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1 IN THE HIGH COURT OF MALAYA AT KUALA LUMPUR IN THE STATE OF WILAYAH PERSEKUTUAN, MALAYSIA (CIVIL DIVISION) ORIGINATING SUMMONS NO: WA-24C-118-07/2017 In the matter of the Adjudication between PWC Corporation Sdn Bhd as Claimant and Ireka Engineering & Construction Sdn Bhd as Respondent pursuant to the Construction Industry Payment and Adjudication Act 2012 And In the matter of the Adjudication Decision dated 13.06.2017 by an Adjudicator, Chine Wai Ting, Jacky And In the matter of Section 28 of the Construction Industry Payment and Adjudication Act 2012 And In the matter of Orders 7 and 28 of the Rules of Court 2012 BETWEEN PWC CORPORATION SDN BHD (Company No: 233329-T) … PLAINTIFF AND 2 IREKA ENGINEERING & CONSTRUCTION SDN BHD (Company No: 381566-U) … DEFENDANT (heard together with) IN THE HIGH COURT OF MALAYA AT KUALA LUMPUR IN THE STATE OF WILAYAH PERSEKUTUAN, MALAYSIA (CIVIL DIVISION) ORIGINATING SUMMONS NO.: WA-24C-127-07/2017 In the matter of the Adjudication Proceedings between PWC Corporation Sdn Bhd as Claimant and Ireka Engineering & Construction Sdn Bhd as Respondent pursuant to the Construction Industry Payment and Adjudication Act 2012 And In the matter of the Adjudication Decision dated 13.06.2017 by an Adjudicator, Chine Wai Ting, Jacky And In the matter of Section 15 of the Construction Industry Payment and Adjudication Act 2012 And In the matter of Order 7 of Rules of Court 2012 3 BETWEEN IREKA ENGINEERING & CONSTRUCTION SDN BHD (Company No: 381566-U) … PLAINTIFF AND PWC CORPORATION SDN BHD (Company No: 233329-T) … DEFENDANT THE JUDGMENT OF Y.A. LEE SWEE SENG [1] PWC Corporation Sdn Bhd (“PWC”) had filed an application under section 28 of the Construction Industry Payment and Adjudication Act 2012 (“CIPAA”) in Originating Summons No. WA-24C-118-07/2017 dated 7.07.2017 (“the Enforcement Application”) to enforce an Adjudication Decision given in its favour as Claimant. [2] On the other hand, the Respondent in the Adjudication, Ireka Engineering & Construction Sdn Bhd (“Ireka”) had filed an Originating Summons No. WA-24C-127-07/2017 to set aside the Adjudication Decision (“the Setting Aside Application”) under section 15(b) and (d) of the CIPAA. Project [3] Ireka appointed PWC as the Subcontractor for supply, fabrication and installation of glass canopy and skylight roof in relation to a project known 4 as “Package 3 – Proposed Completion Works to the Hotel Development on Part of Lot-Lot 203, (New Lot No. 364) Seksyen 72 (Lot G), Mukim Kuala Lumpur, Wilayah Persekutuan” (“Project”) for a contract sum of RM427,359.00 under a Letter of Acceptance dated 14.03.2012 (“the Contract”). [4] It was, inter-alia, agreed that PWC shall provide skilled labour, materials, tools, equipment and the necessary machineries for the execution and completion of the glass canopy and skylight roof works for the Project (“the Works”). [5] Ireka had made a total payment of RM362,313.27 for the works done. The balance of the sum arising under the Contract for the Works done was RM62,578.89, and Ireka said it did not dispute this sum. Problem [6] Ireka maintained that it has no obligation to pay PWC for the amount claimed as it had a contractual set off allowed under its contract with PWC with respect to two other separate contracts. [7] PWC and Ireka had entered into another contract which was the Subcontract Reference no IECSB/Sandakan/136/3.1/091-SO (“Sandakan Contract”). Ireka alleged that PWC had failed to complete the works for Sandakan Project within the contracted time frame and a Certificate of Non Completion dated 01.03.2011 was issued against PWC. The Sandakan Contract provided for Liquidated and Ascertained Damages (“LAD”) to be 5 calculated at the rate of RM8,500.00 per day. The sectional certificate of practical completion was issued on 11.05.2012. Therefore there was a delay of 438 days. The total amount for LAD amounted to RM3,723,000.00. However Ireka had already raised that as a set off in another Adjudication between PWC and Ireka with respect to the Sandakan Project. [8] PWC and Ireka had also entered into another contract, Subcontract Reference no: IECSB/KL Sentral Pkg 3/140/3.1/022-HQ under Letter of Acceptance dated 24.08.2011 (“KL Sentral Contract”). Ireka had also raised the set off of what it claimed is the overpayment under Certificate of Payment No.16 dated 18.04.2016 against Certificate of Payment No. 17 dated 01.12.2016 from PWC in the amount of RM17,790.45. The Proceedings in Adjudication [9] On or about 06.12.2016, PWC had served a Payment Claim dated 06.12.2016 on Ireka to claim for RM62,578.89 for the Works done pursuant to its Progress Claims No. 1 to 6 and a Final Claim. [10] On 21.12.2016, Ireka had served its Payment Response to deny PWC’s Payment Claim. Ireka also made a cross claim against PWC for LAD amounting to RM3,723,000.00 from Sandakan Contract and an overpayment amounting to RM17,790.45 for Certificate of Payment No. 16 dated 18.04.2016 against Certificate of Payment No. 17 dated 01.12.2016 from KL Sentral Contract. 6 [11] On 18.01.2017, PWC had served a Notice of Adjudication on Ireka to initiate the adjudication process. The Kuala Lumpur Regional Centre of Arbitration (“KLRCA”) then appointed an Adjudicator for the said dispute. [12] Subsequent to the appointment of the Adjudicator, Ireka raised a challenge against the jurisdiction of the Adjudicator via a letter dated 07.03.2017. Ireka had submitted that the Adjudicator had no jurisdiction to adjudicate the adjudication proceedings as there was no dispute from Ireka to the amount of the aforesaid claim. [13] The Adjudicator via a reply letter dated 16.03.2016 informed Ireka that she had considered the jurisdictional challenge and directed the parties to proceed with the adjudication proceedings. [14] On 16.03.2017, PWC served its Adjudication Claim on Ireka. PWC sought the sum of RM62,578.89, late payment interest at the rate of 8% on RM62,578.89 from the date of Payment Claim until the date of full and final settlement and costs. [15] On 04.04.2017, Ireka had served the Adjudication Response on PWC. Ireka again did not dispute PWC’s claim and immediately raised the jurisdictional challenge that the Adjudicator had no jurisdiction to proceed with and hear the Adjudication as there was no dispute from Ireka to the amount of the aforesaid claim. Meanwhile, Ireka again cross-claimed on the following: 7