An Adjudication Decision is binding but is subject to disputes and does not equate to a court judgment, allowing for injunctions in winding-up proceedings.

Introduction

[1] The plaintiff filed an originating summons for a Fortuna Injunction, to restrain the defendant from presenting a winding-up petition against the plaintiff, until the disposal of pending proceedings.

[2] After hearing submissions of counsel, I allowed the originating summons. These are the grounds of my decision.

Background Facts

[3] The dispute giving rise to the present action originated from a construction contract entered into between the plaintiff as an employer and the defendant as a contractor. The construction contract involves works on the plaintiff's hotel.

[4] Disputes arose between the parties, and in 2019, the defendant commenced an adjudication claim against the plaintiff ("Adjudication") pursuant to the Construction Industry Payment and Adjudication Act 2012 ("CIPAA"). A decision was delivered in favour of the defendant ("Adjudication Decision"), for the sum of RM7,258,573.30 ("Adjudicated Sum") and costs of RM89,570.

[5] The following steps were then taken by the parties:

a. The plaintiff applied to set aside the Adjudication Decision pursuant to s 15 CIPAA; and

b. The defendant applied to enforce the Adjudication Decision as if it is a judgment or order of the High Court, pursuant to s 28 of CIPAA.

[6] The plaintiff's application was dismissed, and the defendant's application was allowed. This resulted in two appeals, namely:

a. Rayuan Sivil No W-02(C)(A)-1559-10-2020, which is the plaintiff's appeal against the decision of the High Court in dismissing the plaintiff's application to set aside the Adjudication Decision; and

b. Rayuan Sivil No W-02(C)(A)-1560-10-2020, which is the plaintiff's appeal against the decision of the High Court in granting the adjudication enforcement order,

(collectively, "Appeals").

[7] Further, the defendant commenced arbitration proceedings against the plaintiff ("Arbitration"). The claim in the Arbitration is based on the same items that the defendant had claimed in the Adjudication, and for which the defendant obtained the Adjudication Decision. The plaintiff denied the claim and filed a counterclaim against the defendant.

[8] On 7 April 2021, the enforcement of the Adjudication Decision was stayed pursuant to s 16 of CIPAA, pending disposal of the Arbitration, on the condition that the Adjudicated Sum and the related costs be paid to and maintained by the defendant's solicitors ("Conditional Stay Order"). One of the terms of the Conditional Stay Order is that the first tranche of the Adjudicated Sum, worth RM3,500,000 was to be paid on or by 15 May 2021, and the remainder of the Adjudicated Sum be paid on or by 15 August 2021. The plaintiff applied to extend time to comply with the payment conditions under the Conditional Stay Order.

[9] On 21 May 2021, the defendant issued a winding-up notice against the plaintiff ("Winding-Up Notice") pursuant to s 466(1)(a) of the Companies Act 2016 (" CA "). The Winding-Up Notice was premised on the Adjudication Decision, for the Adjudicated Sum and related costs.

[10] In response to the Winding-Up Notice, the plaintiff filed this application for a Fortuna Injunction, to restrain the defendant from presenting a winding- up petition against the plaintiff, pending the disposal of the Arbitration and the Appeals.

Issues And Considerations

Issuance Of The Winding-Up Notice

[11] I will start by examining the provisions pursuant to which the Winding- Up Notice is issued, namely ss 465 and 466 of the CA .

[12] Section 465 of t