FAQ ON EXTENSION OF TIME(EOT) FOR CONSTRUCTION

CONTRACT DURING MOVEMENT CONTROL

ORDER(MCO) IN MALAYSIA DUE TO COVID 19

Adian Corporation's Monthly Company Newsletter

Q1. What is Movement Control

IN THIS PAGE
Order (MCO)?
MCO is a preventative measure Q1. WHAT IS MOVEMENT
CONTROL ORDER
to curb the widespread of COVID (MCO)?
19 and was announced by the
Prime Minister of Malaysia on
16.3.2020[1] with the sole
purpose of restricting movement
of anyone residing in Malaysia
to, from and within an infected
area. The announcement of MCO FOOTNOTES
was made based on Prevention [1]https://www.pmo.gov.my
/2020/03/perutusan-khas-
and Control of Infectious
yab-perdana-menteri-
Diseases Act 1988(“PCIDA”) and mengenai-covid-19-16-
Police Act 1967. mac-2020/
 PAGE 2

Q2. How long is MCO going to IN THIS PAGE

last? Q1. WHAT IS

MOVEMENT CONTROL
ORDER (MCO)?
a. There are currently three
phases of MCO happening in
Malaysia now. The first phase of FOOTNOTES
MCO was from 18.3.2020 until [2]https://www.malaymail.co
31.3.2020 as announced by m/news/malaysia/2020/03/1
Prime Minister Tan Sri 6/pm-malaysia-in-lockdown-
from-wed-until-march-31-all-
Muhyiddin Yassin on shops-closed-except-
16.3.2020[2]. for/1847204
 
[3]https://www.bernama.com
b. The second phase of MCO
/en/general/news_covid-
was from 1.4.2020 until 19.php?id=1824718
14.4.2020 as announced by
Prime Minister Tan Sri [4]https://www.bernama.com
/en/general/news_covid-
Muhyiddin Yassin on
19.php?id=1830577
25.3.2020[3]. We are currently in
the third phase of MCO which is
for the period of 15.4.2020 to
28.4.2020. This is based on the
latest Prime Minister’s
announcement on 10.4.2020
where the MCO is extended to
28.4.2020[4].
 PAGE 3

IN THIS PAGE
Q3. What is an “Infected
Area”? Q3. WHAT IS AN
“INFECTED AREA”?

Following the gazette of the

Prevention and Control of
FOOTNOTES
Infectious Diseases (Declaration
of Infected Local Areas) Order [5]http://www.federalgazette.
agc.gov.my/outputp/pua_202
2020 (“PCID Order 2020”), the 00317_PUA87.pdf
whole of Malaysia has been
defined as an infected area[5] [6]http://www.moh.gov.my/in
dex.php/database_stores/att
The PCID Order 2020 was issued
ach_download/317/19
under Section 11(1) of the
PCIDA[6] which allows the
Minister of Health to make
regulations under Section 11(2)
of the PCIDA, to then prescribe
the measures to be taken to
control or prevent the spread of
an infectious disease within or
from the whole of Malaysia.
 PAGE 4

IN THIS PAGE
Q4. How is Construction
Sector affected by MCO? Q4. HOW IS
CONSTRUCTION SECTOR
AFFECTED BY MCO?

a.  The construction sector is

affected in the first and second
FOOTNOTES
phase of MCO where it falls
[7]http://www.federalgazette.
under non-essential services
agc.gov.my/outputp/pua_202
under MCO. The Government of 00318_PUA91_2020.pdf
Malaysia has ordered all
premises to close except for [8]https://www.malaymail.co
m/news/malaysia/2020/03/1
those involved in the provision 8/works-ministry-all-
of essential services defined construction-work-must-
under Prevention and Control of stop-unless-critical/1847941
Infectious Diseases (Measures
within the Infected Local Areas)
Regulations 2020 (“PCID
Regulations 2020”)[7].As such,
Ministry of Works has on
18.3.2020 announced that all
construction work and
maintenance work must stop
except for critical works are
allowed to continue[8].
 PAGE 5
b. However, during the third
phase of MCO(from 15.4.2020
IN THIS PAGE
until 28.4.2020) which we are
currently in right now, Senior
Q4. HOW IS
Minister Datuk Seri Azmin Ali CONSTRUCTION SECTOR
has announced on 10.4.2020[9] AFFECTED BY MCO?

that  subject to online

application to International
FOOTNOTES
Trade and Industry
[9]https://www.thestar.com.
Ministry’s(MITI) website from my/news/nation/2020/04/10/
13.4.2020 onwards, the govt-allows-more-
following sectors of construction businesses-like-hair-salon-
optometry-to-open-during-
and services related
mco
to construction works could
operate:

i. Projects whereby the main

contractors are G1–G2;

ii. Projects that have achieved

physical progress
of 90% and above;

iii.  Tunnelling works;

iv.  Maintenance works;

v.   Sloping works;

vi. Emergency works that are PAGE 6
consequent to contractual
obligations;
IN THIS PAGE

vii.  Maintenance, cleaning and Q4. HOW IS

drying of stagnant water, spraying CONSTRUCTION SECTOR
of pesticides at construction sites AFFECTED BY MCO?

which prevent the breeding of

Aedes mosquitoes and other pests;

viii. Other works that if left

incomplete may result in danger;

ix. Building projects with 70 IBS

score and above;

x. Construction projects with

accommodation facilities for
workers, such as centralised
quarters for workers or workers’
camp;or

Xi.Professional services related to

the construction industry including
architects, engineers,
town-planners, land surveyors,
quantity surveyors, project
managers, facility
managers as well as other relevant
services.
Q5. What is considered as PAGE 7

critical works? IN THIS PAGE

“Critical Works” is defined by the
Ministry of Work[10] as works Q5. WHAT IS

which if not continued CONSIDERED AS

CRITICAL WORKS?
with, could cause danger and
harm to works, the public or the
environment. Q6. WHAT ARE THE
EXAMPLES OF CRITICAL
Q6. What are the examples of ？
？
WORKS

Critical Works FOOTNOTES

The examples of critical works
are: [10]https://www.mkn.gov.my/
(a)Slope Repairs; web/wp-
(b)Pothole Repairs; content/uploads/sites/3/202
0/03/FAQ-KEMENTERIAN-
(c)Traffic Management Control KERJA-RAYAUpdate-
(TMC); V3_20032020.pdf.pdf.pdf.pdf
(d)Periodical checks of
lifts/travellators/escalators and
other critical mechanical and
electrical equipment;
(e)Repairs of
lifts/travellators/escalators and
other critical mechanical and
electrical equipment;
(f)Maintenance works at
premises of critical services;
(g)Upgrading works at premises PAGE 8
of critical services;
(h)Traffic Light Repairs; IN THIS PAGE
(i)Construction of Bailey Bridge
at location of any collapsed Q6. WHAT ARE THE

bridge; EXAMPLES OF CRITICAL

WORKS ？
(j)Tunnelling Works;
(k)Other emergency works as
specified under the contract; Q7. IF A CONTRACTOR
DEEMS ITS CONSTRUCTION
and PROJECT FALLS UNDER
(l)Other works which if not CRITICAL WORKS, CAN IT

completed would result CARRY ON THE PROJECT AS

USUAL?
indanger.with, could cause
danger and harm to works, the
public or the environment.

Q7. If a contractor deems its

construction project falls
under critical works, can it
carry on the project as usual?
No. Construction companies
must apply via email
(projkkp@mohr.gov.my) to
Occupational Safety and Health
Department (DOSH) in order to
carry out critical works.
 PAGE 9

Q8. If the construction project
does not fall under critical
works, does the contractual
completion date still apply
IN THIS PAGE
Q8. IF THE CONSTRUCTION
PROJECT DOES NOT FALL
UNDER CRITICAL WORKS,
DOES THE CONTRACTUAL
COMPLETION DATE STILL
APPLY DESPITE COVID-19

despite Covid-19 and MCO AND MCO HALTED THE

WORKS FOR WEEKS?

halted the works for weeks?

Yes. In the absence of any
express contractual provision
which provides for automatic
extension of time in such
situation, the contractual
completion date whether found
in awarding letters or in certain
standard contract forms like
PAM, IEM or PWD will still be
unaffected and any delay from
the contractual completion date
would lead to Liquidated
Ascertained Damages(LAD)
being imposed by the employer.
 PAGE 10

IN THIS PAGE
Q9. What if a contractor still
Q9. WHAT IF A
carries out the construction CONTRACTOR STILL
CARRIES OUT THE
works during Covid-19 and MCO CONSTRUCTION WORKS
DURING COVID-19 AND
for non-critical works? MCO FOR NON-CRITICAL
WORKS?

FOOTNOTES
a. Any individuals or body
[11]http://www.agc.gov.my/ag
corporates who carries out cportal/uploads/files/Publicat
construction works which are ions/LOM/EN/Act%20133.pdf
not considered critical works
during the MCO period will be
liable to a fine not exceeding
RM50,000.00 or imprisonment
for a term not exceeding three
years, or both pursuant to
Street, Drainage and Building
Act 1974 (“SDBA”)[11].
 
b. There will be further liability
for a fine of RM1,000.00 for each
day the offence is continued
after conviction.
 PAGE 11

IN THIS PAGE
Q10. Does the law provide for
all the contractual Q10. DOES THE
PROVIDE FOR ALL THE
LAW

completion dates to be CONTRACTUAL

COMPLETION DATES TO

extended for the equal period BE EXTENDED FOR THE

EQUAL PERIOD OF MCO

of MCO in view of Covid-19?

IN VIEW OF COVID-19?

a. No. The law does not provide Q11. WILL EOT BE GRANTED
AUTOMATICALLY IN VIEW
for all the contractual OF MCO?
completion dates to be
extended for the equal period of
MCO in view
of Covid-19.

Q11. Will EOT be granted

automatically in view of MCO?
a. No, unless the contract
referred to expressly
provides for it. Otherwise, there
will be no EOT granted
automatically.
 PAGE 12

IN THIS PAGE
b. There are instances despite
very unlikely that where the Q11. WILL EOT BE GRANTED

Superintendent Officer or AUTOMATICALLY IN VIEW

OF MCO?
Consultants will issue a
Certificate for EOT without any
Q12. WHAT IF THERE IS NO
application being made, but that EOT GRANTED AND THE
does not necessarily make the CONSTRUCTION WORKS

EOT to be granted automatically WAS INDEED DELAYED DUE

TO COVID 19 AND MCO?
without any application.
 
c. An application for EOT based
on the contract is still imperative
to safeguard the contractor’s
interest.

Q12. What if there is no EOT

granted and the construction
works was indeed delayed due
to Covid 19 and MCO?
a. The contractor will risk being
imposed Liquidated Ascertained
Damages (LAD) by the employer
as provided under the contract.
 PAGE 13

IN THIS PAGE
b. This is provided under Section Q12. WHAT IF THERE IS NO
75 of Contracts Act 1950[12] EOT GRANTED AND THE

where a sum as to damages has CONSTRUCTION WORKS

been fixed in the contract and is
payable upon a breach.
 
c. In view of the Cubic Electronic
Sdn Bhd (in liquidation) v Mars
Telecommunications Sdn Bhd
WAS INDEED DELAYED DUE
TO COVID 19 AND MCO?
FOOTNOTES
[12]http://www.agc.gov.my/ag
cportal/uploads/files/Publicat
ions/LOM/EN/Act%20136.pdf

[2019] CLJ 723, the contractor

will now bear the burden of
proof to show the LAD amount
is extravagant and
unconscionable.
 
d. The Employer will no longer
need to prove actual loss or
damage as was the position in
Selva Kumar a/l Murugiah v
Thiagarajah a/l Retnasamay
[1995] 2 CLJ 374.
 PAGE 14

Q13. Can a contractor apply IN THIS PAGE

for an Extension of Time
(“EOT”) in view of MCO
Q13. CAN A CONTRACTOR
APPLY FOR AN EXTENSION

pursuant to the construction

OF TIME (“EOT”) IN VIEW
OF MCO PURSUANT TO
THE CONSTRUCTION
contract? CONTRACT?

a. Yes, but the contractor must

comply with the grounds
provided under the contract to
apply for EOT. For instance,
under PAM Contract 2006,
Clause 23.8 sets out the grounds
of delay in the form of “relevant
events”.
b. In addition, the Contractor
must also seek EOT in
accordance to the procedure of
the underlying contract
executed between the parties.
For example, under PAM
Contract 2006, Clause 23.1 sets
out the procedure to give notice
and particulars in order to apply
for EOT.
 PAGE 15

q14. Can contractor still apply for EOT even if

the Covid-19 and MCO scenario does not fit into
any grounds of application for EOT provided
under the contract?
a. A contractor may rely on the
Force Majeure clause if the
IN THIS PAGE
contract contains the clause.
 
Q14. CAN CONTRACTOR
b. A Force Majeure clause will STILL APPLY FOR EOT EVEN
cover unforeseen events beyond IF THE COVID-19 AND MCO

the control of both parties that SCENARIO DOES NOT FIT

INTO ANY GROUNDS OF
makes the performance of the APPLICATION FOR EOT
contractual obligation impractical PROVIDED UNDER THE
CONTRACT?
and/or impossible.

c.The Courts will definitely be

tasked with the duty to interpret
the respective force majeure
clause in the contract on whether
Covid-19 and MCO is within the
ambit of the same as such
argument will be a virtual certainty
in disputes to come.
 PAGE 16

d. A successful application on
IN THIS PAGE
Force Majeure clause would
excuse the parties legally from
Q14. CAN CONTRACTOR
performing their obligations under STILL APPLY FOR EOT EVEN
the contract. IF THE COVID-19 AND MCO
SCENARIO DOES NOT FIT
  INTO ANY GROUNDS OF
e. If the Superintendent Officer or APPLICATION FOR EOT

Consultants failed to process the PROVIDED UNDER THE

CONTRACT?
EOT application and the
Contractor’s delay was indeed
Q15. WHAT WOULD BE THE
caused by relevant event for which CONSEQUENCE IF
an extension of time is available, CONTRACTOR

then the time would be at large SUCCESSFULLY ESTABLISH

THE TIME IS AT LARGE?
and the Employer will fail in its
LAD claim.
q15. What would be the
consequence if contractor
successfully establish the
time is at large?
a. The common law principle of “time at large” is that if a
delay event occurs which is attributed to the employer
itself and the contract does not allow the completion date
to be extended in that event, the original completion will be
put “at large” and the contractor just need to complete the
works within reasonable time.
 PAGE 17

b. There will be no LAD imposition by IN THIS PAGE

the Employer if time is set at large.
  Q15. WHAT WOULD BE
THE CONSEQUENCE IF
c. In Malaysia, the acceptable CONTRACTOR
circumstances by the Courts on “time SUCCESSFULLY

at large” will be as follows: ESTABLISH THE TIME IS AT

LARGE?
i. additional works instructed by SO
after completion date[13];
ii.  Late site possession[14]; FOOTNOTES

iii.Act of prevention by Employer[15]; [13] See Hudson’s

iv. Failure of SO to grant EOT. Building and Engineering
Contracts  13th Edition
paragraph 6-025 page 738
d. In the Federal Court case of Sim
Chio Huat v Wong Ted Fui [1983] 1 [14] THAMESA DESIGNS
SDN BHD & ORS v
MLJ 151, it was held that in cases
KUCHING HOTELS
where an agreement contains no SDN BHD [1993] 3 MLJ 25
clause for extension of  time  for
completion, the acts of prevention by [15] Daya
the employer whether authorised by Cmt Sdn Bhd v Yuk Tung
Construction Sdn
the contract or whether in breach of Bhd [2018] MLJU 871
it or whether

the prevention is a cause of part or of the whole of the delay

invalidate the liquidated damages clause because by such
acts  time  becomes at  large  and consequently there is no
date from which damages could run and therefore no
damages could be claimed.
d. In the case of Goldcourse Sdn Bhd v PAGE 18
Asaztera Sdn Bhd  [2011] 9 MLJ 700, the
High Court cited with approval the article
by Prof. Vincent Powell-Smith on failure of
SO to grant EOT would set time at large as
follows: IN THIS PAGE
“(18)…I quote them below:
(a) Prof Vincent Powell-Smith,The Malaysian Q15. WHAT WOULD
BE THE
Standard Form of Building CONSEQUENCE IF
Contract(PAM/ISM 69): CONTRACTOR

Clause 23 provides for the Architect to grant SUCCESSFULLY

ESTABLISH THE
an Extension of  Time  on specified grounds TIME IS AT LARGE?
and an Extension of  Time  is grantable on
those grounds and no other. The Architect
has no inherent power to extend the period
for completion and in the absence of an
express provision such as Clause 23 he would
have no power to do so. Failure by the
Architect properly to exercise power to
extend time, where any delay to completion
is caused by the employer for those for
whom those for whom he is responsible in
law, relieves the Contractor from his
liability to pay or allow liquidated
damages (Doddd v Churton  [1897] 1 QB
562  ] and the  time  for completion becomes
'at large', i.e. the Contractor's obligation is
then to complete within a reasonable  time',
(at p 88).”
f. Hence, if the contractor PAGE 19

successfully established time is at

large, then the Employer would
fail in its LAD claim and the
contractor just has to complete its IN THIS PAGE
work scope within reasonable
Q15. WHAT WOULD BE
time.  THE CONSEQUENCE IF

q16. I have several construction CONTRACTOR

SUCCESSFULLY

contracts supplemented by different ESTABLISH THE TIME IS

AT LARGE?

PAM Conditions of Contract such as PAM

Contract 2006(With Quantities), PAM Q16. I HAVE SEVERAL

Contract 2006(Without Quantities), PAM CONSTRUCTION

CONTRACTS

Contract 2018(With Quantities) and PAM SUPPLEMENTED

DIFFERENT
BY
PAM
Contract 2018(Without Quantities), CONDITIONS OF
CONTRACT SUCH AS
which clause shall I rely on for EOT? PAM CONTRACT
2006(WITH

a. First of all, the PAM Contracts QUANTITIES), PAM

CONTRACT
stated above have identical extension 2006(WITHOUT
of time clause. QUANTITIES), PAM
CONTRACT 2018(WITH
QUANTITIES) AND PAM
i. You can rely on Clause 23.1 of the CONTRACT
PAM Contracts and take notes of the 2018(WITHOUT
QUANTITIES), WHICH
importance of giving notification and CLAUSE SHALL I RELY
particulars based on Clause 23.1(a) of ON FOR EOT?

PAM Contracts.
ii. What Clause 23.1(a) requires simply is PAGE 20

that notification of an intention to claim

EOT together with estimation of the
EOT required and particulars of the
MCO must be made within 28 days I N T H I S P A G E
from the commencement of the
relevant event.
               Q16. I HAVE SEVERAL

iii. The commencement of relevant CONSTRUCTION

CONTRACTS
event would be from the date of the SUPPLEMENTED BY
implementation of the MCO.  DIFFERENT PAM

            CONDITIONS OF
CONTRACT SUCH AS
iv. In this regard, since Covid-19 PAM CONTRACT
outbreak is declared as a global 2006(WITH
QUANTITIES), PAM
pandemic and shall be considered as CONTRACT
force majeure event under Clause 2006(WITHOUT
23.8(a) of the PAM Contracts, the QUANTITIES), PAM
CONTRACT 2018(WITH
Contractor can take advantage of such QUANTITIES) AND PAM
clause in its EOT application. CONTRACT
2018(WITHOUT
QUANTITIES), WHICH
b. Next, when the MCO is lifted, you are CLAUSE SHALL I RELY
again required under Clause23.1(b) of ON FOR EOT?

PAM Contracts to send in a Final Claim

for EOT to the Employer within 28 days
from when it is lifted. Make sure to
support your EOT application with
particulars as to how the MCO has
affected the progress of works.
 PAGE 21

q17. I have several other construction IN THIS PAGE

contracts supplemented by PWD forms Q17. I HAVE SEVERAL

of contract such as PWD OTHER CONSTRUCTION

CONTRACTS
Form203(Rev.1/2010) and PWD Form SUPPLEMENTED BY PWD
FORMS OF CONTRACT
203A(Rev.1/2010), can I apply for an EOT SUCH AS PWD
FORM203(REV.1/2010)
under these forms of contract? AND PWD FORM
203A(REV.1/2010),
CAN I APPLY FOR AN
a. While Clause 43.1 of PWD Form EOT UNDER THESE
FORMS OF CONTRACT?
203 & 203A(“PWD”) does provide the
procedure to apply EOT, it seems
that MCO and pandemic is not a
ground for extension of time as it
does not fall under the definition of
Force Majeure.
 
b. Although Clause 43.1(a) of PWD
provides that force majeure can be
an event to allow extension of time
and Clause 58 of PWD is the force
majeure clause itself, it does not
cater for MCO and pandemic under
“Event of Force Majeure” pursuant to
Clause 58.2.
c. It does however worth a shot at PAGE 22
Clause 43.1(i) of PWD which provides 
a ground for extension of time I N T H I S P A G E
following that “the Contractor’s
inability for reason beyond his control Q17. I HAVE SEVERAL
and which he could not reasonably OTHER CONSTRUCTION
CONTRACTS
foreseen at the date of closing of SUPPLEMENTED BY PWD
tender of this Contract to secure such FORMS OF CONTRACT
goods, materials and/or services as SUCH AS PWD
FORM203(REV.1/2010)
are essential to the proper carrying AND PWD FORM
out of the Works”. 203A(REV.1/2010),

  CAN I APPLY FOR AN

EOT UNDER THESE
d. Clause 43.1(i) of PWD would be the FORMS OF CONTRACT?
closest clause to be used as a ground
to seek for an extension of time.
Contractors may argue that MCO and
the pandemic have greatly prevented
the contractor from obtaining supplies
which is beyond their control and
definitely not reasonably
have foreseen.
 
e. Finally, make sure you apply within
a reasonable period of the MCO, give a
written notice to the Superintending
Officer with relevant information and
supporting documents pursuant to
Clause 43.1 of PWD Form of
Contract(203&203A).
q18. My construction contract is PAGE 23

supplemented by IEM Form of Contract

for Mechanical and Electrical
Engineering Works 1989, can I apply for IN THIS PAGE
extension of time in view of MCO? Q18.MY

a. Yes. You can rely on Clause 43 of CONSTRUCTION

CONTRACT IS
the IEM Contract 1989 and give SUPPLEMENTED BY
written notice of the causes of delay IEM FORM OF
CONTRACT FOR
to the Engineer. The grounds to be MECHANICAL AND
relied on is simply 43(a), 43(h) and ELECTRICAL

43(j) of the IEM Contract 1989 as ENGINEERING WORKS

1989, CAN I APPLY
follows: - FOR EXTENSION OF
43(a):  by Force Majeure; TIME IN VIEW OF

  … MCO?

43(h): by reason of any action due to local combination of

workmen, strike, or lockout affecting any of the trades
employed upon the Works, provided the same are not due
to any unreasonable act, neglect or default of the
Contractor or of any sub-contractor, nominated or
otherwise;
 …
  43(j): by the Contractor’s inability for reason beyond his
control and which he could not reasonably have foreseen
at the date of closing of tender of this Contract to secure
such goods and/or materials as are essential to the proper
carrying out of the Works.
b. Next, make sure you have in your PAGE 24

best endeavors try to mitigate the

delay. For example, the Ministry of IN THIS PAGE
International Trade and Industry has
on 10.4.2020 allows certain Q18.MY
CONSTRUCTION
construction project to resume CONTRACT IS
operation provided it has satisfied SUPPLEMENTED BY IEM

the requirements set out by MITI and FORM OF CONTRACT

FOR MECHANICAL AND
has made an application to resume ELECTRICAL
operation from 13.4.2020 onwards ENGINEERING WORKS

provided that such application is 1989, CAN I APPLY FOR

EXTENSION OF TIME IN
successful. VIEW OF MCO?

Q19. Is it true that I can only apply EOT

for the period mirroring MCO period Q19. IS IT TRUE THAT I
CAN ONLY APPLY EOT
FOR THE PERIOD
a. Not exactly. As we all know it will MIRRORING MCO
take time to remobilize work force PERIOD

and procuring materials since every

construction site will be re-operating
at the same time and will definitely
result in construction materials
shortage or delay.
 
b. As such, the extent of EOT
application would very much be fact
dependent.
Q20. Is Loss and Expense claimable by PAGE 25

Contractor to Employer due to MCO? IN THIS PAGE

a. The Contractor must first take note
that not all delaying events qualifies Q20. IS LOSS AND
for loss and expense claims. EXPENSE CLAIMABLE BY

  CONTRACTOR TO
EMPLOYER DUE TO
b. In PAM form of contract, the MCO?
Contractor’s entitlement to loss and
expense is governed by Clause 24 of
FOOTNOTES
PAM Contract.
  [16]http://www.kkr.gov.m
y/public/FAQ%20KEMEN
c. The grounds that give rise to Loss TERIAN%20KERJA%20RA
and Expense claim are provided in YA.pdf
Clause 24.3 of PAM Contract in which
it has to be either attributable to the
employer, architect or consultants.
Hence, it is clear that Clause 24.3 of
PAM Contract did not cater for loss
and expense due to delays by reason
of the MCO.

d. On the another hand, Ministry of

Work[16] clarifies on 18.3.2020 that
the Government will not be
responsible for any losses by reason
of MCO as it is an event that is
beyond the control of the
Government.
 PAGE 26

IN THIS PAGE
e. PWD Form of Contract and AIAC
standard Form has been consistent Q20. IS LOSS AND
EXPENSE CLAIMABLE BY
with Ministry of Works’ announcement
CONTRACTOR TO
where the contractor is not entitled to EMPLOYER DUE TO
claim for any loss and expenses arising MCO?

from force majeure in view of MCO.

 
Q21. WHAT SHOULD
f. It is therefore advisable for the THE CONTRACTORS DO
Contractors to be mindful of cost TO
ASCERTAIN WHETHER
control measures during the
LOSS AND EXPENSE IS
enforcement of the MCO. CLAIMABLE?

q21. What should the Contractors

do to ascertain whether Loss and
Expense is claimable?
a. No doubt that the Contractors must
review the Letter of Award, Letter of
Acceptance or any awarding letters to
review the contract clause ultimately
to determine if MCO give rise to the
extension of time or falls within the
definition of force majeure under the
contract.
 PAGE 27

IN THIS PAGE

b. It is advisable to look for any Q21. WHAT SHOULD

THE CONTRACTORS DO
clause in the awarding letters for TO
rights to claim for Loss and Expense ASCERTAIN WHETHER

in the event of force majeure. LOSS AND EXPENSE IS

CLAIMABLE?

c. Alternatively, the Contractors can

also try to discuss with
counterparty and/or project
consultants in relation to the impact
caused by MCO on performance of
contractual obligations and reach a
mutually benefiting solution
together pertaining to the Loss and
Expense.
 
d. Meantime, the Contractors must
be mindful to mitigate all losses and
expenses as it bears the burden of
proof to show that it has taken
reasonable steps to lessen the
effect of the force majeure event.
 PAGE 28

q22. There is a price fluctuation IN THIS PAGE

after MCO is lifted, who shall bear Q22. THERE IS A PRICE

FLUCTUATION AFTER
the cost? MCO IS LIFTED, WHO

a. It very much depends on SHALL BEAR THE COST?

respective construction contract

whether it contains a price
fluctuation clause. If the contract expressly stated that there
is no price adjustment due to price fluctuation, then the
contractor is not allowed to be reimbursed due to price
fluctuation.

b. Among the standard forms contract, it is observed that

PWD203A form of contract do have price fluctuation clause
provided if Special Provision to the Condition of Contract for
Fluctuation of Price is incorporated.