Malaysia was among the first countries in ASEAN to be heavily impacted by the spread of Covid-19, which forced the country into a Movement Control Order (MCO) from 18 March 2020. During the MCO, non-essential businesses were generally not allowed to operate from their premises, causing production to drop significantly and revenue to fall considerably. Subsequently, a Conditional Movement Control Order (CMCO) was imposed from 4 May until 9 June 2020, where restrictions are significantly relaxed and most businesses are allowed to operate on strict conditions.
The period of MCO and CMCO (“the Period”) had undoubtedly given rise to a large array of legal issues faced by businesses. There have been news of massive pay cuts and lay-offs as companies begin to implement cost-cutting measures. Apart from financial difficulties, the restrictions also meant that companies are forced to delay or unable to fulfil certain contractual obligations. For example, flight operators had to offer refunds for cancellation of flights due to the government’s ban on air travel. A number of major events during the Period which may have been fully paid for had to be cancelled. The Period had also caused disruptions to supply of goods, especially since Malaysia is one of the key players in the global supply chain. Businesses are inevitably exposed to legal repercussions for breach of contract due to non-performance and/or delay.
Click here for the full article by Leonard Yeoh and Nurul Qarirah from Tay & Partners.
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