What is this Act for and how does it impact our current business and/or contract?
This Act was enacted with the purpose to protect parties to a business from further losses due to COVID-19. It serves as a temporary measures up to 2 years or may be extended depend on the outbreak of COVID-19.
This Act consists of 3 main parts, namely:
(i) Part II – the inability of parties to perform their contractual obligations;
The categories of contracts are:
- Construction work contract or construction consultancy contract and any other contract related to the supply of construction material, equipment or workers in connection with a construction contact.
- Perform bond or equivalent that is granted pursuant to a construction contract or supply contract
- Professional services contract.
- Lease or tenancy of non-residential immovable property.
- Event contract for the provision of any venue, accommodation, amenity, transport, entertainment, catering or other goods or services including, for any business meeting, incentive travel, conference, exhibition, sales event, concert, show, wedding, party or other social gathering or sporting event, for the participants, attendees, guests, patrons or spectators of such gathering or event.
- Contract by a tourism enterprise as defined under the Tourism Industry Act 1992 and a contract for the promotion of tourism in Malaysia.
- Religious pilgrimage-related contract.
Part II operates retrospectively from 18 March 2020 until 31 December 2020. However, if a contract has already been terminated, any deposit or performance bond forfeited, any damages received, any legal proceedings, arbitration or mediation commenced, any judgement or award granted and any execution carried between 18 March 2020 and the date of publication will not be affected by section 7. See section 10 of the Act.
(ii) Part III to Part XVIII – Modification to Malaysian legislations – mostly the extension of time and limitation period. Please refer to the Act for the list of legislation affected.
(iii) Part XIX – inability to perform statutory duties or obligations or to conduct statutory meetings
After 18 March 2020 until 31 December 2020 any dispute may be settled by Mediation.
If you need further info or have any questions, do drop us an email or call any of our offices.
