COVID-19 (Temporary Measures) Act 2020 – Ten Key Considerations for the Construction Industry

23 Apr 2020 LegisWatch

The COVID-19 pandemic is first and foremost a human tragedy. It has also caused worldwide economic carnage. Singapore has not been spared – the Minister for Law has described the pandemic as “the most serious crisis [the] country has faced since independence”.

It was against this exceptional backdrop that the COVID-19 (Temporary Measures) Bill was introduced in Parliament on 7 April 2020, and enacted as the COVID-19 (Temporary Measures) Act 2020 (“COTMA”) that very day.

COTMA is an exceptional piece of legislation that provides extraordinary relief for parties to specific contracts that are unable to perform their obligations due to COVID-19. It also has retroactive effect – it applies to specific contracts entered into or renewed before 25 March 2020 or automatically renewed on or after 25 March 2020, and covers contractual obligations in those contracts that are to be performed on or after 1 February 2020.

This, however, should not be mistaken as a sea-change in Singapore’s deep-rooted adherence to the cardinal principle of “sanctity of contract”. The relief under COTMA is temporary – it applies for six months in the first instance (“prescribed period”) and while the Minister for Law may extend or shorten the prescribed period, COTMA states that it must not exceed one year. In short, COTMA allows parties to seek “breathing space” or a “time out” to deal with the impact of COVID-19.

Parties in the construction industry – like other industries heavily reliant on supply chains and labour – desperately need this “breathing space” or a “time out”. They will therefore welcome that COTMA provides relief for the performance of construction and supply contracts – and in fact, provides additional reliefs for these contracts over and above the specified general reliefs.

The provisions in COTMA providing this temporary relief (i.e. Part 2 of COTMA) came into operation on 20 April 2020 and will last at least for the six-month period ending on 19 October 2020, subject to any further extension(s). This update therefore sets out ten considerations you should bear in mind about COTMA if you are a party to a construction or a supply contract.

If you would like information and/or assistance on the above or any other area of law, you may wish to contact the Partner at WongPartnership whom you normally work with or any of the following Partners:

TAY Peng Cheng
Joint Head – Energy, Projects & Construction
d +65 6416 8121
Click here to view Peng Cheng's CV.

Joint Head – Energy, Projects & Construction
d +65 6416 8128
Click here to view Ian's CV.