Government measures in key jurisdictions 4th edition - Flipbook - Page 111
Singapore
Contractual
Issues
What measures
have been taken
to reinforce
contracts?
The Singapore government has enacted legislation providing for temporary relief for the inability to
perform a scheduled contract. It provides temporary relief from legal action over the following
contracts (entered into before 25 March 2020 with contractual performance due on or after 1
February 2020):
•
secured loans from a bank or finance company that are (a) made to a
local SME; and (b) secured against non-residential property in Singapore, or
against any plant, machinery or fixed asset used for business purposes,
•
any hire purchase agreement for a commercial vehicle,
or any plant, machinery or fixed asset used for business purposes,
•
leases or licences for non-residential immovable property,
•
construction or supply contracts,
•
contracts for the provision of goods and services for events such as weddings
and conventions, and
•
tourism contracts such as cruises, hotel accommodation bookings.
•
As of 13 May 2020, two new contracts will also be included. These are (i) options to purchase
and (ii) sale and purchase agreements or agreements for lease of
residential property, between housing developers (both private housing developers and the
Housing & Development Board) and buyers. Property purchasers can only obtain relief upon
the satisfaction of certain criteria.
•
As of 20 June 2020, renters of commercial equipment or commercial vehicles pursuant to a lease
or rental agreement will be able to obtain temporary relief as well.
6 month moratorium: A debtor under any of these contracts may issue a notification for
relief if he finds that an obligation due on or after 1 February 2020 cannot be carried out due
to the Covid-19 pandemic. Upon which creditors are prohibited from taking the following actions for 6
months (20 April 2020 to 19 October 2020):
• court, domestic arbitration, and insolvency proceedings, as well as execution
proceedings against the debtor’s property,
• enforcement of security against immovable/movable property used for business purposes,
• appointing a receiver and manager over the debtor’s property,
• calling on a performance bond given for a construction or supply contract,
• terminating a lease or license over immovable property due to non-payment of rent, and
• exercising any right of re-entry/forfeiture under a lease or license over immovable property.
• Increase of any charges or interest rate payable under the contract unless such increase in charges
or interest is specified in the contract and the increase in charges or interest rate is calculated
by reference to a formula in the contract (any additional increases will not be allowed without
further agreement of the non-performing party).
• Imposition of new charges under the contract without the further agreement of the nonperforming party.
• Requiring any part of a security deposit given pursuant to the contract to be replaced by the nonperforming party except with the further agreement of that party.
The aforementioned actions cannot be taken until after the earliest of:
• The expiry of the 6-month moratorium period from 20 April 2020 to 19 October 2020,
• The withdrawal of the notification for relief, or
• A determination by an assessor that the case is not one eligible for the moratorium (note: under
the new legislation, if a party is not able to come to an agreement with the other party or parties to
the contract for a compromise in relation to his/her obligations covered under the notification for
relief, he/she may apply for an assessor’s determination of the issues involved.
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Government measures in key jurisdictions