Timely payment of adjudication fees and compliance with CIPAA terms are crucial for the validity of adjudicators' decisions in construction disputes.

[1] As is not uncommon, an application by a successful claimant in an Adjudication Decision to enforce the decision would be met by the unsuccessful respondent applying to set aside the Adjudication Decision. Such was the case here where the respondent raised some interesting grounds in setting aside the Adjudication Decision made under the Construction Industry Payment and Adjudication Act 2012 ("CIPAA"). It was argued that the Adjudicator was late by 3 days in making his Adjudication Decision and as such the whole Decision is void. It does not matter that the payment for the Goods and Services Tax ("GST") came on the last day set for the making of the Adjudication Decision for the respondent contended that the Adjudicator had no authority to withhold the release of the Decision on account of the GST of the Kuala Lumpur Regional Centre for Arbitration ("KLRCA") not having been paid before the Decision was made.

[2] An equally interesting challenge to the Adjudication Decision was that the contract having been terminated by the respondent, it shall not be bound to make further payment to the claimant until a final account is determined upon completion of the works. It was initially argued as a jurisdictional point but later its learned counsel was prepared to merely contend that as there was no cause of action that had arisen on the payment claim in question, the Adjudicator should have dismissed the payment claim.

[3] There was also the submission made that there was a breach of natural justice when the Adjudicator granted interest when there was no submission made on it by the parties though the claimant had claimed for it.

Problem

[4] On 20 May 2015, the claimant served a Payment Claim on the respondent for a sum of RM4,035,381.87 in accordance with s 5 of CIPAA. The claimant claimed for the unpaid works done under the Letter of Award dated 8 October 2014 incorporating scope of works and conditions of appointment and in accordance with s 36(4) CIPAA.

[5] The breakdown is as follows:

(a) Payment Certificate No 5 R1 dated 24 March 2015 amounting to RM1,805,866.65

Payment Certificate No 5 R1 dated 24 March 2015 was issued to claimant by Architect for works done with the amount of RM1,805,866.65. The due date for the payment of certified amount purported was 23 April 2015. The claimant alleged that they had not received any payment for the certified amount pursuant to Item 5 of the Letter of Award and/or s 36(4) CIPA Act 2012. The Interim Certificate No 5 R1 was issued for works done comprising of general conditions and preliminaries, bored piles, pile caps and column stumps construction works.

(b) Progress Claim No 6 dated 31 March 2015 amounting to RM2,229,515.22

Progress Claim No 6 dated 31 March 2015 was submitted by claimant for works done to Architect with the amount of RM2,229,515.22. The due date for the payment of progress claim was to be 30 April 2015. However, the claimant alleged that they have not received any payment for the claimed amount pursuant to Item 5 of the Letter of Award and/or s 36(4) CIPAA. The Progress Claim No 6 was prepared for the same nature of works done.

[6] Pursuant to s 6 CIPAA, the respondent submitted their Payment Response dated 25 May 2015, refuting the Payment Claims. With respect to Payment Claim No 5 R1 the respondent reasoned that as the claimants employment had been terminated by the Architect in accordance with Clause 25.0 of PAM Building Contract 2006 vide their letter dated 17 April 2015, pursuant to Clause 25.4(d), the respondent is not bound to make any further payment