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COVID-19 Act 2020

Highlights of Temporary Measures for Reducing the Impact of Coronavirus Disease 2019 (COVID-19) Act 2020 ("Covid-19 Act 2020")


Introduction


i. Covid-19 Act 2020 is a temporary measures for reducing the impact of Covid-19 by modifying the relevant provisions.

ii. In general, Covid-19 Act 2020 shall commence from 23.10.2020 to 22.10.2022, except those specifically provided in their respective Parts. Therefore, please take note of different durations in each Part.

Modifications


1. Contractual Obligations

i. Sections 5 to 10 of Covid-19 Act 2020 cover this Part.

ii. Period of operation- 18.3.2020 to 31.12.2020.

iii. Effect - The inability of any contractual party to perform any contractual obligation shall not give rise to other party to exercise his rights under the contract, provided the failure is due to the measures prescribed, made or taken under the Prevention and Control of Infectious Diseases Act 1988.

iv. The categories of contracts covered under Schedule of Covid-19 Act 2020 are as follows:-

  • Construction work contract;

  • Performance bond granted pursuant to construction contract;

  • Professional services contract;

  • Lease or tenancy of non-residential immovable property;

  • Event contract;

  • Contract by a tourism enterprise as defined under the Tourism Industry Act 1992 and a contract for the promotion of tourism in Malaysia; and

  • Religious pilgrimage-related contract.

v. Any dispute arises from contract obligations may be settled by way of mediation and the mediator shall authenticate the settlement agreement for the parties and such agreement should bind the parties.

2. Limitation Period

i. Sections 11 to 18 of Covid-19 Act 2020 cover this Part.

ii. Period of operation- 18.3.2020 to 31.12.2020.

iii. Effect - Limitation period which expires during 18.3.2020 to 31.8.2020 shall be extended to 31.12.2020 for the following Acts:-

  • Limitation Act 1953;

  • Sabah Limitation Ordinance;

  • Sarawak Limitation Ordinance;

  • Public Authorities Protection Act 1948.

3. Insolvency/ Bankruptcy

i. Sections 19 to 21 of Covid-19 Act 2020 cover this Part.

ii. Period of operation - 23.10.2020 to 31.8.2021

iii. The Covid-19 Act 2020 should apply to Insolvency Act 1967.

iv. Creditor may only initiate bankruptcy proceedings against the debtor for a debt amounts to at least RM100,000.00.

v. Please take note that Insolvency (Amendment) Act 2020 which was published in the Gazette on 22.10.2020, has increased the threshold of commencing bankruptcy proceedings from RM50,000 to RM100,000.00;

4. Hire-Purchase Act 1967

i. Sections 22 to 24 of Covid-19 Act 2020 cover this Part;

ii. Period of operation- 1.4.2020 to 31.12.2020;

iii. Covid-19 Act 2020 applies to Hire-Purchase Act 1967;

iv. The owner has no rights to take possession of goods under a hire-purchase agreement where the default of payment of instalment is from 1.4.2020 to 30.9.2020.

5. Consumer Protection Act 1999

i. Sections 25 to 28 of Covid-19 Act 2020 cover this Part;

ii. Period of operation – 18.3.2020 to 31.12.2020;

iii. Only applies to creditor sale agreement entered before 18.3.2020 and for purchaser who has no overdue instalments before 18.3.2020;

iv. The credit facility provider shall issue a notice to the purchase upon the default in payment of 2 consecutive instalments under credit sale agreement;

v. Within 21 days from the receipt of the notice, the purchaser may:-

  • Pay the overdue instalments;

  • Make an early settlement of total amount (statutory rebate will be given);

  • Terminate the credit sale agreement and surrender the purchased goods to the credit facility provider.

(the failure of purchaser to elect the above shall not render the rights for the credit facility provider to commence any legal proceedings to recover the sum)

vi. Do not cover –

  • Purchaser who has overdue instalments before 18.3.2020;

  • Any creditor sale agreement entered after 18.3.2020;

  • Legal proceedings already commenced before 18.3.2020; and

  • Judgments or awards obtained before 18.3.2020.

6. Distress Action

i. Sections 29 to 31 of Covid-19 Act 2020 cover this Part;

ii. Period of operation – 18.3.2020 to 31.12.2020;

iii. For recovery of rental, a warrant of distress should not include the distrain for the arrears of rent for the period from 18.3.2020 to 31.8.2020.

7. Housing Development (Control and Licensing) Act 1966

i. Sections 32 to 38 of Covid-19 Act 2020 cover this Part;

ii. Period of operation – From 18.3.2020 to 31.12.2020 subject to the application for extension to the Minister;

iii. Effects –

a. The Late Payment Charges shall not be imposed for any late payment charges due the failure of purchaser to pay instalment from 18.3.2020 to 31.8.2020, subject to extension;

b. For Delivery of Vacant Possession, Liquidated Damages, Defect Liability Period and the Rectification of Defects by Developer, the period of 18.3.2020 to 31.8.2020 shall also be excluded from the calculation of:-

  • Time for delivery of vacant possession;

  • The liquidated damages for late delivery of vacant possession;

  • The defect liability period;

  • The time for developer to rectify the defects.

iv. The Tribunal for Homebuyer Claims shall have jurisdiction to hear the claim even though the limitation period for homebuyer to file the claim expired from 18.3.2020 to 9.6.2020 provided the claim is filed from 4.5.2020 to 31.12.2020.

8. Industrial Relations Act 1967 (“IRA 1967”).

i. Sections 39 to 40 of Covid-19 Act 2020 cover this Part;

ii. Period of operation – From 18.3.2020 to 9.6.2020;

iii. The period from 18.3.2020 to 9.6.2020 shall be excluded from the calculation of the period under Industrial Relations Act 1967 for the followings:-

  • Recognition or notifying the trade union of workmen concerned in writing the grounds for not according recognition under s.9(3) IRA 1967;

  • The making of a report in writing to the Director General for Industrial Relations under s.9(4) IRA 1967; and

  • The filing of representation under s.20(1A) IRA 1967.

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