Relief Packages
The key concern for businesses is to minimise operational costs during this period of severe operational and economic disruption. The Singapore Government has responded swiftly and within the course of approximately 2 months, the Government has rolled out three relief packages – the Unity, Resilience, and most recently, the Solidarity budget, in a bid to mitigate the severe economic fallout caused by COVID-19.
The COVID-19 (Temporary Measures) Act (the Act) will have a considerable impact on the enforcement of certain contracts and commercial disputes in Singapore for the next 6 to 12 months. The Act was passed by the Singapore Parliament, and commenced on the same day, 7 April 2020.
The key measures of the Act are:
The Act is meant to give temporary relief to financially distressed individuals, firms and businesses who are facing challenges imposed by COVID-19 but who are otherwise viable and profitable.
It is unsurprising that many of the Act’s sections expressly refer to the relevant provisions of the personal and corporate insolvency legislation applicable in Singapore. In this regard, it is noteworthy that the Act refers expressly to the Insolvency, Restructuring and Dissolution Act (“IRDA”). This warrants some explanation.
On 7 April 2020, the Singapore government passed a wide-ranging bill (the “Act”) providing temporary relief for parties who are unable to fulfil contractual obligations due to the Covid19 crisis.
The Act covers certain contractual obligations to be performed for the period 1 February 2020 to 1 August 2020 (both dates inclusive) (“Relief Period”).
This update sets out the legal implications for commercial litigation and insolvency matters.
A. COMMERCIAL LITIGATION
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The Ministry of Law in Singapore has announced that it will introduce a bill to the Parliament next week to offer temporary relief to businesses and individuals who are unable to fulfil their contractual obligations because of the COVID- 19 pandemic.
The proposed bill includes:
Re Zetta Jet Pte Ltd ([2019] SGHC 53) is a landmark decision by the Singapore High Court on the recognition of foreign bankruptcy proceedings and the public policy exception under the United Nations Commission on International Trade Law (UNCITRAL) Model Law on Cross-Border Insolvency, as adopted by Singapore in the Tenth Schedule of the Companies Act (the Singapore Model Law).
This is the first reported decision in Singapore that:
A worldwide moratorium is one of the most important protections and tools available to a debtor in the Singapore cross-border restructuring regime. A recent Singapore High Court case, Re: Zetta Jet Pte Ltd and Others (Asia Aviation Holdings Pte Ltd, intervener) [2019] SGHC 53 ("Re Zetta Jet (2)"), highlighted some important considerations relating to such a worldwide moratorium, in particular dealing with potential conflicts between different jurisdictions.
Singapore's Cross-border Restructuring Regime
The judicial managers of offshore oil and gas group Swiber have announced a restructuring plan for the company – which includes handing over shares to its professional services providers in part-payment of fees.
Judicial managers Bob Yap Cheng Ghee, Ong Pang Thye and Tay Puay Cheng of KPMG published the plan on 7 May, urging creditors to vote in favour to avoid Swiber’s liquidation.