Senate passes Temporary Measures for Reducing the Impact of Coronavirus Disease 2019 (Covid-19) Bill 2020 : Allen & Gledhill

29 September 2020

On 22 September 2020 the Temporary Measures for Reducing the Impact of Coronavirus Disease 2019 (Covid-19) Bill 2020 (“Bill”) was passed by the Senate (Dewan Negara). Except where the date of commencement and period of operation have been otherwise provided, the Temporary Measures for Reducing the Impact of Coronavirus Disease 2019 (Covid-19) Act 2020 (“Act”) will come into operation on the date of publication of the Act and will continue to remain in operation for a period of two years from such date of publication.

The Bill aims to support the “Prihatin Rakyat Economic Stimulus Package”, the “Prihatin SME Stimulus Package” and the “Short-Term Economic Recovery Plan” as previously announced by the Prime Minister, and seeks to provide temporary measures to reduce the financial and social impact due to Covid-19 through modifying 16 legislation.

Some of the key changes set out in the Bill are discussed here.

Relief from performance of contractual obligations

Part II of the Bill provides relief to parties who are unable to perform their contractual obligations arising from seven specified categories of contracts due to the measures prescribed, made or taken under the Prevention and Control of Infectious Diseases Act 1988 to prevent the spread of Covid-19. This part is to have retrospective effect from 18 March 2020 and will continue to remain in operation until 31 December 2020. The categories of contracts are set out 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 and a contract for the promotion of tourism in Malaysia; and
religious pilgrimage-related contract.

Extension of the limitation period

Parts XVI to XVIII of the Bill provide modifications to the Courts of Judicature Act 1964, Subordinate Courts Act 1948 and Subordinate Courts Rules Act 1955 which, inter alia, empower the Chief Justice to issue any direction relating to the business of the courts and modify any provision of the rules of court or suspend the application of such rules of court as may be necessary in the interest of justice, public safety, public security, public health or for other sufficient reason. These Parts are to have retrospective effect from 18 March 2020 and will continue to remain in operation for a period of two years from the date of publication of the Act.

Power of the Chief Justice in relation to the business and rules of court

Part XI of the Bill provides modifications to the Housing Development (Control and Licensing) Act 1966 and includes amendments related to late payment charges, delivery of vacant possession and liquidated damages and the defects liability period of housing accommodation. This Part is to have retrospective effect from 18 March 2020.

Amendments in relation to housing accommodation

Part VII of the Bill increases the minimum threshold for the presentation of a bankruptcy petition by creditor(s) against a debtor from RM50,000 to RM100,000. This part comes into operation on the date of publication of the Act and will remain in operation until 31 August 2021.

Increase in the minimum threshold for the presentation of a bankruptcy petition

Parts III to VI of the Bill provide that general limitation periods under the Limitation Act 1953, the Sabah Limitation Ordinance, Sarawak Limitation Ordinance and the Public Authorities Protection Act 1948, which expire within the period of 18 March 2020 to 31 August 2020, will be extended to 31 December 2020. These Parts are to have retrospective effect from 18 March 2020 and will continue to remain in operation until 31 December 2020.

Amendments in relation to housing accommodation

Part XI of the Bill provides modifications to the Housing Development
(Control and Licensing) Act 1966 and includes amendments related to late payment charges, delivery of vacant possession and liquidated damages and
the defects liability period of housing accommodation. This Part is to have retrospective effect from 18 March 2020.

Power of the Chief Justice in relation to the business and rules of court

Rahmat Lim & Partners COVID-19 Resource Centre

Rahmat Lim & Partners has a COVID-19 Response Centre on its website www.rahmatlim.com that contains knowhow and materials covering the legal and regulatory aspects of the COVID-19 crisis.

In addition, Rahmat Lim & Partners has a cross-disciplinary COVID-19 Legal Task Force consisting of Partners across various practice areas to provide rapid assistance. Should you have any queries, please do not hesitate to get in touch with us at covid19taskforce@rahmatlim.com or your usual contact at Rahmat Lim & Partners.