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2024 MarsdenLR 1667
COURT OF APPEAL PUTRAJAYA
TSR BINA SDN BHD – Appellant
Versus
SYARIKAT PEMBENAAN YEOH TIONG LAY SDN BHD & ANOTHER APPEAL – Respondent
[Civil Appeal Nos: W-02(C)(A)-1352-07-2021 & W-02(C)(A)-1353-07-2021]
The adjudicator's discretion in managing submissions does not constitute a breach of natural justice, and the High Court erred in setting aside the adjudication decision.
Headnote:(A) Construction Industry Payment and Adjudication Act 2012 – Sections 12, 15, 24, and 25 – Adjudication decision enforcement – High Court set aside adjudication decision on grounds of natural justice – Court found no breach of natural justice as adjudicator acted within discretion and considered all submissions – Appeals allowed. (Paras 26, 56)
(B) Natural Justice – Principles – Adjudicator must comply with natural justice but has discretion on procedures – No automatic right for further submissions unless new issues arise – High Court erred in finding a breach of natural justice. (Paras 12, 49)
Facts of the case: TSR Bina Sdn Bhd sought to enforce an adjudication decision against Syarikat Pembenaan Yeoh Tiong Lay Sdn Bhd, which was set aside by the High Court on grounds of natural justice. TSR appealed against this decision.
Findings of Court: The court found that the adjudicator had acted within his powers and that the High Court had erred in its decision to set aside the adjudication decision.
Issues: Whether the adjudicator breached natural justice by denying further submissions and whether the High Court's decision was justified.
Ratio Decidendi: The court held that the adjudicator's discretion in managing submissions was appropriate and did not constitute a breach of natural justice, emphasizing the need for timely resolution in adjudication processes.
Result: Appeals allowed.
JUDGMENT
Introduction
[1] There are two related matters filed in the Kuala Lumpur High Court. First, an application by TSR Bina Sdn Bhd (TSR) pursuant to s 28 of the Construction Industry Payment and Adjudication Act 2012 (CIPAA) and O 69A, r 5 of the Rules of the 2012 (ROC) and/or the inherent jurisdiction of the Court via an Originating Summons No WA-24C-249-12/2020 (OS 249) to enforce the Adjudication Decision dated 5 February 2020 (AD) decided by the learned Adjudicator (LA). Second, an application by Syarikat Pembenaan Yeoh Tiong Lay Sdn Bhd (YTL) pursuant to s 15 of the CIPAA, O 69A r 3 of the ROC and/or the inherent jurisdiction of the Court via an Originating Summons No WA-24C-8-02/2021 (OS 8) to set aside the AD or alternatively, to stay the enforcement of the AD pending the disposal of the arbitration proceedings. Both OS were heard together and at the end of the proceedings, the learned High Court Judge (LHCJ) allowed YTL's OS 8 and dismissed TSR's OS 249. Aggrieved by the decisions TSR appealed.
[2] TSR's appeal against the High Court decision in OS 8 is registered as Civil Appeal No W-02(C)(A)-1352-07/2021 (Appeal 1352) and TSR's appeal against the High Court decision in OS 249 is registered as Civil Appeal No. W-02(C) (A)-1353-07/2021 (Appeal 1353). Before us, both appeals were heard together.
Brief Background Facts
[3] On 27 October 2016 the Government of Malaysia appointed CRCC CREC CCCC Consortium Sdn Bhd (CCC Consortium) as the main contractor for the design, construction, supply, installation, completion, testing, commissioning and maintenance of the electrified double track from Gemas to Johor Bahru (the said Project).
[4] Then, on 31 November 2017 CCC Consortium appointed SIPP-YTL JV, the unincorporated joint venture formed between YTL and SIPP Rail Sdn Bhd as the main subcontractor. By Letter of Award (LOA) dated 4 January 2019, YTL appointed TSR as the subcontractor to undertake the work known as "Site Clearance and Embankment Earthwork with all associated works (Subcontract Works) for the total sum of RM307,306,227.05.
[5] TSR commenced the Subcontract Works. TSR submitted the progress payment application for Interim Payment No 1 (IP-1) on 10 April 2019. In response, YTL issued an Interim Payment Certificate No 1 (IPC No 1) on 25 April 2019 certifying work done amounting to RM920,000.00. On 2 May 2019 TSR submitted a progress payment application for Interim Payment No 2 (IP- 2) and YTL issued an Interim Payment Certificate No 2 (IPC No 2) certifying work done amounting to RM767,200.00. Then, on 31 May 2019 TSR submitted a progress payment application for Interim Payment No 3 to YTL for the sum of RM3,090,358.59 (IP-3). On 10 June 2019, YTL issued a revised IPC No 1 dated 25 May 2019 for an increased certified sum of RM976,100.00.
[6] Dissatisfied with the progress of the Subcontract Works performed by TSR, YTL issued a Notice of Default to TSR on 21 June 2019. TSR contested and objected to the Notice of Default but was unsuccessful. Following that, YTL issued a Notice of Termination to terminate TSR's subcontract on 1 July 2019.
[7] Despite the issuance of the IPCs, that is, the revised I PC No 1 and IPC No 2, YTL did not make any payment to TSR. Aggrieved, TSR initiated an adjudication proceeding via Adjudication Reference No AIAC/D/ADJ- 2779-2019 under CIPAA against YTL to recover the certified sum pursuant to revised IPC No 1 and IPC No 2.
[8] On 5 February 2020, the LA handed down the AD and ordered, amongst others, that the total adjudicated sum of RM1,106,503.46 must be paid by YTL to TSR on or before 19 February 2020. YTL was also ordered to pay interest at the rate of 5% per annum on any part of the adjudicated sum which remained unpaid and finally, YTL was to pay the costs of the adjudication proceedings amounting to RM33,559.74 on or before 19 February 2020.
[9] Further to the above, TSR had also issued a Notice of Arbitration against YTL to challenge, inter alia, the unlaw
