Covid-19 SME Singapore | Covid-19 is now classified as a Pandemic by the World Health Organisation and many countries have ordered a lock down to prevent a further spread of the virus while Singapore has done well in doing a stage by stage action plan to allow for “Social Distancing”.
Dale Fisher, chair of the World Health Organization (WHO) Global Outbreak Alert and Response Network has said that
“All the things that Singapore has in place, any country under lockdown will need to do these, or implement these during lockdown, so that they can be safe afterwards,” He outlined some of these measures, including isolating and quarantining cases, contact tracing — identifying and isolating those in close contact with infected patients, and practicing social distancing.”
All such measures to prevent a further spread of Covid-19 and the general fear amongst consumers in Singapore have collectively resulted in small and medium enterprises in Singapore having their business being badly affected. Some examples include food and beverage outlets which have seen the number of patrons dropping/dwindling and an increase in takeout orders but the ecommerce players now are unable to cope with so many orders for takeouts.
The Singapore Ministry of Law has looked at this situation and wants to prevent widespread closures of SME Singapore arising out of Covid-19 and has expedited the passing of the COVID-19 (Temporary Measures) Bill.
So what are the types of contracts covered
The Bill will cover the following contracts:
- Leases or licences for non-residential immovable property (e.g. lease for factory premises);
- Construction contract or supply contract (e.g. contract for the supply of materials);
- Contracts for the provision of goods and services (e.g. venue, catering) for events (e.g. weddings, business meetings);
- Certain contracts for goods or services for visitors to Singapore, domestic tourists or outbound tourists, or promotion of tourism (e.g. cruises, hotel accommodation bookings); and
- Certain loan facilities granted by a bank or a finance company to SMEs
The Ministry of Law has just announced its intention to introduce the “COVID-19 (Temporary Measures) Bill”. The Bill will enable companies’ whose businesses have been adversely affected by Covid-19 to seek relief from fulfilling their contractual obligations such as paying rent, paying instalments on bank loans, fulfilling their construction contracts, etc for a period of six months.
The measures will cover relevant contractual obligations that are to be performed on or after 1 February, for contracts that were entered into or renewed before 25 March.
How does it work?
The Bill will prohibit a contracting party from taking the following legal actions against a non-performing party:
- Court and insolvency proceedings;
- Enforcement of security over immovable property as well as movable property that is used for the purposes of business or trade;
- Call on a performance bond given pursuant to a construction contract; and
- Termination of leases of non-residential premises.
Who will administer the Scheme?
Assessors will be appointed by the Minister for Law to resolve disputes arising from the application of the Act. They will determine if a dispute arises because of Covid-19 or not and the process is intended to be fast and effective. This bill is intended to last for 1 year.
Finally, we quote from Franklin D. Roosevelt,
“The only thing we have to fear is fear itself.”
If you need assistance in dealing with these new relief measures, please do not hesitate to contact us.
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