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2020 MarsdenLR 2178
HIGH COURT MALAYA SHAH ALAM
GUMI ASLI ELEKTRIKAL SDN BHD – Appellant
Versus
DAZZLING ELECTRICAL (M) SDN BHD & ANOTHER CASE – Respondent
[Originating Summons Nos: BA-24C-61-06-2019 & BA-24C-78-07-2019]
A party must demonstrate that an adjudication decision was improperly procured through fraud to set it aside, as outlined in the Construction Industry Payment and Adjudication Act 2012.
Headnote:(A) Construction Industry Payment and Adjudication Act 2012 – Sections 6, 10, 15, and 28 – Originating Summons filed for setting aside and enforcing an adjudication decision – Dismissal of setting aside application and granting of enforcement order – Allegations of fraud and denial of natural justice addressed in context of CIPAA provisions – Courts determined a party must prove that fraud resulted in improper procurement of adjudication decision. (Paras 14-22)
(B)
Natural Justice – Second rule – Adjudicator can proceed without a party who fails to respond appropriately, thus prohibiting claims based on denial of natural justice. (Paras 17-18)
Facts of the case:
Originating summonses filed by Gumi to set aside an adjudication decision and by Dazzling to enforce it, with issues involving alleged fraud and natural justice violation raised by Gumi.
Findings of Court:
No evidence of fraud and the adjudication decision validly made; enforcement granted in favor of Dazzling.
Issues
: Allegations of fraud in the procurement of the adjudication decision; natural justice rights of the parties; validity of adjudication decision under CIPAA.
Ratio Decidendi:
Court ruled Gumi failed to prove fraud or improper procurement; adjudicator acted lawfully in absence of Gumi who failed to respond as required.
Result:
Setting aside OS dismissed; enforcement OS allowed.
A. Introduction
[1] By consent of both parties, the following two originating summonses (OS) are heard together:
(1) OS No: BA-24C-61-06-2019 (Setting Aside OS) has been filed by Gumi Asli Elektrikal Sdn Bhd (Gumi) against Dazzling Electrical Sdn Bhd (Dazzling) for a court order to set aside an Adjudication Decision made on 18 December 2018 (AD) by an adjudicator, Ms Christine Khor Meow Wei (Adjudicator); and
(2) Dazzling has instituted OS No: BA-24C-78-07-2019 for leave of court to enforce the AD against Gumi (Enforcement OS).
B. Issues
[2] The following questions arise in these two OS:
(1) is Gumi barred by O 28 r 3C(1), (3) and (4) of the Rules of 2012 (RC) from relying on the two OS on two letters (both dated 25 October 2019) attached to Gumis third written submission dated 29 October 2019 [Two Letters (25 October 2019)]?;
(2) whether the AD had been improperly procured through fraud within the meaning of s 15(a) of the Construction Industry Payment and Adjudication Act 2012 (CIPAA) when:
(a) Dazzling purportedly misrepresented to Gumi that Dazzling would withdraw the adjudication against Gumi (Alleged Misrepresentation); and
(b) Gumi averred that Dazzling had concealed material facts from the Adjudicator (Alleged Concealment) in the form of two letters dated 15 July 2015 and 25 February 2018 from Gumi to Dazzling [Gumis Letter (15 July 2015) and Gumis Letter (25 February 2018)]; and
(3) could the Adjudicator proceed with the adjudication against Gumi in the absence of Gumi? In this regard, had Gumi been denied of its right to be heard pursuant to the second rule of natural justice under s 15(b) CIPAA? This issue discusses the effect of ss 6(4) and 10(3) CIPAA.
C. Background
[3] By way of a letter of award dated 30 June 2015 (Subcontract), Gumi had appointed Dazzling to do Subcontract works (Subcontract Works). According to cl 11 of the Subcontract (cl 11), among others:
(1) Dazzling "shall present monthly progress claims" regarding the Subcontract Works which have been done;
(2) "all payments shall be subjected to retention of ten percent (10%) of the certified value of work done"; and
(3) the "payment to [Dazzling] as certified by [Gumi] shall be made within 14 days from the interim certification date" of the Subcontract Works.
[4] Dazzling claimed, among others, as follows:
(1) the Subcontract Works had been completed by Dazzling;
(2) Gumi had only paid RM4,536,393.32 [exclusive of Goods and Services Tax (GST)] to Dazzling for the completed Subcontract Works; and
(3) the following sums were due from Gumi to Dazzling under the Subcontract [Sums Claimed]:
(a) an amount of RM901,656.15 for the Subcontract Works; and
(b) GST in a sum of RM54,099.37.
[5] Gumis Letter (15 July 2015) stated that, among others, Gumi was only obliged to pay Dazzling for the Subcontract Works within 30 days after the issuance of the following two certificates by "Jabatan Kerja Raya" (JKR):
(1) certificate of completion of works; and
(2) certificate of payment.
[6] According to Gumis Letter (25 February 2018), among others, the amount stated in Gumis "Conditional Certificate of Payment No 11" was "conditional" and would be "synchronised and finalised according to the value derived from the measurement of work done made by" JKR.
[7] On 27 July 2018, Dazzling served on Gumi a "Payment Claim" for the Sums Claimed within the meaning of s 5(1) and (2) CIPAA. Gumi did not serve a "Payment Response" (under s 6 CIPAA) on Dazzling.
[8] Dazzling served a notice of adjudication [pursuant to s 8(1) CIPAA] on Gumi on 14 August 2018.
[9] There was no agreement by Dazzling and Gumi regarding the choice of an adjudicator. As such, the Asian International Arbitration Centre (AIAC) appointed the Adjudicator in this case.
[10] Upon the appointment of the Adjudicator, the Adjudicator issued the following directions:
(1) Dazzling shall file an "Adjudication Claim" under s 9(1) and (2) CIPAA within 10 working days from the date of receipt of the Adjudicators appointmen
