Saudi ministry allocates $4.5 billion to cushion impact of COVID-19 crisis on workers

Saudi ministry allocates $4.5 billion to cushion impact of COVID-19 crisis on workers
Municipal workers in the Eastern Province spray disinfectant on a street to prevent the spread of the coronavirus disease (COVID-19). (SPA)
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Updated 02 April 2020

Saudi ministry allocates $4.5 billion to cushion impact of COVID-19 crisis on workers

Saudi ministry allocates $4.5 billion to cushion impact of COVID-19 crisis on workers
  • Total number of coronavirus cases reaches 1,720 in Kingdom

JEDDAH: The Saudi Ministry of Human Resources and Social Development has allocated SR17 billion ($4.5 billion) to deal with the economic and jobs fallout from the coronavirus crisis.

Nasser bin Abdulrahman Al-Hazani, a spokesperson for the Ministry of Human Resources and Social Development, said that the outlay was in line with the Kingdom’s efforts to contain the outbreak while supporting the private sector, economic growth and employment.

Under new ministry rules, expat workers whose residency permits (iqama) expire before June 30 will be exempt from financial fees and their permits extended for three months, he said.

Al-Hazani said that under the Saudi labor system employees cannot be forced to take unpaid leave without their consent.

Meanwhile, the Ministry of Health said that 157 new coronavirus cases have been recorded in the Kingdom. It also said that 99 people have recovered from the virus — the highest number since the beginning of the outbreak — bringing the total number to have recovered to 264.

FASTFACT

264

The total number of COVID-19 patients in Saudi Arabia who have recovered so far

The total number of confirmed cases in Saudi Arabia reached 1,720, with most new cases divided between Madinah with 78 and Makkah with 55. 

The ministry said that another six people have died from the virus, bringing the total to 16, five of whom were non-Saudis.

“We notice a significant decline in travel-related cases due to the precautionary measures taken by the ministry and other governmental entities,” Health Ministry spokesman Dr. Mohammed Al-Abd Al-Aly said. “We announced one case only today and soon we won’t have any more cases related to travel.”

Al-Aly said that Saudi Arabia’s efforts to control the crisis mean it is one of only a few countries in the world able to control the virus outbreak.

The Saudi Interior Ministry has urged people to stay home even outside curfew hours.

“Many people are rushing to shopping centers and malls as soon as the curfew period is over,” Sami Al-Shuwairikh, spokesman for the Saudi General Directorate of Public Security, said. “We emphasize that leaving the house during open hours should only be for necessary needs.”

The directorate received 37,000 special requests regarding transportation and humanitarian cases in the past two days.


Overdue business rents waived by Saudi court

Overdue business rents waived by Saudi court
If a contract obliges one of the parties to carry out a task, which cannot be completed on time due to the pandemic, the court can temporarily suspend the implementation of the obligation. (SPA)
Updated 19 January 2021

Overdue business rents waived by Saudi court

Overdue business rents waived by Saudi court
  • The new regulations cover construction contracts, supply contracts, and the like, which have been affected by the pandemic

RIYADH: The General Assembly of the Saudi Supreme Court has ordered the waiving of overdue rents on businesses hit by the coronavirus disease (COVID-19) pandemic, and called for a review of such contracts between tenants and owners.

The steps have been taken in view of the circumstances caused by the pandemic, wherein an obligation or contract cannot be implemented without unusual losses.

The president of the Supreme Court, Khalid bin Abdullah bin Muhammad Al-Luhaidan, approved the decisions backed by 32 members of the assembly, Okaz newspaper reported.

Authorities have set conditions that have to be met before a case can be considered for review under the new regulations.

If a contract was concluded before the commencement of the preventive measures announced in the wake of the pandemic, then the impact was direct and unavoidable. If in such a case, an affected party was not compensated or did not reach a deal to mitigate the impact of the health crisis, then it qualifies for a review and the new regulations will then take effect, said legal sources.

The Supreme Court said a competent court will issue its verdict based on facts and circumstantial evidence, and may order amendments to a contract.

It also said the new provisions will be applicable to tenancy contracts and movable properties affected by the pandemic.

It clarified that if, due to the pandemic, a tenant was unable to use the leased property, in whole or in part, the court would reduce the rent as much as the usually intended benefit was reduced.

A lessor, meanwhile, does not have the right to terminate the contract if a tenant is late in paying rent for the period during which it was impossible to fully or partly use the property due to the pandemic.

HIGHLIGHT

The Supreme Court said a competent court will issue its verdict based on facts and circumstantial evidence, and may order amendments to a contract.

The new regulations also cover construction contracts, supply contracts, and the like, which have been affected by the pandemic.

If the pandemic causes an increase to the cost of materials and labor wages, etc., the court shall increase the value of the contract while ensuring the obligor can afford to bear the expense. The obligee, upon increasing the obligation, has the right to request the termination of the contract. If the increase in the cost of materials is temporary, the court reserves the right to temporarily suspend the contract.

If the pandemic causes a shortage of material in the market, the court can reduce the quantity to the extent it deems sufficient to protect the obligor from harm.

Moreover, if the shortage of materials is temporary, the court can temporarily suspend the contract if the person obligated to it is not severely affected by this suspension. If he is harmed, he may request termination of the contract. If the materials were not available at all, leading to the impossibility of implementing the contractual obligations or some of them, the court will terminate the clauses that are impossible to implement upon the request of one of the parties to the contract.

If a contract obliges one of the parties to carry out a task, which cannot be completed on time due to the pandemic, the court can temporarily suspend the implementation of the obligation. If the other party fears unusual damage due to the suspension, he may request termination of the contract.

In addition, the court also stressed the need to carefully assess the damages on a case-to-case basis, and that one or more experts should do the assessment. While assessing damages, it should be made clear what losses were incurred directly due to the pandemic and had nothing do to with seasonal upswing in certain activities.

The Supreme Court explained that a court is bound, when considering cases arising from contracts and obligations affected by the pandemic, not to apply penalty clause or fines in whole or in part — depending on the case.

In the event that a contract includes a clause of exemption from liability for one of the contracting parties when an emergency or force majeure occurs, the condition has no effect, and the party that breaches the obligation must provide evidence that the pandemic was the reason for the breach.

The affected contracts that are not covered by the provisions of this principle shall be subject to the legal and statutory litigation principles, said the court.

Commenting on the decision, Talal Albotty, the regional director of the Central Region, Salama Insurance Co., said there is a type of insurance called “suspension of operations” because of continuous epidemics, and falls under property insurance.

“This type of insurance can be found in European countries and some Asian countries but it is not applicable in Saudi Arabia,” he told Arab News. “The insurance against projects does not exist because when the project stops, insurance stops.”

Regarding the rise in prices of commodities, or the increase in prices because of pandemics and suspension of imports, a condition must be added stating that the value of property or project must increase by 10-25 percent, he added.

“Now most reinsurance companies around the world stopped offering insurance related to pandemics and contagious diseases in most countries, including COVID-19, because their impact was huge and the companies sustained huge losses,” he said.

Saudi lawyer Reem Alajmi said the resolution aims to treat and remedy the losses incurred by parties to the contract in terms of obligations.

“The parties could not fulfil their obligations because of a lack of sufficient resources or suspension of working hours during the pandemic. Fulfilling the obligation fully or partially was difficult because COVID-19 pandemic was a force majeure,” she told Arab News.

According to Alajmi, the effects or damage caused by the pandemic must not be covered by other laws. “Proving the occurrence of damage is the responsibility of the plaintiff and the defendant based on evidence submitted to the court,” she added. “The contracts and obligations are amended accordingly.”