KUALA LUMPUR – The Temporary Measures for Reducing the Impact of Coronavirus Disease 2019 (Covid-19) Act 2020 came into force last week, aimed at cushioning the economic blow dealt by the pandemic.
The Vibes spoke to lawyers Kuhan Manokaran and V. Satchiananthan to gain a better understanding of the new law and how Malaysians stand to benefit from it.
Unfulfilled contracts
The various iterations of movement curbs imposed since March 18 have led to many businesses being unable to complete their contractual obligations, opening them up to the risk of getting sued.
Section 7 of the Covid-19 Act protects selected categories from being hauled to court over this.
Kuhan said construction, tenancy and tourism contracts are among them.
“If, let’s say, two parties are in a construction contract, and because of the movement control order (MCO), certain things couldn’t be performed. The affected party cannot sue.”
The dispute can be mediated and a binding settlement reached instead.
Extended time period to sue
For contractual disputes arising before the MCO took effect, the act allows a longer time period for legal action to be taken.
“Under Malaysian law, there’s something called a limitation period. If you want to sue someone, there is a window of time in which you can take action,” said Kuhan.
“For example, if you want to pursue a contractual suit, you have six years to do it since the time of the breach.”
Under the Covid-19 Act, limitation periods ending between March 18 and August 31 this year are extended to December 31.
“This change gives additional ability and flexibility for people to exercise their right and take action,” said Kuhan.
No late fees for new homeowners
Previously, new house buyers had to pay a penalty for late instalments, as per the Housing Development (Control and Licensing) Act 1966.
“The Covid-19 Act prevents developers from charging that penalty on purchasers who fail to make payments due to reasons related to the MCO for the period between March 18 and August 31,” said Kuhan.
Increased limit for bankruptcy declaration
Prior to this, a person must owe at least RM50,000, with the inability to make repayments, to be declared a bankrupt.
The Covid-19 Act increases the amount to RM100,000.
“However, the RM100,000 increase applies only up to August 31, 2021,” said Satchiananthan.
He pointed to a similar amendment to the Insolvency Act 1967 that increases the bankruptcy threshold to RM100,000 and gives discretionary powers to the law minister to amend the amount.
The Covid-19 Act was passed in the Dewan Rakyat on August 25, and the Dewan Negara on September 22.
Minister in the Prime Minister’s Department (Parliament and Law) Datuk Takiyuddin Hassan has said the purpose of the act is to provide relief to individuals and businesses grappling with the fallout from the virus crisis. – The Vibes, October 30, 2020
