Case Update: Creditor can Issue a Winding Up Notice based on a Mere Adjudication Decision

The Court of Appeal in Likas Bay Precinct Sdn Bhd v Bina Puri Sdn Bhd [2019] MLJU 49 has decided that a petitioner can issue a statutory demand for winding up based on a mere adjudication decision. There is no requirement to first enforce the adjudication decision as a court judgment before issuing such a winding up notice.

The Court of Appeal distinguished the earlier Court of Appeal decision in Mobikom Sdn Bhd v Inmiss Communiations Sdn Bhd [2007] 3 CLJ 295. The decision of Mobikom was decided under the old Arbitration Act 1952. It held that an arbitral award must first be registered as a judgment before the winding up notice could be issued.

Instead, the Court of Appeal in this Likas Bay decision held that there was nothing in the language of section 28 of CIPAA (Construction Industry Payment and Adjudication Act 2012) that required the adjudication decision to first be registered as a judgment before such a winding up could be issued. It was without doubt that the petitioner was a creditor to whom the company had been adjudicated to have owed monies to. Here, there was no application to set aside the adjudication decision.

Further, the successful party in adjudication can also rely on section 31 of CIPAA. Section 31(2) expressly provides that the remedies provided by CIPAA are without prejudice to other remedies available in the construction contract or any written law.


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