This briefing looks at the measures being taken by the Singapore government to support businesses and meet the challenges posed by Covid-19, with the introduction of the Covid-19 (Temporary Measures) Act 2020 (the Act)¹, and the Registrar's Circular No, 4 of 2020: Updates on Measures Relating to Covid-19², focussing on:

COVID-19 (Temporary Measures) Bill to offer respite for businesses and individuals struggling to fulfil contractual obligations or facing bankruptcy/insolvency as a result of the COVID-19 outbreak.

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 Singapore Ministry of Law will introduce the COVID-19 (Temporary Measures) Bill (the Bill) in Parliament next week to address the impact of COVID-19 on businesses and individuals' ability to fulfil their contractual obligations. The Bill will also make some temporary changes relating to bankruptcy and insolvency.

The Bill will apply to various categories of contracts, including:

COVID-19 has had impacts on contracts relating to commercial undertakings (e.g., construction projects), commercial and industrial tenancies, and individual consumer transactions (e.g. bookings for events). Individuals or companies who are unable to meet their obligations may have to pay damages or forfeit deposits. Otherwise stable businesses may be sued and face lengthy litigation or possible insolvency.

On 1 April 2020, the Ministry of Law announced that it intended to introduce the COVID-19 (Temporary Measures) Bill (“Bill”) in Parliament within one week. The Bill aims to provide temporary relief and protection for individuals and companies who are unable to fulfil their contractual obligations because of COVID-19.

UPDATE #3 FROM THE RHTLAW CRISIS RESPONSETEAM:

The Singapore High Court recently issued the first-ever super-priority order for debts arising from rescue financing under Section 211E(1)(b) of the amended insolvency laws in the Companies Act. The decision shows that the court is open to adopting relatively unique deal structures, and could be a benefit for more business-centric solutions.

A Singaporean construction company in liquidation has successfully sued one of its former directors for failing to act in the best interests of the company, highlighting the importance of directors being aware of, and protecting against, potential personal liability for breach of duty.

Directors’ liability – the risk

Investment funds in Singapore are typically constituted as companies, unit trusts or limited partnerships. This is set to change with the advent of a new fund vehicle, the Variable Capital Company ("VCC"). The VCC is now an alternative, after the commencement of the Variable Capital Companies Act 2018 ("VCC Act") on 14 January 2020. This update focuses on the considerations a financier may wish to take note of when financing a VCC.

What is a VCC?