The discretionary power under s 16 of CIPAA must be exercised to uphold the statutory aim of expediting payments in the construction industry, preventing stays that hinder the adjudication process.

[1] This is an application to stay the Adjudication Decision made on 12^th December 2014 by the Adjudicator under the Construction Industry Payment Adjudication Act 2012 (CIPAA). The application is made under s 16 of CIPAA.

Background facts

[2] The applicant is the main contractor for the project known as "The Proposed Tourist Recreational and Commercial Development (Phase II-KK Times Square)". On 5^th October 2011, the applicant awarded the 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" to the respondent. The respondent filed an Adjudication Claim on 26^th September 2014 under s 9 of CIPAA for work done as at 6^th June 2014. The Adjudicator granted the claim and awarded RM4,187,840.90 inclusive of expenses and costs in favour of the respondent.

Stay Application

[3] Section 16 of CIPAA under which this application is made reads as follows:

16. Stay of adjudication decision

(1) A party may apply to the High Court for a stay of an adjudication decision in the following circumstances:

(a) an application to set aside the adjudication decision under section 15 has been made; or

(b) the subject matter of the adjudication decision is pending final determination by arbitration or the Court.

(2) The High Court may grant a stay of the adjudication decision or order the adjudicated amount or part of it to be deposited with the Director of the KLRCA or make any other order as it thinks fit.

[4] The applicant has made this application under s 16 (1)(b), ie on the ground that the subject matter of the Adjudication Decision is pending final decision by arbitration or the Court. Counsel for applicant submitted that the Court ought to grant a stay because there is a pending counterclaim by the applicant against the respondent in Suit No BKI 22-NCVC-63/8-2014 in the sum of RM13,544,690.45. In the affidavit in support, the senior manager of the applicant said that based on final certification by the applicant, the respondent has been overpaid in the sum of RM13,544,590.45. In Suit No BKI 22-NCVC-63/8-2014, the respondent is the plaintiff. The respondent's claim in the above mentioned suit is for the return of scaffolding at the worksite that the applicant prevented them from removing. The case of the respondent was that although the scaffolding was purchased by the applicant, the respondent had fully paid for it by way of contra payments due to them. The applicant responded by pleading in the Defence and Counterclaim that a much larger sum, ie RM13,544,590.45 was due to them in the final draft certificate because of overpayment. The final draft certificate was issued on 3^rd September 2014. The draft final certificate is disputed by the respondent on the ground that there was no final joint Inspection.

Whether Stay Ought To Be Granted?

[5] Counsel for the applicant and respondent have cited oft quoted cases relating to stay of execution applications. In my opinion, an application for stay of an Adjudication Decision under s 16 of CIPAA is sui generis. It must be considered against the scheme and purpose of CIPAA. The discretion under s 16 must not be exercised in the same manner as ordinary applications for stay of execution or stay of proceedings as it may defeat the objective of Parliament in promulgating CIPAA in the first place. The basic aim of CIPAA is to provide a statutory adjudication mechanism whereby a disputed interim certificate is speedily settled by the CIPAA Adjudicator. An enlightening discussion on the purpose and background of CIPAA is found in the judgment of Mary Lim Thiam Suan J in the case of UDA Holdings Bhd v. Bisraya Construction Sdn Bhd & Anor, [2015] 5 CLJ 527. Under the CIPPA regime, sub-contractors need not wait until final certification or long drawn out arbitration heari