Singapore Airlines Airbus A350 Hawaiian Shirt

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Rima Mrad, Partner at BSA Ahmad Bin Hezeem & Associates LLC, echoes Turk’s sentiment, noting how the unprecedented nature of the COVID-19 crisis took many companies off guard, and some of the decisions made then have led to problems in the long run. “These issues happened especially in the first phase, meaning the second and third quarter of 2020, when employees were requested to work from home,” she notes. “Companies at that time were overwhelmed with concern, and they moved ahead with the application of different measures to address the uncertainties relating to the impact of COVID-19 over the long term, which included wages reduction, placing people on annual leave or unpaid leave, and layoffs. Many employees were initially accommodating; however, this created a pipeline of major labor disputes. This has not stopped, especially now that we can note the difficulties that companies are facing to bring employees back to offices.”
Another key challenge the private sector faced is now evident through an increase of lease disputes on both residential and commercial properties, which Turk notes is due to tenants either renegotiating, defaulting, or breaching their contracts. Mrad adds that lease disputes were indeed predominant among retailers, entertainment venues, and F&B outlets, since they were the ones most affected by the precautionary measures imposed on them in connection with COVID-19. “Many companies had to default on lease payments, which caused them to be in dispute with their landlords,” she explains. “We can see an increasing number of bounced check cases relating to leases, and the ongoing challenge to negotiate COVID-19 relief measures and their relevant timelines.”
In addition, Mrad points out that many companies had to be in default as a result of the global impact of the coronavirus pandemic, especially those working in contracting, logistics and trade, as they were affected by the changes to logistical routes as well as delays in shipping, deliveries, and supply. “These defaults pushed companies to be in breach of their contractual obligations, and some of them are still dealing with the exposure that they have been subjected to as a result of this,” she explains. “Many companies were also in default of their obligations to settle their due payments to the banks from whom they obtained finance or facilities.”
Singapore Airlines Airbus A350 Hawaiian Shirt
In the early periods of the COVID-19 outbreak, Turk says, one of the most widely debated topics was whether the pandemic could have been considered a force majeure situation in supply contracts, lease agreements, and “even employment contracts to terminate/ cancel contracts or be used as a defense to limit liability.” Mrad adds, “The use of force majeure as a basis to be in default under a contractual obligation had to be used with caution in such circumstances, especially for businesses that were not heavily impacted by COVID-19 restrictions i.E. Not required to close down.” But in the UAE, whether COVID-19 can indeed be seen as a force majeure event depends on a number of factors.
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