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2021 MarsdenLR 2597
HIGH COURT MALAYA KUALA LUMPUR
ASM DEVELOPMENT (KL) SDN BHD – Appellant
Versus
ECONPILE (M) SDN BHD – Respondent
[Originating Summons No: WA-24C-252-11/2019]
The court emphasized that an applicant for a stay must demonstrate clear errors or substantial injustice, not merely argue against the merits previously adjudicated.
Headnote:(A) Construction Industry Payment and Adjudication Act 2012 – Section 16 – Stay of adjudication decision – Application dismissed as the appellant failed to identify clear and unequivocal errors in the adjudicator's decision. The appellant's claims were largely grounded in matters already ruled upon in previous applications. The adjudicated amount was found to be recoverable given the financial health of the respondent. (Paras 30, 32-35, 39, 44-46)
Facts of the case: The appellant sought a stay of an adjudication decision awarding a significant payment to the respondent, citing alleged errors in the adjudicator's assessment and pending arbitration claims against the respondent.
Findings of Court: The court found no clear error justifying the stay and that the respondent's financial position was robust enough to ensure recoverability of payments.
Issues: Principal issue was whether the alleged errors warranted a judicial stay of the adjudication decision.
Ratio Decidendi: The court affirmed that merely asserting errors does not meet the threshold for a stay under section 16 of CIPAA; substantive evidence of actual injustice must be demonstrated.
Result: Application disallowed.
JUDGMENT
Introduction
[1] This is an application to stay the adjudication decision made under the Construction Industry Payment and Adjudication Act 2012 ("CIPAA") in consequence to my setting aside and enforcement decisions reported in ASM Development (KL) Sdn Bhd v. Econpile (M) Sdn Bhd (and Another Appeal), [2021] 8 MLJ 99 ("Previous Decision").
[2] The Plaintiff is a private limited company involved in property development business.
[3] The Defendant is also a private limited company involved in bored piling and foundation work business.
[4] For easy of reference, the parties will hereinafter be addressed as ASM and EP respectively.
Background And Preliminary
[5] By a letter of award dated 26 September 2016 ("Contract"), ASM appointed EP as the contractor to carry out the Work Package 1: Diaphragm Wall, Contiguous Bored Pile, Earthworks, Piling Works and Basement Structure Works (Basement 2 to LG 1) for the project known as "Cadangan Pembangunan Bercampur 69 Tingkat Yang Mengandungi 7 Blok Pangsapuri Servis (4214 unit) Di Atas Lot 36190, Mukim Petaling, Kuala Lumpur" ("Works")
[6] The Contract incorporated the PAM Conditions of Contract 2006 Edition (With Quantities) ("PAM Conditions") as amended by ASM. The superintending officer ("SO") responsible for the administration of the Contract is the executive director of ASM.
[7] The date of commencement and completion date of the Works stipulated in the Contract are 8 October 2016 and 7 January 2018 respectively.
[8] Since commencement of the carrying out of the Works, EP encountered difficulties and the completion date was extended to 7 April 2018.
[9] However, the Works were not completed by the extended completion date stipulated in the Contract. The parties therefore negotiated on the further revision of the completion date of the Works which included having revised completion dates on stage or sectional basis for parts of the Works. There seem to be no mutually acceptable agreement achieved between the parties.
[10] As the result, ASM's architect in early 2019 retrospectively issued a certificate of non-completion dated 7 April 2018 which entitled ASM to deduct or recover liquidated and ascertained damages ("LAD") for late completion from EP.
[11] EP submitted 27 progress payment claims since the commencement of the Works. Notwithstanding that interim payment certificates have to be issued monthly under the Contract, the SO only issued 15 interim payment certificates. The certification of the rest of the progress payment claims was withheld.
[12] As the result, EP consequently issued to ASM its notice of default dated 25 February 2019 pursuant to clause 26 of the PAM Conditions and EP thereafter by letter dated 13 March 2019 determined its employment under the Contract accordingly.
[13] By a letter dated 28 March 2019, ASM disputed EP's determination of its employment under the Contract.
[14] In consequence, EP separately commenced adjudication proceedings against ASM for its progress payment claims no 16 to 24 and progress payment claims no 25 and 26.
[15] The subject matter of the Previous Decisions relate to EP's adjudication of progress payment claims no 25 and 26 ("Adjudication").
[16] At the request of EP, the director of the Asian International Arbitration Centre appointed Ar. Menaha Ramanath as the adjudicator to conduct the Adjudication ("Adjudicator").
[17] The Adjudicator on 17 September 2019 issued her adjudication decision ("Decision"). In her Decision, she awarded the sum of RM6,039,324.99 together with interest and costs to EP.
[18] Since ASM did not honour the Decision as awarded, EP instituted its enforcement application on 9 October 2019.
[19] ASM retaliated with its setting aside application on 27 November 2019. In addition ASM also on the same day filed its application to stay the Decision ("Application")
[20] During case management, the parties agree that I defer hearing the Application till after the disposal of the parties' respective setting aside and e
