BAC Singapore hosted its first webinar series since the Covid-19 lockdown on Wednesday, 29 April 2020. The session titled ‘Lawyer in the House 1: Legal Effects of the COVID–19 (Temporary Measures) Act 2020 on Businesses & Property Transactions’ was attended by over 30 participants.
Two guest speakers were invited to share their legal insights on the topic. The first speaker was Mr. Alfred Dodwell, Managing Director of Dodwell & Co LLC and a senior legal practitioner with extensive experience in civil and criminal litigation as well as family law matters in Singapore. The second speaker was Mr. Ivan Lee of Tito Isaac & Co with experience in conveyancing and corporate matters.
Mr Alfred started the session by introducing some key aspects of Singapoe’s COVID-19 (Temporary Measures) Act 2020 which came into effect on 7 April 2020. The Act, inter alia, brings into force temporary measures in relation to contractual obligations under a range of scheduled contracts, provides relief to financially distressed individuals, businesses and firms, and alternative arrangements for the conduct of company meetings.
In order to benefit from the temporary relief measures under the Act, the following conditions must be satisfied:
- Date of contract. The contract must be entered into or renewed (other than automatically) before 25 March 2020.
- Type of contract. Examples of contracts that fall within the ambit of the Act include event and tourism-related contracts, certain secured loan facilities, a lease or licence of non-residential immovable property, and construction and supply contracts.
- Date of performance.The party to the contract is unable to perform an obligation in the contract that is to be performed on or after 1 February 2020.
- Reason for non-performance.The inability to perform such an obligation is to a material extent caused by the COVID-19 pandemic.
- Notification. The party has served the Relief Notification on the other party in accordance with the Act.
The speakers examined current issues faced by travelers who have made traveling plans overseas or booked a hotel for accommodation. “For example, if you have made holiday plans to Bali, this Act doesn’t apply as such an event takes place beyond the jurisdiction of Singapore”, said Mr Alfred. He conceded that the current issues faced by individuals in relation to booking of airline tickets for overseas trips present a rather tricky situation. “The Act covers mostly wedding/travel plans within Singapore, where individuals can negotiate with the hotel on terms for cancellation or postponement of the event to a later date. If the hotel refuses to refund the deposit for the event due to Covid-19, then the individual can submit an application for relief with the Panel under the Ministry of Law”, he added.
Mr Ivan Lee pointed out that provisions under the Act relating to temporary relief measures for contractual obligations came into force on 20 April 2020. He also highlighted the issue of force majeure and whether parties can rely on it for the non-performance of contractual obligations. “For parties to rely on force majeure, it has to be contained in the contract as it is a contractual clause. Most contracts do not specifically provide for a pandemic or epidemic – in this regard, the courts will examine the words used in the contract, to determine if the non-performance falls within any of the stipulated events such as Acts of God, etc. The parties must prove they took steps to mitigate losses and the inability to perform the contract was beyond the control of parties to the contract”, he remarked.
He went on further to touch on other current issues relating to property transactions commenced prior to the lockdown such as how parties are required to execute the S&P agreement as the Act does not cover this area. “It is difficult to determine whether digital signatures would have the same legal effect as a signature in the usual circumstances”, he remarked. “Usually, lawyers would encourage clients to agree in writing as to the accepted mode of execution. As for witnessing of the document, clients are advised to use video conferencing tools”, he said.
The event ended with a brief Q&A session where the guest speakers answered questions from the participants on bankruptcy and insolvency issues.