2025 MarsdenLR 4742
HIGH COURT (KUALA LUMPUR)
ALIZA SULAIMAN, J
MRCB Builders Sdn Bhd – Plaintiff
Versus
SMM Resources Sdn Bhd and another – Defendant
ORIGINATING SUMMONS NOS WA-24C-125-06 OF 2020 AND WA-24C-150-07 OF 2020
Rajesh Kumar Sharma (Vicknaraj, RD Ratnam, Rajesh Kumar & Assoc) in Originating Summons No WA-24C-125-06 of 2020 for the plaintiff and in Originating Summons No WA-24C-150-07 of 2020 for the defendant.
K Sheela T Vinayaka Das (Sheela Vinayaka & Co) in Originating Summons No WA-24C-150-07 of 2020 for the plaintiff and in Originating Summons No WA-24C-125-06 of 2020 for the defendant.
The adjudicator's jurisdiction is strictly confined to disputes arising from the specific agreement, and parties must substantiate claims within the timeframe defined in the contract.
Headnote:(A) Construction Industry Payment and Adjudication Act 2012 - Sections 12(1), 15(b) and (d), 28 - Application to set aside and stay adjudication decision - Party's claims for payment of works carried out - Court dismissed the setting aside application, allowed the enforcement application, except for claims outside contract period, affirming adjudicator's decision boundaries. (Paras 1, 3, 56)
(B) Jurisdictional boundaries in adjudication - Adjudicator may only consider disputes arising directly under the specific agreement, findings not substantiated on natural justice grounds. (Paras 14-15, 36-39, 43-55)
Facts of the case:
Private companies involved in a manpower supply agreement disputed payment claims totaling RM1,047,758.75, adjudicated to RM1,023,736.25 with costs awarded. MRCB argued denial of natural justice and excess of jurisdiction regarding certain claims beyond the agreement period.
Findings of Court:
MRCB’s challenge to the adjudicator’s decision on SMM’s claims was dismissed; enforcement granted, barring non-certified periods claimed.
Issues: Did the adjudicator exceed jurisdiction by entertaining claims outside the contract? Did MRCB's allegations of procedural impropriety hold?
Ratio Decidendi: The adjudicator’s jurisdiction is confined to the matters arising from the agreement and parties cannot raise issues not previously presented during adjudication. The court could not entertain challenges to the merits of the adjudicator’s decision.
Result: Setting Aside Application dismissed; Enforcement Application allowed in part.
Certainly. Based on the provided legal document, here are the key points summarized with appropriate referencing:
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The court's primary focus is on the jurisdiction of the adjudicator, which is strictly limited to disputes arising from the specific agreement between the parties. Claims outside the contractual period or not arising directly under the agreement are generally beyond the adjudicator’s jurisdiction [p_36-39].
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The adjudicator's decision is binding unless it is set aside on specific grounds, such as breach of natural justice or excess of jurisdiction. The court emphasizes that challenges to the merits of the decision are not permissible at this stage; only jurisdictional or procedural issues can be grounds for setting aside the decision [p_33-36].
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The dispute involved claims for payment for manpower supply, with the adjudicated amount being slightly less than the total claimed. The adjudicator awarded a sum after considering the claims, including costs and additional expenses, with a specified timeline for payment and interest provisions [p_20-26].
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The court dismissed the application to set aside the adjudication decision, affirming that the adjudicator’s jurisdiction was confined to claims within the contractual period and arising from the agreement. Claims for periods beyond the agreement's duration were found to be outside the adjudicator’s jurisdiction and thus could not be considered [p_38-39].
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The court recognized that the adjudication decision could be severed, meaning that parts of the decision found to be beyond jurisdiction could be set aside, while the rest remains enforceable. This approach aligns with the purpose of the relevant legislation to facilitate quick and efficient dispute resolution [p_46-47].
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The court clarified that the power to enforce an adjudication decision extends to enforcing only the parts that are within the adjudicator’s jurisdiction. The decision to enforce can be partial, and the parts exceeding jurisdiction can be severed and set aside without invalidating the entire decision [p_43-44].
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The court emphasized that the legislation does not expressly provide for the partial setting aside of an adjudication decision, but Malaysian jurisprudence supports the practice of severance to uphold the purpose of the legislation. This allows for the enforcement of valid parts while removing invalid or jurisdictionally defective parts [p_46-54].
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The court dismissed the challenge based on procedural grounds, including the alleged failure to consider certain defenses or claims, as these issues pertain to the merits, which are not subject to judicial review at this stage [p_32-33].
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The decision highlights the importance of the adjudicator’s role in considering all relevant defenses and claims within the scope of the dispute referred, and that errors or omissions in reasons do not automatically warrant setting aside unless they relate to jurisdiction or natural justice violations [p_42-46].
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The overall outcome was that the application to set aside the adjudication decision was dismissed, with the enforcement of the decision being granted in part, specifically excluding claims for periods outside the contractual scope. The costs awarded reflect the partial success of the enforcement (!) .
Would you like a more detailed analysis or assistance with specific legal implications?
| Table of Content |
|---|
| 1. introduction and procedural background of the case. (Para 1 , 2 , 3) |
| 2. background information on the parties involved and contractual obligations. (Para 5 , 6 , 7 , 8 , 9 , 10 , 11 , 12) |
| 3. arguments regarding denial of natural justice and excess of jurisdiction. (Para 14 , 15 , 16) |
| 4. court's analysis of claims and jurisdiction. (Para 18 , 25 , 36 , 38) |
| 5. conclusion and orders given by the court. (Para 56) |
Aliza Sulaiman J:
GROUNDS OF JUDGMENT
Introduction
[1]Initially there were three applications before the Court and these are –
(a)the application by MRCB Builders Sdn Bhd (‘MRCB’) in encl. 1 in Originating Summons (‘O.S.’) No. WA-24C-125-06/2020 (‘O.S. No. 125’) pursuant to sub-s 12(1), s 15(b) and (d) and para 16(1)(a) of the Construction Industry Payment and Adjudication Act 2012 [Act 746] (‘CIPAA’), and O. 7, O. 28, O. 69A, rr. 2, 3 and 4 and O. 92, r. 4 of the Rules of Court 2012 (‘RoC 2012’) to set aside and stay the Adjudication Decision dated 22.5.2020 (‘AD’) delivered by the learned Adjudicator, Ms. Han Li Meng (‘Adjudicator’) until the disposal of the suit;
(b)the application by MRCB in encl. 5 in O.S. No. 125 pursuant to the same provisions as above cited to stay the AD pending the disposal of encl. 1; and
(c)the application by SMM Resources Sdn Bhd (‘SMM’) in encl. 1 in O.S. No. WA-24C-150-07/2020 (‘O.S. No. 150’) pursuant to s 28CIPAAO. 7, O. 28, O. 69A, rr. 1, 2, 5 and 7 and O. 92, r. 4 RoC 2012 to enforce the AD.
[2]The parties consented to the applications being heard together and on the hearing date, the Court drew the attention of learned counsel who appeared for MRCB, Mr. RK Sharma, to the similarity between prayer 4 in encl. 1 and prayer (a) in encl. 5 in O.S. No. 125. Mr. RK Sharma acknowledged that these prayers would be rendered academic and he then withdrew prayer 4 in encl. 1 and the stay application in encl. 5. The Court accordingly struck out encl. 5 with no order made as to cost.
[3]After having read the cause papers and written submissions filed, including the submissions which were prepared following the hearing of the remaining applications, and having heard the oral submissions by Mr. RK Sharma, and Ms. K. Sheela for SMM, the Court pronounced that MRCB’s application vide encl. 1 in O.S. No. 125 (‘Setting Aside Application’) is dismissed and SMM’s application vide encl. 1 in O.S. No. 150 (‘Enforcement Application’) is allowed except for the part of the AD in respect of SMM’s non-certified claims for the supply of workers from October 2018 to January 2019 amounting to RM181,400.00. MRCB was ordered to pay costs of RM5,000.00 each for the Setting Aside Application and Enforcement Application to SMM, subject to allocator.
[4]I now provide my full grounds for the above said decision.
Brief Facts
[5]MRCB is a private limited company which carries out the business of provision of engineering and construction services and investment holding.
[6]SMM is similarly a private limited company and it carries out business in general construction, investment holding, dealing in all kinds of industrial products, publishing, importing and exporting and any other business.
[7]By a Manpower Supply Agreement dated 30.1.2019 (‘Agreement’), MRCB appointed SMM to supply workers and/ or labours for “The Proposed “The Desa Desaru” at Desaru Johor Darul Takzim for Desaru Estate Sdn Bhd” (‘Project’).
[8]The commencement date as stipulated in Schedule 1 of the Agreement is 31.5.2018 and the completion date is 30.9.2018.
[9]A dispute arose between the parties with regards to the claims submitted by SMM for the manpower supply in the total sum of RM1,047,758.75 which was purportedly due and owing by MRCB to SMM. This resulted in the issuance of the Payment Claim dated 4.9.2019 by SMM to MRCB.
[10]The particulars of the claim as tabulated in para 20 of the AD are as follows:
| No. | Particulars | Due date | Amount (RM) |
|---|---|---|---|
| Certified Claim | |||
| 1. | IPC No. 10 | 6.4.2019 | 312,091.25 |
| 2. | IPC No. 11 | 6.4.2019 | 289,322.50 |
| Non-Certified Claim | |||
| 3. | Aug. 2018 | 28.10.2018 | 164, |