1. ) Pcp Construction Sdn Bhd v 1. ) Leap Modulation Sdn Bhd (WA-24C-53-03/2018 & WA-24C-61-03/2018)

Unlawful deduction of RM795,000.00 from Payment Certificate No. 19; 8

(ii) Work done which was not certified and paid of RM5,027,105.34;

(iii) Interest payable for the outstanding sum unpaid for the work done of RM248,816.18;

(iv) Usage of tower cranes and generator sets after determination of RM531,452.00;

Materials left at the site after determination of RM254,543.62;

(vi) Rectification of defective work at another building along Jalan Damai of RM218,792.45; and

(vii) Loss of profit due to wrongful and unlawful determination of RM8,885,520.00. [5] Leap Modulation raised as their defence set-offs consisting of the following:

Additional Costs of Completion to date amounting to RM8,988,844.61;

(ii) Costs of Making Good/Rectification of Defective & Non-Compliance Works to date amounting to RM4,203,931.52;

(iii) Costs of Temporary Safety Structures amounting to RM300,000.00;

(iv) Idling and Ancillary Costs amounting to RM1,236,562.51;

Liquidated Ascertained Damages to be computed upon completion; and

(vi) Any other or further costs of rectification for the Claimant’s non-compliance works as the rectification work is still ongoing. 9 [6] The Adjudicator delivered his Adjudication Decision and allowed a sum of RM4,061,420.75 in the corrected Adjudication Decision in favor of PCP on 6.2.2018 and dismissed the whole of the defence of Leap Modulation and with that the whole of the various heads of set-offs. The items in the Payment Claim allowed were for the value of Work done and the rental of tower cranes and the generator-sets. [7] Leap Modulation initiated arbitration proceeding against PCP, before the Adjudication Award was delivered, vide a Notice of Arbitration dated 30.6.2017 and Points of Claim dated 5.2.2018. Prayers [8] Whilst PCP had applied to enforce the Adjudication Decision under section 28 of the CIPAA, Leap Modulation had applied for the Adjudication Decision to be set aside under section 15(b),(c) and (d) of the CIPAA and there was also a subsequent application filed by Leap Modulation to stay the Adjudication Decision. [9] In applying to set aside the Adjudication Decision Leap Modulation had alleged that the Adjudicator had not acted impartially in allowing PCP’s Claim for usage and dismantling of the cranes and also for rental of the generator sets but had failed to grant Leap Modulation’s Claim for rectification works and also for costs of completing the balance Works. [10] It was also alleged that the Adjudicator in granting a certain sum for the cranes and the generator sets had arrived at the quantum based on the balanced provision for “Preliminaries” which neither party submitted on and as such there was a breach of natural justice justifying setting aside the whole of the Adjudication Decision. 10 [11] It was further argued that this is not a case where the part of PCP’s Claim not affected by the breach of natural justice could be severed from the part affected as in reality the breach of natural justice had emanated from something more insidious in that it proceeded from the Adjudicator’s biasness and partiality towards PCP, such that the whole of the Adjudication Decision had been tainted and contaminated and hence the whole of the Decision must be set aside. [12] Leap Modulation also sought to persuade the Court that the Adjudicator had acted in excess of his jurisdiction in deciding on the validity or otherwise of the termination of the Contract when that issue had not been properly raised before him for Decision. [13] PCP shall be referred to as the Claimant and Leap Modulation as the Respondent as they were so referred to in the Adjudication. [14] Parties agreed that if the Adjudication Decision is set aside then correspondingly the enforcement would be dismissed and that conversely if the setting aside is dismissed then the enforcement would be allowed. [15] The above is of course without prejudice to the Respondent applying for a stay of the Adjudication Decision under section 16(1)(b) of the CIPAA until the disposal of the arbitration. [16] With consent of both the parties, the setting aside and enforcement applications were heard together followed by the stay application. Principles [17] Section 15 of the CIPAA provides that: “An aggrieved party may apply to the High Court to set aside an adjudication decision on one or more of the following grounds: 11

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.” [18] It would be helpful to set out some guiding principles as teased from some decisions of our Courts. [19] In Bina Puri Construction Sdn Bhd v Hing Nyit Enterprise Sdn Bhd [2015] MLJU 941 at paragraph 9 Justice Ravinthran Paramuguru J. held that: “[9] ... It must be noted that under CIPPA, there is no right of appeal against the decision of the Adjudicator which is interim in nature or of temporary finality only. Section 15 has provided limited grounds on which the decision of the Adjudicator may be set aside. Since an application under section 15 is not an appeal, the decision of the Adjudicator cannot be reviewed on merits… [12] ... As I said earlier, section 15 does not envisage that the decision of the Adjudication can be reviewed on its merits. Therefore, it is immaterial if the Adjudicator had erred in his finding of facts.”(emphasis added) [20] The same principle was echoed and expanded further by Justice Mary Lim Thiam Suan J (now JCA) in ACFM Engineering & Construction Sdn Bhd v Esstar Vision Sdn Bhd and another case [2015] MLJU 1951 where her Ladyship held that: 12 “[54] In one of the few adjudication cases that went on appeal, the Court of Appeal in Carillion Construction Limited v Devonport Royal Dockyard Limited [2005] EWHC 778 too, gave relevant insights as to the approach and attitude of the Courts in such matters. At paragraphs 85 and 86 of the judgment, the Court said: "85. The objective which underlies the Act and the statutory scheme requires the Courts to respect and enforce the adjudicator's decision unless it is plain that the question which he has decided was not the question referred to him or the manner in which he has gone about his task is obviously unfair. It should only be in rare circumstances that the courts will interfere with the decision of an adjudicator… [55] Again, one finds the same refrain from the Court of Appeal. That these adjudication decisions are meant to be complied with; and that it is only in "rare" cases or where it is "plain that the question which he has decided was not the question referred to him or the manner in which he has gone about his task is obviously unfair" that the Court should wade in to interfere. I agree that this is the right approach to adopt in relation to section 15 of CIPAA 2012.”(emphasis added) [21] In Econpile (M) Sdn Bhd v IRDK Ventures Sdn Bhd and another case [2016] MLJU 640 at paragraph 72, this Court had referred to the English case of the UK Technology and Construction Court in Westwood Structural Services Ltd v Blyth Wood Park Management Co Ltd [2008] EWHC 3138 (TCC) which held that: 13 “[13] The principles as to enforcement of adjudicators' decisions are well known. They can be summarised as follows:

"the objective which underlies the Act and the statutory scheme requires the courts to respect and enforce the adjudicator's decision unless it is plain that the question which he has decided was not the question referred to him or the manner in which he has gone about his task is obviously unfair. It should be only in rare circumstances that the courts will interfere with the decision of an adjudicator": see para 85 of the judgment of Chadwick LJ in Carillion Construction Ltd v Devonport Royal Dockyard Ltd [2005] EWCA Civ 1358 104 ConLR 1 [2006] BLR 15.

An error of fact or law will not invalidate an adjudicator's decision. If the adjudicator has answered the right question in the wrong way, his decision will nevertheless be binding. It is only if he has answered the wrong question that his decision will be a nullity: see the Court of Appeal decisions in Bouygues (UK) Ltd v Dahl-Jensen (UK) Ltd [2001] 1 All ER (Comm) 1041, 73 ConLR 135, [2000] BLR 522 and C & B Scene Concept Design Ltd v Isobars Ltd [2002] EWCA Civ 46, 82 ConLR 154 [2002] BLR 93.”(emphasis added) Whether the Adjudicator had failed to act independently or impartially in assessing the evidence of the Respondent in their set-offs raised 14 [22] An Adjudication Decision may be set aside if the Adjudicator had failed to act independently or impartially in making his Decision as provided for under section 15(1)(c) of the CIPAA. [23] The requirement that a decision maker under any statutory scheme, or tribunal or for that matter a Court must not fail to act independently or impartially is a given as no decision can be allowed to stand if it had been tainted by a lack of independence or impartiality. Learned counsel for the Respondent referred to the English case of Re Medicaments and Related Classes of Goods (No. 2) [2001] 1 WLR 700 where Lord Phillips explained what is constituted as “bias” at paragraph 37 and 38 as follows: “Bias is an attitude of mind which prevents the Judge from making an objective determination of the issues that he has to resolve. A Judge may be biased because he has reason to prefer one outcome of the case to another. He may be biased because he has reason to favour one party rather than another. He may be biased not in favour of one outcome of the dispute but because of a prejudice in favour of or against a particular witness which prevents an impartial assessment of the evidence of that witness. Bias can come in many forms. It may consist of irrational prejudice or it may arise from particular circumstances which, for logical reasons, predispose a Judge towards a particular view of the evidence or issues before him. The decided cases draw a distinction between ‘actual bias’ and ‘apparent bias’. The phrase ‘actual bias’ has not been used with great precision and has been applied to the situation:

where a Judge has been influenced by partiality or prejudice in reaching his decision and 15

where it has been demonstrated that a Judge is actually prejudiced in favour of or against a party. ‘Apparent bias’ describes the situation where circumstances exist which give rise to a reasonable apprehension that the Judge may have been, or may be, biased.”(emphasis added) [24] In the context of Adjudication for instance, Judge Bowsher QC in the case of Discain Project Services Ltd v Opecprime Development Ltd [2001] 80 ConLR 95 at page 113 dismissed the claimant’s application to enforce the adjudicator’s decision, based on the ground that there was a real possibility or a real danger that the adjudicator was biased as follows: “Applying the test set out in Re Medicaments and Related Classes of Goods (No. 2) [2001] 1 WLR 700, on the facts as I have found them, I hold that although Mr. Sutcliffe was not biased, those facts would lead a fair-minded and informed observer to conclude that there was a real possibility or a real danger that he was biased.” (emphasis added) [25] Learned counsel for the Respondent also referred to the case of Paice and Another v Harding (t/a M J Harding Contractors) [2016] EWHC B22 (TCC), where Finola O’Farrell QC also summarized the principles of the real danger of bias/apparent bias test as follows: “[39] The test for apparent bias is whether an informed and fair minded observer, with knowledge of all the relevant circumstances, would conclude that there was a real possibility that the tribunal was biased… [40] The test is an objective one and not dependent upon the characteristics of the parties… 16 [41] The court must look at all the circumstances as they appear from the material before it, not just at the facts known to the objectors or available to the hypothetical observer at the time of the decision… [42] The material circumstances will include any explanation given by the decision-maker under review as to his knowledge or appreciation of those circumstances… [43] The fair-minded observer must be assumed to know all relevant publicly available facts; must be assumed to be neither complacent nor unduly sensitive or suspicious; must be assumed to be fairly perspicacious in that he or she is able to distinguish between what is relevant and what is irrelevant and when exercising judgment able to decide what weight should be given to the facts that are relevant” (emphasis added) [26] The “real danger of bias test” has been applied by the Malaysia Court as can be seen in the case of Metramac Corporation Sdn Bhd v Fawziah Holdings Sdn Bhd; Tan Sri Halim Saad & Che Abdul Daim Hj Zainuddin (Interveners) [2007] 4 CLJ 725. The Federal Court there set aside the decision and judgments of the Court of Appeal due to the reason that the decision and judgments of the Court of Appeal cannot stand the test of real danger of bias. The Federal Court observed as follows at page 765: “[70] We are therefore of the opinion that the stage at which bias is said to have arisen is quite immaterial. The real danger of bias can arise at any stage in a judicial or quasi-judicial proceeding or even in administrative tribunal. The crucial point in determining the presence of bias is to objectively enquire whether the facts and circumstances asserted to be evidence of bias affirmatively 17 answer the test for real danger of bias as formulated by this court. In other words the enquiry is to determine whether there is "a departure from the standard of even-handed justice which the law requires from those who occupy judicial office or those who are commonly regarded as holding a quasi-judicial office, such as an arbitrator. The reason for this clearly is that having to adjudicate between two or more parties; he must come to his adjudication with an independent mind, without any inclination or bias towards one side or other in the dispute." (per Lord Thankerton in the English case of Franklin v. Minister of Town & Country Planning [1948] AC 87). [71] Further, we do not think there is any good reason to limit any finding of real danger of bias in a judicial proceeding only up to the stage of pre-delivery of judgment. The element of real danger of bias can be said to have played a role in a tribunal or in any of its members at the time of coming to its decision if the judgment delivered or the contents therein render an affirmative answer after taking it through the test of bias as enunciated by this court, objectively and carefully, by the reviewing or appellate court personifying as a reasonable man or a fair-minded and informed observer. (See: R v. Gough [1993] AC 646). [72] In other words the question is 'whether the allegation and the factual circumstance could have 'caused a fair-minded and informed bystander to entertain a fear of real danger of bias'” (emphasis added) [27] Applying the above test of a real danger of bias, learned counsel for the Respondent argued that such a danger was present when in relation to 18 Claimant’s claim of rental and dismantling costs for tower cranes and gen-sets in the Adjudication, the Adjudicator decided that PCP was entitled to the rental costs of RM282,178.00 and dismantling costs of RM45,000.00, despite that there being no evidence that tax invoices had been issued by the Rental Companies to PCP and that such rental and dismantling costs had been incurred / paid by PCP (see paragraph 83 of the Adjudication Decision). [28] The Adjudicator had stated as follows at paragraph 78 of his Decision: ”[78] I should remark here that the following evidence was not produced before me, whether they were available or not:

Actual rental costs paid by the Claimant (PCP herein) to Majumuda (M) Sdn Bhd for the period 01.02.2016 to 30.06.2016;

Invoices for rental by Majumuda (M) Sdn Bhd to the Claimant for the said period;

Tax invoices by TTL Sale & Rental Sdn Bhd for the period 01.02.2016 to 26.03.2016 and for the period 26.04.2016 to 30.06.2016…” [29] However, when it came to the evidence of the Respondent, the Adjudicator had dismissed all the set-offs raised by Leap Modulation in the Adjudication on the basis that there is no evidence to show that Leap Modulation had incurred such costs. See paragraphs 133, 136, 139 & 142 of the Adjudication Decision where the Adjudicator had stated that: “… I also find that the Respondent (Leap Modulation herein) has failed to prove quantum in respect of this set-offs item.” 19 [30] That, according to learned counsel for the Respondent, is clearly a case where the Adjudicator had applied two different standards of proof in allowing PCP’s claim and dismissing Leap Modulation’s set-offs. It was argued that to allow the Adjudicator’s findings to stand, would lead an informed and fair-minded observer to conclude that there was a real possibility that the Adjudicator was biased. [31] I am afraid that is an over-simplification of the Adjudicator’s careful weighing of the evidence before him en-route to his Decision on the quantum he had granted to the Claimant for the rental and dismantling costs of the cranes and the rental of the gen-sets. [32] It would be grossly unfair to say of the Adjudicator that he had applied two different standards where proof is concerned, one for the Claimant and another for the Respondent. [33] The totality of the evidence of the cranes and gen-sets costs incurred by the Claimant must be compared and contrasted with that for the rectification works allegedly incurred by the Respondent. [34] The findings of the Adjudicator must be read in the context of the whole Decision and not confined to isolated paragraphs which, when taken out of context, may be made to lend support to the Respondent’s assertion of biasness. [35] The Claimant had claimed the sum of RM531,452.00 for the usage of the tower cranes and gen-sets after the determination of the employment. [36] The Adjudicator assessed the evidence on the rental of cranes. The Adjudicator had allowed a lesser sum for the rental of the tower cranes as the evidence did not shore up and support the whole of the Claimant’s Claim. Learned counsel has zeroed in on the evidence not produced at paragraph 78 of the Decision which is a rather selective reading of the 20 Decision. For context and continuity I am constrained to reproduce paragraph 77 of his Decision where the Adjudicator had set out the evidence of the quantum of the rental costs as follows: “77. As to the quantum of the rental costs entitlement, the evidence before me comprises of:

Rental Agreement between Majumuda (M) Sdn Bhd and the Claimant dated 09.07.2014 (shortly after the Contract Date of Commencement of 02.05.2014) with rental rates for the two (2) tower cranes, now the subject matter of the Claimant’s Claim here.

Two (2) Tax Invoices by TTL Sale & Rental Sdn Bhd for the rental period 27.03.2016 to 25.04.2016 for two gen-sets totaling RM7,102.00......” [37] The argument on making a reference to the “Preliminaries” when the claim for rental is higher than the “Preliminaries” is not without any justification. The Adjudicator reasoned at paragraph 83(a) as follows: “(a) To me, reasonable remuneration to the Claimant in this situation should be based on actual costs, provided actual costs do not exceed the amount of the preliminaries. Allowing a claim beyond the agreed price for the preliminaries would be outside the contemplation of the parties at the time when parties entered in (sic) the Contract, notwithstanding the determination.

By virtue of the rental agreement between Majumuda (M) Sdn Bhd and the Claimant dated 09.07.2014, and notwithstanding the absence of Invoices from Majumuda (M) Sdn Bhd or evidence of actual payment, I am satisfied that the rental costs for the tower cranes of RM320,000.00 as claimed by the Claimant have been 21 incurred by the Claimant for the period of 01.02.2016 to 30.06.2016. I am however unable to award this sum when the balance of the recurrence cost in the Preliminaries for tower cranes is only RM275,076.00 (see paragraph 82(a) above). Having given this matter due consideration, I am therefore only prepared to allow the Claimant the sum of RM275,076.00 for the rental of the tower cranes.” (emphasis added) [38] The reality of the business of construction is such that tower cranes have to be rented unless it is one’s own. There was the incontrovertible evidence of the rental agreement between Majumuda (M) Sdn Bhd and the Claimant dated 9.7.2014. The Adjudicator was satisfied with respect to the costs incurred but did not allow that sum but instead a lower sum as the balance “Preliminaries” for this item is only RM275,076.00. [39] I can detect no biasness here and no double standard as there is evidence on the balance of probabilities but a lesser sum is allowed consistent with the agreed “Preliminaries” sum. [40] As for the dismantling costs of the tower cranes the Adjudicator reasoned as follows at paragraph 89: “The Claimant claims the sum of RM167,564-00 (without GST) for the dismantling of the tower cranes...This sum is also supported by various invoice issued by third parties. I am however guided again by the pricing in the Preliminaries. Pursuant to paragraph 82(a) above, the completion costs for the tower crane is only RM45,000-

00...For the same reason stated in paragraph 83(a) above, I can therefore see no basis for justification for the Claimant making a claim that exceeds RM45,000-00, irrespective of the validity of the determination.” (emphasis added) 22 [41] I agree with the learned counsel for the Claimant that despite the Claimant having submitted sufficient evidence in the form of invoices issued by third party, the Adjudicator had nonetheless only allowed a lesser sum of RM45,000.00 based on the Completion Price in the “Preliminaries”. [42] With respect to the Claimant’s Claim for the rental of the gen-sets the Adjudicator had allowed a lesser of RM7,102.00 based on two tax invoices issued by TTL Sale & rental Sdn Bhd for the total sum of RM7,102.00 which is less than the balance recurrence costs in the “Preliminaries” at paragraph 82(b) of the Decision. [43] There was clear evidence of the rental and dismantling of the cranes and the gen-sets and the only problem was with respect to the amount of the claim which the Adjudicator was not prepared to give as contractually he was of the view that the claim should not exceed the balance of the “Preliminaries” provided for. Out of the sum of RM531,452.00 claimed, the Adjudicator only allowed the sum of RM327,178.00. [44] However, the same cannot be said of the Respondent’s claim for the rectification costs where the Adjudicator found that there was no evidence to support Plaintiff's claim as stated in paragraph 136 of the Adjudication Decision as follows: “Even if I am wrong with regard to the invalidity of the determination of the Contract, the only apparent evidence before me in respect of rectification of the alleged defective and non compliance works is an estimate by the Quantity Surveyor dated 06.11.2017, tabulating the defects and the corresponding estimated costs. By this mere tabulation, the Respondent has not proven the defective and non-compliance works. Even if the Respondent had proven the 23 existence of the same, the Quantity Surveyor's estimates do not demonstrate to me that the Respondent has in fact incurred this amount or any part thereof...” (emphasis added) [45] In other words whilst the tower cranes were rented, used and dismantled and the gen-sets were rented, there was by contrast, no defects that could be said to be conclusively attributed to the Claimant and certainly no rectification works had been done or payments made to any third party contractor for what had been tendered in evidence is a mere quotation! [46] Needless to say, where weight and quality of evidence is concerned, it is the sole discretion of the Adjudicator as to how much weight is to be given to the evidence presented in assessing the evidence. Parliament did not want an Adjudicator to be embroiled with the technicalities of admitting or rejecting evidence according to the strict rules of evidence under the Evidence Act 1950 and indeed it is not applicable in the proceeding under the CIPAA as stated under section 12(9) of the CIPAA. [47] In PWC Corp Sdn Bhd v Ireka Engineering & Construction Sdn Bhd and another appeal [2018] MLJU 152 this Court had observed as follows: [38] It was also submitted that the Adjudicator's failure to consider the re-measurement provision when he wholly accepted PWC's claim was a material breach which is of considerable importance to the outcome of the Adjudication Decision. Therefore, it was apparent that the Adjudicator failed to demonstrate his impartiality in the process of delivering his decision. [40] I must state at the outset that the issue of sufficiency of evidence and the weight to be attached to it are not matters that 24 may be raised in a Setting Aside Application as this Application is not by way of an appeal. [41] In BM City Realty & Construction Sdn Bhd v Merger Insight (M) Sdn Bhd & Another case [2016] 1 LNS 1096 it was explained as follows: [62] I agree even if there was a failure to take into account of payment made to the NSCs, it is merely an error of findings of facts/law. Such an error does not require the Adjudication Decision to be set aside. There will not be a denial of natural justice if the Adjudicator had addressed all the right issues even in the wrong way. The adjudicator's decision will nevertheless be temporarily binding. It is only when the adjudicator has answered the wrong issues that his decision will be a nullity..." [42] As pointed out by learned counsel for the Claimant the Respondent's averment that the learned Adjudicator "did not consider Ireka's re-measurement documents and calculations” is incorrect. This can be seen in paragraphs 60 to 65 of the Adjudication Decision and paragraphs 83 & 84 of the Adjudication Decision. [43] Again, in relation to the weight to be given to documents that are in evidence, this remains the pure province of the Adjudicator's discretion and discernment and with that, his decision. Suffice to say that Parliament in its wisdom had provided under section 12(9) of the CIPAA as follows: "The Evidence Act 1950 [Act 56] shall not apply to adjudication proceedings under this Act." (emphasis added) 25 [48] Any backdoor or indirect method of challenging the weight and sufficiency of evidence with respect to any findings of fact under the guise of the Adjudicator been partial in applying different strokes to the same folks is doomed to fail unless there is cogent and irrefutable evidence pointing inexorably to the real danger of biasness and partiality of the Adjudicator. [49] The mindset of the Adjudicator cannot be said to have an inherent default of biasness against the Respondent as when viewed as a whole the Adjudicator had also dismissed the following of the Claimant’s Claim:

RM254,543.62 for the material left at the site after the unlawful determination on ground that the Claimant had not proved it;

RM218,792.45 for the rectification of defective works at another building at Jalan Damai on ground that it is under a separate contract and

RM9,905,148.14 for the loss of profit as a result of the unlawful termination on ground that it is not a Payment Claim for work done. [50] It was also submitted that under Clause 25.4(iv) of the COC it is provided that: “The Contractor (PCP) shall allow or pay to the Employer (Leap Modulation) in the manner hereinafter appearing the amount of loss caused to the Employer by the determination…… but upon such completion and verification of the accounts within a reasonable time the Architect shall certify the amount of expense properly and actually incurred by the Employer and the amount of any loss caused to the Employer by the determination and, if such amounts added to the monies paid to the Contractor before the 26 date of determination exceed the total amount which would have been payable on completion in accordance with this Contract, the difference shall be a debt payable to the Employer by the Contractors and if the said amounts when added to the said monies be less than the said total amount, the difference shall be a debt payable by the Employer to the Contractor.”(emphasis added) [51] Learned counsel for the Respondent submitted that under the above clause the Claimant is to indemnify the Respondent for all additional costs incurred by the Respondent after the determination, provided that the Architect has certified the amount of expense properly and actually incurred by the Respondent. It was further argued that since the Set-Offs Documents were made available to the Adjudicator, the Respondent’s Set-Offs should have been allowed by the Adjudicator, despite the fact that there is no proof that such costs were incurred by the Respondent. [52] Nothing could be further from the truth. The opening words of the above Clause are premised on there being a loss caused to the Respondent and there would only be a loss caused to the Respondent if the termination by the Respondent of the Contract had been lawful. It follows that if the termination is unlawful then the Claimant cannot be said to have caused the Respondent to suffer loss. Any other interpretation would allow the Respondent to profit from their breach and that would be untenable and absurd under the law! [53] Even assuming for a moment that he had erred in accepting the Claimant’s evidence in support of their claim and rejecting the Respondent’s evidence with respect to their set-offs, that in the absence of cogent evidence of biasness, is not sufficient ground to set aside the Adjudication Decision. 27 [54] Whilst wrong rejection of evidence of a party may be a factor to consider in deciding if the Adjudicator had failed to act independently and impartially with respect to that party, in the absence of clear and cogent evidence, this Court would not find a case for a real danger of biasness. Whether the Adjudicator had failed to act impartially in awarding costs of the proceedings wholly against the Respondent [55] Section 18(1) of the CIPAA provides for Costs of Adjudication Proceedings as follows: “(1) The adjudicator in making the adjudication decision in relation to costs of the adjudication proceedings shall order the costs to follow the event and shall fix the quantum of costs to be paid.” [56] The quantum of costs to be awarded is purely within the discretion of the Adjudicator. This has also been made clear in the case of PWC Bina Sdn Bhd v Ideal City Development (M) Sdn Bhd and another suit [2017] MLJU 2029 where it was held that: “[42] It was also contended there was denial of natural justice in the award of costs on solicitor and client basis where there was no opportunity for ICD to rebut or address the adjudicator. As stated in BM City Realty Construction Sdn Bhd v Merger Insight (M) Sdn Bhd [2016] 1 LNS 1096 an adjudicator has the jurisdiction to determine the quantum of costs on such basis as he thinks fit and is something within the discretion of the adjudicator unless it can be shown that he has acted on wrong principles. Therefore there is no ground for this Court to interfere where costs is within the discretion of the adjudicator and there has 28 been no evidence of the adjudicator acting on wrong principles.(emphasis added) [57] The Adjudicator had awarded costs of the Adjudication proceedings to the Claimant as

most of the Claimant’s claims were allowed despite the fact that there were few claims being dismissed;

on the contrary, the whole of Respondent’s claim was being dismissed by the Adjudicator and

the net result was that the Respondent was required to pay the Claimant the sum of RM4,061,420.75. [58] In fact the Claimant had requested for their Claims Consultant’s Costs amounting to RM148,000.00 and the Adjudicator did not award any sum at all since “this is a bare figure without any supporting documents or evidence.” See paragraph 149 of his Decision. [59] In the circumstances the costs of RM114,679.28 with respect to the Adjudicator’s fees (following the KLRCA’s Recommended Schedule of Fees) and the KLRCA’s administrative fees, registration and appointment fees as well as GST cannot be said to be against all accepted principles of costs to follow the event as stated by the Adjudicator at paragraph 148 of his Decision. [60] There is no basis whatsoever to latch on to the quantum of costs awarded by the Adjudicator to lambast the Adjudicator for being bias in favor of the Claimant. Whether there was a breach of natural justice in the Adjudicator arriving at the quantum of claim to be allowed for the cranes and the 29 generator-sets by reference to the Preliminaries without reverting to the parties [61] The Adjudicator had decided on the validity of the above claims of the Claimant with reference to the documentary evidence and also by referencing it to the agreed contractual “Preliminaries” sum. I cannot fathom how that could be said to be a breach of natural justice. Surely if the “Preliminaries” are before the Adjudicator, he should have the liberty to refer to it in his Decision even though the parties, for reasons best known to them, would prefer not to submit on the bearing that the “Preliminaries” might have on the Claimant’s Payment Claim. [62] The Claimant was keen to be allowed the whole of the sum claimed irrespective of the provision for “Preliminaries”. The Respondent was bent on arguing that there is no basis to allow this item on the Payment Claim. Surely the Adjudicator as part of his duty to determine if the Respondent is liable and if so for how much, is entitled to assess what is a reasonable claim having regard to the evidence of sum incurred as supported by evidence and the contractually agreed sum for the “Preliminaries”. There is no need for the Adjudicator to revert to the parties at every stage of his decision-making process especially after parties have presented their submission unless he had doubts that he wanted to clarify within the parties. An Adjudicator works within a tight time frame and a delay beyond the time frame for delivering his Decision would render his Decision void and unenforceable under section 12(3) of the CIPAA. [63] An Adjudicator, just like an Arbitrator is not bound to accept either of 2 diametrically opposing views submitted by the parties and he is perfectly entitled to follow a path in between the 2 extremes for so long as the 30 evidence where quantum is concerned can be gathered from the documents presented. [64] I recall what was said in the context of setting aside an Arbitral Award in Soh Beng Tee & Co. Pte Ltd v Fairmount Development Pte Ltd [2007] 3 SLR 86, a decision of the Singapore Court of Appeal where the argument of a breach of natural justice was raised in an attempt to set aside an Arbitral Award. At page 119 it was explained as follows: "It is almost invariably the case that parties propose diametrically opposite solutions to resolve a dispute. They may expect the arbitrator to select one of these alternative positions. The arbitrators, however, is not bound to adopt an either/or approach. He is perfectly entitled to embrace a middle path (even without appraising the parties of his provisional thinking or analysis) so long as it is based on evidence that is before him. Similarly, an arbitrator is entitled - indeed, it is his obligation, to come to his own conclusions or inferences from the primary facts placed before him. In this context, he is not expected to inexorably accept the conclusions being urged upon him by parties, neither is he expected to consult the parties on his thinking process before finalizing the award unless it involves a dramatic departure from what has been presented to him. Each case should be decided within its own factual matrix. It must always be borne in mind that it is not the function of the court to assiduously comb an arbitral award microscopically in attempting to determine if there was any blame or fault in the arbitral process; rather an award should be read generously such that only meaningful 31 breaches of the rules of natural justice that have actually caused prejudice are ultimately remedied." (emphasis added) [65] If an Arbitral Award is to be read generously and not with the predilection to find fault with it, how much more an Adjudication Decision which have to be delivered within a short and strict time frame under section 12(2) which Decision is only of interim finality under section 13 of the CIPAA. One party would invariably be unhappy but he would have his full and final remedy in arbitration or litigation as the case may be. [66] One must not be fixated to the principle of natural justice to the point of being fastidious about it such that every minor breach of it would attract the sanction of having the whole of the Decision set aside. After all the basic requirement of natural justice is that the Adjudicator must accord procedural fairness to both parties to allow them the opportunity to present their case and be heard, whether by way of written submissions or oral or both. In other words the manner the Adjudicator goes about making his Decision must not be manifestly unfair. [67] It does not mandate the Adjudicator to decide in a particular manner. So long as he had considered the arguments of both parties, he cannot be faulted if he were to arrive at a so-called wrong finding of fact or law or mixed finding of fact and law. In a case of a clear, obvious and unequivocal error, the Court might be constrained to grant a stay of the Decision pending arbitration or litigation. Understandably, a successful setting aside under section 15 of the CIPAA would be few and far in between. [68] As was observed by this Court in Gazzriz Sdn Bhd v Hasrat Gemilang Sdn Bhd [2016] MLJU 1054: [45] It cannot be overstated that the unsuccessful party in an Adjudication must not simply raise the ground of breach of natural 32 justice in setting aside an Adjudication Award just because that party now disagrees with the interpretation of law or finding of facts based on the evidence or both. The ground of breach of natural justice should not be used as a backdoor way to set aside an Adjudication Decision made after both parties have been given the opportunity to submit their Payment Claim and Payment Response and followed by Adjudication Claim and Adjudication Response and if need be an Adjudication Reply after that… [46] I recall the Singapore case of Am Associates (Singapore) Pte Ltd v Laguna National Golf and Country Club Ltd [2009] SGHC 260, and the dicta Judith Prakash J, in a context not dissimilar to ours: "23. There are two rules of natural justice: the first is that a man should not be the judge in his own cause and the second is that the judge or Adjudicator or other arbiter must hear both side of the dispute. The second rule is often referred to by its Latin tag, audi alteram partem. Laguna's submission, while not specifically identifying which rule of natural justice had been breached, appeared to refer to the second one....

…The audi alteram partem rule required the Adjudicator to receive both parties submissions and consider them; it did not require him to decide the dispute in accordance with Laguna's submissions. It was clear from the Adjudication Determination that the Adjudicator had conducted the adjudication in accordance with the principles of natural justice: he had called an adjudication conference at which both parties were able to make their submissions, an opportunity 33 which Laguna had availed itself of. Thereafter, as the Adjudication Determination itself made plain, the Adjudicator gave consideration to all points raised and he then came to certain conclusions for which he gave his reasons. However dissatisfied Laguna may be with those decisions, it cannot ask for the Adjudication Determination to be set aside because it considers the decisions to be against the weight of the evidence.

The principles of natural justice are concerned with the provision of a fair hearing to contending parties. They do not mandate any particular result. As long as the parties have been given a fair hearing, the decision cannot be set aside for failure to comply with natural justice. A party who is dissatisfied with the decision on its merits cannot use the principles of natural justice to have the decision set aside..." (emphasis added) [69] Learned counsel for the Respondent had referred to the case of Balfour Beatty Construction Ltd v Lambeth London Borough Council [2002] EWHC 597 (TCC) where Humphrey Lloyd QC held that the Adjudicator had failed to comply with the rules of natural justice and accordingly set aside the decision of the adjudicator, based on the following grounds: “[33] Thus, in my judgment, the adjudicator not only took the initiative in ascertaining the facts but also applied his own knowledge and experience to an appreciation of them and thus, in effect, did BB's work for it. Lambeth knew of course that Mr Richards intended first to verify the “as built programme” and it made 34 submissions on it and on each of the Relevant Events. Mr Richards did not however inform Lambeth of what he then intended to do with the facts. He did not invite their comments on whether the “as built programme” or chart that he had drawn to depict the actual progress of the work was a suitable basis from which to derive a retrospective “critical path”. Nor did Mr Richards inform either party of the methodology that he intended to adopt, or to seek observations from them as to the manner in which it or any other methodology might reasonably and properly be used in the circumstances to establish or to test BB's case. In my judgment he ought to have done so. BB had not presented its case on that basis. Lambeth had criticised BB both at the outset and in its final, if belated, submissions that it had failed to establish its case in any proper way. One would ordinarily expect the appropriate method of analysis to be agreed before it was used by an architect or other contract administrator. The adjudicator steps into the shoes of such a person. If an adjudicator intends to use a method which was not agreed and has not been put forward as appropriate by either party he ought to inform the parties and to obtain their views as it is his choice of how the dispute might be decided. An adjudicator is of course entitled to use the powers available him but he may not of his own volition use them to make good fundamental deficiencies in the material presented by one party without first giving the other party a proper opportunity of dealing both with that intention and with the results. The principles of natural justice applied to an adjudication may not require a party to be aware of “the case that it has to meet” in the fullest 35 sense since adjudication may be “inquisitorial” or investigative rather than “adversarial”. That does not however mean that each party need not be confronted with the main points relevant to the dispute and to the decision.” [70] As can be appreciated the breach of natural justice in the above case was precisely because the Adjudicator had used a method not agreed upon by both parties to supply the deficiencies in the Claimant’s case. That would be a clear infraction of the principles of natural justice. [71] Our CIPAA recognized that an Adjudicator shall have the power and thus may proceed under section 25 (i) to inquisitorially take the initiative to ascertain the facts and the law required for the decision but always within the issues raised in the parties’ Payment Claims and Payment Response as well as in the parties’ Adjudication Claim, Adjudication Response and Adjudication Reply. [72] That being the case the Court would be slow to conclude that there has been a breach of natural justice merely because the Adjudicator had inquisitorially ascertained certain facts and the law. [73] Granted where he is drawing on his own knowledge and expertise which he is allowed to under section 25(d) of the CIPAA, he must of necessity proceed cautiously for fear that what he relied on is not in the evidence before him. This was the problem that plagued the Adjudicator’s Decision in the case of Carillion Utility Services Limited v SP Power Systems Limited [2011] CSOH 139 as highlighted by learned counsel for the Respondent. There the Adjudicator did not adopt the method of quantification which the claimant had put forward and which the respondent had criticized but used his own experience of what would constitute reasonable commercial rates for the additional equipment employed at the 36 time the contract was formed in coming into his adjudication decision. In dismissing the claimant’s application to enforce the adjudication decision, Lord Hodge held that: “[32] Where, on the authorities cited above, I consider that he allowed an opportunity for injustice to occur was in applying the commercial rates which from his experience he saw as reasonable and about which there appears to have been no evidence. See paragraph [10] above. There is no doubt that the calculation of X was a material part of his decision. It cannot be regarded as being in any way peripheral. Nor was it insignificant. As it was an addition to a daily charge, a minor adjustment in the rate, say by 30%, would have altered the mark up which he allowed by over £100,000. The parties were entitled to know of this input into his reasoning and to have a chance to comment on it. [33] I therefore conclude that in so acting, Dr Hunter breached the rules of natural justice in failing to give the parties notice of the commercial rate which he proposed and the way in which he proposed to apply it in reaching his conclusion.” (emphasis added) [74] Learned counsel for the Respondent also referred to the case of Herbosh-Kiere Marine Contractors Ltd v Dover Harbour Board [2012] EWHC 84 (TCC) where the claim made by the claimant was in relation to delay related claims being evaluated using specific resource rates. The basis of such assessment was not in dispute. In the decision, the adjudicator awarded the claim by adopting an overall daily rate for delay instead of the specific resource rates. In declining to enforce the decision by the adjudicator, Akenhead J held at paragraph 34 that: 37 “It follows from the above that the adjudicator's decision cannot be enforced because not only has he exceeded his jurisdiction by addressing and finding a method of assessment which formed no part of the dispute referred to him but also he has breached the rules of natural justice, doubtless unwittingly, by deciding the case not only on the basis not argued by either party at any stage but also without giving each party the opportunity to make submissions at least on the method of assessment which the adjudicator considered that he should adopt.” (emphasis added) [75] I have no problem with the proposition of law laid down above but it is not the same as in the present case. The Respondent argued that the Adjudicator had ignored the amount claimed by the Claimant for the rental costs and dismantling costs and applied his own methodology and/or basis in calculating the Claimant’s claim for the same, despite the fact that it was never raised and/or submitted by the parties herein. [76] The above proposition is misplaced as there was evidence to support the claims for rental and dismantling costs of the tower cranes but from the evidence before him, had reduced it so as not to exceed the balance “Preliminaries” sum provided for. [77] That is a whole world of difference from proceeding on a method not submitted by the parties for the parties had submitted at diametrically opposite poles and the Adjudicator had tried to arrive at what is fair and reasonable having regard to the evidence before him and what the parties had agreed with respect to the “Preliminaries”. [78] I would therefore find that there had been no breach of natural justice in the manner in which the Adjudicator had arrived at his Decision with respect to the amount he had allowed the Claimant with respect to the 38 rental and dismantling of the tower cranes and the rental of the generator-sets. Whether the Adjudicator had acted in excess of jurisdiction in deciding on the legality of the termination by the Respondent [79] Learned counsel for the Respondent argued that whilst section 25(n) of the CIPAA provides that “The adjudicator shall have the powers to decide or declare on any matter notwithstanding no certificate has been issued in respect of the matter” that alone is not enough for the Adjudicator to decide on the validity of the termination unless the Claimant specifically prayers for it to be decided by the Adjudicator. [80] I do not think that the Claimant must be required to anticipate the defence that the Respondent would raise in the Payment Response. The Claimant is entitled to proceed purely on a Payment Claim for the work done and services rendered and such a claim does not need the Adjudicator to decide on the validity of the termination. [81] However when the defence of set-offs was raised, it then behooves the Claimant to prevail upon the Adjudicator to decide on the issue of the validity of the termination because the ramifications and entitlement to the reliefs prayed for would depend on whether the defence of the specific set-offs can bite. [82] Here is when the parties could not agree. The Claimant had argued that the Adjudicator had jurisdiction to decide on the validity of the termination and the Respondent had argued that he had no such jurisdiction. [83] To be clear the Adjudicator had under paragraph 44 of his Decision exercised his discretion pursuant to section 27(3) of the CIPAA to proceed 39 and complete the Adjudication without prejudice to the rights of any party to apply to set aside the Adjudication Decision under section 15 of the CIPAA or to oppose the application to enforce the Adjudication Decision under section 28(1) of the CIPAA. [84] That approach is perfectly proper in the circumstances of the case. He had nevertheless expressed his own views at paragraph 43 as follows: “43. Having given the respective parties’ contentions due consideration, it would appear that I do have jurisdiction to determine over matters in respect of the alleged wrongful and unlawful determination of the Contract, provided it is connected and/or incidental to a claim for payment for work done.” (emphasis added) [85] Being a jurisdictional issue this Court is at liberty to hear the argument afresh unfettered by how the Adjudicator had decided. It would be unrealistic if not impossible for the Adjudicator to decide if the Claimant’s Payment Claim had been reduced accordingly by way of the set-offs raised by the Respondent as their defenses without deciding on whether or not the termination was lawful. [86] The question may be asked if the Adjudicator can decide on the validity of the set-offs consisting mainly the additional costs of completion of RM8,988,844.61 without considering if the termination is lawful or unlawful? The obvious answer is that the Adjudicator cannot go about deciding that without dealing with the issue of whether the determination of the Claimant’s employment under the Contract is lawful as stated in paragraph 114 of the Decision. Curiously the Respondent wanted the Adjudicator to decide on the set-offs and to allow it in full to extinguish the 40 Claimant’s Claim without the need to decide on the validity of the termination. [87] It would be fair to say that if a defence raised by the Respondent is such that if accepted would be in demunition or extinguishing the Claimant’s Claim, then the issue of the legality of the determination of the Claimant’s employment may become so inextricably linked to the issue of whether and to what extent the Claimant is entitled to their Payment Claim. [88] Surely the Adjudicator would have to consider the legality of the determination before he could decide on whether the Respondent is entitled to set-offs their claim of the additional costs of completing the uncompleted Works to the tune of RM8.9 million. [89] In the event that the determination is lawful then the Respondent would be entitled to claim the additional costs to complete the balance Works provided it can be proved. [90] The Adjudicator gave his reasons for holding that the determination was unlawful in the circumstances of the case in paragraph 115 to 130 of his Decision. Briefly he found that the delay was not significant enough for a project of the size of RM65 million where the Contract sum is concerned with the delay of about 2.5%-4.5% and thus the alleged default of the failure to proceed regularly and diligently with the Works was not serious enough a default to warrant the determination of the Claimant’s employment under the Contract. See paragraph 122 of his Decision. This is a mixed finding of fact and law and this Court would not disturb. [91] With respect to the failure of the Claimant to comply with the Architect’s Instructions, the Adjudicator had considered each one of them and had concluded that sufficient steps had been taken to attend to the breaches. 41 [92] He had then, after giving his reasons, concluded that the determination of the Contract was unlawful and made the finding that the Respondent was not entitled to the additional costs of completion as well as the other heads of the set-offs. [93] He had also proceeded further to consider if, assuming that he had been wrong and that the termination was lawful, whether the Respondent had proved their set-offs based on the evidence presented. He concluded that the Respondent had not so proved. See paragraphs 133, 136, 139 and 142 of the Decision. [94] I have no good reason to set aside this part of his Decision to dismiss the whole of the defence of set-offs of the Respondent on ground of a lack of jurisdiction for the Adjudicator must of necessity decide on the issue to arrive at a valid finding as to whether the Claimant’s Claim would be diminished or extinguished by the Respondent’s set-offs. [95] Once the defence of set-offs is raised, then depending on the nature of the set-offs, the ramifications of the defence raised in the Payment Response and Adjudication Response must be considered by the Adjudicator. As was held in Cantillon Ltd v Urvasco Ltd [2008] 117 ConLR 1: "[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) [96] The Adjudicator had acted well within his jurisdiction in arriving at his decision to dismiss the Respondent’s set-offs. 42 Pronouncement [97] For all the reasons given above I had held that the Adjudicator had not failed to act independently or impartially in coming to the Adjudication Decision. There is no denial of natural justice in the Adjudication Decision as the evidence that the Adjudicator acted upon was pursuant to a term of the Contract and such evidence was available to the Adjudicator. [98] The Adjudicator had not acted in excess of his jurisdiction by deciding on the validity of the termination as the defence of the various set-offs cannot be properly considered without deciding on the validity of the termination. [99] In the upshot I had dismissed the application to set aside and correspondingly allowed the application for enforcement of the Adjudication Design with costs of RM5,000.00 each to the Claimant PCP. [100] As for the stay application, the parties were able to arrive at a negotiation settlement with the recording of the following conditional stay terms by consent:

Leap Modulation shall pay PCP the sum of RM4,173,283.57 by way of paying half of that sum to PCP within 3 weeks from the date of the consent order;

Leap Modulation shall pay the other half to their solicitors into an interest bearing account within the same 3 weeks and a copy of the Fixed Deposit receipt shall be furnished to PCP’s solicitors; an 3. The stay shall be pending the outcome of the arbitration already commenced; 43

The above sum released direct to PCP shall be guaranteed personally and irrevocably by a director of PCP ie Goh Pian

Any interest earned shall be for the benefit of the winning party in the arbitration and 6. Each party shall bear their own costs. [101] The above is without prejudice to Leap Modulation’s right of appeal against the setting aside and enforcement order made herein. Dated: 28 September 2018. -signed-Y.A. LEE SWEE SENG Judge Construction Court High Court, Kuala Lumpur For the Plaintiff in : WA-24C-53-03/2018 : And the Defendant in : Phang Soon Mun and Chew Chun Wei WA-24C-61-03/2018 : (Messrs Han & Partners) And the Defendant in : WA-24C-62-03/2018 : 44 For the Defendant in : WA-24C-53-03/2018 : Andrew Heng Yeng Hoe, Alan Wong And the Plaintiff in : Teck Wei and Roger Leong Chun Lim WA-24C-61-03/2018 : (Messrs Zain Megat & Murad) And the Plaintiff in : WA-24C-62-03/2018 : Date of Decision: 12 June 2018.