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2025 MarsdenLR 5783
HIGH COURT (KUALA LUMPUR)
LIM CHONG FONG, J
Giatreka Sdn Bhd – Plaintiff
Versus
SGW Engineering Construction Sdn Bhd and another – Defendant
ORIGINATING SUMMONS NO. WA-24C-108-06/2019 AND NO. WA-24-138-08/2019
Rodney Gomez (Pauline Koh Xiu Yi with him) (Shearn Delamore & Co) for the applicant.
Avinder Singh Gill (A.S. Gill, Thong & Agnes) for the respondent.
The validity of a payment claim under CIPAA hinges on strict statutory compliance, and an adjudicator cannot conclusively determine his own jurisdiction, necessitating judicial review.
Headnote:(A) Construction Industry Payment and Adjudication Act 2012 - Section 5(2) and 15 - Cross applications for setting aside and enforcement of adjudication decision - Validity of the Payment Claim put forth by the respondent was disputed due to its alleged defects - The adjudicator acted in excess of jurisdiction; ruling was set aside while the enforcement application was dismissed. (Paras 18, 38, 40, 48)
(B) Adjudicator's impartiality and natural justice - The acts of the adjudicator, although challenged for unfairness, were deemed proper; procedures followed were consistent with statutory provisions. (Paras 41-46)
Facts of the case:
The parties were involved in a construction dispute over a project in Langkawi, with the claimant issuing a payment claim under CIPAA. The adjudicator's decision partially favored the claimant, prompting the other party to seek to set aside the decision.
Findings of Court:
The court upheld that the adjudicator's ruling exceeded jurisdiction due to defective payment claims and remitted costs.
Issues: The primary issues concerned the validity and service of the Payment Claim and whether the adjudicator maintained proper jurisdiction.
Ratio Decidendi: The court found that the validity of the Payment Claim must meet strict statutory requirements, and the adjudicator cannot determine his own jurisdiction conclusively.
Result: Application to set aside adjudication decision allowed; enforcement application dismissed.
| Table of Content |
|---|
| 1. jurisdiction of the court over contract disputes. (Para 1 , 2 , 3 , 4 , 5 , 6) |
| 2. procedural steps in adjudication and arbitration. (Para 7 , 8 , 9 , 10 , 11 , 12) |
| 3. affidavit submissions in court proceedings. (Para 13 , 14 , 15 , 16) |
| 4. contentions regarding adjudication decisions. (Para 18 , 19 , 20 , 21 , 22 , 23) |
| 5. basis of jurisdiction in adjudications. (Para 24 , 25 , 26) |
| 6. requirements for a valid payment claim. (Para 27 , 28 , 29 , 30 , 31) |
| 7. legislative intent and statutory interpretation. (Para 32 , 33 , 34) |
| 8. impact of document construction standards. (Para 35 , 36 , 37) |
| 9. service requirements for legal documents. (Para 38 , 39 , 40) |
| 10. nature of adjudicator's decision-making authority. (Para 41 , 42 , 43 , 44 , 45) |
| 11. conclusion regarding adjudication processes. (Para 46 , 47 , 48) |
| 12. dismissal of enforcement proceedings. (Para 49) |
Lim Chong Fong J:
GROUNDS OF DECISION
Introduction
[1]These are cross applications for the setting aside as well as enforcement of an adjudication decision made pursuant to the Construction Industry Payment and Adjudication Act 2012 (“CIPAA”).
[2]The Applicant in Originating Summons no. WA-24C-108-06/2019 (“OS1”) and the Respondent in Originating Summons no. WA-24C-138-08/2019 (“OS2”) is a private limited company involved in the construction business.
[3]The Respondent in OS1 and the Applicant in OS2 is also a private limited company involved in the M&E construction business.
[4]For purposes of this decision, it is convenient and clearer to address the parties as Giatreka and SGW respectively.
Salient Background Facts
[5]By a main contract described as the Cadangan Membina Bagi Cadangan Pembangunan Taman Tema Air Mengandungi Bangunan Utama Restoran, Kolam-Kolam dan Gelongsor Air, Sebagai Tambahan Kepada Kemudahan Resort Bella Vista Sedia Ada Melibatkan Sebahagian Lot PT 1233 & PT 1234 Seksyen 6, Bandar Kuah, Daerah Langkawi, Kedah Darul Aman, Giatreka was appointed by the Langkawi Internation Sdn Bhd as the main contractor to carry out and complete the aforesaid project (“Works”).
[6]Consequently by a letter of award dated 22 March 2016 and the formalized contract dated 22 September 2016 (“Contract”), Giatreka appointed SGW as the principal sub-contractor to carry out and complete the Works.
[7]There were disputes and differences that arose between them in the carrying out of the Works and SGW, on 23 May 2018, issued a notice of arbitration to Giatreka. They then agreed to the appointment of Mr. Rajendra Navaratnam as the arbitrator and the arbitration hearings have been fixed in early 2020.
[8]That notwithstanding, SGW on 26 December 2018 issued a letter ref:SGWHP/714LWKCIPAA/01 to Giatreka and served it at 49-51, Block D, The Boulevard, Mid Valley City, Lingkaran Syed Putra, 59200 Kuala Lumpur (“Payment Claim”). The Payment Claim is reproduced below:
[9]Giatreka did not reply to the Payment Claim and SGW, on 18 January 2019, issued a notice of adjudication pursuant to s. 7CIPAA
[10]Consequently, the director of the Asian International Arbitration Center appointed Mr. Masoud Moinfar as the adjudicator (“Adjudicator”).
[11]For the purposes of the adjudication proceedings, the parties submitted the following documents:
(i)SGW’s adjudication claim dated 19 March 2019 (“Adjudication Claim”);
(ii)Giatreka’s adjudication response dated 1 April 2019 with 5 volumes of documentary evidence (“Adjudication Response”);
(iii)SGW’s adjudication reply dated 15 April 2019 (“Adjudication Reply”);
(iv)SGW’s response to Giatreka’s response to Adjudicator’s queries dated 6 June 2019;
(v)Giatreka’s response to SGW’s response to Adjudicator’s queries dated 8 June 2019; and
(vi)SGW’s response to Giatreka’s response to Adjudicator’s queries dated 12 June 2019.
[12]The Adjudicator on 18 June 2019 issued his adjudication decision (“Adjudication Decision”), allowing part of SGW’s claim and dismissing Giatreka’s counterclaim.
[13]As a result, Giatreka filed OS1 to set aside the Adjudication Decision pursuant to s. 15C
