Prosecution Action Taken Against Non-compliance with Assessors' Directions under COVID-19 Temporary Measures Act 2020

Ms Sylvia Lim asked the Minister for Law regarding contracts of which relief has been sought under the COVID-19 Temporary Measures Act 2020, what prosecution action has been taken under Sections 13(11) and 13(12) of the Act to deal with parties who, without reasonable excuse, fail to comply with directions as determined by Assessors.

Under the COVID-19 (Temporary Measures) Act 2020 ("Act"), parties who are unable to perform certain contractual obligations because of COVID-19 may serve a notification for relief on the other party (or parties) to the contract. Contracting parties are encouraged to continue negotiations in order to reach a mutually beneficial outcome.

However, if parties are unable to agree, the Act provides a simple and inexpensive framework for an Assessor to review the case. The Assessor may make a determination to resolve the dispute between parties, without any party having to initiate court proceedings or similar legal action.

In many cases, parties have been able to resolve the matter between themselves without requiring an Assessor. For most cases that were reviewed by an Assessor, parties have complied with the determination issued by the Assessor. In some cases, parties may have difficulties meeting the directions made in the determination. For example, they may need more time to refund the monies specified, because they have been impacted by COVID-19 significantly, or because time may be needed for third parties such as banks, or credit cards, to process and effect the refund. If one party does not comply with the determination, we would urge parties to first discuss, and show consideration to each other if possible.

If the matter cannot be resolved amicably, the Act provides that the party in whose favour the determination was made may apply to the Court to enforce the determination in the same manner as a court judgment or order.

The Act additionally provides for offences including that for failing to comply with an Assessor’s determination without reasonable excuse. Given the economic situation, such prosecution should be reserved for the most egregious type of cases.

As at 22 January 2021, no prosecutorial action has been taken in respect of the offences provided for under sections 13(11) and 13(12) of the Act.