Malaysia - Chapter 9 - Force Majeure and Hardship in the Asia-Pacific Region
Darshendev Singh is a Partner with Lee Hishammuddin Allen & Gledhill. His primary area of practice is commercial dispute resolution with a focus on complex disputes relating to construction, engineering, oil & gas, and infrastructure projects;
Leong Chee Weng is a Partner with Tuang, Chu & Co. He heads the firm’s Construction Dispute Resolution and International Arbitration Practice Group. His practice area includes commercial dispute resolution with a primary focus in complex dispute resolution in construction, engineering, oil & gas, and infrastructure projects. Chee Weng’s clients come from a diversified range of industries, including but not limited to property developers, manufacturers, foreign state-owned companies, suppliers and contractors
Originally from Force Majeure and Hardship in the Asia-Pacific Region
I. Force majeure
A. Background and definition of force majeure in Malaysia
1. Does Malaysia recognize force majeure or any other legal concept similar to force majeure such as frustration, etc. (in the following: “force majeure”)? Are there any statutory provisions or is there any case law setting forth the definition of force majeure?
Malaysia does recognize the concepts of force majeure and frustration. Be that as it may, whilst these concepts are often used interchangeably, they are distinct.
Features of force majeure are as follows:
(a) Force majeure is a creature of contract. In other words, unless expressly adopted by the parties, force majeure will not be implied into contracts governed by Malaysian law.
(b) Force majeure clauses are usually triggered by events which:
(i) prevent, hinder or delay (as the case may be) the party from performing the contract for the time being; and
(ii) are outside the parties' control and/or which could not have been foreseen to take place at the time of contracting.
(c) The effects of a force majeure clause are usually the following:
(i) the party relying on the force majeure clause is relieved from performing their contractual obligations affected by the force majeure even.
(ii) upon the cessation of such event, the party relying on the force majeure even is obliged to immediately resume performance.
(iii) unless expressly provided for in the force majeure clause, a force majeure event does not automatically bring the contract to an end.