Covid-19 Act
How it differs from your jurisdiction?
Malaysia recently tabled in parliament its Covid-19 Bill 2020 for first reading. The Bill aims to support the economic stimulus packages announced by the Malaysian government, mitigate the financial and social impact due to Covid-19 and seeks to provide temporary measures in reducing the impact of Covid-19 to the nation. In this respect, AIADR President, Datuk Professor Sundra Rajoo has highlighted the key takeaways of the Covid-19 Bill 2020.
- Introduction
The Malaysia’s Temporary Measures For Reducing The Impact Of Coronavirus Disease 2019 (Covid-19) Bill 2020 (also known as the “Covid-19 Bill”) has been tabled in parliament for first reading. As it stands, no litigation/arbitration/adjudication proceedings can be commenced during the effective period.
- Key Takeaways
In summary, the Covid-19 Bill seeks to briefly do three things: –
- Suspend the obligations of a number of contracts listed under its schedule (construction contract included);
- Provide an extension of the limitation period expiring during the period from 18 March 2020 to 31 August 2020 to 31 December 2020; and
- Suspension and expansion of statutory obligations under the Insolvency Act 1967, Consumer Protection Act 1999, the Distress Act 1951, the Housing Development (Control and Licensing) Act 1966, the Industrial Relations Act 1967, the Private Employment Agencies Act 1981, the Land Public Transport Act 2010, the Commercial Vehicles Licensing Board Act 1987, the Courts of Judicature Act 1964, the Subordinate Court Act 1948.
The Covid-19 Bill has a saving provision in terms of its moratorium i.e. if you are to take any steps right now to assert your rights until the publication of the Act itself (terminating agreement, forfeiture of deposits, commencing court proceedings, etc), the Act will not seek to suspend those proceedings/rights that you have taken now.
The Minister of Law is the Minister in charge of this bill. The period of moratorium is from 18 March 2020 to 31 December 2020 and can be in operation for a period of two years after the date of publication of the Act.
- Difference with Singapore Covid-19 Act
Malaysia’s Covid-19 bill differ largely from the Singapore’s Covid-19 (Temporary Measures) Act 2020 (“Singapore Covid-19 Act”), amongst others, on a few parts:-
- Malaysia’s Covid-19 Bill has a mediation provision where the procedure for mediation is to be determined by the minister; however, the Singapore Covid-19 Act, there is no mediation provision but the Ministry of Law Singapore advises parties to “first discuss, understand each other’s positions, and try to reach a compromise” (which is similar to mediation);
- Malaysia’s Covid-19 Bill has no provision for the appointment of assessor if mediation fails; the Singapore’s Act has a provision for the appointment of an assessor if mediation fails. The assessor will determine if the dispute can continue with its proceedings or not; and
- Malaysia’s Covid-19 Bill is from 18 March 2020 until 31 December 2020; Singapore’s Covid-19 Act is from 20 April 2020 until 19 October 2020.
- The minister of law’s power under the Malaysia’s Covid-19 Bill is limited – they can only issue gazette to extend the duration beyond 31 December 2020 and amend the schedule to the Act. Singapore’s Covid-19 Act allows the minister to make further regulations under the Act and they have issued a regulation after the publication of the Act to control crowd activities. I note that this kind of regulations falls under the role of the Minister of Health.
- Suspension of Obligations of Contracts
The Covid-19 Bill suspends any rights of parties to enforce their rights for any contracts listed under the schedule of the Covid-19 Bill from 18 March 2020 to 31 December 2020.
The contracts which are listed in the schedule are as follows:
- 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 contract;
- Performance 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 [Act 482] and a contract for the promotion of tourism in Malaysia; and
- Religious pilgrimage-related contract.
However, the Covid-19 Bill has a saving provision where it says parties’ rights are not affected if action is taken now until publication of this Act e.g. terminate contract, forfeiture of deposits and commencement of proceedings.
Parties may refer disputes to mediation. However, please note that mediation is not mandatory.
- Limitation Period
Any limitation period that falls between 18 March 2020 to 31 August 2020 will be extended to 31 December 2020. This affects the Limitation Act 1953, Sabah Limitation Ordinance, Sarawak Limitation Ordinance and the Public Authorities Protection Act 1948.
Please take note that the Covid-19 Bill only extends the limitation once until 31 December 2020 and is not subject to further extension by the minister if the minister wishes to extend the duration of Covid-19 Bill.
Suspension and expansion of statutory obligations under statutes. The Covid-19 Bill suspends the statutory rights and obligations under the following Acts: –
- Insolvency Act 1967 – increase the level of indebtedness from RM 60k to RM 100k from 18 March 2020 to 31 December 2020 or any other period which the minister of law orders.
- Hire Purchase Act 1967 – suspension of HPA rights to repossess for failure to pay instalments from 1 April 2020 to 30 September 2020.
- Consumer Protection Act 1999 – insert of section 24v into the Consumer Protection Act 1999 by allowing purchaser to have a slight reprieve in paying back goods purchased on credit.
- Distress Act 1951 – no distrain for the arrears of rent from 18 March 2020 to 31 August 2020 for any warrant of distress issued under section 5(1) of the Distress Act 1951.
- Housing Development (Control and Licensing) Act 1966 – for purchasers, suspension of late payment charges in the event purchaser fail to pay for any instalments from 18 March 2020 to 31 August 2020; for developers, the period of 18 March 2020 to 31 August 2020 (and subject to further extension by the minister) is to be excluded out from the calculation of liquidated damages (“LAD”) under schedule H and vacant possession; for calculation of defect liability period under the Act, 18 March 2020 to 31 August 2020 shall be excluded from the calculation of it, subject to further extension of the period by the minister up to 31 December 2020.
- Industrial Relations Act 1967 – the Covid-19 Bill suspends any recognition for according recognition or making a report and filing of representation from 18 March 2020 to 9 June 2020.
- Private Employment Agencies Act 1981 – the Covid-19 Bill excludes any calculation of the period from 18 March 2020 to 9 June 2020 for an application to renew license under the Private Employment Agencies Act 1981.
- Land Public Transport Act 2010 – the Covid-19 Bill modifies section 21 and 56 of the Land Public Transport Act 2010 by extension from 3 months to 12 months with certain conditions of the temporary change of use of public service and goods vehicles respectively.
- Commercial Vehicles Licensing Board Act 1987 – the Covid-19 Bill modifies section 23 and 24 of the Commercial Vehicles Licensing Board Act 1987 by extension from 3 months to 12 months with certain conditions of the temporary change of use of public service and types of change of vehicles respectively.
- Courts of Judicature Act 1964 and Subordinate Court Act 1948 – enlarging the powers of the Chief Justice (“CJ”) where CJ is able to make decisions of the dispensation of justice, public safety, public security, public health or propriety and to issue any direction relating to the business of the Court.
However, some of it comes with saving provisions whereby if parties have already acted before the publication of the Covid-19 Bill, parties’ existing rights will not be affected.
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Datuk Professor Sundra Rajoo
President of the Asian Institute of Alternative Dispute Resolution (AIADR)
14 August 2020
Disclaimer: This Brevi Nota does not and is not intended to constitute legal advice. All information, content, and materials are for general informational purposes only.
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