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Most pressing commercial legal issues when MCO was first Announced

Can I rely on the force majeure clause for unable to perform my contractual obligation due to the Control of Movement Order?

The term ‘force majeure’ is taken from the Commercial Code of France, or Code Napoleon. This term is used with reference to all circumstances independent of the will of man, and which it is not in his power to control.

Events of force majeure are said to be foreseeable events in the sense that the events are spelled out in an agreement.

The occurrence beyond the control and without the fault or negligence of the party affected could be force majeure events. Acts of God is a good example. These events may or may not happen. The parties to the agreement provided for such events under the force majeure clause when they foresaw that such events may occur.

In the Court of Appeal (Singapore), it was said in Glahe International Expo AG v ACS Computer Pte Ltd and another appeal [1999] 2 SLR 620, as follows:

... doctrine of frustration operates on a completely different level from a force majeure clause. Whereas a force majeure clause is an agreement as to how to resolve outstanding obligations upon the onset of a foreseeable event, the doctrine of frustration concerns the treatment of contractual obligations upon the onset of an unforeseeable event.

As such, for a tenant or any party to the agreement to rely on a force majeure clause in the current situation, the Control of Movement Order or a similar situation must first be covered in the force majeure clause. Only subsequent to that, we could look at the remedy.

A force majeure clause normally provides a remedy if a force majeure situation takes place. That includes suspension or termination of the agreement.

Are you in essential business or service?

Is it accurate to refer to the Industrial Relations Act 1967 (“IRA”) to find out the definition for essential business or service pursuant to the Control of Movement Order?

No, it is not accurate. The essential services referred to in the First Schedule only applicable to IRA (Section 2) and under certain situations provided under IRA (Section 43).

In order to find out whether you are in an essential business or service, you are advised to refer to the Federal Government Gazette on the Prevention and Control of Infectious Diseases (Measures within the Infected Local Areas) Regulations 2020 (P.U.(A) 91) or “Lampiran A” of the “Kenyataan Media Majlis Keselamatan Negara Jabatan Perdana Menteri 18 Mac 2020”.

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