The adjudicator's jurisdiction under CIPAA is limited to claims raised through proper payment responses, and failure to respond precludes counterclaims.

[1] This is an application under s 15 of the Construction Industry Payment And Adjudication Act 2012 (CIPAA) to set aside the decision of the adjudicator.

Background Facts

[2] The applicant is the main contractor of a project known as "The Proposed Tourist Recreational and Commercial Development (Phase II-KK Times Square)". The respondent was engaged by the applicant to perform sub-contract works known as "RC Structural Work to Shopping Mall, Shops and Elevated Car Park, part of Basement Level and Balance of Basement Work". The sub-contract works were originally awarded to Hing Nyit Enterprise by a letter of award dated 5 October 2011 for the contract price of RM60,411,702.78. Subsequently, the respondent (Hing Nyit Enterprise Sdn Bhd) took over the sub-contract works. The applicant was notified by letter dated 3 October 2012.

[3] By middle of 2014, a dispute arose between the parties over interim payment claims. The respondent issued a notice of dispute under cl. 36.1 of the general conditions of contract on 10 July 2014. On 17 July 2014, the respondent served a payment claim. There was no reply from the applicant and on 17 July 2014, the respondent served a "payment claim" under s 5 of CIPAA. Under s 6(2), a non-paying party that disputes a payment claim is required to file a "payment response" stating the amount disputed and the reason for the dispute. However, the applicant did not file a payment response. Thus, under s 6(4), the entire amount is deemed disputed. On 5 August 2014, the respondent served a notice of adjudication under s 8. On 19 August 2014, at the request of the respondent, the Kuala Lumpur Regional Centre for Arbitration appointed Mr Ramdas Tikamdas as the adjudicator. Pursuant to s 9, after the acceptance of appointment by the adjudicator, the respondent served an adjudication claim on the applicant on 26 September 2014. The respondent served the amended adjudication claim on 7 October 2014. In their claim, the respondent claim a sum of RM4,370,000 for work done up to 6 June 2014. The respondent claimed payment on Interim Claims No. 29, 30, 31, 32 and the penultimate claim due from February 2014 to June 2014. The respondent also claimed other payments due from the applicant, ie RM125,185.79 being the amount double charged by the respondent for materials supplied by the applicant, RM46,249.78 for refund of administration fee for unused material returned by the respondent to the applicant and RM122,213.01 for the amount wages for daily workers. The last item was incurred because of a request by the applicant for more daily workers after an overhead crane broke down. However, the respondent gave a credit of RM714,205.18 for materials supplied by the respondent and thus reduced their claim to RM3,949,443.40.

[4] Although, the applicant did not file a payment response, they filed an adjudication response on 20 October 2014. The applicant stated in the adjudication response that the interim amounts claimed by the respondent in the Interim Claims No. 29, 30, 31 and 32 are subject to a final certificate and that the interim claims maybe adjusted. The applicant stated that in preparing Interim Certificate No. 28, they discovered a gross miscalculation in respect of quantities of building materials used and that this was brought to the attention of the respondent. The applicant also stated that they brought to the respondents notice the fact of alleged overpayment in verbal communication and emails. Thus the applicant disputed the respondents claim of RM4,370,000 for Interim Claim