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The Malaysian Bar is deeply concerned that the Government has scheduled a one-day sitting of the Dewan Rakyat, on 18 May 2020, set only to hear the speech of the Yang di-Pertuan Agong and to table certain legislation for their first reading. According to various news reports, there will be no motions and no debates during this sitting; all business being deferred to the next sitting, likely to be held sometime in July 2020.As we in Malaysia begin to plan for an exit strategy from the Movement Control Order (“MCO”), urgent legislation is needed now to protect individuals, businesses and companies from the consequences of being unable to perform or fulfil their contractual obligations arising from the measures taken in relation to COVID-19 prevention.
So far, the measures that have been announced by the Government in relation to commercial activity — apart from ordering businesses and shops to shut or open — lack legitimacy as they are being implemented by way of administrative directives. These administrative directives tend to apply only to regulated institutions such as financial institutions, government-linked corporations, government departments, and government agencies. These do not include the vast number and varied nature of private business transactions, for example supply agreements, sale and purchase agreements, the majority of employment contracts, and rental or hire agreements.
While some contracts may have provided for exceptional circumstances, with the use of a force majeure clause, many will have not. Even contracts with force majeure clauses may not be sufficient to avoid termination and/or penalties for non-performance. Legal protection from the unintended non-performance of contracts, needs to be provided for specifically, and enacted by way of legislation, so as to provide comprehensive coverage.
In Singapore, legislation was introduced in the second week of April 2020 to ensure that, amongst other things, booking deposits could not be forfeited for wedding or business functions that had to be postponed, and termination of business premises leases due to non-payment of rent. In the United Kingdom, the Coronavirus Act 2020 was introduced in March 2020 to allow for regulations to be made regarding employment contracts, to protect employers and employees.
A similar “COVID-19 law” is desperately needed in Malaysia, and must be in place before we emerge from the MCO. We strongly urge the Government to introduce one as soon as possible, and to extend the sitting of the Dewan Rakyat to cater for this. The Dewan Negara also needs to meet, in order that Parliamentary business can fully take place.
The urgent needs of the rakyat and vital interests of the nation need to be immediately deliberated on, debated and decided. Other legislatures elsewhere in the world have shown that, with a bit of creativity and out-of-the-box thinking, Parliamentary business can and does proceed with sufficient physical-distancing precautions. We must also do the same.
Salim Bashir
President
Malaysian Bar
29 April 2020