2019 MarsdenLR 1760
HIGH COURT MALAYA KUALA LUMPUR
SKYWORLD DEVELOPMENT SDN BHD – Appellant
Versus
ZALAM CORPORATION SDN BHD & OTHER CASES – Respondent
[Originating Summonses Nos: WA-24C-212-09-2018 WA-24C-218-10-2018 & WA-24C-203-09-2018]
Timely delivery of adjudication decisions is mandatory under CIPAA; failure renders the decision void.
Headnote:Section 12 of the Construction Industry Payment and Adjudication Act 2012 ('CIPAA') mandates that adjudicators must deliver adjudication decisions within 45 working days following the service of an adjudication reply. In this case, the adjudication decision was delivered one day late, leading to the court's finding that the decision was void under s 12(3) of CIPAA. The crux of the dispute centered on whether the adjudication reply was properly served within the statutory timeframe. The court determined the service occurred on 21 May 2018, making the decision delivered on 26 July 2018 out of time and therefore void.
| Table of Content |
|---|
| 1. importance of timely adjudication decisions. (Para 1 , 2 , 3 , 4 , 5 , 6 , 12) |
| 2. conditions under which the adjudication decision is void. (Para 22 , 23 , 24 , 25 , 26 , 27 , 28) |
| 3. strictures of service methods in cipaa. (Para 29 , 30 , 31 , 32 , 33) |
| 4. void nature of late adjudication decisions. (Para 39 , 40) |
[1] These three applications heard together underscored the importance of delivering an adjudication decision on time and in time and the serious consequences that ensue when delivered out of time even by a day; or for that matter by a minute. It is a case of a miss is as good as a mile with the harsher consequence of having to start the process all over again!
[2] These three applications before this court arose out of an adjudication decision delivered on 26 July 2018 under the Construction Industry Payment and Adjudication Act 2012 ("CIPAA"). Two were filed by Skyworld Development Sdn Bhd ("Skyworld") with respect to setting aside the Adjudication Decision and another for a stay application to stay the Adjudication Decision pending arbitration.
[3] Zalam Corporation Sdn Bhd ("Zalam") had, on the other hand, filed an application to enforce the Adjudication Decision.
[4] The details of the applications are as follows:
(i) Originating Summons No: WA-24C-212-09-2018 ("Skyworlds Setting Aside Application");
(ii) Originating Summons No: WA-24C-218-10-2018 ("Skyworlds Stay Application"); and
(iii) Originating Summons No: WA-24C-203-09-2018 ("Zalams Enforcement Application").
[5] Skyworld is the plaintiff in the Setting Aside Application and in the Stay Application whereas Zalam is the plaintiff in Enforcement Application.
[6] To avoid confusion, the parties shall be referred to as Zalam and Skyworld and sometimes as the claimant and the respondent respectively as they were so referred to in the Adjudication.
[7] All three applications were directed to be heard together for the issues straddle one another but for practical disposal, the following sequencing made sense: first the Setting Aside Application, then the Stay Application followed by the Enforcement Application.
[8] In the event that the Setting Aside Application is allowed then invariably the Stay Application would have become academic and the Enforcement Application would have to be dismissed.
[9] In the event that the Setting Aside Application is dismissed then this court would still have to consider if there are any merits in the Stay Application and if the Stay should be conditional or unconditional and correspondingly the conditions, if any, that should be attached to the order for Enforcement of the Adjudication Decision.
Proceedings In The Adjudication
[10] All too often, like most cases that had come before this court arising out of a statutory adjudication under the CIPAA, Zalam as the claimant in the Adjudication had claimed for payment for work done from Skyworld under a construction contract. The claim under a Payment Claim was based on Certificates Nos 31, 32 and 33 for a project as stipulated in the Letter of Award dated 13 January 2015.
[11] The events that ensued were rather unremarkable. It proceeded with the anticipation and expectation that had come to characterise most adjudications under the CIPAA. On 23 January 2018, Zalam served a payment claim dated 22 January 2018 on Skyworld claiming for the sum of RM11,734,013.34. On 2 February 2018, Skyworld responded by serving a payment response of even date on Zalam disputing the entire amount as alleged in the said Payment Claim.
[12] On 13 February 2018, Zalam thereafter served a notice of adjudication dated 12 February 2018 on Skyworld and with that the adjudication proceedings between the parties began.
[13] An Adjudicator was appointed and the Adjudicator issued a notice of appointment to act as the Adjudicator in Form 6 to both Zalam and Skyworld on 12 April 2018.
[14] Form 6 contained, among others, the Adjudicators direction with respect to the mode of service of documents in the Adjudicatio