CIPAA applies to disputes post-practical completion in construction contracts, and parties cannot contractually exclude its jurisdiction.

[1] The plaintiff had appointed the defendant as their sub-contractor for the 'Design, Construction and Completion of Two Office Towers for Bank Kerjasama Rakyat Malaysia' ("the said project") for 'Mechanical and Electrical Works (Main Contract)' and also 'ID Works'.

[2] The parties entered into a construction contract in writing with respect to the Main Contract with the plaintiff issuing to the defendant a Letter of Award dated 11 January 2010. The plaintiff and the defendant also subsequently executed the PAM Standard Contract 2006 (Without Quantities) on 27 December 2010 for the contract sum of RM82.2 million.

[3] With respect to the ID Works, the plaintiff issued a Letter of Award dated 3 October 2012 to appoint the defendant to undertake ID Works. Although it was mentioned that parties would be adopting the PAM Standard Contract 2006 (With Quantities), the plaintiff and defendant did not get round to signing the PAM Standard Contract. The contract sum for ID Works was for RM11.2 million.

Problem

[4] As the defendant had not been paid on its various progress claims and certificates, it had on 28 April 2017 issued an Adjudication Notice for the Main Contract and subsequently on 9 May 2017, the defendant issued an Adjudication Notice for ID Works to bring parties to adjudication in two separate adjudication proceedings.

[5] The plaintiff's Defences are that the defendant's performance as its sub-contractor had placed the plaintiff in a predicament as there were a lot of unrectified defective works and uncompleted tasks. As a result, the plaintiff had to appoint third party contractors to assume and attend to the rectification works and also to complete what was not done by the defendant to mitigate the losses which arose from being late in delivery of the said project. There was also the corresponding back charges and LAD claims by the defendant as set-offs.

[6] The plaintiff contended that because of the failure of the defendant to complete the Works on time it had issued a 'Certificate of Non-Completion' on 28 October 2013.

[7] From the plaintiff's Affidavit one can see that the dispute that had arisen between the parties is not atypical of many a construction contract dispute. The plaintiff said that for the Main Contract, the plaintiff had paid a sum of RM82,762,019.02. As for ID Works, the plaintiff had paid RM9,440,284.96. The parties could not agree on the amount of variation order, back charges and liquidated damages.

[8] It was helpful of the plaintiff to provide a snapshot of respective parties' positions, in exh "MZA-1", setting out where the difference and divergence lie and hence the areas of disputes as follows:

Main Contract/M &E Works

[9] For ID Works, apparently the defendant could not wait any longer for its non-payment and had issued a s 218 Notice to Wind Up pursuant to Companies Act 1965 to wind up the plaintiff based on one interim certificate sometime in 2016. As a measure of self-preservation, the plaintiff which is a going concern and very much a solvent company had to file for a fortuna injunction to put a stop to the winding-up proceeding. The Kuala Lumpur High Court granted the fortuna injunction and the defendant has since then appealed against the High Court's decision to the Court of Appeal. The appeal has yet to be disposed.

[10] It was drawn to this Court's attention that the said project was only given its Certificate of Practical Completion Without Conditions late 2016.

[11] Adjudication proceedings under the Construction Industry Payment and Adjudication Act 2012 ("CIPAA") have just been commenced by the defendant for both Main Contract and ID Works in April and May 2017 after issuance of Certificate of Practical Completion.

[12] Th