Professional Documents
Culture Documents
Zico Law Covid Bill Part 1
Zico Law Covid Bill Part 1
MALAYSIA
This article will highlight some of the key areas of the COVID Bill, the purpose of which is to
introduce temporary measures to help reduce the impact of COVID-19.
The COVID Bill comprises 19 parts and the temporary measures can be broadly divided into
three categories:
The COVID Bill shall generally remain in operation for two years from the date of publication.
However, the COVID Bill provides for specific periods of operation for the relevant Parts. In
addition, the Prime Minister has the power to extend the operation of the COVID Bill, a power
which can be exercised more than once.
• 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.
We have separately published our views on Part II which can be found here.
A summary of the key measures and practical effect of the modifications are set out below.
The period of operation for this Part is 18 March 2020 until 31 December 2020.
The period of operation for both Parts is the same as for West Malaysia.
However, any proceedings, actions or other matters required to be done under the Insolvency
Act 1967 which are still pending before the publication of the COVID Bill shall be dealt with under
the Insolvency Act 1967 as if it had not been modified by the COVID Bill.
However, if an owner has already exercised his power of taking possession of the relevant goods
before the date of publication of the COVID Bill, his action will be deemed to be validly exercised
and there will be no suspension of his rights to take possession.
While previously the credit facility provider could recover the total amount outstanding through
legal proceedings if the purchaser failed to make an election, the COVID Bill no longer allows the
credit facility provider to commence any legal proceedings to recover the total outstanding
amount payable. However, this modification only applies if the credit sale agreement was entered
into before 18 March 2020 and if the purchaser had no overdue instalments before 18 March
2020.
Again, there are saving provisions where legal proceedings which have already commenced to
recover, or any judgement or award obtained for the outstanding amount payable by the
purchaser during the period from 18 March 2020 until the date of publication of the COVID Bill
are not affected.
The second modification is to extend the limitation period under section 99(2) of the Consumer
Protection Act 1999. Section 99(2) provides that the jurisdiction of the Tribunal to hear consumer
claims is limited to causes of action which have accrued within three years of the claim. The
COVID Bill extends the period for the Tribunal to hear consumer claims to 31 December 2020 if
the jurisdiction expires between 18 March 2020 and 15 June 2020.
Part X – Distress Act 1951
Section 5 of the Distress Act 1951 gives a landlord the right to apply ex parte to a Judge or
Registrar for a warrant of distress to distrain, i.e. seize the property of the tenant at the relevant
premises in order to recover rent due or payable by a tenant for a period not exceeding 12
completed months of the tenancy immediately preceding the date of the application.
While the COVID Bill does not preclude a landlord from applying for such warrant of distress, the
warrant shall exclude the distrain of the arrears in rental for the period between 18 March 2020
and 31 August 2020.
Any warrant of distress that was issued before the date of publication of the COVID Bill shall be
dealt with under the Distress Act 1951 as if it has not been modified by the COVID Bill.
• it was not possible to convene, hold or conduct any statutory meeting in the manner
provided in the Act; and
• this was due to the measures prescribed, made or taken under the Prevention and
Control of Infectious Diseases Act 1988.
However, before the making of such order, if any statutory meeting is convened, held or
conducted in a manner that does not correspond with the relevant Act, it shall still be deemed
valid.
Commentary
The COVID Bill has tried to address as many areas as possible that have been affected by the
pandemic. However, it has been criticised as being too little and too late for the measures to
have any impact in relieving the burden the pandemic has caused. Even though the
modifications to the various Malaysian legislation generally apply retrospectively, the savings
provisions highlighted above have the effect of watering down their intended purpose.
Nonetheless, the introduction of the COVID Bill is still a step in the right direction in these
unprecedented times. Further amendments may be needed along the line once the Act is
implemented to further improve or add to the prescribed measures to deal with the various issues
arising from the pandemic.
If you have any questions or require any additional information, you may contact Khoo Yu Lin or
the ZICO Law partner you usually deal with.