1. ) Euroland & Developments Sdn Bhd v 1. ) Tack Yap Construction (M) Sdn Bhd (WA-24C-114-06/2018, WA-24C-115-06/2018, WA-24C-116-06/2018)

There were 3 applications before the Court with respect to an Adjudication Decision made under the Construction Industry Payment and Adjudication Act 2012 (“the CIPAA”). [2] The first in Originating Summons No. 24C-114-06/2018 was an application filed by Euroland & Developments Sdn Bhd (“Euroland”) for stay of the Adjudication Decision pending the disposal of a civil suit involving the same dispute in this Court. It was made under section 16(1)(b) of the

The second was another application in Originating Summons No.: WA-24C-115-06/2018 filed by Euroland to set aside the Adjudication Decision under section 15(b) and (d) of the CIPAA. [4] The third was an application in Originating Summons No. WA-24C- 116-06/2018 filed by Tack Yap Construction (M) Sdn Bhd (“Tack Yap”) to enforce the Adjudication Decision under section 28 of the CIPAA. [5] By consent the applications for setting aside and enforcement were heard together followed by the application to stay the Adjudication Decision and for good reason. If the application to set aside were allowed then the application for enforcement would have to be dismissed and the stay application would have become academic. [6] Conversely if the application for setting aside were dismissed then generally the application for enforcement would be allowed and as for the application for stay pending the disposal of a civil suit already commenced, that would have to be considered on its merits. 7 Project [7] Euroland as Employer had appointed Tack Yap as their Main Contractor by a Letter of Award dated 19.2.2016 (“Letter of Award”). It was for the construction of the main building superstructure works for 347 units of condominiums on Lot 2223, Damai Perdana, Cheras, Daerah Hulu Langat, Selangor Darul Ehsan (the “Project”), collectively called the “Works”. [8] The agreed contract sum payable to the Main Contractor for the Works is RM76,800,000.00 excluding GST as stated in the Letter of Award after the Main Contractor’s Tender together with its terms and conditions as well as a breakdown of the prices were accepted by the Employer. [9] The Main Contractor had been given the relevant architectural drawings for each of the floors together with the elevation drawings for the purposes of the quotation and Tender. [10] Clause 12.1 of the Letter of Award, which later proved to be a contentious issue, provided that rationalisation and adjustment of the rates and pricing will be done by a consultant quantity surveyor. Parties had also agreed that Letter of Award shall constitute a legal and binding contract between the parties until such time the contract documents are executed. [11] The Main Contractor commenced the Works on or around April 2016. Progress claims were submitted by the Main Contractor and the Project Architect, Look Design Architect, duly certified all the Progress Claims submitted up to Interim Claim No.7. [12] However Euroland only paid Tack Yap about 80% of the Certified Claims with another 5% being retained as the Retention Sum in relation to the Progress Claims as at 10.3.2017. Tack Yap as the Main Contractor raised various written objections to the underpayment but to no avail. 8

Tack Yap could not be continuing with the construction as there was not only late certification but underpayment as well to the tune of RM4 million plus and then they gave a Notice to Rectify Breach to Euroland and thereafter terminated the Contract by a Notice of Termination on 17.4.2017. Proceedings in the Adjudication [14] After the termination of the Contract, Tack Yap proceeded with Adjudication as Claimant under the CIPAA for the outstanding sums due to them as the Unpaid Party from the underpayment of the Interim Certificates for the balance outstanding sum of RM4,946,539.74 and retention sum of RM1,211,099.94 together with interests and costs. [15] Euroland as the Non-paying Party and Respondent in the Adjudication asserted an oral agreement arrived at some time around April 2016, before the commencement of construction of the Works between the parties as follows:

Euroland shall pay Tack Yap approximately 80% of the ‘net value’ of work done (‘net value’ being the claimed value of work done less retention sum of 5% - “Net Value”) of the progress claims (“80% of Net Value”), which is approximately 75% of the ‘Claimed Sum’ under each progress claim (‘Claimed Sum’ being the Net Value plus GST)(“Claimed Sum”); and 2. The balance of the value of such Claimed Sum under the progress claims will be paid as and when Euroland is able to, depending on the progress of sales of the apartment units in the Project and the progressive payments received there from, with such payments being in the absolute discretion of 9 Euroland, and with any such balance to be fully settled upon completion of the Project; and 3. The Tack Yap’s progress claims shall be subject to rationalisation and adjustment by the Consulting Quantity Surveyor at any time as to its reasonableness based upon the actual and/or reasonable value of the Works constructed by Tack Yap at the material time as provided for in the Letter of Award. [16] Euroland also raised a jurisdictional challenge in that the Adjudicator had no jurisdiction as part of the Contract was oral and as such was not a construction contract made in writing within the meaning of section 2 of the [17] Euroland also pleaded that the Works constructed by Tack Yap contains numerous defects (“Defective Works”); and that Tack Yap had been making excessive claims in its Progress Claims. It was further argued that the amounts claimed by Tack Yap were in excess of the actual and/or reasonable value of the Works constructed by them (“Excessive Claims”). [18] In brief Euroland disputed the whole of Tack Yap’s claim and sought to set-off and counterclaimed for the following:

An overpayment of RM6,666,794.10;

The costs incurred in the process of engagement of a replacement contractor to construct and complete the Works of the Tack Yap;

The costs of the replacement contractor;

The costs incurred in engaging professional consultants to assess the Tack Yap’s Works;

The costs for rectifying the defective works; 10

The costs of the consequent delay caused to the construction and completion of the Works and to the Euroland’s fulfilment of its obligation towards the purchasers of the apartment units in the Project, including liquidated and ascertained damages claims by those purchasers; and 7. The costs and expenses associated with the considerable time, trouble and inconvenience Euroland has been put to in dealing with all matters arising from Tack Yap’s breaches. [19] The Adjudicator decided substantially in favor of Tack Yap and via his Adjudication Decision dated 25.5.2018, he ordered Euroland to pay a sum of RM4,946,539.74 for the Works together with interest of RM290,609.00 to Tack Yap. [20] He further held that the Retention Sum was validly withheld in the circumstances of the case. The Adjudicator also ordered Tack Yap to bear 80% of the costs of the adjudication and party costs. Prayers [21] Euroland had in the setting aside application raised the ground of a denial of natural justice in that the Adjudicator had failed to consider material documents and issues before him. [22] Critically he had exceeded his jurisdiction in that the Contract was not a construction contract in writing as there was an oral agreement to the Contract where parties had agreed that payments for every Certificate shall be less 20% of the amount certified. [23] The Main Contractor Tack Yap had earlier commenced Suit No.: WA- 22C-50-04/2017 against Euroland and Euroland had filed a set-off and Counterclaim against Tack Yap (“Main Suit”). 11 [24] At the time of disposal of these 3 applications, the Main Suit was ready to be heard with the trial commencing in a week’s time. [25] The parties shall be referred to as Euroland as Employer or sometimes as the Respondent in the Adjudication and as Tack Yap as Main Contractor or sometimes as Claimant in the Adjudication. Principles [26] There are very limited grounds under which an aggrieved party in an Adjudication may apply to set aside an Adjudication Decision. This is consistent with the understanding that a setting aside application is not an appeal against the Decision which is only of interim finality and that generally wrong findings of facts and interpretation of the law are not matters that would justify a setting aside unless it goes towards jurisdiction. [27] Euroland has made this application pursuant to section 15(b) and (d) of the CIPAA which provides as follows: “15. An aggrieved party may apply to the High Court to set aside an adjudication decision on one or more of the following grounds:

the adjudication decision was improperly procured through fraud or bribery;

there has been a denial of natural justice;

the adjudicator has not acted independently or impartially; or

the adjudicator has acted in excess of his jurisdiction.” (emphasis added) [28] It would be helpful to remind ourselves of the dicta of the Court of Appeal in ACFM Engineering & Construction Sdn Bhd v Esstar Vision 12 Sdn Bhd and another appeal [2016] MLJU 1776 at paragraph 21 when considering an application under section 15(b) of the CIPAA as follows: “In the context of section 15 of CIPAA 2012, it cannot be the function of the Court to look into or review the merits of the case or to decide the facts of the case. The facts are for the adjudicator to assess and decide on. The Court’s function is simply to look at the manner in which the adjudicator conducted the hearing and whether he had committed an error of law during that process. Such error of law relates to whether he had accorded procedural fairness to the Appellant.” Whether there was a denial of natural justice when it was alleged that the Adjudicator had failed to consider material documents and issues before him [29] Learned counsel for the Employer argued that the Adjudicator erroneously concluded that rationalisation and adjustment of the rates and pricing need not be done despite it being clearly stipulated in Clause 12.1 of the Letter of Award. [30] Though there were some words missing from Clause 12.2 with the effect that the Clause had become a hanging phrase, I have no problem accepting the fact as found by the Adjudicator that it should be read as follows where the missing words have been put in place: “Before the signing of the Contract Documents, the rates and prices you submitted in the Bills of Quantities shall be rationalized and adjusted by the Consulting Quantity Surveyor as to their reasonableness but the Contract Sum shall remain unchanged.” 13 [31] A careful reading of the relevant paragraphs of the Decision would show that the Adjudicator had considered the applicability of the said Clause and held that it is incumbent on the Employer to exercise their right to rationalise the rates for the purpose of avoiding front loading before the commencement of the Works for otherwise it would be tantamount to shifting the goal post. Here the rationalization was done after the termination of the Contract by the Main Contractor. [32] The Adjudicator had reasoned at pages 22-24 of his Decision as follows: “It would be obvious to a reasonable reader that this clause is incomplete. The conditional part of the clause is missing – “but the Contract” …what? Applying a reasonable person or Officious Bystander test to this incomplete clause I find it reasonable that the clause was intended to be in line with similar typical rationalization clauses used in Malaysia, the intent of which are to ensure that any pricing errors of front loading by the Contractor are addressed before the signature of the Contract without altering the Tender sum. …. In this matter, where the Letter of Award referred to Contract Documents that were not issued, I find that the Respondent’s right to amend the rates and/or correct errors expired once Claimant began work on the Project. I deem it unreasonable to expect that the Contract price could vary based on market conditions once that Contract price was agreed upon and Parties were committed. I 14 determine therefore that Respondent’s allegation that the Contract provided Respondent the right to rationalise and adjust Progress Claims fails. …. Given my findings that Respondent cannot rely on the Letter of Award to rationalise and adjust Claimants Payment Claims, and my finding that the Claimant can rely on the Architects Payment Certificates, the allegation by Respondent that the Claimant has made Excessive Claims supported by the report by a Quantity Surveyor on the remeasurement of quantities and requantification of rates cannot stand. I find each of the Payment Claims of the Claimant was supported by a progress measurement calculation based on a percentile apportionment of the work across the different heads of the Bills of Quantities. The fact that this method of progress measurement was agreed to by the Parties is evidenced by the fact that the Architect was willing to certify seven Payment Certificates based on Claimant’s progress claims using this method. It is unreasonable for the Respondent to now change the agreed progress measurement methodology to one using a detailed Bill of Quantities generated well after the Contract was on foot, and claim for the difference in the measured progress. This in effect is changing the goalposts after the game has started. I find the application of “market rates” by Respondent to the new Bill of Quantities to reassess the value of the work done to be equally 15 unreasonable. Quantities to reassess the value of the work done to be equally unreasonable. ....Whether or not the Quantity Surveyor deemed these rates reasonable at the time of his assessment is not material. The Claimant and Respondent had agreed on the project price in the Letter of Award, and I have determined that any opportunity the Respondent had to adjust or rationalize rates within the boundaries of the agreed price ceased once the Claimant began work.” (emphasis added) [33] The Adjudicator has asked himself the right question as to whether the rationalisation of the rates can still be effected after the commencement of the Works in the circumstances of the case where the Architect had certified based on the Progress Claims submitted with a detailed breakdown of the rates and the percentage of work completed for each floor. [34] He was of the view that rationalisation of the rates to justify over payment would be grossly unfair as the Architect had certified the Works completed based on the apportionment of the rates to the work done for the podium and the tower block and there was not a whimper of wrangling. No Quantity Surveyor had been appointed for this purpose of rationalisation of the rates and it was only after the termination that rationalisation of the rates with a view to reducing the amount paid to the Main Contractor and to make a case for overpayment would smack of an afterthought. [35] The Adjudicator had made a finding that the contract in this case consisted of not just the Letter of Award but also the Tender Documents submitted by the Claimant and the terms and conditions therein. The Letter of Award itself referred to the Tender submitted by the Claimant and indeed 16 the Letter of Award would not be complete without reference to the Tender Documents which contained the detailed Bill of Quantities for the Preliminaries and Main Building Works and the pricing for each item based on the Architectural Drawings for each of the floors furnished by the Employer to the Main Contractor for the latter to fill up and submit the Tender Documents. [36] The Adjudicator had given his reasons for rejecting the remeasurement which he said at page 24 paragraph 4.1 x as this: “The Claimant and Respondent had agreed on the project price in the Letter of Award and I have determined that any opportunity the Respondents had to adjust or rationalize rates within the boundaries of the agreed price ceased once the Claimant began work.” [37] That being the case, he had properly addressed the counter argument of the Respondent that there was overpayment arising out of rationalization or remeasurement and so it cannot be a breach of natural justice as natural justice does not mandate that the Adjudicator must arrive at a certain outcome or conclusion. [38] Further the Adjudicator had also considered the set-off raised in rectification works and damages arising out of wrongful termination. [39] Again the Adjudicator had considered the evidence before him on the rectification works and held as follows: that the Respondent merely stated that he reserves the right to claim for defective works “at an appropriate time”, see page 25 paragraph 4.3 c ii of the Decision. In the light of the lack of evidence on rectification costs the Adjudicator was in no position to allow any set-off based on rectification costs. [40] At the end of the day the above findings of the Adjudicator are findings of mixed fact and law and this Court would not interfere. Suffice to 17 say that the Adjudicator’s reasons are clear and though the matter may be argued afresh at the trial, for the moment there is no breach of natural justice in the Adjudicator arriving at the decision that he did. [41] Natural justice does not require the Adjudicator to arrive at a decision that favours a particular party. All that it requires is that the Adjudicator considers all the relevant matters before him as produced and submitted by the parties and arrives at a reasoned Decision. [42] Otherwise in all cases where a party is aggrieved the argument could be mounted that had the Adjudicator considered all material documents and issues properly, he would have arrived at a Decision in favour of the aggrieved party. That would be harnessing and hijacking the ground of breach of natural justice to set aside a Decision merely because one is not happy with the outcome! [43] As stated in many an occasion all that natural justice requires is that the Adjudicator must accord procedural fairness to the parties before him and that the way he went about hearing the parties and making a decision is not manifestly unfair. [44] Parliament appreciates the fact that errors in findings of facts and in interpreting the relevant clauses and the law may creep into the Decision but that can be corrected at the trial or arbitration. [45] In the event that the error is obvious, clear and unequivocal, the Court when hearing an application for a stay under section 16(1)(b) of the CIPAA may be inclined to grant a stay of the Decision or the enforcement of the Decision. [46] Looking at the reasons given by the Adjudicator I cannot conclude, much less castigate his Decision as being a clear, obvious and unequivocal error. 18 [47] What was clear was a backdoor attempt to make a frontal challenge to an Adjudication Decision and that simply would not do. [48] Learned counsel submitted that the Adjudicator had failed to give any weight to the fact that after the termination of the Contract, the Architect had sent several letters to both parties, proposing for a joint site valuation of work done to determine the value of work done as the Contract has been terminated. [49] I must say that the above proposition pales into insignificance when the Architect himself had certified the Works done as having been properly done with the issuance of the Interim Certificate. [50] At any rate matters such as weight to be attached to certain evidence or that the Adjudicator had failed to judicially appreciate certain arguments are not the stuff that has anything to do with natural justice but rather with the merits of the case. This Court must restrain itself from and resist every temptation to going down the broad road of an appeal by way of rehearing on merits that can only lead to destruction of the very design of Adjudication which is to produce a result of interim finality where the immaculate fullness can be had in a decision after trial where witnesses are called or an award in arbitration. [51] This is not a case where the Adjudicator had not considered the defences raised but having considered them, had found them wanting and so rejected them. [52] Merely because the Adjudicator had disagreed with the Employer, that does not mean that the rules of natural justice must have been breached. Natural justice is not a magic wand to be waved each time one is unhappy with an Adjudication Decision! To categorize and castigate a 19 failure to judicially appreciate certain material evidence as a breach of natural justice would be an abuse of its hallowed principles. [53] Learned counsel for the Employer Euroland had also submitted that the Adjudicator breached the rules of natural justice when he failed to take into consideration that the Contract had been terminated before there could be a rationalisation and adjustment of the rates and pricing and that payment should be based on a joint inspection of the Work done; it could no longer be based on the Interim Certificates. [54] Reliance was placed or rather misplaced on the case of Usima Sdn Bhd v Lee Hor Fong (trading under the name and style of Pembinaan LH Fong) [2017] 5 MLJ 273 where the Federal Court observed as follows: [20] By its very nature, an interim certificate can never be considered as a final determination of the value of works done or programmed in the contract. We reproduce below what the learned author Chow Kok Fong states in his book titled Law and Practice of Construction Contracts (4th Ed) Vol 1 at pp 441-442:

8.12 Interim certificates are certifications of payments made in accordance with some timeline stipulated in a construction contract. In essence, a certificate is a statement by the certifier (typically the architect, engineer, contract administrator or Superintending Officer) that during the period covered by the certificate, the contractor has carried out the works and supplied materials up to the value shown in the certificate as well as the net amount which the contractor is entitled to be paid, after allowing for the adjustments permitted by the terms of the contract. These certifications are never intended to be a precise or final determination of the value of the works. 20 Thus, Hobhouse J in Secretary of State for Transport v Brise-Farr Joint Venture (1993) noted: At the interim stage, it cannot always be a wholly exact exercise. It must include an element of assessment and judgment. Its purpose is not to produce a final determination of the remuneration to which the contractor is entitled but is to provide a fair system of monthly progress payments to be made to the contractor.

8.13 In the absence of any provision to the contrary, the sum certified in an interim certificate is thus taken to be an estimate of the value of the work done up to the date shown in the certificate. Thus, while the employer or owner is obliged to pay what is certified, the amount certified is not binding on the parties and may be adjusted upon the completion of the works. [21] Speaking on the same subject matter, Keating on Construction Contracts by Stephen Furst (8th Ed) London Sweet and Maxwell, 2006 at p 139 says: Interim certificates are thus approximate estimates, made in some instances for the purpose of determining whether the employer is safe in making a payment in advance of the contract sum, in others whether he is under a duty to pay an instalment and, if so, how much he is to pay. A contractual right to receive payments for the value of work done and materials supplied arises not upon the work being done but upon the issue of the interim certificate in 21 respect of such work and materials. Such certificate are not normally binding upon the parties as to quality or amount and are subject to adjustment on completion. They have been described as having ‘provisional validity’ or being ‘provisional estimates of the sum to which the contractor is entitled by way of instalment payments’. The sum certified is not the true final value of the work done and materials supplied but what in the opinion of the engineer is due on the basis of the monthly statements. [22] In the House of Lords’ case of The Tharsis Sulphur and Copper Company v M’Elroy & Sons and Others (1878) 3 App Cas 1040 (HL) Lord Cairns LC at p 1045 had referred to what the parties called as engineers certificate issued from time to time authorising interim payments as: The certificates I look upon as simply a statement of a matter of fact, namely, what was the weight and what was the contract price of the materials actually delivered from time to time upon the ground, and the payments made under those certificates were altogether provisional, and subject to adjustment or to re-adjustment at the end of the contract. [23] The English Court of Appeal in Henry Boot Construction Ltd v Alstom Combined Cycles Ltd [2005] 3 All ER 932 ruled that interim certificates were no more than provisional estimates of the sum to which the claimant was entitled by way of instalment payments. At the final stage, the claimant and the engineer had 22 to perform a very different exercise and it would be an integral part of the final certificate that it would contain the engineer’s statement of the contract price ascertained by him after considering the final account, as detailed supporting documentation and all information reasonably required by him for its certification.”(emphasis added) [55] Learned counsel for Euroland then postulated that in the event the Adjudicator were to consider the above documents and facts as well as the fact that the Contract had been terminated, there is a strong likelihood the Adjudicator would come to a different outcome in his Decision. His Decision, it was surmised, would have been that there would be no sum due and payable by the Employer to the Main Contractor; and that there was excessive payment made by Euroland as Employer to Tack Yap as Main Contractor. [56] To begin with that does not fit the cap of natural justice. It is a rehashed argument that the Adjudicator made a wrong finding of fact based on his erroneous understanding of the true nature of Interim Certificates. [57] The Adjudicator had already given his reasons why there cannot be a unilateral rationalisation of rates and adjustment in pricing after the commencement of Works for that was not what was contemplated under the Contract and that it would be unfair to the Main Contractor who had claimed based on the rates stated for each item completed as set out in the Progress Claims. [58] Whilst Interim Certificates are not final and they are not cast in concrete, they are nevertheless good for payments for the Work done. By all means adjustment may be made but there must be a basis for it such as some of the Works were omitted and that there were variations to the 23 Works or that there ought to be some set-offs because of delay caused. It cannot be because there has been a unilateral adjustment of rates such that what is certified by the Architect as having been completed becomes upon termination, Works not completed yet! Neither can there be an adjustment based on a different pricing from the sums quoted in the Tender Documents furnished by the Employer and filled in by the Main Contractor and which the Employer had agreed to with the issuance of the Letter of Award which even referred to the fact that any conflict in the terms in the Tender Documents vis-a-vis the Letter of Offer will be resolved in favour of the Letter of Award. [59] As can be seen from the breakdown of the Progress Claims the amount claimed consisting of the superstructure works of the 5 floors of car park in the podium block and what was claimed was the bare structure of the frames, floors and walls and nothing had been claimed on furnishing or staircase or painting. [60] Some credit must be given to the Architect’s Certification that this had been completed unless there is clear evidence that the Architect had certified as work done when it had not been done and that would have been fraud! [61] Whilst adjustment is allowed there must be a basis for it and certainly not on the basis of change in rates and pricing and apportionment of the Work done to yield a percentage in favour of the Employer when parties had approved the apportionment by conduct in approving and certifying the Progress Claims. [62] Indeed the Employer is estopped from now asserting a different rate and pricing and apportionment of Work done. 24 [63] There was also much ado about the Adjudicator not bringing to the attention of the parties and not asking them to address the fact that Tack Yap did not take issue to a joint site valuation to determine the total value of work done. I must confess my difficulty in following this argument and more so when it is coloured with the castigation of a denial of natural justice. Surely if Euroland is convinced as to the pivotal point of the joint inspection they must then pursue it vigorously before the Adjudicator. There was no evidence of Tack Yap agreeing to what was produced by Euroland arising from the joint inspection. [64] This is not a case where the Adjudicator had gone on a frolic of his own but one where having all the evidence before him, he was entitled to deal with that which is material with respect to the issues before him. Here it is the issue of whether the Employer can rationalise the rates and alter the pricing and undo the certification with respect to the progress of the completed Works. The case of Cantillon Ltd v. Urvasco Ltd [2008] 117 Con LR 1 was cited wherein Akenhead J has summarized the principles in page 20 as follows: "[57] From this and other cases, I conclude as follows in relation to breaches of natural justice in adjudication cases:

It must be first established that the Adjudicator failed to apply the rules of natural justice.

Any breach of the rules must be more than peripheral; they must be material breaches.

Breaches of the rules will be material in cases where the adjudicator has failed to bring to the attention of the parties a point or issue which they ought to be given the opportunity to comment upon if it is one which is either 25 decisive or of considerable potential importance to the outcome of the resolution of the dispute and is not peripheral or irrelevant.

Whether the issue is decisive or of considerable potential importance or is peripheral or irrelevant obviously involves a question of degree which must be assessed by any judge in a case such as this.

It is only if the adjudicator goes off on a frolic of his own, that is wishing to decide a case upon a factual or legal basis which has not been argued or put forward by either side, without giving the parties an opportunity to comment...." (emphasis added) [65] What is apt here and should have been applied to the factual matrix of this case is the caution in paragraph (e) as emphasized above. Therefore there is no basis for challenging and set aside the Adjudication Decision based on this ground of a denial of natural justice. Whether there was a denial of natural justice in that the Adjudicator was said to have restricted his jurisdiction wrongly in not deciding whether the construction contract was partly oral and hence excluded from the CIPAA [66] The denial of natural justice was said to have consisted in the Adjudicator declining to decide on whether CIPAA applies to a construction contract that is partly oral. The following paragraphs of the Decision were referred to as proof of this: 26 “On 8th March 2018 the matter was heard in the High Court and was dismissed with costs, and Respondent was instructed to submit the Arbitration Response. As the High Court has determined that the matter does fall under the CIPAA, I determine that it is unnecessary for me to make a determination on whether there is “absolute lack of jurisdiction” arising from the contract being partly in writing and partly oral. The decision of the High Court speaks for itself, and the Adjudicator and Parties are bound by that decision.” [67] I have no problem accepting and in fact have adopted the position that an Adjudicator who deliberately takes an erroneously restrictive view of his own jurisdiction with the result that he decides not to consider an important or material element of the dispute referred to him would be in breach of natural justice. [68] This proposition of law can be found in the case of Pilon Limited v. Breyer Group Plc [2010] EWHC 837 (TCC) which principle has been adopted and applied by our Federal Court in View Esteem Sdn Bhd v Bina Puri Holdings Berhad [2018] 2 MLJ 22. In Pilon Limited case (supra) it was held that: "22. As a matter of principle, therefore, it seems to me that the law on this topic can be summarized as follows:

22.1. The adjudicator must attempt to answer the question referred to him. The question may consist of a number of separate sub-issues. If the adjudicator has endeavoured generally to address those issues in order to answer the question then, whether right or wrong, his decision is enforceable: see Carillion v. Devonport. 27

22.2. If the adjudicator fails to address the question referred to him because he has taken an erroneously restrictive view of his jurisdiction (and has, for example, failed even to consider the defence to the claim or some fundamental element of it), then that may make his decision unenforceable, either on grounds of jurisdiction or natural justice: see Ballast, Broadwell, and Thermal Energy.”(emphasis added) [69] However the confusion here had sprung from the conflation in the use of the word “jurisdiction”. The Federal Court had in View Esteem (supra) approved of the different senses in which the word “jurisdiction” had been used as in the core or original jurisdiction as opposed to competence and contingent jurisdiction in Terminal Perintis Sdn Bhd v Tan Ngee Hong Construction Sdn Bhd and another case [2017] MLJU 242 as follows: “[16] The term 'jurisdiction' under the CIPAA is not used in the administrative or public law sense but in relation to matters within the scope of the CIPAA. On this point, in Terminal Perintis Sdn Bhd v Tan Ngee Hong Construction Sdn Bhd and another case [2017] MLJU 242 Lee Swee Seng J observed as follows (at para [70]): In the application of our CIPAA, we are free from the shackles of the language of administrative law and judicial review. The word 'jurisdiction' is used in s 15(d) as in the adjudicator having acted in 'excess of his jurisdiction' as a ground for setting aside an adjudication decision. It is also used in s 27(1) with respect to an adjudicator's jurisdiction being limited to the matters raised in the payment claim and the payment response. Then there is a reference to it in s 27(2) with respect to extending his 28 jurisdiction by way of agreement in writing to deal with matters not specifically raised in the payment claim and payment response. Finally there is the reference to a 'jurisdictional' challenge, which when raised, does not prevent the adjudicator from proceeding and completing the adjudication without prejudice to the rights of any party to set it aside under s 15 or to oppose its enforcement under s 28 ... Issues as to whether there is a valid cause of action, does not go towards jurisdiction but rather to the merits of the claim ... [17] The learned judge also made note of the various types of jurisdictional complaints within the CIPAA which may be categorised as core jurisdiction, competence jurisdiction and contingent jurisdiction. The common feature in all of them is the presupposition that the CIPAA applies to determine if the adjudicator had kept within his jurisdiction." [70] A core or original jurisdiction issue would be one where the question is whether the CIPAA would apply to the type and nature of the contract where the applicability or non-applicability as the case may be of the CIPAA with respect to section 2 and 3 of the Act is concerned. [71] For instance if it is raised, as in this case, that the contract is one that is partly in writing and partly oral and as such it is outside the scope of the applicability of section 2 of the CIPAA. [72] In such a case an Adjudicator is at liberty to proceed under section 27(3) of the CIPAA as if he has jurisdiction and to leave the issue of core or original jurisdiction to the Court in a setting aside application or in opposing an enforcement application. Section 27(3) of the CIPAA expressly empowered the Adjudicator to so proceed as follows: 29 “(3) Notwithstanding a jurisdictional challenge, the adjudicator may in his discretion proceed and complete the adjudication proceedings without prejudice to the rights of any party to apply to set aside the adjudication decision under section 15 or to oppose the application to enforce the adjudication decision under subsection 28(1)." [73] In a case of contingent jurisdiction, an Adjudicator having a core or original jurisdiction to adjudicate the dispute, would have jurisdiction to decide on the dispute before him if the matter is raised in compliance with the conditions in the CIPAA. For example his jurisdiction is over matters raised in the Payment Claim and Payment Response as stated in section 27(1) of the CIPAA. The Federal Court had also held in View Esteem (supra) that even though for example, a defence has not been raised in the Payment Response but raised for the first time in the Adjudication Response, the Adjudicator must still consider it and not decline jurisdiction for to do so would be to unduly restrict one’s jurisdiction. [74] I understand that learned counsel for the Employer is challenging the core or original jurisdiction of the Adjudicator in that he has no jurisdiction to adjudicate on a construction contract that is not wholly in writing but one which had been varied by an oral contract. Learned counsel had cited the case of YTK Engineering Services Sdn Bhd v Towards Green Sdn Bhd & Other Cases [2017] 1 LNS 601 as follows: “[59] However here we are talking about his core jurisdiction as in whether CIPAA confers jurisdiction on an Adjudicator with respect to the type of "construction contract" that falls within the ambit and powers of an Adjudicator under the scheme of statutory adjudication. Thus a construction contract for the construction of a house by a natural person for the buyer's 30 occupation and a non-payment under it would not be a matter that is covered under CIPAA because of its non-application section under section 3 CIPAA. Likewise a construction contract for construction work carried out wholly outside the territory of Malaysia. So too would be a shipping contract or a mining contract which does not fall within the meaning of "construction work" under section 4 and hence not a "construction contract" under section 2 and 4 of CIPAA. [60] An Adjudicator cannot adjudicate a Payment Claim made under any contract but only one made under a "construction contract" as set out under the "Application" section in section 2 and as defined in section 4 and as one not coming within the non-application provision of section 3. [61] Where CIPAA does not confer jurisdiction on the Adjudicator to adjudicate a Payment Claim because it does not fall within the meaning of "construction contract" then the Adjudicator cannot erroneously assume jurisdiction. This is because it relates to his core jurisdiction which Parliament under CIPAA has not conferred jurisdiction on him. [62] Where an Adjudicator makes an error with respect to his core jurisdiction, this Court is at liberty to set the Decision aside on ground that he had no jurisdiction to adjudicate and hence exceeded his jurisdiction by proceeding to adjudicate when he should not have.” (emphasis added) [75] Here the issue of whether the contract is not fully in writing but altered with respect to payment in an oral agreement, when argued from the point of view of core or original jurisdiction would mean this: does the CIPAA 31 under section 2 apply to a construction contract in writing when the contract has been altered by an oral agreement on terms of payment? [76] This issue had been raised in a application brought by the Employer’s previous solicitors on 4.1.2018. Euroland had filed an originating summons in WA-24C-5-01/2018 for, inter alia, a declaration that any disputes arising between Euroland and Tack Yap in relation to the Project do not fall within the ambit and jurisdiction of the CIPAA in that the construction contract was not one in writing as part of the Contract was an oral agreement on the terms of payment with respect to Euroland paying only 80% of each Interim Certificate. [77] There was also an interlocutory application sought before this Court to injunct the Adjudicator from proceeding on ground that the contract in question was partly in writing and partly oral and as such it falls outside the scope of section 2 of the CIPAA and with that the Adjudicator had no jurisdiction to proceed to adjudicate the dispute. The application for an injunction was not proceeded with as parties could agree to the Court granting an order for extension of time for the respective parties to serve their Adjudication Response and Adjudication Reply and in the meanwhile this Court had dismissed the declarative prayers of Euroland. [78] It is for the Adjudicator to make his finding of fact as to whether there was such an oral contract which in this case has the effect of varying the written terms of the contract in writing in the Letter of Award which had also referred to the Tender Documents submitted which included the Bill of Quantities and the rates and pricing duly filled up. The Adjudicator in proceeding with the Adjudication was merely following the directions of the High Court and that surely cannot be a breach of natural justice. 32 [79] It cannot be a case where the moment an oral contract is raised then the Adjudicator must decline jurisdiction unless of course both the Claimant and Respondent in the Adjudication had agreed that the whole of the contract is oral. [80] If that were so then it is very easy to defeat Adjudication by merely asserting that the contract was an oral contract or that it was partly in writing and partly oral and then the Adjudicator would have no jurisdiction to proceed with the Adjudication. Precisely because of this that Parliament in its wisdom enacted section 27(3) of the CIPAA to grant liberty to the Adjudicator to proceed as if he had jurisdiction and to deliver his Decision, with that Decision being liable to be set aside for excess of jurisdiction in the High Court under section 15(d) of the CIPAA. [81] Parliament appreciates that some issues on jurisdiction with respect to core or original jurisdiction can be deep waters beyond the depths of some Adjudicators who may not be legally trained but whose expertise are drawn from other professional fields such as Quantity Surveying, Architectural or Engineering. [82] I see nothing wrong and everything proper for the Adjudicator to proceed under section 27(3) of the CIPAA and leave the matter of jurisdiction to be argued in this Court in a setting aside application. [83] To be fair to the Adjudicator he had given his reasons at pages 17-20 of his Decision on why he had rejected the argument of the Employer that there was an oral agreement to vary the written terms of the construction contract. The Adjudicator was unimpressed with the fact that Euroland through their Chief Operating Officer, Mr KH Tong, could not recall the exact location(s) and discussion(s), if at all, which led to the Oral Agreement. He expressed his bewilderment over the fact that if there had 33 been an Oral Agreement as alleged, then surely there would be some contemporaneous response to the multiple reminders for the short payments for there were no less than 7 Interim Certificates issued by the Architect. He found on the balance of probabilities that the so-called Oral Agreement did not exist. [84] There is clearly and certainly no denial of natural justice here but a most natural course to take in the interest of justice where the Decision of interim finality may be considered from the point of view of whether he had unduly restricted his jurisdiction in so deciding. Whether there was a denial of natural justice when en-route to dismissing the Employer’s set off, the Adjudicator had decided on the validity of the termination by the Main Contractor [85] Learned counsel for Euroland submitted that when the Adjudicator decided on the validity of the termination by Tack Yap, he went on a frolic of his own as the parties had not submitted on it. It was argued that he should have given the parties an opportunity to comment on what he had minded to decide with respect to the issue of termination. [86] The case of Cantillon Ltd v Urvasco Ltd [2008] 117 ConLR 1 was cited as authority for the above proposition. [87] The Employer’s assertion of a denial of natural justice on the above ground is misconceived. To begin with it was the Employer who had raised as their defence in the Payment Response served the wrongful termination by the Main Contractor. The Adjudicator stated in paragraph 8 and page 8 of his Decision that the Employer had alleged that even if there was underpayment (which the Employer denied), that did not constitute a 34 repudiatory breach entitling the Main Contractor to terminate the Contract and the Main Contractor wrongfully terminated the Contract. [88] Therefore as the issue of wrongful termination by the Main Contractor was raised by the Employer themselves in the Payment Response, the Adjudicator must of necessity consider the issue for otherwise he would be in breach of natural justice. [89] The Employer as Respondent in the Adjudication had further reiterated and repeated this in their Adjudication Response as pointed out at paragraph 11 at page 13 by the Adjudicator in his Decision wherein it was summarized that the Employer asserted that they had fulfilled their obligations in accordance with the Oral Agreement and that the termination by Tack Yap as the Claimant in the Adjudication was wrongful. It was further stated that the Employer accepted the alleged wrongful termination as repudiation of the Contract by the Main Contractor. [90] In fact the Employer had premised their set-offs precisely on the allegation of the Main Contractor having terminated the Contract unlawfully. At paragraph 9 of page 8 of the Decision the Adjudicator had stated that due to the termination of the Contract by the Main Contractor, the Employer had to engage a replacement contractor to complete the Works and that they would hold the Main Contractor liable for the costs and expenses associated with the engagement. [91] It was in that context that the Adjudicator had to consider the validity of the termination by the Main Contractor for underpayment of the Interim Certificates. The Adjudicator had to consider the issue of the validity of the termination raised by the Employer as without deciding on that he would not be able to decide on whether the Employer’s defence by way of a set-off should be allowed. 35 [92] Whether or not further submissions would be required on the issue of termination is a matter within the discretion of the Adjudicator under section 25(a) of the CIPAA. If a matter is a natural consequence arising from his finding of fact and if he is clear on the law, there is no need for him to ask for further submissions from the parties. [93] It is for him under section 25(a) of the CIPAA to establish the procedures in conducting the adjudication proceedings including limiting the submission of documents by the parties. Where parties had the opportunity to submit but failed to, they cannot be heard to be complaining of a denial of natural justice. Even the refusal to accept further submissions are not grounds for arguing a denial of natural justice. [94] In Tidalmarine Engineering Sdn Bhd v Conlay Construction Sdn Bhd and another appeal [2017] MLJU 738 at paragraph 42 it was held that there was no basis for arguing that there was a breach of natural justice merely because the Adjudicator had not allowed the parties to file their written submissions on the issues raised and in particular, on the jurisdictional challenge taken. [95] Likewise in TYL Land and Development Sdn Bhd v SIS Integrated Sdn Bhd and another case [2018] MLJU 217 it was observed as follows: “[106] The Adjudicator further found that all the submissions before him are clear for him to make a decision as stated in paragraph 39 of the Decision. Thus, having considered the Respondent’s solicitors request and having found that there is no necessity for further submissions, the Adjudicator could not be said to have committed any breach of natural justice. [107] The Court would be loathed to interfere with the discretion of the Adjudicator in deciding whether or not to allow further 36 documents to be served unless the procedure adopted is manifestly unfair or prejudicial to one party.” (emphasis added) [96] The issue of the validity of the termination cannot be divorced from the set-off claimed by the Employer with respect to the costs and expenses incurred by them in engaging a rescue contractor to complete the unfinished Works. It cannot be gainsaid that if the termination by the Main Contractor is unlawful then the Employer would be entitled to the set-off raised, subject always to proof. Conversely if the termination by the Main Contractor is lawful then the Employer would not be able to claim for the set-odd raised in the costs and expenses incurred in so engaging a rescue contractor to finish the Works. [97] I find no denial of natural justice in the way the Adjudicator had gone about deciding on the issue of the validity of the termination raised by the Employer as Respondent in the Adjudication in their Payment Response and Adjudication Response as follows at pages 24-25 of the Decision: “4.2. Issue 4.2: Is the Respondent’s allegation that even if there was underpayment that it would not constitute a repudiatory breach entitling Claimant to terminate the Contract and that Claimant wrongfully terminated the Contract valid? If so, are Respondent’s claims for costs due to engaging new contractor valid? ….. b. Section 40 of The Malaysian Law of Contract (1950) states: “When a party to a contract has refused to perform, or disabled himself from performing his promise in its entirety, the promise may put an end to the contract, unless he has signified by words or conduct, his acquiescence in its continuances.” 37 The “promise” in this case is the obligation of the Respondent to pay the Claimant, and at face value it would seem that the claimant was justified in termination, as the Respondent had not fulfilled his promise to pay. c. However, it is an established principle that not every breach of promise in a contract will give rise to a right to terminate or rescind a contract. The Malaysian Court of Appeal has addressed this point in Kemuning Setia Sdn Bhd vs. Tan Kok Siang where reference was made to Visu Sinnadurai on “The Law of Contract” which states that the guideline is “whether the breach is of sufficient gravity to allow the other party to rescind the contract” and further in the Court of Appeal’s decision (quoted in Kamuning Setia vs. Tan Kok Siang) in Ching Yik Development Sdn Bhd v Setapak Heights Development Sdn Bhd [1996] 3 MLJ 675 which held that: “Now, in every contract, be it for the sale of land or any other commodity, there are, generally speaking, some terms that are of fundamental importance and others of less or minor importance. The law creates the distinction for the purpose of determining the kind of remedy that is to be made available to an innocent party, i.e. the party who is not guilty of the breach. Where the term that has been flouted is fundamental to the contract, the innocent party is entitled to treat himself as being discharged from further obligations under it. But where the obligation that has been breached is only subsidiary or minor in nature, the innocent party may not treat himself as being free of 38 his obligations under the contract, although he may sue and recover damages for the non-performance of the subsidiary term.” d. The question that needs to be answered is whether the breach of promise in this matter, the non payment of more than 20% of the Certified Claim, was “subsidiary or minor” in nature. I find that the non-payment of such a large proportion of the claims cannot be regarded as subsidiary or minor, and I determine that the Claimant’s termination of contract was valid. As such, I determine that Claimant has no liability for the costs and expenses incurred by Respondent arising from this termination.” (emphasis added) [98] Even if there had been a breach of natural justice, for which this Court had found none, it is one that falls within the exception stated in the case of Herbosh-Kiere Marine Contractors Ltd v. Dover Harbour Board [2012] 140 Con LR 47 in page 110 where it was held that: "[32]...Whilst the principle which he puts forward is unchallengeable, and although it could be said that the adjudicator has arguably gone wrong in fact or in law in assessing the financial entitlement as he did, it is not that which is the subject of legitimate criticism. What he can be criticized for is deciding something not only on a basis which was not argued in the adjudication proceedings but also without giving either party the opportunity to address the point. ... 39 [33] In essence, and doubtless for what he believed were good and sensible reasons, the adjudicator has gone off "on a frolic of his own" in using a method of assessment which neither party argued and which he did not put to the parties. In some cases, this may not be sufficient to prevent enforcement of the decision where the "frolic" makes no material difference to the outcome of the decision. Thus, an adjudicator who refers to a legal authority which neither party relied upon, may have his or her decision enforced nonetheless if the application of that legal authority obviously makes no difference to the outcome. The breach of the natural justice has to be material. Here, for the reasons indicated above, the breach is material and has or has apparently led to a very substantial financial difference in favour of HKM but necessarily against the interests of DHB.” (emphasis added) [99] There was thus nothing wrong on the Adjudicator referring to the propositions of law en-route to and in support of the finding of mixed fact and law that the termination of the Contract by Tack Yap as the Main Contractor was lawful and valid on the circumstances of the case. [100] I am reminded of the dicta in Cantillon Ltd v Urvasco Ltd [2008] 117 ConLR 1 where it was observed as follows: "[67] .....As the authorities established that the responding party can put forward any arguable defence in adjudication, ......it must follow that the adjudicator can rule not only on that defence but also upon the ramifications of the defence to the extent that it is successful in so far as it impacts upon the fundamental dispute." (emphasis added) 40 [101] Once the defence of set-offs is raised and in this case in the context of additional costs and expenses incurred on the engaging of a rescue contractor to finish the Works, the ramifications of the defence raised by the Employer as Respondent in the Adjudication in both their Payment Response and Adjudication Response, are such that the Adjudicator cannot afford not to consider it for otherwise he would be in breach of natural justice. Whether the Adjudicator had exceeded his jurisdiction in that the construction contract was not one made in writing as part of the Contract was an oral contract on the terms of payment [102] It was argued that the Adjudicator had no jurisdiction as the construction contract in question was not one “made in writing” in that part of the Contract was oral. [103] The Adjudicator had given his reasons for rejecting the argument by Euroland that there was an oral contract with respect to the Payment Terms in that the Employer was only contractually obliged to pay 80% of the Interim Claims certified for the Progress Claims on the Work done. [104] I would not disturb that finding of fact based on cogent reasonings as set out in pages 17-20 of his Decision. [105] As such the question of a lack of jurisdiction or having acted in excess of his jurisdiction, does not arise. [106] Assuming for a moment that there was indeed an oral term in a construction contract in writing, does it mean then that the Adjudicator would have no jurisdiction? I have set out the reasons for rejecting that argument in Euroland & Development Sdn Bhd v Tack Yap 41 Construction (M) Sdn Bhd [2018] MLJU 861. I shall not repeat what had been stated there but shall only add the following: Section 2 of the CIPAA reads: “This Act applied to every construction contract made in writing relating to construction work carried out wholly or partly within the territory of Malaysia including a construction contract entered into by the Government.” [107] It is obvious that the Legislator did not say that the “construction contract” must be wholly in writing. It is not unusual in a construction contract for some terms to be varied orally as parties proceed along the performance of the Contract. It may be a term on Variation where it is oral and perhaps there may or may not be Minutes on the said Variation requested by the Employer or the Superintending Officer or the Project Director. There might be a variation with respect to additional works or omission of works or for purchase of materials by the Employer or that there should be no need for a Bankers Guarantee as contractual required in writing of the Main Contractor but that a retention sum should be deducted from every Interim Certification of the Progress Claims. It may even be a case of the Main Contractor requesting for direct payment to the Subcontractor from the Employer or that the Employer had agreed to materials of a similar brand to be used in substitution to that which had been contractually agreed. [108] The permutations can be varied and to allow a construction contract to be excluded from Adjudication under the CIPAA on a mere oral variation of the construction contract in writing would be to encourage a Non-Paying Party to skirt Adjudication and indeed to immunize themselves from 42 Adjudication on such a flimsy ground as that parties had agreed to an oral variation of the written contract. [109] The KLRCA CIPAA Circular 03 (now read as the AIAC CIPAA Circular 03) clarified the meaning of a “construction contract made in writing” as follows: “CONSTRUCTION CONTRACT IN WRITING”

There is a contract in writing:- a) if the contract is made in writing (whether or not it is signed by the parties); b) if the contract is made by exchange of communications in writing; or c) if the contract is evidenced in writing.

Where parties agree otherwise than in writing by reference to terms which are in writing, they make a contract in writing.

A contract is evidenced in writing if a contract made otherwise than in writing is recorded by one of the parties, or by a third party, with the authority of the parties to the contract. [110] No where is it stated that the whole of the construction contract shall be in writing and it would suffice if the contract is evidenced in writing. Clearly the intention was not to exclude a construction contract merely because some terms may be oral or that at a later stage parties may agree to an oral term. The important question is whether the said contract is in writing and the intent is that of certainty in the terms which are before the Adjudicator for application to the Payment Claim and Adjudication Claim 43 and defences that may be raised in the Payment Response and Adjudication Response. [111] One can well imagine the difficulties an Adjudicator would have to wrestle with if the construction contract is purely oral for it would be difficult for the Adjudicator to decide based on a conflict of the evidence presented before him. [112] However where the terms of a construction contract had been reduced into writing then even the absence of a term on submission of Progress Claim or period of progress payment shall not vitiate the Payment Claim made as section 36 of the CIPAA allows for the importation and imposition of default terms on for example the frequency of the progress Payment or the due date for payment. [113] The intent of Parliament was to save and salvage the construction contract from being excluded by section 2 of the CIPAA merely because some key terms in the contract in writing are absent. The fact that under section 36(1)(c) “Any variation agreed to by the parties to the construction contract by which the contract price or any other rate specified in the construction contract is to be adjusted” (emphasis added) as a matter that should be taken into consideration in deciding the value of a progress payment, would strongly militate against the fact that a mere allegation of an oral variation to terms of payment would render the construction contract one that cannot be adjudicated upon. [114] I am even prepared to accept by “Any variation” referred to above as may be oral or written but the deciding factor is that there has been an agreement on the variation. It is for the Adjudicator to decide as part of this fact-finding obligation to determine if there has been a variation and the fact 44 that there might have been an oral variation does not disqualify the construction contract from the application of the CIPAA. [115] The important thing is that the base contract upon which works had been commenced was already in writing no matter how rudimentary such that a failure even on matters like fees, prices and rates which had not been agreed upon or prescribed shall not under section 36(2)(a) and (b) render the construction contract one that is not in writing such that it is excluded from Adjudication under the CIPAA. [116] The whole tenor and thrust of section 36 on “Default Provisions in the Absence of Terms of Payment” is to keep a construction contract in writing under the scheme of Statutory Adjudication in line with the express purposes stated in its long title. A fortiori if an absence of an agreement on such a key term as value of progress claim and its regularity of submission and period of payment does not take the construction contract outside the scheme of Statutory Adjudication, then how much more when it is alleged that there has been an oral contract varying the written terms? [117] It is clearly incumbent on the Adjudicator to decide on his finding of fact as to whether there was a variation agreed to by the parties and to act accordingly. [118] Whether or not there is a variation affecting the value of the Progress Payment is a matter within the province and purview of the Adjudicator and he does not exceed his jurisdiction in so deciding irrespective of whether he found for an agreed variation or no variation whatsoever. [119] Therefore the Adjudicator, in deciding in this case that there was no oral contract varying the terms of the written contract, had kept within his jurisdiction in adjudicating the dispute. 45 [120] The application for the setting aside of the Adjudication Decision both on ground of a denial of natural justice and excess of jurisdiction would have to be dismissed. Whether there should be a Stay of the Adjudication Decision pending the trial of the same disputes [121] Then there is the application for stay of the Adjudication Decision. The fact that there has been a Main Suit commenced and now ready for trial is just a threshold condition to be met. Section 16(1)(a) and (b) referred to the following 2 situations:

an application to set aside the adjudication decision under section 15 has been made; or

The subject matter of the adjudication decision is pending final determination by arbitration or the court. [122] Here the application for stay is made under section 16(1)(b) of the [123] The Employer as the Respondent in the Adjudication must show that the Adjudicator had made a clear, obvious or unequivocal error in his Decision for a stay of the Decision under section 16(1) of the CIPAA. See the test laid down in View Esteem (supra) Federal Court. [124] For the reasons given by the Adjudicator for his findings of fact and of mixed fact and law in arriving at his Decision, I cannot detect any such error. [125] The Court may also consider whether there is a likelihood that Tack Yap as the Claimant in the Adjudication might not be able to pay back should Euroland succeed in the Main Suit in their Counterclaim at trial. [126] However looking at the financial position of the Claimant, they have in 2016 a gross revenue of RM13.7 million and a total asset of RM10.9m 46 against a total liability of RM9.6 m. Their turnover appears to have improved considerably from 2014. [127] On the other hand the Respondent Euroland has a loss of RM1.2 million for 2016. In Enclosure 4 of the application at Tab 24, for year ending 31.12.16 there is a total assets of RM62million and total liabilities of RM66.1million giving a net negative of RM3.94million. [128] The Claimant Tack Yap would have more reasons to fear with respect to payment compared to the Respondent Euroland with respect to getting their payment back if the payment were to be made now. [129] I can appreciate that Tack Yap’s claim against Euroland in the Main Suit is for, inter alia, RM9,497,501.92 which includes the balance amount in Interim Certificates No.1-7, Progress Claims No. 8-10 not certified by the Architect yet and the release of the Retention Sum. [130] Tack Yap, through the Adjudication, had merely claimed the certified sum of RM4,946,539.74 and the release of the Retention Sum. I can accept the fact that an Employer in withholding such large sums of money would undoubtedly contribute to a decline in the Main Contractor’s financial health, without delving yet into the merits of the Claim and Counterclaim in the Main Suit. [131] There is clearly no evidence that the Claimant is near insolvent or that they would not be able to pay back the Respondent should the Respondent succeed at the trial. [132] However seeing that the trial in the Main Suit shall commence on 25.7.2018 and continuing to 26.7.2018 and 14.8.2018, being the allocated dates for trial, I am prepared to grant a partial stay subject to terms. [133] The interest of justice would be served with the Respondent Euroland paying direct to the Claimant Tack Yap through their solicitors 50% of the 47 total amount given by the Adjudicator which would include interest, costs, fees and expenses of the adjudication and the balance 50% to the Claimant’s solicitors as stakeholders pending the disposal of the Main Suit provided always that the above sums are paid on or before the expiry of 10 working days from the date of this order (ie excluding Saturday and Sunday) and failing which there shall be no stay. Pronouncement [134] For all the above reasons I had dismissed the application for setting aside the Adjudication Decision with costs of RM5,000.00. [135] I had also granted a conditional Stay of the Decision subject to the above terms with costs of RM5,000.00 to the Claimant Tack Yap. [136] Correspondingly the enforcement application was also allowed on the same terms as the stay in that if the payments are not made on or before the expiry of 10 days from the date of the order, then the whole of the adjudication amount shall be enforced as a judgment of the Court. [137] The Court also granted costs of RM5,000.00 to the Claimant for the enforcement application. [138] Learned counsel for the Respondent, Mr Edwin Bak, applied orally for stay on the Decision of this Court. [139] Mr Richard Kok for the Claimant objected as there is no good reason to stay since this is a monetary judgment. 48 [140] The Court had dismissed the oral application for stay as there are no special circumstances shown. An oral interim stay was applied for and on the same ground as the stay, pending appeal, I had dismissed the interim stay as well since the 10 working days given for compliance with the conditional stay order would give the Respondent Euroland enough time for applying for a stay from the Court of Appeal. Dated: 8 October 2018. - signed - LEE SWEE SENG Judge Construction Court High Court, Kuala Lumpur For the Plaintiff in : WA-24C-114-06/2018 : Balan Nair and Edwin Bak and WA-24C-115-06/2018 : (Messrs Thomas Philip) and for the Defendant in : WA-24C-116-06/2018 : 49 For the Defendant in : WA-24C-114-06/2018 : Richard Kok and Winnou Chung and WA-24C-115-06/2018 : (Messrs Rhiza & Richard) and for the Plaintiff in : WA-24C-116-06/2018 : Date of Decision: 18 July 2018.