COVID-19 AMENDMENT BILL 2021

Legal Updates from YHA Law Firm

In brief

The Temporary Measures for Reducing the Impact of Coronavirus Disease 2019 (COVID 19) Amendment Bill 2021 was enacted by the Dewan Rakyat of Parliament on December16,2021. The bill was referred to as the Covid 19 Amendment Bill.

What is the new context in Covid 19 Amendment Bill?

Part XIA

The Covid-19 Amendment Bill adds a new Part XIA to the home development laws, which makes significant charges. We like to discuss the six major adjustments that will have an impact on housing developers and buyers.

a. Agreement and First Agreement

As can be seen in Schedule G, H, I and J, the term ‘agreement’ basically means sale and purchase agreement under the Housing Development (Control and Licensing) Regulations 1989.
However, the terms of ‘first agreement’ only applies between the first buyer of the property and the developer but this does not apply to the subsequent purchasers, therefore they will not enjoy the relief measures.

b. Late payment charges- Developers cannot charge

The developer shall not impose any late payment costs for unpaid instalments between 1 January 2021 and 31 December 2021, according to Clause 38B in the bill. The waiver of late payment penalties is only valid for the first agreement signed before May 31, 2021.

Q. I bought a house from developer A and failed to pay the monthly payments for the months of June to September during MCO. Is it possible for developer A to charge me late fees for the three months of unpaid instalments?

A. No, if the purchaser failed to pay any instalment under the schedule of payment for the period from 1 January 2021 – 31 December 2021, the developer cannot impose any late payment charges in respect of such unpaid instalments. However, subsequent purchasers will not enjoy these benefits.

c. Developer can apply for extension of delivery of vacant possession

Clause 38C of the Bill states that the developer may apply to the Minister for an exemption from the calculation of late delivery of vacant possession or completion of common facilities for any period between January 1, 2021 and December 31, 2021 if the Minister is satisfied that the inability was caused by the COVID-19 control or prevention measures specified, made, or taken under Act 342

Q. What if you bought a house from developer A and they failed to deliver the vacant possession and incomplete common facilities for the household? Are they liable to pay the penalties for failing to deliver vacant possession and incompletion of common facilities?

A. No, if the developer fails to complete everything by the time given, they are exempted from the calculation of late delivery of vacant possession or completion of common facilities for any period between 1 January,2021 till 31 December, 2021 only if the minister is satisfied that the inability was caused by the COVID-19 control or prevention measures specified, made, or taken under Act 342

d. Taking of Vacant Possession

Section 38D of the Bill states that if the purchaser is unable to take vacant possession during the period 1 June 2021 to 31 October 2021 or any other time not covered by clause 38C above, the purchaser is not deemed to have taken vacant possession. During the full lockdown in 2021, the mobility control limitations were in effect from June 1 to October 31, 2021.

Q. What if you have bought a house from developer A and you have to move in by the given timeframe from the developer, however you are unable to do so. Does that mean that you have taken vacant possession of the property?

A. No, the purchaser is not regarded to have taken vacant possession if he or she is unable to do so during the period 1 June 2021 to 31 October 2021, or any other time not covered by clause 38C above.

e. Exclusion of calculation of defect liability period

The period from 1 June 2021 to 31 October 2021 shall also be excluded from the calculation of the defect liability term, according to Clause 38E of the Bill.

Q. I have taken vacant possession of my new house on 2.5.2020, when is my defect liability period ends?

A. Assuming your defect liability term is 24 months and you shall have another extra 4 months and 30 days under the Covid-19 act.

f. Saving

The bills stated that any legal procedures begun, or any judgement or award obtained, to recover late payment charges owed by the purchaser or liquidated damages would be unaffected by the revisions in section 38B, 38C, 38D, and 38E.

2) On the other hand, the new Covid-19 Amendment Bills 2021 have also added two new sections which are;

Section 40A states that under the Industry Relations Act of 1967, the period from 1 June 2021 to 31 December 2021 will be omitted from the calculation of the period for according recognition, making a report and filing of representation and;
Section 40B held that under the Industrial Relations Act 1967, any employer, trade union of employers, trade union of workers, or worker who is in a place subject to an enhanced movement control order is excluded from the calculation of the period.

3) Part XIIIA and XIIIB

a. XIIIA (Modifications to the Sabah Labour Ordinance)

Section 42B, which allows employees to file a complaint under paragraph 7A(3), has been extended from June 1, 2021, to the expiration date of this Act, but not beyond December 31, 2022. Section 42C, on the other hand, states that an employee who is in a location subject to an enhanced movement restriction order is exempt from the calculation of the time limit for filing a complaint under paragraph 7A(3).

b. XIIIB (Modifications to the Sarawak Labour Ordinance)

Section 42E stated that the period from May 29, 2021 to October 31, 2021 should be excluded from the calculation of the period for filing a complaint under paragraph 8A(3), whereas Section 42(F) refers to employees who are subject to an enhanced movement control order.

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.

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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.

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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.

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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.

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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.

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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.

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