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Excess of Jurisdiction - Clause 36.6

  • Courts set aside adjudication decisions where adjudicator decided claims based on clause 36.6 of the contract, not cited by parties in Payment Claim, Adjudication Claim, or Responses; this exceeded scope under s 27(1) CIPAA. the adjudicator had exceeded his jurisdiction because he had gone outside of the perimeters of what the parties had alleged in the payment claim, adjudication claim and the responses thereto; the Adjudicator had exceeded his jurisdiction in deciding the dispute based on clause 36.6 of the Contract ["

    EXYTE MALAYSIA SDN BHD vs GREENCON RESOURCES SDN BHD - High Court

    "] ["

    EXYTE MALAYSIA SDN BHD vs GREENCON RESOURCES SDN BHD - High Court

    "] ["

    SUE LYE CONSTRUCTION SDN BHD vs BRILLIANT LTP CONSTRUCTION SDN BHD & ANOTHER CASE - High Court

    "] ["

    SUE LYE CONSTRUCTION SDN BHD vs BRILLIANT LTP CONSTRUCTION SDN BHD & ANOTHER CASE - High Court

    "] ["

    KEMAS MAJU CONSTRUCTION SDN BHD vs MASTER CRAFT GROUP SDN BHD & OTHER CASE - High Court

    "] ["

    KEMAS MAJU CONSTRUCTION SDN BHD vs MASTER CRAFT GROUP SDN BHD & OTHER CASE - High Court

    "]
  • Insight: Adjudicator's jurisdiction strictly limited to matters raised; deviation allows setting aside under s 15(d) CIPAA, without merits review. Should the Adjudicator decide the dispute on a matter not referred to him in the Payment Claim and the Payment Response, then he would have exceeded his jurisdiction and such a Decision would be liable to be set aside under s 15(d) CIPAA ["

    SQA BUILDERS SDN BHD vs LUXOR HOLDINGS SDN BHD & ANOR - High Court

    "] ["

    EXYTE MALAYSIA SDN BHD & ORS vs PERUSAHAAN RADZMIN SDN BHD & ORS - High Court

    "]

Excess of Jurisdiction - Unpleaded Claims (e.g., EOT, Interest)

  • Court set aside decision for granting Extension of Time (EOT) not pleaded in Payment Claim, breaching s 15(d). The Adjudicator had acted in excess of his jurisdiction, breaching s 15(d) of the CIPAA 2012 in granting the EOT not pleaded in the Payment Claim; ["43"] In the premises, the Plaintiff's application to set aside the Adjudicator decision is allowed ["

    DAYA BUILDERS SDN BHD vs CREST REALTY SDN BHD - High Court

    "]
  • Similar for unraised interest/set-off; entire decision set aside if exceeds scope. the adjudicator has exceeded his jurisdiction by granting the fourth pre-AD interest sum ["

    Setia Fontaines Sdn Bhd vs Pro Tech Enterprise Sdn Bhd and another - High Court

    "] ["

    ZENITH DEVELOPMENTS SDN BHD vs MENTA CONSTRUCTION SDN BHD - High Court

    "] (contrast: no set aside if stayed within claim ["

    ZENITH DEVELOPMENTS SDN BHD vs MENTA CONSTRUCTION SDN BHD - High Court

    "])

Analysis and Conclusion

  • Principle: s 15(d) CIPAA permits setting aside for excess jurisdiction (scope limited to Payment Claim/Response per s 27(1)); not appeal on merits/errors of law. this Court would be at liberty to set aside the Adjudication Decision on ground of excess of jurisdiction; 'jurisdiction' is used in the sense of the scope of the dispute that is before the Adjudicator for decision ["

    EXYTE MALAYSIA SDN BHD vs GREENCON RESOURCES SDN BHD - High Court

    "] ["

    PLP ELECTRICAL ENGINEERING SDN BHD vs KERJAYA PROSPEK (M) SDN BHD & ANOTHER CASE - High Court

    "] ["

    BASICS DECOR SDN BHD vs VENTURA INTERNATIONAL SDN BHD - High Court

    "] ["

    SUE LYE CONSTRUCTION SDN BHD vs BRILLIANT LTP CONSTRUCTION SDN BHD & ANOTHER CASE - High Court

    "] ["

    EXYTE MALAYSIA SDN BHD & ORS vs PERUSAHAAN RADZMIN SDN BHD & ORS - High Court

    "] ["

    ERA UNIVERSE DEVELOPMENT SDN BHD vs KEN LIP CONSTRUCTIONS & TRADING SDN BHD & ANOTHER CASE - High Court

    "]
  • Courts consistently set aside pay now, argue later decisions where adjudicator strays outside pleaded matters (e.g., cl 36.6, EOT), treating as nullity; partial set aside possible in some views but often entire under single s 15 application ["

    DAYA BUILDERS SDN BHD vs CREST REALTY SDN BHD - High Court

    "] ["

    Setia Fontaines Sdn Bhd vs Pro Tech Enterprise Sdn Bhd and another - High Court

    "] ["

    SQA BUILDERS SDN BHD vs LUXOR HOLDINGS SDN BHD & ANOR - High Court

    "]
When Courts Set Aside CIPAA Adjudication Decisions for Exceeding Jurisdictional Scope

CIPAA Adjudication: Can Courts Set Aside Decisions for Exceeding Jurisdiction?

In the fast-paced world of Malaysian construction, disputes over payments can grind projects to a halt. The Construction Industry Payment and Adjudication Act 2012 (CIPAA) provides a swift mechanism for resolving these through adjudication. But what happens when an adjudicator steps beyond the boundaries of the payment claim? Can courts intervene and set aside the decision? This is a common question: cases court set aside the adjudication decision on the grounds that the adjudicator exceeded his jurisdiction by determining matters outside the scope of the Payment Claim.

This post dives into the legal landscape, analyzing key cases under CIPAA and drawing analogies from arbitration. While no direct CIPAA precedents show courts setting aside decisions purely for exceeding the payment claim scope, the principles highlight strict jurisdictional limits. Note: This is general information, not legal advice—consult a qualified lawyer for your situation.

Jurisdiction Limits in CIPAA Adjudication

Under CIPAA, an adjudicator's authority is tightly confined to the referred dispute, stemming from the payment claim and any valid payment response. Section 15 allows challenges to set aside decisions on limited grounds, including jurisdictional overreach. However, courts typically uphold decisions unless there's clear evidence of excess.

In one key case, an aggrieved party sought to set aside a decision favoring outstanding crane supply payments, alleging the adjudicator exceeded jurisdiction, denied natural justice, and lacked impartiality. The court ruled: The Court found that there were no valid grounds presented to set aside the decision; Exyte’s arguments did not demonstrate a lack of jurisdiction or natural justice... The court emphasized that the adjudicator had not exceeded his authority and had considered all material evidence and arguments, ruling that errors claimed were not sufficient for overturning the decision.

EXYTE MALAYSIA SDN BHD vs SARENS (MALAYSIA) SDN BHD - 2025 MarsdenLR 2845

The originating summons was dismissed, affirming that an adjudicator's decision can only be set aside under specific grounds, which must be substantiated; mere dissatisfaction with the decision does not constitute valid grounds for review.

EXYTE MALAYSIA SDN BHD vs SARENS (MALAYSIA) SDN BHD - 2025 MarsdenLR 2845

Similarly, in a dispute over interim payments after delays, the main contractor failed to file a payment response, limiting counterclaims. The court refused to set aside: The adjudicator's jurisdiction under CIPAA is limited to claims raised through proper payment responses, and failure to respond precludes counterclaims.

BINA PURI CONSTRUCTION SDN BHD vs HING NYIT ENTERPRISE SDN BHD - 2015 MarsdenLR 1355

No excess jurisdiction was found, as the decision stayed within procedural bounds.

BINA PURI CONSTRUCTION SDN BHD vs HING NYIT ENTERPRISE SDN BHD - 2015 MarsdenLR 1355

These rulings underscore a high threshold: adjudicators may evaluate evidence and arguments within the claim's scope without triggering set-aside.

Instances of Set-Aside Under CIPAA: Different Grounds

While no reviewed cases match the exact query—setting aside for determining matters outside the payment claim—some CIPAA decisions have been voided on related jurisdictional flaws. For example, in a subcontractor dispute, the court set aside an adjudication: The Court found that the Adjudicator lacked jurisdiction due to the late delivery of the adjudication decision and the incorrect application of the CIPAA... The Adjudicator's failure to comply with statutory timelines rendered the decision void.

ENCORP ISKANDAR DEVELOPMENT SDN BHD vs KONSORTIUM IPMINES MERZ SDN BHD

Here, jurisdiction hinged on CIPAA's applicability to a post-enactment novation agreement, but late issuance was decisive.

ENCORP ISKANDAR DEVELOPMENT SDN BHD vs KONSORTIUM IPMINES MERZ SDN BHD

In another, the High Court initially set aside for natural justice breaches (e.g., managing submissions), but this was overturned on appeal: The court found that the adjudicator had acted within his powers and that the High Court had erred in its decision to set aside the adjudication decision... The adjudicator's discretion in managing submissions was appropriate and did not constitute a breach of natural justice.

TSR BINA SDN BHD vs SYARIKAT PEMBENAAN YEOH TIONG LAY SDN BHD & ANOTHER APPEAL

This reinforces judicial deference unless flaws are blatant.

TSR BINA SDN BHD vs SYARIKAT PEMBENAAN YEOH TIONG LAY SDN BHD & ANOTHER APPEAL

Analogous Principles from Arbitration and Tribunals

CIPAA adjudication mirrors arbitration, where exceeding scope is a set-aside ground under Arbitration Act 2005 (AA 2005) s 37(1)(a)(iv)/(v). Courts may partially set aside if extraneous matters are severable: Grounds for setting aside exist where the tribunal has exceeded the authority by dealing in the award with matters that go beyond the terms of the arbitration agreement or the scope of the issues referred by the parties for resolution... If the tribunal exceeds its authority in respect of some matters only, and its decisions on those matters are severable... the High Court may only set those parts of the award.

SUNWAY CREATIVE STONES SDN BHD vs SYARIKAT PEMBENAAN YEOH TIONG LAY SDN BHD & ANOTHER CASE - 2020 MarsdenLR 2185

SINERJUTA SDN BHD vs JO ARCHITECTS SDN BHD & ANOTHER CASE - 2025 MarsdenLR 1037

Tribunals face similar confines: Tribunal jurisdiction is similarly limited to the dispute so referred... Section 10(4) permits the Tribunal to decide only disputes or points referred to it and matters incidental thereto and the tribunal cannot go beyond the terms of reference.

GENTING MALAYSIA BERHAD vs YB MENTERI SUMBER MANUSIA & ANOR - 2021 MarsdenLR 221

Exceeding renders decisions ultra vires, though no CIPAA parallels directly applied this to payment claim scope.

GENTING MALAYSIA BERHAD vs YB MENTERI SUMBER MANUSIA & ANOR - 2021 MarsdenLR 221

Arbitration precedents warn: The arbitrator had exceeded his jurisdiction by awarding more than what was claimed by the appellants. (From a partnership dispute where the award was set aside for procedural non-compliance and overreach.) Other cases distinguish errors within jurisdiction from excess, allowing set-aside only for the latter.

Exceptions, Limitations, and High Threshold

  • Severability: Only separable extraneous parts fall; valid portions survive.

    SUNWAY CREATIVE STONES SDN BHD vs SYARIKAT PEMBENAAN YEOH TIONG LAY SDN BHD & ANOTHER CASE - 2020 MarsdenLR 2185

  • High Bar: Mere dissatisfaction or alleged errors insufficient; must prove clear excess, lack of natural justice, or procedural flaws.

    EXYTE MALAYSIA SDN BHD vs SARENS (MALAYSIA) SDN BHD - 2025 MarsdenLR 2845

  • No CIPAA Set-Asides on Scope Alone: Reviewed documents show refusals, prioritizing payment finality unless jurisdiction is blatantly exceeded (e.g., new terms).

    EXYTE MALAYSIA SDN BHD vs SARENS (MALAYSIA) SDN BHD - 2025 MarsdenLR 2845

    BINA PURI CONSTRUCTION SDN BHD vs HING NYIT ENTERPRISE SDN BHD - 2015 MarsdenLR 1355

  • Payment Responses Critical: Failure precludes counterclaims, but doesn't auto-invalidate if scope respected.

    BINA PURI CONSTRUCTION SDN BHD vs HING NYIT ENTERPRISE SDN BHD - 2015 MarsdenLR 1355

Adjudicators must not impose new contract terms, but evaluating claims per contract is upheld.

EXYTE MALAYSIA SDN BHD vs SARENS (MALAYSIA) SDN BHD - 2025 MarsdenLR 2845

Practical Recommendations for Construction Parties

To challenge on excess jurisdiction:1. Prove the decision addressed unraised matters (e.g., counterclaims or new terms).2. File timely under CIPAA s 15.3. Demonstrate severability.4. Always file compliant payment responses to preserve rights.

Absent clear excess, expect courts to uphold, emphasizing adjudication's speed over merits review.

Key Takeaways

  • Courts under CIPAA s 15 rarely set aside for exceeding payment claim scope—applications dismissed where bounds respected.

    EXYTE MALAYSIA SDN BHD vs SARENS (MALAYSIA) SDN BHD - 2025 MarsdenLR 2845

    BINA PURI CONSTRUCTION SDN BHD vs HING NYIT ENTERPRISE SDN BHD - 2015 MarsdenLR 1355

  • Analogies from arbitration allow targeted set-asides for severable overreach.

    SUNWAY CREATIVE STONES SDN BHD vs SYARIKAT PEMBENAAN YEOH TIONG LAY SDN BHD & ANOTHER CASE - 2020 MarsdenLR 2185

  • Other voids stem from timelines or procedures, not scope.

    ENCORP ISKANDAR DEVELOPMENT SDN BHD vs KONSORTIUM IPMINES MERZ SDN BHD

  • Prioritize compliance; adjudication favors claimants with valid claims.

For construction firms, understanding these nuances prevents costly missteps. Stay informed on CIPAA evolutions, and seek specialist advice for disputes.

References:1.

EXYTE MALAYSIA SDN BHD vs SARENS (MALAYSIA) SDN BHD - 2025 MarsdenLR 2845

: Core refusal despite excess claim.2.

BINA PURI CONSTRUCTION SDN BHD vs HING NYIT ENTERPRISE SDN BHD - 2015 MarsdenLR 1355

: Response limits upheld.3.

SUNWAY CREATIVE STONES SDN BHD vs SYARIKAT PEMBENAAN YEOH TIONG LAY SDN BHD & ANOTHER CASE - 2020 MarsdenLR 2185

,

SINERJUTA SDN BHD vs JO ARCHITECTS SDN BHD & ANOTHER CASE - 2025 MarsdenLR 1037

: Arbitration scope.4.

GENTING MALAYSIA BERHAD vs YB MENTERI SUMBER MANUSIA & ANOR - 2021 MarsdenLR 221

: Tribunal limits.5.

ENCORP ISKANDAR DEVELOPMENT SDN BHD vs KONSORTIUM IPMINES MERZ SDN BHD

,

TSR BINA SDN BHD vs SYARIKAT PEMBENAAN YEOH TIONG LAY SDN BHD & ANOTHER APPEAL

: CIPAA set-asides on other grounds. #CIPAA #ConstructionLaw #Adjudication
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