Construction Industry Payment & Adjudication Act (CIPAA) Malaysia

OUR CIPAA ADJUDICATION EXPERIENCE

We are at the forefront of advising clients on pursuing construction contract payment disputes via CIPAA adjudication since its enforcement on 15 April 2014. We assisted our client to submit and register CIPAA Adjudication Case No.001 and 002 with the KLRCA (as it was then) in July 2014. To date we have assisted clients in over 300 cases for a range of payment disputes including:

claim for payment for an oil & gas equipment supply contract, where the site is defined as an FPSO vessel in Sarawak;
defence of a claim for construction of transmission towers where the claim is based on a collateral contract;
defence of a claim for variation works for a highrise office development pursuant to the PAM 2006 contract;
defence of a claim from Nominated Sub-Contractor against the Main Contractor for retention sums held by the Employer post-determination;
claim for penultimate payment certificate and variation works for a condominium construction project, including a defence to the employer’s counter claim of liquidated damages by way of detailed delay analysis justifying the contractor’s extension of time claims;
claim for final certificate, variation works and loss and expense against a Government entity for a road improvement works project under PWD design and build contract terms;
claim for final account under a PAM 2006 contract where the terms of contract provided for bespoke incentive payments provisions for timely completion of works, and defence against a counterclaim of latent defects;
defence of payment claims relating to a prestigious 5 star hotel development where the claims were not part of payment for work done under an express term of the construction contract pursuant to section 4 of CIPAA;
claim for variation works for a factory construction project under bespoke contract terms utilising the default provisions pursuant to section 36 of CIPAA in the absence of applicable terms in the contract;
claim for milestone payment for a bio-mass power plant construction project where the employer is a foreign entity who had assigned his payment obligation to another foreign entity;

defence to counterclaims for numerous cases where the respondent had failed to serve a valid payment response pursuant to section 6 of CIPAA;
claim for progress payments where the architect had failed to issue interim payment certificates under a PAM 2006 contract, after the contractor had terminated his employment due to non-payment;
defence of payment claim for a marine piled break water with set-off and counterclaim where the claimant had caused significant defects to the works;
acted for the non-paying party, submitted notice of adjudication for claims of over-payment and liquidated damages for three commercial building contracts, against the unpaid party’s CIPAA payment claims;
acted for a Nominated Sub-Contractor (NSC) under the PAM 2006 Conditions of Contract for claims against the Main Contractor in relation to non-certification and non-payment of certified sums;
defence of payment claim relating to disputed variations, liquidated damages and loss and expense for construction works for a high end office development under the PAM 2006 Conditions of Contract;
defence of payment claim relating to a highway construction project where subsequent payment certifications had resulted in overpayment for the works; an
claim for interim payments on five consecutive progress claims against the main contractor on a sewerage piping project, including claims filed post-termination of the sub-contractor concerned during concurrent arbitration proceedings; and
Six concurrent adjudications against the Employer of an education facility project where the Employer had placed multiple contracts with the same Contractor.

Court Decisions
A number of adjudication cases where we have provided our services were subsequently referred to the courts on jurisdictional challenge, set aside and/or stay applications, resulting in landmark decisions from the courts reinforcing the application of CIPAA as a speedy, interim and relatively affordable means of resolving construction payment disputes in Malaysia. See:

UDA Holdings Bhd v Bisraya Construction Sdn Bhd & MRCB Engineering Sdn Bhd [2015] AMEJ 27 on the retrospective applicability of CIPAA to all construction contracts and payment disputes.

Dinamik Maju Corporation Sdn Bhd v Indacon Sdn Bhd [2015] Shah Alam High Court Suit No.24-303-03/2015, on the dismissal of the Plaintiff’s application to strike out and/or set aside the CIPAA proceedings on the grounds of non-applicability and/or lack of jurisdiction.

WRP Asia Pacific Sdn Bhd v Bluescope Lysaght (Malaysia) Sdn Bhd [2015] AMEJ 1747 on the setting aside of the adjudicator’s decision for excess of jurisdiction.

MIR Valve Sdn Bhd v TH Heavy Engineering Berhad [2017] AMEJ 0538 on the applicability of CIPAA 2012 for payment disputes in relation to construction work performed on a FPSO vessel.

SKS Pavillion Sdn Bhd v Tasoon Injection Pile Sdn Bhd [2018] 5 AMR 889 on the adjudicator’s jurisdiction to determine a final account claim, loss & expense claim and extention of time.

MRCB Builders Sdn Bhd v Southern Builders (J) Sdn Bhd [2018] AMEJ 169 where the Court of Appeal affirmed the powers of the adjudicator to review under-certification of payment, and the consequence of an unclear Liquidated Damages provision has on the Respondent’s ability to counterclaim in adjudication.

Desaru Peace Holdings Club Sdn Bhd v Malaysian Resources Corporation Berhad [2019] 5 AMR 621 on the setting aside of the adjudicator’s decision for a breach of natural justice.

Indacon Sdn Bhd v DMC Development Sdn Bhd [2019] AMEJ 1054 on the settlement of the adjudication decision by means of a Court Consent Order.

Genbina Sdn Bhd v Bina Puri Construction Sdn Bhd [2019] AMEJ 1607 on the right of the Receiver & Manager of the Claimant to commence adjudication proceedings.

Cabnet Systems (M) Sdn Bhd v Dekad Kaliber Sdn Bhd & Anor [2020] 3 AMR 257 on the application of s.30 of CIPAA 2012 against the principal where the Respondent had been wound up under the Companies Act 2016.

MRCB Builders Sdn Bhd v Wazam Ventures Sdn Bhd and another case [2020] MLJU 208 on whether the Adjudicator had breached the rule of natural justice by not allowing the Respondent to file a Rejoinder after the Adjudication Reply.

Borneo Highway PDP Sdn Bhd v Intan Marudu Sdn Bhd [2020] AMEJ 0308 on the extent the adjudicator is required to provide his reasoning in arriving at his decision.

Jetson Construction Sdn Bhd v Skyscape Industries Sdn Bhd [2020] AMEJ 0848 on the Court’s powers to set aside the adjudication decision where it is arguable the adjudicator had wrongly answered the issue.

PJ Midtown Development Sdn Bhd v Pembinaan Mitrajaya Sdn Bhd [2020] MLJU 1432 on the lack of a hearing as a ground for breach of natural justice and whether the adjudicator is in excess of jurisdiction when dealing with the question of extension of time.

MRCB Builders Sdn Bhd v SMM Resources Sdn Bhd and another case [2021] MLJU 1455 on the validity of an Adjudication Decision delivered beyond 45 working days as prescribed under Section 12(3) of CIPAA 2012

Otis Elevator Company (M) Sdn Bhd v Desaru Convention Centre Sdn Bhd and other cases [2023] MLJU 917 on whether a settlement agreement between the employer & main contractor on a previous adjudication will bar the sub-contractor from enforcing an Adjudication Decision against the employer via Section 30 of CIPAA 2012

Progress Centre Engineering Sdn Bhd v Desaru Corniche Hotel Sdn Bhd & Anor [2023] MLJU 896 on the enforcement of Section 30 of CIPAA 2012 against the “principal” where the successful unpaid party is a sub-subcontractor four-tier below the employer.

Further information on CIPAA adjudication and the adjudication process are available from the Asia International Arbitration Centre. Please visit http://aiac.world for latest updates and amendments.

USEFUL CONTACT:
Asia International Arbitration Centre
(Adjudication Authority)
Jalan Sultan Hishamuddin, Kampung Attap
50000 Kuala Lumpur, Malaysia
Tel: +603 2271 1000
Fax: +603 2271 1010
Website: aiac.world
Email: adjudication@aiac.world