The Federal Court in its grounds of judgment dated 16 October 2019 in Jack-In Pile (M) Sdn Bhd v Bauer (Malaysia) Sdn Bhd held that the Construction Industry Payment and Adjudication Act 2012 (CIPAA) applies only prospectively to construction contracts. CIPAA came into effect on 15 April 2014. Therefore, CIPAA only applies to construction contracts signed after this date.
Prior to this decision, there were High Court and Court of Appeal decisions holding that CIPAA could apply retrospectively to construction contracts. So if there were unpaid amounts arising from pre-15 April 2014 construction contracts, contracting parties could invoke CIPAA, had obtained adjudication decisions and had enforced payment.
It is now uncertain what will be the impact of this Federal Court decision on already decided adjudication matters based on pre-15 April 2014 construction contracts. Continue reading →
The Federal Court in its grounds of judgment dated 1 August 2019in Martego Sdn Bhd v Arkitek Meor & Chew Sdn Bhd decided on important points of law on adjudication and final payments under a construction contract. The Federal Court had to decide whether the Construction Industry Payment and Adjudication Act 2012 (CIPAA) could apply. Further, it was also determined whether CIPAA could apply to payment disputes between an architect and client. The grounds of judgment were written by Justice Mohd Zawawi Salleh FCJ.
The recent High Court decision Skyworld Development Sdn Bhd v Zalam Corporation Sdn Bhd (see the grounds of judgment dated 8 February 2019) stresses the critical importance of the statutory timelines under the Construction Industry Payment and Adjudication Act 2012 (CIPAA). This is more so when the adjudication papers can be served electronically.
In this case, the Adjudicator had issued his Adjudication Decision one day out of time and this rendered the decision void.
The Court of Appeal in Likas Bay Precinct Sdn Bhd v Bina Puri Sdn Bhd  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 recent International Malaysia Law Conference 2018 was held on 14 to 17 August 2018. The conference featured an adjudication session titled ‘CIPAA: Adjudication Leading the Way?‘ A very enlightening, and somewhat troubling, discussion on how adjudication has developed in Malaysia over the last four years since its coming into force. Adjudication may not have achieved its aims of providing a swift resolution of disputes.
The session featured three very experienced construction and adjudication practitioners. Ir Harbans Singh, a chartered engineer, arbitrator, adjudicator, mediator, and advocate and solicitor (non practicing). Rohan Arasoo, partner of Harold Lam Partnership. Belden Premaraj, principal partner of Belden.
The panel discussed whether adjudication was a success in Malaysia and whether it raised more hurdles for the construction industry players. The panel looked into the statistics of past adjudications and the case law that has developed.
The following is a report by Kelvin Seah who attended the interesting session. Continue reading →
There can be legal repercussions to a company when one of its directors is adjudged bankrupt. It is common in the constitution or articles of association to provide that the office of the director will become vacant if the director becomes bankrupt. I set out below three interesting legal issues that arise from bankruptcy and directors.
First, I will deal with the potential adverse impact of bankruptcy on directors’ resolutions and legal proceedings. This in light of the recent Court of Appeal decision in Sazean Engineering & Construction Sdn Bhd v Bumi Bersatu Resources Sdn Bhd  5 AMR 443;  MLJU 839. This decision was under the Companies Act 1965 (CA 1965). Secondly, I interpret these issues in light of the Companies Act 2016 (CA 2016). Thirdly, potential ways to overcome such arguments. Continue reading →