Parliament: Proposed laws will protect event deposits from being forfeited, but do not mean immediate refunds, says Shanmugam

A wedding on at the Ritz Carlton on March 21, 2020. ST PHOTO: HAIRIANTO DIMAN

SINGAPORE - New laws were passed on Tuesday (April 7) to protect deposits for event and tourism-related contracts from being forfeited if the event is affected by the coronavirus pandemic.

But these deposits will not have to be refunded immediately in every case as making such payments could impose a severe financial impact on some parties, said Law and Home Affairs Minister K. Shanmugam in Parliament on Tuesday (April 7).

The Covid-19 (Temporary Measures) Act aims to provide temporary protection when a contractual obligation cannot be undertaken due to the outbreak.

It will cover events that were scheduled to be held on or after Feb 1 such as wedding banquets, business meetings or conferences. It also includes contracts for accommodation or entertainment related to tourism.

If an event cannot proceed due to the outbreak, any deposits forfeited would be restored once a claim has been lodged. Non-compliance would be an offence.

If parties - such as an events firm and client - end up in dispute, an assessor appointed by the Ministry of Law will decide on a "just and equitable" outcome based on the facts of each case, said Mr Shanmugam.

He gave the example of a man who booked a space for his daughter's 21st birthday celebration that would have been held on April 4.

The booking had been made in early March with more than 10 guests invited. But a March 24 ruling from the Government limited gatherings to 10 people.

The man wanted a refund or to postpone the event and approached the event space provider but he was told that any postponement could be done only 30 days in advance, terms that were stated in their contract.

"This is not reasonable," said Mr Shanmugam.

Conversely, he noted that a group of bridal studios had written a joint letter to him about "unreasonable couples" who asked for a full refund of their packages.

The studios had provided services to the couples for up to a year before the wedding date, with staggered payments made.

The studios noted that they were facing cash-flow issues and that it would be unfair to provide a full refund. Instead, they suggested to work out a postponement for the couples with no penalties, said Mr Shanmugam, adding: "That is a reasonable equitable position."

He noted that there are other solutions besides refunds. For example, the event could be postponed with the deposit held back or it could be cancelled and the deposit repaid in full or partially, depending on the expenses incurred, over a period of time.

If the parties cannot agree, these will be decided by an assessor, he added.

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