Adjudication decisions under CIPAA 2012 are valid and enforceable unless substantial breaches of natural justice occur; interim resolutions are crucial for maintaining cash flow in construction disputes.

MARY LIM J

GROUNDS OF JUDGMENT

Introduction

[1]These four applications are heard together. Two of them, Originating Summons No: 24C-15-04/2015 and Originating Summons No. 24C-11-04/2015 concern an adjudication decision made by IR Leon Weng Seng on 6.4.2015. The other two Originating Summonses Nos. 24C-16-05/2015 and 24C-9-04/2015 concern an adjudication decision made by Murelidaran M Navaratnam on 30.3.2015.

[2]All four Originating Summons were heard together. It makes every good sense since these cases concern the same primary parties who had entered into two separate yet related contracts. The disputes that arose between them went to two separate adjudications, both of which are under challenge. Ranhill E&C Sdn Bhd [Ranhill], the successful party, is seeking to enforce both decisions under section 28Construction Industry Payment and Adjudication Act 2012

[3]There are many common grounds relied on both parties in respect of all four cases. All four cases were heard together with written and oral submissions made by all counsel. The parties are in agreement that Ranhill’s applications for enforcement follow consequently in the event Tioxide’s applications to set aside are dismissed.

The construction contracts

[4]These are the background facts. Tioxide is a private limited company incorporated under the laws of Malaysia and is part of the group of companies owned by the Huntsman Corporation (“Huntsman”). Huntsman is listed on the New York Stock Exchange. Tioxide Malaysia operates a pigment manufacturing plant also known as the Teluk Kalong Facility at Kawasan Perindustrian Teluk Kalong, Terengganu Darul Iman. It is responsible for managing a project known as “Sustainability Project Phase 1 – Copperas Extraction” (the “PSP1 Project”). Ranhill is in the business of construction and engineering contracting.

[5]Tioxide decided to expand the capacity of the Teluk Kalung Facility. It identified various sections of the Facility for upgrading, expansion and construction. One of those sections was Substation 5 and the MCC Building which housed the electricity facilities. It was decided that these two sections would be expanded. Tebodin (Malaysia) Sdn Bhd was engaged to oversee the construction works. Tebodin was the Project Manager.

[6]In June 2013, Ranhill and Tioxide entered into two agreements with respect to these upgrading, expansion and construction works of the PSP1 Project:

i.An agreement in writing entitled Contract for Civil Works dated 9.5.2013 (the “Civil Works Contract”) where Ranhill agreed to undertake the supply of civil works for the Production Sustainability Project Phase 1 – Cooperas Extraction – Building and Construction for RM7,025,530.78. The Civil Works Contract was amended on 23.12.2013.

ii.An agreement in writing entitled Contract for Mechanical & Piping Works dated 18.6.2013 (the “MPW Contract”) for an agreed price of RM8,550,000.00.

[7]Disagreements arose between the parties which were brought to adjudication by Ranhill.

The adjudication - the Civil Works Contract

[8]In relation to the Civil Works Contract, Ranhill’s claim was based on a failure to certify a total sum of RM224,304.85 as seen in Invoice and Interim Payment Certificate No. 13. Ranhill’s position was that Tebodin ought to have certified that amount as payable but had failed to do so. To this, Tioxide inter alia alleged that the contract was not based on measurement of works as submitted by Ranhill; that there were delays, third party involvement and failure to carry out contractual obligations; that Ranhill h