CORONAVIRUS DISEASE 2019 (COVID-19) ACT 2020

Legal Updates from YHA Law Firm

What is Covid-19 Act 2020?
It is a written law to provide temporary measures in reducing the negative impacts of Covid-19 pandemic to individuals and companies.

When did Covid-19 Act 2020 come into force?
23 October 2020.

What is in the Covid-19 Act 2020?

LIMITATION ACT 1953

The Covid-19 Act extended time limitation to commence legal action. Any limitation period which expires from 18.3.2020 – 31.8.2020 shall be extended to 31.12.2020. For example:

Q: I have loaned RM10,000.00 to A on 2.8.2014. A refuses to return me the money. When is the last day I can sue A?

A: Before the commencement of the Covid-19 Act, the last day for you to sue A is on 1.8.2020 (6 years limitation period applies). However, you now have until 31.12.2020 to sue A.

INSOLVENCY ACT 1967

The Covid-19 Act increases the threshold to commence bankruptcy petition from RM50,000.00 to RM100,000.00. For example:

Q: I owe the bank RM70,000.00. Can the bank file a bankruptcy petition against me?

A: No. Before the coming into force of the Covid-19 Act, if you owe the bank for more than RM50,000.00, the bank can do so. However, under the Covid-19 Act, the creditor can only file a bankruptcy petition if the amount of debt is more than RM100,000.00.

HIRE-PURCHASE ACT 1967

Q: I have a hire purchase agreement with Bank P. However, during the Movement Control Order (“MCO”), I have failed to pay more than 2 months of instalments. Can the bank take possession of my car?

A: No. The bank cannot take possession of any goods i.e. your car for failure of payment of instalments for the period from 1.4.2020 – 30.9.2020.

CONSUMER PROTECTION ACT 1999

If you have a credit sale agreement entered before 18.3.2020 and there are no overdue instalments before 18.3.2020, you have 3 options. The credit facility provider cannot sue you for the outstanding payment. For example:

Q: I have bought an iPhone 11 on 17.3.2020 via credit sale agreement with Maxis. During MCO, I have failed to pay 2 months of instalments. What are my options?

A: If Maxis issue you notice of overdue payment, you can choose to either pay the overdue instalments, pay off the entire credit sale agreement or return your iPhone 11 to Maxis. Maxis is also not allowed to commence legal action to recover the outstanding amount from you.

DISTRESS ACT 1951

Q: I have rented a room in Condominium Y. During MCO, I have failed to pay my rental for the period from April – July 2020. Can my landlord get a warrant of distress and seize my goods and sell them off for the purpose of recovering the rental?

A: No. If the tenant is unable to pay rental for the period from 18.3.2020 – 31.8.2020, the landlord is not allowed to seize the tenant’s goods and sell them to recover the arrears under the Distress Act 1951.

HOUSING DEVELOPMENT (CONTROL AND LICENSING) ACT 1966

(i) Late payment charges

Q: I have bought a house from developer Y. During MCO, I have failed to pay instalments for the period from April – June 2020 to developer Y. Can developer Y impose late payment charges on me for the 3 months of unpaid instalments?

A: No. If the purchaser failed to pay any instalment under the schedule of payment for the period from 18.3.2020 – 31.8.2020, the developer cannot impose any late payment charges in respect of such unpaid instalments. You may apply for extension of this period until 31.12.2020.

(ii) Delivery of vacant possession (“VP”) and liquidated damages (“LAD”)

Q: I have bought a house from developer Z. The expected date for the delivery of VP is on 1.6.2020. However, developer Z has failed to deliver the VP on 1.6.2020 and deliver the VP on 15.8.2020. Can I claim LAD from developer Z for late of delivery of VP?

A: No. The period from 18.3.2020 – 31.8.2020 shall be excluded from the calculation of the LAD.

(iii) Defect liability period (“DLP”)

The period from 18.3.2020 – 31.8.2020 shall be excluded from the calculation of DLP.

Q: I have taken VP of my new house on 1.5.2019, when is my DLP ending?

A: Assuming your DLP is 24 months and you shall have another extra 5 months and 13 days under the Covid-19 Act, it should end on 13.10.2021. However, you may even apply to the Minister for extension of another extra 4 months. In such event, your DLP will then end on 12.2.2022

INDUSTRIAL RELATIONS ACT 1967

Q: My boss has fired me on 31.5.2020. When is the last day for me to file a representation to the Industrial Relation Department?

A: You have 60 days to file a representation. However, the period from 18.3.2020 – 9.6.2020 will not be counted in the 60 days period.

Do you require further assistance ? do contact us directly at http://yhalaw.com.my/contact-us

ADMIRALTY IN REM – WRONGFUL ARREST – POSSESORY RIGHT – ARREST GONE WRONG: WHEN A SHIP ARREST BACKFIRES WITH DAMAGES

In Eletson Holdings Inc & Ors v The Vessel “Paros” [2026] 8 MLJ 80, the High Court set aside an arrest after finding that the plaintiffs had no proprietary or possessory right to the vessel at the time of the writ, as the bareboat charter had already been terminated. The Court held that the claim was in substance a corporate control dispute dressed up as an admiralty action, and emphasised that such disputes do not fall within admiralty jurisdiction. Critically, the plaintiffs’ failure to disclose the termination of the charter when obtaining the arrest warrant amounted to a serious breach, leading the Court to find mala fides or gross negligence and order damages for wrongful arrest. The decision reinforces that ship arrest is a powerful remedy that must be exercised with full disclosure and a proper maritime foundation.

14 July ,2026 No Comments

GUARANTEE – PERSONAL GUARANTEE ≠ PAY ON DEMAND: COURT DRAWS THE LINE BETWEEN SURETYSHIP AND DEMAND GUARANTEES

In CE Energy DMCC v Bashar [2026] Lloyds’s Rep 267, the Commercial Court clarified that not all guarantees labelled “on demand” will be treated as demand guarantees. On a proper construction, the court held that the personal guarantee in question was a contract of suretyship, requiring proof of the principal debtor’s liability rather than automatic payment upon demand. Crucially, the court found that the debtor’s “irrevocable” admissions of debt in a payment agreement created a binding contractual estoppel, which the guarantor could not challenge. The decision also confirms that, where payment is due on a “day certain”, a seller may still claim the price notwithstanding retention of title. The case underscores the importance of precise drafting and the risks of entering into settlement agreements that conclusively fix liability.

14 July ,2026 No Comments

MARITIME NEGLIGENCE – PLAINTIFF CLAIMED FOR DAMAGES CAUSED DURING ANCHOR DEPLOYMENT OPERATION – CALDERBANK OFFERS

In Tom Eastwind 365 Sdn Bhd v The Owners of the Vessel “Icon Sophia” [2025] 9 MLJ 397, the High Court held that the doctrine of res ipsa loquitur applied in a maritime collision during an anchor deployment operation, allowing an inference of negligence against the tug owner. The Court clarified that the doctrine is not defeated merely because the defendant adduces evidence explaining the accident – such evidence goes to rebutting the inference, not preventing it. While liability was established due to the tug master’s error of judgment in manoeuvring too close to a stationary barge, the plaintiff failed to properly prove its damages and was awarded only RM50,000. Notably, despite succeeding on liability, the plaintiff was ordered to pay costs after rejecting reasonable Calderbank offers, underscoring the risks of pursuing litigation without properly substantiated claims.

14 July ,2026 No Comments

JURISDICTION – BILLS OF LADING – BREACH OF HIMALAYA CLAUSE – BREACH OF EXCLUSIVE JURISDICTION CLAUSE – ONEROUS OR UNUSUAL TERMS

In Maersk Guinéa-Bissau SARL v Almar-Hum Bubacar Baldé SARL [2026] 1 Lloyd’s Rep 215, the English Commercial Court held that a shipper was liable for breach of an exclusive jurisdiction clause and a Himalaya clause after commencing proceedings in Guinea-Bissau instead of England. The Court confirmed that such clauses are standard and enforceable, and that commencing foreign proceedings in breach of them can give rise to a claim for damages. Notably, the Court also recognised that Himalaya clauses may be used offensively, allowing subcontractors to recover losses caused by wrongful litigation. The foreign judgment was not recognised due to lack of jurisdiction and denial of natural justice.

14 July ,2026 No Comments

DELIVERY WITHOUT PRESENTATION OF BILL OF LADING – LOI WON’T SAVE YOU: SHIPOWNER LIABLE FOR MISDELIVERY DESPITE INDEMNITY

In United Overseas Bank Ltd v The “Maersk Katalin” [2026] 1 Lloyd’s Rep 18, the Singapore High Court reaffirmed that delivery of cargo without presentation of original bills of lading remains a fundamental breach, even where carried out against letters of indemnity. The Court held that LOIs merely shift commercial risk but do not authorise misdelivery, and rejected arguments of consent, ratification and causation. Significantly, the Court emphasised that the burden lies on the carrier to prove that the loss would have occurred in any event – a burden not easily discharged. The decision underscores the continued strict liability regime in misdelivery cases, particularly where banks as bill holders are involved.

14 July ,2026 No Comments

CONTRACT LAW – ‘UK COURTS’ MEANS ENGLAND: COURT UPHOLDS JURISDICTION DESPITE VAGUE CLAUSE

In SMT Global Logistics Ltd v Georgian Airlines LLC [2025] Lloyd’s Rep. Plus 89, the Commercial Court held that a clause referring disputes to “the court in accordance with current legislation of the United Kingdom” was a valid jurisdiction clause in favour of the High Court of England and Wales. The Court also confirmed that the Montreal Convention does not apply to pure contractual claims for non-performance, such as repayment and loss of profits. Emphasising a broad and commercially sensible interpretation, the Court enforced the parties’ choice of forum and refused to stay proceedings, reaffirming that jurisdiction clauses will be upheld unless there are overwhelming reasons to depart.

14 July ,2026 No Comments