A CIPAA debt is enforceable and undisputable in winding up proceedings, even amidst ongoing arbitration or appeals, as it constitutes a judgment debt.

Saheran Suhendran:

Introduction

[1] This matter concerns a petition ("the Petition") to wind up the Respondent ("Embition") for failing to satisfy an adjudication decision under the Construction Industry Payment and Adjudication Act 2012 ('CIPAA'). The Index hereof is as below.

Background Facts

[2] Pursuant to a Letter of Award dated 13 June 2018 ("LOA"), Embition appointed the Petitioner to carry out infrastructure works ("Works") in a project known as "Construction and Completion of Infrastructure Works for Cadangan Pembangunan (Guarded Community) on Lot 424, Mukim Ulu Kelang, Selangor Darul Ehsan" (the "Project"), see: Exhibit "CKL-1", Encl 21

[3] Embition claimed that the Works were delayed due to the Petitioner's breaches of the LOA. The Petitioner applied for extensions of time ("EOTs"), which were allowed by the project architect ("Architect"). The Architect also certified claims for variation orders ("VO Claims").

[4] Embition consistently disputed the VO Claims and the EOTs. The CIPAA Proceedings and the Arbitration.

[5] On 27 December 2022, the Petitioner made a claim against Embition for RM1,347,044.94 under s 5 of CIPAA. On 6 January 2023, Embition disputed liability for RM1,279,425.69 proffering a cross-claim of RM847,380.75 as at 31 December 2022 together with liquidated damages accruing at RM15,000.00 per day.

[6] On 26 January 2023, the Petitioner, by a Notice of Adjudication, initiated adjudication proceedings against Embition.

[7] The adjudicator delivered his decision dated 15 May 2023 ("Adjudication Decision" or Encl 15) ordering Embition to pay the Petitioner RM1,347,044.94 with interest and costs, see Exhibit "CKL-2", Encl 2.

[8] On 7 June 2023, the Petitioner filed an enforcement application via OS 91 ("Enforcement Application"). Embition filed Encl OS 81 which prayed for an order to set aside Encl 15 ("Setting Aside") and filed OS 80 for a stay pending arbitration ("Stay").

[9] On 20 October 2023, the High Court granted the Enforcement Application ("the Enforcement Decision") over the Adjudication Decision resulting in an enforceable debt ("CIPAA Debt"). And the Court dismissed the Stay and Setting Aside applications, see: Exhibit "CKL-3", Encl 2.

[10] Embition appealed ("the CA Appeal"). I was informed that the hearing date before the Court of Appeal is fixed on 31 January 2025, see Exhibit "CKL-4", Encl 2.

[11] There is also an ongoing arbitration initiated by Embition against the Petitioner on 4 January 2023 ("the Arbitration"). The evidentiary hearing of the Arbitration was fixed between 26 November 2024 and 29 November 2024, see Exhibit "CKL-5", Encl 21.

[12] As such, there were several on-going proceedings whereby the Adjudication Decision and thereby, the CIPAA Debt were questioned.

The Petitioner's Case

[13] On 19 March 2024 and after the Arbitration was commenced, the Petitioner filed the Petition to wind up Embition.

[14] The Petitioner's case is straight forward. It claims that the Petition ought to be granted as:

(a) the CIPAA Debt is not genuinely disputed;

(b) Embition is unable to pay its debts.

Not Genuinely Disputed

[15] First, the Petitioner submits that the CIPAA Debt is not disputed notwithstanding the CA Appeal. It treats the CIPAA Debt as a judgment debt, which (without more) is due notwithstanding an appeal.

[16] The Petitioner further submits that a Court cannot go behind the Adjudication Decision and the Enforcement Judgment nor to decide the merits of the CIPAA claim in the Petition, citing Smartframe Sdn Bhd v. Anjung Bahasa Sdn Bhd ; 2011 MarsdenLR 3738 at para 8.1.

Unable To Pay Its Debts

[17] Secondly, the Petitioner claims that Embition failed to pay the CIPAA Debt in totality. On the expiry of a demand by the Petitioner under section 466 of the Companies Act 2016 (" CA 2016"), Embition was deemed to be unable to pay its debts, see Pontian United Theatre Sdn Bhd v. Southern Finance Bhd 2006 MarsdenLR 1382 at headnote (1).

[18] After completio