The burden of proof for fraud lies with the claimant, and procedural fairness must be ensured in adjudication proceedings, affirming the validity of the adjudicator's decision.

JUDGMENT

(2 Originating Summonses)

Sumathi Murugiah JC:

A. Introduction

[1] In April 2023, Tera Va Sdn Bhd (TV) had commenced Adjudication Proceedings pursuant to the Construction Industry Payment and Adjudication Act 2012 (CIPAA 2012) against the Ayam Bintang Sdn Bhd (AB) to claim a sum of RM294,750.00 being the unpaid sum arising from the completion of Phase 1 works based on a construction contract made between them. The Adjudicator decided in favour of the Defendant in her Adjudication Decision (AD).

[2] As a result of the AD, the followings were filed by the parties:

(i) OS No BA-24C-55-08/2023 (Enforcement OS) was filed by AB for a court order to enforce the AD pursuant to s 28 of CIPAA 2012; and

(ii) OS No BA-24C-60-08/2023 (Setting Aside OS) was filed by TV to set aside the AD.

[3] Since there are 2 OSs filed in relation to this AD, the parties agreed to having both the OSs heard together and for the decision to be delivered together. For ease of reference the parties will be referred to henceforth with the acronym of TV and AB respectively.

B. Brief Background

[4] TV was appointed by AB to install a Solar Photovoltaic (PV) Solution ("SPS") at its premise located at Kuantan, Pahang ("the Premise") with 278.10 KWp for a total contract sum of RM613,000.00 to generate electricity using solar energy.

[5] The performance of the contract between the parties were to be carried out in 2 phases:

i. Phase 1 - 168.3 KWp for RM393,000.00 whereby 25% of the sum shall be paid upon AB submitting its application to the Malaysia Investment Development Authority (MIDA and the remaining 75% of the sum upon testing and commissioning of Phase 1; and

ii. Phase 2 - 109.89 KWp for RM220,000.00.

[6] TV completed Phase 1 works and had accordingly issued a final report on 30 September 2021 together with an invoice dated 30 September 2021 for the agreed balance of 75% of RM393,000.00 amounting to RM294,750.00 to AB. However, AB did not pay TV the invoiced sum and had further not continued with the construction of Phase 2.

C. Adjudication Proceedings

[7] On 16 December 2022, TV issued a Payment Claim to AB for the unpaid sum of RM294,750.00 and a Payment Response dated 30 December 2022 was issued by AB rejecting the Payment Claim on the basis that TV had failed to observe and perform its contractual obligations and duties.

[8] In its Payment Response, AB had also made a cross claim, deductions and/or set-off for a sum of RM302,580.00 against the claim made by TV in the Payment Claim.

[9] Due to non-payment by AB, TV commenced adjudication proceedings. An Adjudication Claim dated 28 April 2023 by TV was issued to AB. An Adjudication Response dated 12 May 2023 was issued by AB and the same was replied by TV via its Adjudication Reply dated 22 May 2023.

[10] Upon conclusion of the adjudication proceedings, the Adjudicator, Loo Yee Mei had delivered her decision via her AD dated 6 June 2023 as follows:

i. TV shall pay AB a sum of RM7,830.00;

ii. TV shall bear all the costs of the adjudication proceedings amounting to RM13,326.26; and

iii. TV shall pay AB for Costs of Reference amounting to RM28,000.00.

[11] The parties agreed for this court to hear both the OSs together and a decision was delivered accordingly.

[12] Being dissatisfied with the decision, a Notice of Appeal has been filed by TV.

D. Object CIPAA 2012

[13] CIPAA 2012 is a creature of the legislation intended to facilitate speedy and regular payments in the construction industry. As cash flow is the utmost important factor in the construction industry, CIPAA provides interim measures to disputing parties to solve payment issues expeditiously so as not to jeopardise the continuance of the construction contract entered into by them. (see Martego Sdn Bhd v. Arkitek Meor & Chew Sdn Bhd And Another Appeal; [2020] 6 MLJ 224; [2019] 8 CLJ 433; [2019] 5 AMR 516 FC; Bertam Development Sdn Bhd v. R&C Cergas Teguh Sdn Bhd; [2017] 8 AMR 466;)

E. Issues

[14] TV's application to set aside the AD pursuant to s 15 of CIPAA 2012 is