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2021 MarsdenLR 4204
HIGH COURT MALAYA KUALA LUMPUR
WAH LOON (M) SDN BHD – Appellant
Versus
CHINA CONSTRUCTION YANGTZE RIVER (M) SDN BHD – Respondent
[Originating Summons No: WA-24C-70-05/2021]
Adjudication decisions under CIPAA may only be set aside on strict grounds; minor procedural errors do not undermine substantial justice.
Headnote:(A) Construction Industry Payment and Adjudication Act 2012 – Sections 5, 8, 15, 26, and 28 – Adjudication decision enforcement and setting aside applications – Disputes arose from payment claims under a sub-contract. The adjudicator ruled in favour of the claimant, allowing some claims and dismissing others. The respondent attempted to set aside the decision on grounds of jurisdiction and natural justice but failed to establish their claims. (Paras 17, 34, 48)
(B) Natural Justice – The Court found no procedural unfairness and acknowledged the adjudicator’s authority to make decisions under CIPAA despite disputes over procedural regularity. (Paras 36, 39)
Facts of the case: The case involves two private companies engaged in a construction project, where disputes over a sub-contract payment led to adjudication proceedings under CIPAA. WL made a payment claim which CCYR disputed, leading to a series of applications to enforce and set aside adjudicator decisions. (Paragraphs 10-12)
Findings of Court: The Court held that CCYR’s claims for setting aside the adjudicator's decision due to lack of jurisdiction and breach of natural justice were unmeritorious, upholding the adjudication decision. (Paragraphs 34, 48)
Issues: The key issues were whether CCYR could set aside the adjudicator's decision based on alleged jurisdictional defects and whether natural justice was denied. (Paras 17, 36)
Ratio Decidendi: The Court emphasized the limited review role of the courts in adjudication disputes and reaffirmed that minor procedural shortcomings do not invalidate adjudication decisions under CIPAA, as they are aimed at quick resolution in construction disputes. (Paras 28, 39)
Result: OS 1 allowed with costs; OS 2 dismissed with costs.
JUDGMENT
Introduction
[1] These are cross applications to set aside as well as to enforce an adjudication decision made pursuant to the Construction Industry Payment and Adjudication Act 2012 ("CIPAA").
[2] The Plaintiff in Originating Summons No WA-24C-70-05/2021 ("OS 1") and the Defendant in Originating Summons No WA-24C-161-09/2021 ("OS 2") is a private limited company involved in the construction business.
[3] The Defendant in OS 1 and the Plaintiff in OS 2 is also a private limited company involved in the construction business.
[4] For ease of referencing, the parties will be described as WL and CCYR respectively.
Background And Preliminary
[5] Agile PJD Development Sdn Bhd appointed CCYR as the main contractor to construct and complete known as 'The Superstructure for the Cadangan Pembangunan Kondominium (813 unit) yang mengandungi:
(A) 5 blok Pangsapuri 8 tingkat (Blok A, B, C, D dan E) (71 unit);
(B) 2 blok Pangsapuri 18 tingkat (Blok F dan G) (70 unit) dan 1 tingkat kemudahan;
(C) 2 blok Pangsapuri 44 tingkat (Blok H dan K) (342 unit) dan 1 tingkat kemudahan;
(D) 2 blok Pangsapuri 44 tingkat (Blok I dan J) (330 unit) dan 1 tingkat kemudahan;
(E) 3 tingkat Bawah Rendah Tempat Letak Kereta
Di atas Lot 67756 (Lot PT 15230, Jalan Duta Hartamas, Mukim Baru, Bandaraya Kuala Lumpur, Wilayah Persekutuan.' ("Project").
[6] Consequently by a nominated sub-contract dated 19 May 2017 ("Sub-Contract"), CCYR in turn appointed WL to carry out and complete the supply, delivery, installation, testing, commissioning and handling of the electrical services work of the Project.
[7] By reason of payment disputes that have arisen between the parties in respect of progress claims no 36 and 37 made pursuant to the Sub-Contract, WL on 21 August 2020 issued its payment claim against CCYR under s 5 of the CIPAA.
[8] Since there was no favourable outcome, WL thereafter on 8 September 2020 issued its notice of adjudication against CCYR and the Asian International Arbitration Centre appointed Mr Chong Joo Tian as the adjudicator ("Adjudicator").
[9] After having received the adjudication claim, adjudication response and adjudication reply ("Adjudication") and submissions of the parties, the Adjudicator on 8 March 2021 (and corrected on 11 March 2021) decided and ordered as follows ("Decision"):
(200) Based on the reasons and findings made by me as stated above, I hereby DECIDE that the claims made by the claimant in the Payment Claim against the respondent (to the extent which I have decided above) shall be and is hereby allowed with costs.
(201) In the circumstances, I hereby DECLARE, FIND AND HOLD as follows:
i) that I have the jurisdiction to determine this dispute between the parties;
ii) that the claimant's claim for the aggregate amount under IPC Nos 36 and 37 to the extent and in the sum of RM496,712.93 shall be and is hereby allowed;
iii) that the respondent's claim for LAD in the sum of RM572,552.55 shall be and is hereby dismissed;
iv) that the respondent's claim for loss and expense to the extent and in the sum of RM54,500.00 shall be and is hereby allowed;
v) that the respondent's claim for the retention sum to the extent and in the sum of RM49,671.29 shall be and is hereby allowed;
vi) that the respondent has the right to set off the said sums if RM54,500.00 and RM49,671.29 against the sum of RM496,712.93
vii) that the net amount due and payable by the respondent to the claimant shall be the sum of RM392,541.64; and
viii) that the claimant shall be entitled to the costs of these proceedings in the sum of RM65,349.75.
ADJUDICATOR'S ORDER
(202) In consequence thereof, I hereby ORDERED as follows:
i) that the respondent bears and pays to the claimant the Adjudicated Amount of RM392,541.64 within fourteen (14) days from the date of receipt of this Adjudication Decision by the respondent;
ii) that the respondent bears and pays to the claimant the costs of these Adjudication proceedings (including the legal costs) in the sum of RM65,349.75 within fourtee
