Singapore has introduced a variety of legal reliefs and mechanisms to support businesses in the construction and other sectors as they manage the impact of the Covid-19 pandemic.
The Covid-19 (Temporary Measures) Act (the Act) was enacted in April 2020, and covers a multitude of temporary measures dealing with Covid-19. Of particular relevance to construction contractors and employers is part 2 of the Act, which relates to temporary relief for a party’s inability to perform contracts, including construction and supply contracts.
The Act has been followed by a number of complementary measures. Recent measures include part 8 of the Act, which provides relief in relation to additional plant and material rentals due to Covid-19 related delay with effect from 30 September 2020. Parts 8A and 8B of the Act are expected to come into effect in late November 2020 and will introduce a ‘universal’ time extension and cost sharing scheme applicable to both public and private sector projects.
To safeguard against unfair outcomes, contracting parties can apply to a government-appointed registrar for the appointment of an assessor to resolve disputes over the application of the Act. Section 12 sets out the requirements for such applications, which must be in the form and manner specified by regulations and accompanied by a prescribed fee.
An application for assessor’s determination must be served on the protected parties and such other persons and within such times prescribed by the regulations. If satisfied that the application is compliant, the registrar will proceed with the appointment and notify the parties.
The assessor will decide whether the relevant contract is covered by the Act; and whether the party’s inability to perform contractual obligations was materially caused by a Covid-19 event. The assessor may consider the ability and financial capacity of the relief-seeking party as part of its determinations.
Where an assessor has determined that the contract is covered by the Act and that the party’s inability to perform its contractual obligation was caused by a Covid-19 event to a material extent, the assessor may make further determinations to achieve a just and equitable outcome in the circumstances. Determinations or further determinations may, with leave of the court, be enforced like court judgments or orders.
Further determinations that may be made by an assessor under Part 2 include:
requiring a party to do anything or pay a sum of money to discharge a contractual obligation; or
in cases where a contractual right of repossession of goods, re-entry or forfeiture has been exercised by a party, requiring that party to return goods or return possession of the immovable property to the relief-seeking party.
Assessor proceedings are intended to be time and cost efficient, and the Act expressly provides that each party should bear its own costs for the proceedings and may not be represented by a lawyer. Assessor determinations bind all parties to the application and all parties claiming under or through them, and cannot be appealed. Failure to comply with an assessor’s determination without reasonable excuse is an offence punishable by a fine of up to S$1,000.
Time extensions and cost-sharing
The Covid-19 (Temporary Measures) Amendment No. 3) Bill was passed on 3 November 2020, introducing additional relief measures targeted at ensuring that no single stakeholder bears an undue share of the burden imposed by Covid-19. They include:
a universal extension of time (EoT) of 122 days granted for all construction contracts which qualify for relief under a new part 8A in the Act; and
contracting parties to all such qualifying construction contracts will also be required to co-share certain non-manpower related additional costs, up to a cap, under a new part 8B in the Act.
The amendments are expected to kick in at the end of November 2020. Further details of the relief measures, and the requisite changes in subsidiary legislation, will be announced shortly.