Ingenieur Vol.72 ingenieur October 2017-FA3 | Page 75
By Jocelyn Lim Yean Tse, Partner, SKRINE
Jocelyn Lim examines some significant
local cases since the inception of statutory
adjudication in Malaysia Her Ladyship’s decision, which was subsequently
upheld by the Court of Appeal (unreported), gave
retrospective effect to CIPAA.
The Construction Industr y Payment and
Adjudication Act 2012 (“CIPAA”) came into
operation on April 15, 2014. Since then, the
Malaysian courts have had the opportunity to
consider various aspects of CIPAA on a number
of occasions. This article examines some of the
significant decisions that have been handed down
by the courts in the past two and a half years and
provides a ‘snippet’ on the legal principles laid
down in these cases. This means that all payment disputes under any
construction contract, other than those which fell
within the statutory exceptions in sections 3, 40
and 41 of CIPAA, can be referred for adjudication
under the Act regardless of when the construction
contract was executed or when the payment
disputes arose.
CIPAA APPLIES RETROSPECTIVELY Government Construction Contract
Similarly, there was much discussion as to what
constitutes a “Government construction contract”,
a term used but not defined in the Construction
Industry Payment & Adjudication (Exemption)
Order 2014 (“2014 Exemption Order”). Questions
arose as to whether the expression encompasses
construction contracts entered by statutory
bodies and Government-linked companies; or is
it to be limited to contracts entered into by the
“Government”, as defined in section 4 of CIPAA.
Prior to the coming into force of CIPAA, there was
much discussion within the construction industry
on the scope of its application. Questions as to
whether CIPAA applies to construction contracts
signed before its date of coming into force and
whether payment disputes arising before the said
date fall within the scope of CIPAA were foremost
in the minds of industry players.
On October 31, 2014, Malaysia’s first judicial
pronouncement on matters involving CIPAA
was made in UDA Holdings Berhad v Bisraya
Construction Sdn Bhd & Anor & another case
[2015] 11 MLJ 499. The High Court Judge Dato’
Mary Lim (as she then was) had the opportunity
to deal with the above questions which centred on
the issue of the retrospective application of CIPAA.
EXPANSIVE vs RESTRICTIVE
INTERPRETATION
This question was dealt with in Mudajaya
Corporation Bhd v Leighton Contractors (M) Sdn
Bhd [2015] 5 CLJ 848, where the court held
that for a construction contract to fall within the
meaning of a “Government construction contract”,
it must be one where the Government, be it the
Federal or a State Government, is a party to it.
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DEVELOPMENT OF
STATUTORY ADJUDICATION
IN MALAYSIA