Temporary Measures For Reducing Impact Of COVID-19 – Travel Industry

by | Aug 14, 2020 | Business, Contracts, Featured, Law

No one saw the impact COVID-19 could have on the world. Unfortunately, as we enter August, the disease has not ended its spread and is still causing death and economic loss to billions of people around the world. Governments have taken efforts to minimize the impact of COVID-19. One of such efforts is enacting legislation on measures to reduce the impact of COVID-19. Singapore has taken such steps by passing the COVID-19 (Temporary Measures) Act 2020. Malaysia will hopefully follow suit. The Bill is now in parliament. Only when this Bill is passed will it become law.

This write-up will focus on the consequences of the Bill to the Travel Industry (if it passes without any changes).

How is the Travel Industry is covered under this Bill?

1. Inability to Perform Contractual Obligations – Contract for Promotion of Tourism in Malaysia

Not all contracts entered by and with the travel industry is allowed to claim for temporary relief under the Bill. It is only for contracts that are entered by a Tourism Enterprise as defined under the Tourism Industry Act 1992 (tour operating business, travel agency business and business providing tourism training) AND it is a contract for the promotion of tourism in Malaysia.

Note the scope of the application –

A. You must be registered under the Tourism Industry Act. If you are in the travel industry business BUT NOT registered, this Bill would not apply; AND

B. It must be a contract related to the promotion of tourism in Malaysia. If you are registered under the Tourism Industry Act BUT your contract is for the purchase of office equipment, this Bill would not apply.

2. Inability to Perform Contractual Obligations – Religious Pilgrimage-Related Contract

The application of this is wider in application as it seems to apply to all religious pilgrimage. It does not specify only for muslims (Umrah & Haji) but should apply for other religions that have their pilgrimage. It also seems wider as it covers all related contracts.

What If My Contract Qualifies?

This means that if you are unable to perform your contract, you have NOT committed a breach of contract. In simple terms, the other party cannot:-

i. Terminate the Contract;

ii. Claim for Damages;

iii. Claim for a Refund.

What If I Have Already Been Sued?

Any legal action taken shall be deemed valid. You cannot go back and use this Bill if the contract has already been terminated; money refunded; or judgement entered against you.

How Long Will I Have This Protection?

You will have protection under this Bill until 31.12.2020.

What Other Protections Do You Have Besides Contracts?

You may also look at some other protections provided under this Bill which may relevant to you including if you have bought any item that falls under the Hire-Purchase Act; the Consumer Protection Act; and Distress (an action carried out to recover rent due and payable). As the Bill stands, the protection afforded to the travel industry are limited to the above.

Do not hesitate to contact us by email should you require more information.

NIK ERMAN NIK ROSELI Commercial Lawyer



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