Adjudication decisions under CIPAA are provisional; errors do not lead to jurisdictional excess unless fundamental breaches occur. Validity sustains unless a significant jurisdictional error is proven.

JUDGMENT

Wong Kian Kheong J:

Background

[1] This judgment concerns the following two originating summonses (OS):

(1) Alpha Galaxy Sdn Bhd (Alpha) has filed OS no. BA-24C-4-01/2020 (Alpha's OS) against Euro Destar (M) Sdn Bhd (Euro). Alpha's OS was subsequently amended with leave of court and prayed for the following orders:-

(a) an order to set aside an adjudication decision made on 3 January 2020 (AD) by an adjudicator, Mr Jong Chien Hui (Adjudicator), in favour of Euro against Alpha (Alpha's Setting Aside Application); or

(b) if Alpha's Setting Aside Application is dismissed, an order to stay the execution of the AD pending the disposal of Shah Alam Civil Suit No. BA-22C-44-10/2020 (Alpha's Suit) filed by Alpha against Euro (Alpha's Stay Application); and (2) Euro has filed OS no. BA-24C-14-02/2020 for leave of court to enforce the AD against Alpha (Euro's Enforcement Application).

[2] By way of a "Letter of Award" dated 28 September 2017 (LA), Alpha appointed Euro to carry out construction work (Works) of a warehouse in Puncak Alam, Kuala Selangor (Project). Euro had accepted the LA on 4 October 2017. The"Terms and Conditions" of the LA provided as follows, among others:

"1.8 The given quantities are PROVISIONAL and payment will be made based on site measurement and/or as per built drawings of actual work executed. [Clause 1.8]

...

7.0 Payment Terms

7.1 Progress payment shall be made within 30 working days from the invoicing date. Invoice can be submitted every month or 10% of completion of works whichever is later. [Clause 7.1]"

[Emphasis Added]

[3] The Project was not completed by Euro because Alpha had terminated Euro's appointment (Termination).

[4] Subsequent to the Termination, Euro claimed that Alpha had yet to pay a sum of RM898,408.44 (plus 6%"GST") to Euro for the Works (Euro's Claimed Sum). Euro's Claimed Sum was based on Euro's "Progress Claim No. 4 (Final)" dated 14 May 2018 (Euro's PC no. 4). Euro's Claimed Sum was supported by "Progress Payment No. 4" (QS's Certificate no. 4) which had been certified by the Project's Quantity Surveyor, Aziz, Azizi & Partners Sdn Bhd (QS). QS's Certificate no. 4 was premised on a valuation of the Works conducted on 2 June 2018.

[5] Adjudication proceedings were commenced by Euro against Alpha based on Euro's Claimed Sum (Adjudication). At the Adjudication:-

(1) Alpha's "Adjudication Response" alleged that Euro had breached the LA which had caused loss to Alpha in a sum of RM7,867,212.74 (Alpha's Cross-Claim); and (2) the Adjudicator delivered the AD as follows, among others:-

(a) Alpha's Cross-Claim was dismissed;

(b) Alpha shall pay RM843,593.58 to Euro (Adjudicated Amount);

(c) interest on the Adjudicated Amount shall be paid by Alpha to Euro as stipulated in the AD; and

(d) Alpha shall borne all the costs of Adjudication, costs of the Adjudicator and all other fees as specified in the AD (Adjudication Costs).

Approach

[6] As explained in Otis Elevator Company (M) Sdn Bhd v. Castmet Sdn Bhd, I adopt the following approach in deciding these 2 OS:

(1) Alpha's Setting Aside Application will be determined first. If the AD is set aside by the court:-

(a) Alpha's Stay Application will be rendered academic; and

(b) Euro's Enforcement Application should be refused;

(2) if I dismiss Alpha's Setting Aside Application, the court will then decide Alpha's Stay Application. If Alpha's Stay Application is allowed, Euro's Enforcement Application should be dismissed; and (3) if Alpha's Stay Application is refused, this court will then proceed to determine Euro's Enforcement Application.

Issues

[7] The following questions arise in these 2 OS:

(1) with regard to Alpha's Setting Aside Application:-

(a) did the Adjudicator commit an error of law in deciding that Clause 7.1 was a "conditional payment provision" which was invalid under s 35 of the Construction Industry Payment and Adjudication Act 2012 (CIPAA)?;

(b) if the answer to the issue in sub-paragraph (a) is in the affirmative:-

(i) whether the Adjudicator had exceeded