The court upheld adjudication decisions under CIPAA as enforceable unless clear procedural breaches are demonstrated, reinforcing the statutory framework's aim of maintaining cash flow in the construction industry.

Wong Kian Kheong J:

A. Introduction

[1] This is a judgment concerning the following two originating summonses (OS):

(1) OS No: BA-24C-69-07-2019 (MRCBs OS) has been filed by MRCB Builders Sdn Bhd (MRCB) against Wazam Ventures Sdn Bhd (Wazam) to set aside an adjudication decision made on 25 June 2019 (AD) by an adjudicator, Mr Chua Siow Leng (Adjudicator), in favour of Wazam against MRCB. In MRCBs OS, MRCB has filed an application in court encl no 12 (encl 12) to stay the enforcement of the AD until the disposal of:

(a) MRCBs OS; or

(b) an arbitration between MRCB and Wazam regarding their dispute which forms the subject matter of the AD (Arbitration); and

(2) Wazam has filed OS No BA-24C-84-08-2019 against MRCB (Wazams OS) for leave of court to enforce the AD against MRCB.

[2] MRCB and Wazam had consented for MRCBs OS, Wazams OS and encl 12 to be heard together.

[3] When encl 12 was first heard by me, I had granted an ad interim stay of enforcement of the AD pending the disposal of MRCBs OS (Ad Interim Stay).

B. Background

[4] MRCB had been appointed as a main contractor of a construction project (Project).

[5] By way of a Letter of Award dated 6 December 2016 (LA), MRCB appointed Wazam as a sub-contractor for the Project (Sub-Contract). The LA provides that the Sub-Contract shall include, among others, "Conditions of Contract (PWD Form 203A-Rev 1/2010) (CoC).

[6] Regarding the Sub-Contract:

(1) on 7 July 2017, Wazam issued Progress Claim No 5 as its final claim (PC5) for works done by Wazam in respect of the Sub-Contract (Works). PC5 totaled RM667,785.11;

(2) MRCB did not respond to PC5 until 5 July 2018 when MRCB issued an Interim Payment Certificate No 5 (IPC5)

(3) on 13 November 2108, MRCB called on a bank guarantee (for a sum of RM233,059.84) provided by Wazam for the Sub-Contract (Performance Bond)

(4) Wazam claimed as follows from MRCB (Wazams Claim):

(a) an amount of RM900,844.95 for Works done; and

(b) a refund of the Performance Bond; and

(5) Wazams Claim was referred to adjudication (Adjudication).

[7] MRCB had resisted the Adjudication on the following grounds:

(1) throughout the Works by Wazam, MRCB issued "Non-Conformance Reports" (NCR) regarding Wazams failure to carry out satisfactorily the Works (Defects). Wazam did not remedy the Defects;

(2) Wazam did not complete the Works within the time period stipulated in the Sub-Contract (Wazams Delay). Wazam had applied to MRCB for an extension of time to complete the Works (EOT Application) but MRCB rejected the EOT Application on the ground that Wazam did not attach any document to support the EOT Application [MRCBs Dismissal (EOT Application)];

(3) PC5 was premature because:

(a) Clause 31.3 CoC (cl 31.3) provides that the Superintending Officer (SO) [defined in cl 1.1(n) CoC] shall issue a Final Certificate within three months after:

(i) the expiry of the "Defects Liability Period" [defined in cl 1.1(g) CoC] for the whole Works; or

(ii) the issue of the "Certificate of Completion of Making Good Defects" [as provided in cl 48.4 CoC (cl 48.4)]

- whichever is the later.

As the Defects had not been remedied by Wazam, the SO could not issue a Final Certificate; and

(b) para 7.5 LA (para 7.5) has provided that payment for the Final Payment Certificates shall be released to Wazam after Wazam has issued to MRCB:

(i) the "Final As-Built Drawings" (Drawings); and

(ii) a statutory declaration declaring that Wazam has duly completed the Works and has duly complied with Wazams financial obligations owed to Wazams sub-contractors, suppliers, service providers and workers (SD).

Wazam had failed to provide the Drawings and SD to MRCB;

(4) MRCB engaged with Wazam over a year to finalise the particulars of Wazams Claim in PC5 but Wazam could not substantiate Wazams Claim with documents. MRCB issued IPC5 out of goodwill and in compliance with cl 31;

(5) Wazam was not entitled to claim from MRCB because Wazam had not completed the Works and had demobilised from the site of the Project (Wazams Demobilisation);