Malaysia’s COVID-19 Act: Contractual Reliefs Extended to 30 June 2021

Malaysia’s Temporary Measures for Reducing the Impact of Coronavirus Disease 2019 (COVID-19)  Act 2020 (the COVID-19 Act) (I have written more about the COVID-19 Act here) will see an extension of its key relief on the inability to perform contractual obligations. The relief has been extended to 30 June 2021.

Through the Temporary Measures for Reducing the Impact of Coronavirus Disease 2019 (COVID-19) (Extension of Operation) Order 2021, Part II of the COVID-19 Act has been extended for the period from 1 April 2021 to 30 June 2021. This means there will be continued protection and relief on the application to contractual obligations for the contracts in the Schedule.

The key provision is section 7 of the COVID-19 Act on the contractual relief:

Inability to perform contractual obligation
7.  The inability of any party or parties to perform any contractual obligation arising from any of the categories of contracts specified in the Schedule to this Part due to the measures prescribed, made or taken under the Prevention and Control of Infectious Diseases Act 1988 [Act 342] to control or prevent the spread of COVID—19 shall not give rise to the other party or parties exercising his or their rights under the contract.

 

This extension of operation is to be read together with the earlier extension from 1 January 2021 to 31 March 2021.

In practice, I have seen very little practical application of the contractual relief provisions of the COVID-19 Act. It remains to be seen whether this further extension will be of great benefit.

The COVID-19 Act only came into force on 23 October 2020. This was long after the economic shock from the Movement Control Order in March 2020 and long after contracts had already been terminated.

Read more in my articles on the COVID-19 Act:

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