COVID-19: Navigating the legal measures

Nbas Covid 19

In light of the legal challenges businesses may face due to COVID-19 related events, we want to highlight the legal measures that are currently put in place by Singapore’s Government under the COVID-19 (Temporary Measures) Act.

In an op-ed published in the Straits Times on May 7, VK Rajah (former Supreme Court judge and Attorney-General of Singapore) and Professor Goh Yihan (Dean, School of Law, Singapore Management University) argued that global business centres like Singapore will have to prepare for what they call a “legal tsunami” of disputes following COVID-19.

We have previously summarised relevant support measures provided through three budgets launched between 18 Feb and 6 April. The support provided through these budgets amounts to 12 % of Singapore’s GDP. As a complement to the financial measures, the Government has also introduced temporary legal measures to meet the challenges of the situation.

COVID-19 (Temporary Measures) Act

The Singaporean Parliament passed the COVID-19 (Temporary Measures) Act on 7 April 2020. The Act commenced on 20 April. It is meant to provide relief for the businesses that are unable to fulfil their contractual obligations due to COVID-19 related events.

Minister for Law, K. Shanmugam calls the Act a “legal circuit breaker”. For a temporary period, the Act will prevent contracting parties from taking certain legal actions, if certain types of contracts are breached. Importantly, the inability to fulfil the contract must be caused by COVID-19 related circumstances.

The Minister for Law has explained the Act and the reasonings behind it. His speech to Parliament can be read here. However, NBAS has summarised some important aspects that Norwegian businesses should be aware of.


The Act covers contracts entered into before 25 March 2020, with obligations to be performed on or after 1 February 2020. The Act will initially be in place for 6 months, but may be extended.

Relief provided for businesses unable to perform contracts

The Act covers contracts under five broad categories:

  1. Leases and licenses of non-residential properties. The Act will help those who are unable to pay due to COVID19 related events.
  2. Construction-related contracts. The Act will help those who for example are affected by supply disruption and manpower shortage caused by COVID19.
  3. Event and tourism-related contracts (such as conferences and banquets). Under the Act,  deposits cannot be forfeited if the party seeking relief has notified the other party.
  4. Hire-purchase or conditional sales agreements, for assets used for manufacturing, production or other business purposes.
  5. Certain loan facilities given to small and medium-sized enterprises (SMEs). SMEs are for this purpose defined as entities where turnover does not exceed $100 million in its latest financial year.

What do you need to do?

In order to obtain the relief, those who are unable to perform their contracts must inform the other parties to the contract. Information of how to proceed can be found here. 

Relief provided for financially distressed businesses

The Act also creates a temporary change to bankruptcy and insolvency laws. For companies the threshold for insolvency is increased from $10 000 to $100 000. As such, a company cannot be made bankrupt unless they owe a minimum of $100 000.