The conversion of a ship into a FPSO vessel constitutes construction work under CIPAA if it serves the oil and gas industry, thereby qualifying for adjudication.

[1] These applications that are before the court raise an interesting issue with respect to whether works done on a ship to convert it into a Floating Production Storage and Offloading ("FPSO") vessel is construction work within the meaning of "construction contract" under the Construction Industry Payment and Adjudication Act 2012 ("CIPAA"). Like most ships, she had a fanciful name: Nordic Laurita or Deep Producer 1.

[2] The answer to that would determine whether the claimant's claim in the adjudication involving the Provision to Supply Complete Package of Actuated Shutdown Valve ("the valves") for the Layang FPSO Project ("the Project") is one falling within CIPAA. Layang is off the coast of Sarawak and the supply of the valves to the Project was in Perak.

[3] It is not in dispute that the Project is a FPSO Vessel Conversion Project. MIR Valve Sdn Bhd ("MIR"), was appointed by TH Heavy Engineering Berhad ("TH") to supply the valves which will be installed and would form a part of the vessel. It was also agreed by the parties that the supply and installation of the valves onto the FPSO is to fit it for the production and processing of gas condensate and crude oil.

[4] There are three applications before the court by way of originating summons ("OS"). In OS WA-24C-139-11/2016, the plaintiff there is MIR who is the successful claimant in the adjudication. They have applied to enforce the decision of the adjudicator.

[5] The other two applications are OS WA-24C-143-11-2016 and OS WA- 24C-144-11-2016 where TH have applied to set aside two related adjudication decisions involving the supply of valves by MIR to them for the same Project.

[6] By consent the two applications were heard together. For the avoidance of confusion, the parties shall be referred to by their designations as the claimant and the respondent as in the adjudication or as MIR and TH respectively.

Proceedings In The Adjudication

[7] The dispute between the two parties relates to two disputes both arising from a purchase order dated 17 December 2015. The contract sum for the supply of the valves was USD1,017,513.00 ("the Purchase Sum").

[8] On 2 February 2016, a variation to the value of USD139,432.00 was ordered by way of Variation Order No. H100000315-VO1-1. This had the effect of revising the sum upwards to USD1,156,945.00 ("the Revised Purchase Sum").

[9] The claimant submitted to the respondent a total of three Tax Invoices for the sum of USD752,014.25 (excluding GST) for work done since 2 March 2016. The details of the three Tax Invoices are set out below:

(i) CD201500199B for USD347,083.50;

(ii) CD201500199C for USD289,236.25; and

(iii) CD201500199D for USD115,694.50.

[10] The respondent failed to honour the three Tax Invoices resulting in a payment dispute between them. The claimant served a payment claim on the respondent and subsequently followed through with the service of an adjudication claim on or about 12 July 2016 on the respondent pursuant to CIPAA. On 4 November 2016, the adjudicator, Mr Krishna Raj T Rajagopal, gave decision in favour of the claimant.

[11] The claimant also submitted two Tax Invoices for the sum of USD404,930.75 (excluding GST) for work carried out since 2 March 2016. The details of those tax invoices are as follows:

(i) CD201500199A for USD115,694.50; and

(ii) CD201500199 for USD289,236.25.

[12] The respondent failed once again to honour the two Tax Inv