The court upheld the constitutionality of the CIPAA, confirming that adjudication under the Act does not infringe on judicial powers nor create unequal treatment among disputants.

Lim Chong Fong J:

Introduction

[1] This is an application principally for a declaration to avoid the appointment of the adjudicator pursuant to the Construction Industry Payment and Adjudication Act 2012 ("CIPAA").

[2] The plaintiff is a private limited company involved in the construction business.

[3] The 1st defendant is also a private limited company involved in the construction business.

[4] The 2nd defendant is an individual and empanelled in the Kuala Lumpur Regional Centre for Arbitration ("KLRCA"), now Asian International Arbitration Centre ("AIAC") panel of adjudicators.

[5] The 3rd defendant is an individual and presently the director of the AIAC.

[6] The 4th defendant is a body jointly constituted pursuant to a Host Country Agreement made between the Government of Malaysia and the Asian African Legal Consultative Committee, now the Asian African Legal Consultative Organisation ("AALCO").

[7] The 5th defendant is the Minister of Works assigned with responsibilities under ss 33, 39 and 40 of the CIPAA.

[8] The 6th defendant is the Minister assigned with responsibilities under ss 33 of the CIPAA.

[9] The 7th defendant is the Government of the Federation of Malaysia.

[10] The 5th to 7th defendants were added as parties upon the plaintiff's application which was allowed by me on 30 October 2019.

Preliminary And Salient Background Facts

[11] Pursuant to a construction contract, the plaintiff appointed the 1st defendant as a sub-contractor to carry out earthworks and geotechnical works in respect of a project described as Naiktaraf Laluan FT60 dari Damar Laut ke Changkat Jering (Pakej 1: Ch 0 - Ch 10400) ("Project").

[12] There were payment disputes that arose between them in connection with the Project.

[13] As a result, the 1st defendant initiated adjudication proceedings against the plaintiff under the CIPAA and the 3rd defendant, by a letter dated 5 July 2019, appointed the 2nd defendant as the adjudicator.

[14] Consequently, the plaintiff on 5 August 2019 instituted this Originating Summons ("OS") praying as follows:

Surface-level declarations

1. It be declared that the purported appointment of the 2nd defendants as the adjudicator by a document dated 4 July 2019 ("Appointment of Adjudicator") in the matter of adjudication proceedings conducted under Asian International Arbitration Centre ("AIAC") Ref No AIAC/D/ADJ-2516-2019 between the 1st defendant and the plaintiff ("Adjudication Proceedings") is null and avoid.

2. It be declared that Direction No 1 and No 6, both issued by the 2nd defendant to the 1st defendant and the plaintiff dated 16 July 2019, are null and void.

3. It be declared that the invoice issued by the AIAC to the plaintiff dated 23 July 2019 is null and void.

Root-level declarations

4. It be declared that ss 18(1), 19(3) and 19(4) of Construction Industry Payment and Adjudication Act 2012 ("CIPA Act 2012") are invalid for contravention of art 8(1) of the Federal Constitution (" FC ") to the extent that the said sections:

(a) impose liability on the respondent in an adjudication proceedings ("respondent") for 'fees of the adjudicator';

(b) render the respondent liable to deposit a proportion of the said fees with the Director of the AIAC;

(c) make such fees recoverable from the respondent through an award costs.

5. It be declared that r 9(2) of the self-proclaimed rules of AIAC known as 'AIAC Adjudication Rules & Procedure' ("AIAC Rules") is invalid for being made without legal authority in s 32 of the CIPA Act 2012 and for contravening art 8(1) of the FC to the extent that the said rule imposes:

(a) liability on the respondent to deposit a portion of 'fees and expenses' referred to in r 9(2)(a);

(b) liability on any party to pay the 'administrative fee' referred to in r 9(2)(b) of the AIAC Rules.

6. It be declared that Schedule III (Administrative Fee Schedule) of the AIAC Rules is invalid for being made without legal authority in s 32 of the CIPA Act 2012 and for contravening art 8(1) of the FC .

Ancillary praye