An adjudicator's failure to consider all defense arguments constitutes a breach of natural justice under CIPAA 2012.

[1] There are two appeals before us. They emanate from the orders of the Shah Alam High Court dated 9 March 2017. The plaintiff in the High Court, and the appellant here, had filed two applications to set aside two adjudication decisions which were delivered pursuant to the Construction Industry Payment Adjudication Act 2012 ("CIPAA 2012"). The applications were dismissed by the High Court.

[2] Aggrieved with the decision, the appellant filed the instant appeals. After hearing the parties and taking into consideration the written submissions, we allowed the appeals and set aside the orders of the High Court. Our reasons for doing so now follow and will constitute the judgment of the Court.

Background Facts

[3] By a Letter of Award dated 2 November 2011, the appellant appointed the respondent as the design and build contractor for a project known as "Cadangan Pembangunan Gated Komuniti 18 Tingkat yang Mengandungi (a) 252 unit Kondominium (Tingkat 4-17); (b) Tempat Letak Kereta Bertingkat (Tingkat Bawah - Tingkat 3); (c) 3 unit Kedai Serbaguna, (Tingkat Bawah); (d) Kemudahan Awam iaitu Dewan Serbaguna, Tadika, Surau, Kolam Renang & Taman Permainan Kanak-Kanak; (e) 1 unit Pencawang Elektrik (f) 2 unit Pondok Pengawal di atas Lot HS(D) 46211, No PT 27424, Mukim Ampang, Daerah Ulu Langat, Negeri Selangor ("the Project"). The contract sum stated in this Letter of Award was RM65,966,227.13.

[4] By a separate Letter of Award dated 28 November 2011, the appellant appointed the respondent as the design consultant for the Project. The contract sum stated in this Letter of Award was RM2,187,419.43. The respondents scope of works as the design consultant included architectural design, geotechnical design, civil & structural design, mechanical & electrical design, landscaping design and quantity surveying consultancy works.

[5] By another Letter of Award dated 15 December 2011, the appellant awarded additional works to the respondent for a total lump sum of RM9,415,597.51. The scope of works under this Letter of Award included changes to the structural and architectural works for the Project.

[6] On or around 30 January 2013, the appellant and the respondent entered into a formal contract. The contract is based on the Standard PAM Conditions of Contract 2006 (Without Quantities) ("the Contract"). The contract sum was RM78,199,244.07.

[7] Disputes, however, arose between the parties. The appellant commenced arbitration proceedings in relation to the contract works vide its Notice to Arbitrate dated 23 May 2015. Adjudication proceedings were later commenced by the respondent against the appellant under CIPAA 2012, namely, under Adjudication Reference No: KLRCA/D/ADJ-0411-2016 by Ms Samrith Kaur as Adjudicator ("the 1st Adjudication"); and under Adjudication Reference No: KLRCA/D/ADJ-0436-2016 by Ms Louise Jacqueline Azmi as Adjudicator ("the 2nd Adjudication").

[8] In respect of the 1st Adjudication, the Adjudication Decision was dated 16 November 2016 (amended on 5 December 2016), which determined as follows:

(i) The appellant to pay the respondent the sum of RM9,514,017.00 ("the 1st Adjudication Amount") within four weeks from the Adjudication Decision;

(ii) The appellant shall pay to the respondent the late payment interest at 7.60% per annum (Maybank Base Lending Rate at 6.6% plus 1%) for the amount certified under Payment Certificate No 24 and No 28 from the due date for each payment certificate until the full and final settlement of the certified amount;

(iii) The appellant shall pay to the respondent the late payment interest at 7.85 per annum (Maybank Base Lending R