1. Adjudication proceedings under CIPAA for outstanding lease payments — challenge to the proceedings on grounds of limitation under the Limitation Act 1953 and abuse of process. (Para 1 , 4 , 5 )
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2026 MarsdenLR 2109
HIGH COURT MALAYA KUALA LUMPUR
RAJES RAGHAVJI, JC
CHINA STATE CONSTRUCTION ENGINEERING (M) SDN BHD – Appellant
Versus
SYNARGYM SDN BHD – Respondent
[Originating Summons No: WA-24C-16-02/2026]
Petitioner Advocates:Terence Loh,Han Jean Lee ,Respondent Advocate: Datuk Selva Kumar Mookiah,Suria Juan Pillai,Sajitha Suresh
Limitation is a substantive defense to be decided by the adjudicator under CIPAA, not a "core jurisdiction" threshold. Courts will not intervene pre-decision unless it is "plainly and obviously clear" that the adjudicator lacks jurisdiction, especially where factual disputes regarding acknowledgment of debt exist.
Headnote:(A) Construction Industry Payment and Adjudication Act - Section 7(3) - Limitation Act 1953 - Sections 6(1) and 26(2) - Arbitration Act 2005 - Section 18 - Threshold for judicial intervention in ongoing adjudication proceedings is high; court should be slow to intervene unless it is "plainly and obviously clear" from undisputed facts that the adjudicator has absolutely no jurisdiction (Para 10) - Limitation is a substantive defense to be determined by the adjudicator and not a "core jurisdiction" threshold that allows for pre-emptive court intervention (Paras 16, 23, 25) - The "pay now, argue later" philosophy of the statutory adjudication mechanism precludes the use of limitation as a means to neutralise the process before a decision is rendered (Paras 16, 25).
(B) Arbitration - Where an arbitration agreement exists, disputes arising from the contract, including questions of limitation and acknowledgment of debt, fall within the ambit of the arbitral tribunal (Para 28).
(C) Abuse of Process - The commencement of adjudication is an exercise of a statutory right and does not constitute an abuse of process unless the claims are plainly without legal foundation (Paras 36, 38).
Facts of the case:
A party initiated adjudication proceedings to recover outstanding payments for services provided under a lease agreement. The opposing party sought a declaration that the claims were statute-barred and that the proceedings constituted an abuse of process, arguing that the claims were time-barred on the face of the payment claim. A dispute existed as to whether certain meeting minutes and emails constituted an acknowledgment of debt sufficient to restart the limitation period.
Findings of Court:
The claims were not "plainly and obviously" time-barred due to a genuine factual dispute regarding the acknowledgment of debt. Limitation is a substantive defense for the adjudicator to determine, not a threshold condition of jurisdiction. The existence of an arbitration clause further supports the refusal to grant pre-emptive relief.
Issues: Whether the court should intervene in ongoing adjudication proceedings to determine if claims are time-barred; whether limitation under the statutory framework is a matter of core jurisdiction; whether the initiation of adjudication proceedings can amount to an abuse of process.
Ratio Decidendi: The court ruled that limitation is a substantive defense and not a jurisdictional threshold. Pre-decision intervention is only warranted when the lack of jurisdiction is obvious. Factual disputes regarding acknowledgment of debt require forensic examination and cannot be summarily resolved on affidavit evidence. The statutory right to adjudication and the presence of an arbitration agreement further preclude pre-emptive judicial declarations.
Result: Originating Summons dismissed with costs.
Legal Category Hierarchy
- practice and procedure
- civil law
- alternative dispute resolution
Table of Contents
2. Whether limitation is a core jurisdictional threshold requiring pre-decision court intervention or a substantive defense for the adjudicator to determine. (Para 7 , 8 , 15 , 20 )
3. Pre-decision intervention requires a plainly and obviously clear lack of jurisdiction; limitation is a substantive defense, and factual disputes preclude summary determination on affidavit. (Para 10 , 12 , 13 , 16 , 17 , 18 , 19 , 23 , 24 , 25 , 26 , 46 , 47 )
4. Limitation under s 7(3) CIPAA is a substantive defense for the adjudicator to decide, not a threshold condition depriving the adjudicator of core jurisdiction. (Para 16 , 23 , 25 )
5. Originating Summons dismissed with costs. (Para 48 , 49 )
6. What is the threshold for the High Court to intervene in ongoing CIPAA adjudication proceedings before a decision is rendered?
The Court should be slow to intervene unless it is plainly and obviously clear from undisputed facts that the adjudicator has absolutely no jurisdiction. The burden of satisfying this high threshold lies with the applicant. (Para 10 )
7. Does a time-barred claim under the Limitation Act 1953 deprive a CIPAA adjudicator of core jurisdiction?
No. Limitation is a substantive defense that an adjudicator is competent to decide. It is not a structural deficiency or a threshold condition that requires pre-determination by the Court to establish core jurisdiction. (Para 16 , 17 , 23 , 25 )
8. How is the effect of an acknowledgment of debt under s 26(2) of the Limitation Act 1953 determined?
It is a question of interpretation and construction of documents and surrounding circumstances. It requires an unequivocal admission of a subsisting debt; mere negotiations or disputes over liability generally do not suffice. (Para 12 , 41 , 45 , 46 )
9. When does the commencement of CIPAA adjudication proceedings constitute an abuse of statutory process?
Commencement of adjudication is an exercise of a statutory right and generally not an abuse of process unless the proceedings are instituted unreasonably and oppressively, based on claims plainly without legal foundation. (Para 36 , 38 )
10. How does the existence of an arbitration clause affect a court's willingness to grant declaratory relief regarding limitation in CIPAA proceedings?
Where a dispute regarding limitation arises from a contract containing an arbitration clause, the court is reluctant to pre-empt the arbitrator's function by granting pre-emptive declaratory relief. (Para 28 , 29 , 32 , 33 )
JUDGMENT
(Enclosure 1)
A. Background
[1] This is the plaintiff's Originating Summons ("OS") seeking, inter alia, a declaration that defendant's claims in Adjudication AIAC/D/ADJ-6273-2025 are statute-barred under s 6(1) of the Limitation Act 1953 ("LA 1953"), a declaration that the adjudication constitutes an abuse of statutory process, and a permanent stay of those proceedings.
[2] After reviewing the Affidavits filed together with its exhibits, considering the written submissions of both parties and the relevant authorities submitted, I dismissed the OS with costs to the defendant on 9 March 2026. The plaintiff has since lodged an appeal against my decision in respect of the OS. These constitute my full reasons for the decision.
B. Court Proceedings
[3] The following cause papers were filed:
i. Originating Summons dated 6 February 2026;
ii. Affidavit in Support of plaintiff affirmed by Shen Jianqiang on 6 February 2026;
iii. Affidavit in Reply of defendant affirmed by Rohan Ashwin Sankey on 16 February 2026; and
iv. Affidavit in Reply of plaintiff affirmed by Li Zhengyin on 25 February 2026.
C. Background Facts
[4] The defendant initiated an adjudication ("Adjudication") proceedings against the plaintiff by serving on the plaintiff with a payment claim on 20 November 2025. On 8 December 2025, the defendant submitted a Notice of Adjudication under registration number AIAC/D/ADJ-6273-2025 against the plaintiff at the Asian International Arbitration Centre ("AIAC").
[5] The Adjudication was initiated to recover outstanding amounts from several tax invoices ("Tax Invoices") issued by the defendant for services provided to the plaintiff under a Machinery/Equipment Lease Agreement ("Lease Agreement"), totalling RM1,076,039.29, along with accrued interest of RM1,905,529.98.
[6] The Learned Adjudicator accepted the appointment to oversee the adjudication on 15 January 2026. The Adjudication has progressed to the point where defendant had submitted its adjudication reply on 24 February 2026.
D. The Nature Of The Plaintiff's Challenge
[7] Before I address the substantive issues, it is important to characterise precisely what the plaintiff is seeking to do. It invites this Court to intervene before any adjudication decision has been rendered, on the basis that the claims are plainly time-barred on the face of the payment claim.
[8] The plaintiff frames this as a core jurisdiction challenge under View Esteem Sdn Bhd v. Bina Puri Holdings Berhad 2017 MarsdenLR 1852; [2018] 2 MLJ 22; [2019] 5 CLJ 479; [2017] 8 AMR 167, where the Federal Court confirmed that the High Court retains supervisory jurisdiction over CIPAA proceedings to determine questions of core jurisdiction, and that such challenges may be raised at any stage.
[9] I accept that this Court has the jurisdiction to hear and determine a genuine core jurisdiction challenge under CIPAA. The supervisory role of the High Court over statutory adjudication is not in doubt. The real question, however, is whether the circumstances of this case warrant the exercise of that jurisdiction at this pre-decision stage? — and for the reasons that follow, I find that they do not.
E. Issue 1: The Applicable Threshold For Pre-Decision Intervention
[10] The Court of Appeal in Aspen Glove Sdn Bhd v. Tialoc Malaysia Sdn Bhd 2024 MarsdenLR 262; [2024] 4 MLJ 825; [2024] 7 CLJ 1 correctly articulates the threshold: this Court should be slow to intervene in ongoing adjudication proceedings unless it is "plainly and obviously clear" from undisputed facts that the adjudicator has absolutely no jurisdiction. The burden lies firmly on the applicant — ie the plaintiff — to satisfy that high threshold.
[11] The defendant relies on Koh Lek Constrcution & Renovation Sdn Bhd v. Smartech International Sdn Bhd [2023] MLRHU 1708, where Nadzarin J (now JCA) held it was "highly improper" to determine limitation purely on affidavit evidence where the relevant facts are in dispute. I agree with this observation as a stateme
