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COVID-19 Singapore: Marine Considerations for the Singapore (Temporary Measures) Act

  • Market Insight 8 April 2020 8 April 2020
  • Asia Pacific

  • Coronavirus

The only marine contracts that would seem to be affected by the Act are for the international carriage of passengers by sea, which is specifically defined as a tourism based contract.

COVID-19 Singapore: Marine Considerations for the Singapore (Temporary Measures) Act

Cruise ship companies may have to return deposits if served with certificates of relief. They may also be prevented from charging cancellation fees. The definition of "tourism-related" contracts includes "a contract for the provision of transport… for visitors to Singapore, domestic tourists or outbound tourists".  This is potentially a very expansive definition and one issue to be resolved is whether this would apply to contracts for the supply of goods and services to the cruise ship industry.

It appears that the temporary relief or protection under the Act will not extend to parties to contracts in the marine or shipping sector (e.g. shipbuilding contracts, charterparties, supply of commodities, etc.) as yet, since none of these fall under or appear to be covered under the Schedule.  That said, suppliers involved in the sale and supply of construction materials may find themselves affected if they are involved in trades with construction companies in Singapore as construction or supply contracts are given their meanings by reference to section 2 of the Security of Payment Act.

Given the direct impact on the shipping industry caused by the spread of COVID-19 globally, it is also likely that we will see an increase in default under contracts and parties taking steps to secure their claims by way of the arrests of vessels in Singapore.  As far as we know, such steps can still be taken and are not restricted and/or prohibited under the Act (though it is to be noted that this will be more difficult practically in light of the "circuit breaker" restrictions put in place by the government and the full capacity of the ports).  There remains the possibility that temporary relief may be extended in due course to include further types of contracts such as charterparties or commodity contracts in the marine and shipping sector.

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