INGENIEUR
ADJUDICATING PAYMENT DISPUTES UNDER CIPAA 2012:
THE ESSENTIAL STEPS
IN PRACTICE
By Ir. Harbans Singh K.S
P.E, C.Eng, C.Arb, Advocate & Solicitor (Non-practising)
T
he Construction Industry Payment and
Adjudication Act 2012 (Act 746) (CIPAA)
together with its Regulations (CIPAA
Regulations 2014) as well as the Exemption
Order (CIPAA Exemption Order 2014) came into
operation on April 15, 2014. CIPAA has been
subsequently held by the High Court and the
Court of Appeal to apply retrospectively as well as
prospectively. The Act covers “payment” disputes
in the construction industry for all construction
contracts (inclusive of consultancy contracts)
made in writing for construction work done either
wholly, or partly in Malaysia both for the private
as well as the public sector subject to stipulated
exemptions and non-applications.
To date the appointing authority under the
Act i.e. the Kuala Lumpur Regional Centre for
Arbitration (KLRCA) has reported an exponential
increase in the number of payment disputes
being referred and adjudicated with a very high
success rate in favour of “unpaid parties”. This
short article is not a legal treatise nor an attempt
to delve deeper into the legalities or intricacies
of the Act but merely deals with the basic steps
that a practitioner needs to be aware of when
prosecuting, or defending a typical payment claim
under CIPAA.
Since CIPAA encourages and in fact by way of
some of its relevant provisions e.g. Section 8(3),
stipulates “lay” participation at all stages of the
adjudication process, the KLRCA has developed
and published some standard Templates, or Forms
which are available in the public domain and
which can be used as a sample by practitioners at
almost all stages of the adjudication process. The
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Forms are contained in Schedule 1 of the KLRCA
Adjudication Rules & Procedures (Rev. 14 May
2014). There are sixteen Forms in total and are
at the moment in English and Bahasa Malaysia,
although the Mandarin version is in the process of
being drafted. The said Forms can be downloaded
from the KLRCA’s website at www.klrca.org and
can be modified as necessary by the parties to
suit their particular needs and/or circumstances
of their case. In view of these Forms being mere
samples and intended to be used for guidance
purposes only, the parties should use them with
care and should seek proper legal advice as
necessary since KLRCA does not admit any liability
for the correctness or suitability of the same.
Be that as it may, the basic steps in the
adjudication process and the relevant Forms
that may be employed in each instance are listed
below in brief.
STEP 1: PREMINARY REQUIREMENTS
● ●
● ●
Is Section 2 CIPAA satisfied?
> > Is the construction contract “in writing”?
> > Does it relate to construction work
carried out “wholly or partly in
Malaysia”?
Is it not applicable/exempted under CIPAA?
> > Does it fall under the Non-applications
in Section 3?
> > Does it fall under the Exemption Order
2014?