings will generally be conducted via email, unless the assessor sees a need for videoconferencing or in-person hearings.

The assessor will decide if the case is eligible for relief, and "will seek to achieve an outcome that is just and equitable in the circumstances". The assessor's determination is binding and there are no appeals, with parties not allowed to be represented by lawyers.

The law covers leases or licences of non-residential property; construction or supply contracts; event or tourism-related contracts such as venue hire; hire purchase or conditional sales agreements for plant, machinery, or vehicles used for commercial purposes; and loans to small and medium-sized enterprises secured against commercial or industrial property, or plant, machinery, or fixed assets used for business purposes in Singapore.

The law also temporarily increases the thresholds for bankruptcy and insolvency for individuals and businesses respectively.