1. ) SQA Builders Sdn Bhd v 1. ) Luxor Holdings Sdn Bhd (WA-24C-133-11/2016 & WA-24C-151-12/2016)

Subject to subsection (2), the adjudicator’s jurisdiction in relation to any dispute is limited to the matter referred to adjudication by the parties pursuant to sections 5 and 6." [25] Section 5 is on Payment Claim and section 6 is with respect to Payment Response. [26] All that is redeeming when a Payment Response is not served either out of mistake or without appreciating the significance and importance of it is that the non-paying party is deemed to have disputed the whole of the unpaid party Payment Claim. The unpaid party cannot take a judgment in default as it were or have an Adjudication Decision in 14 default in its favour. It would still have to prove its claim but that the non-paying party cannot raise positive defences other than answering what was raised in the unpaid party's Adjudication Claim. [27] Learned counsel said that the law here is not settled yet as the Federal Court had granted leave to appeal to the Appellant from the decision of the court of Appeal in View Esteem Sdn Bhd v Bina Puri Holdings Bhd [2016] 6 MLJ 717. However for the moment, the decision made by the High Court which was affirmed by the Court of Appeal remains good law and I agree with the Claimant's submission that the Adjudicator is right in following the principles decided in the View Esteem case both in the High Court and in the Court of Appeal. [28] Learned counsel for the Claimant SQA referred to the High Court the recent case of BM City Realty & Construction Sdn Bhd v Merger Insight (M) Sdn Bhd and another case [2016] MLJU 1567 where, the Respondent in the Adjudication alleged that the Adjudicator had acted in excess of his jurisdiction in failure to consider the issue of set-off for damages, in particular its LAD claim not raised in its Payment Response. The High Court held at paragraphs 84 and 85 that: “[84] In the first place for the Adjudicator to properly consider the issue of LAD claimed as a set-off, BMCRC must raise it in its Payment Response under S 6 CIPAA so as to allow the 15 Adjudicator to assume jurisdiction in determining the issue before him. [85] It was not raised as a specific Defence of set-off but only raised for the first time in the Adjudication Response. That simply would not do…” [29] Likewise in Bina Puri Construction Sdn Bhd v Hing Nyit Enterprise Sdn Bhd [2015] MLJU 941 it was observed as follows in a case where the counterclaim raised only in the Adjudication Response was not heard by the Adjudicator: "Counterclaim of applicant [10] The main point raised by the applicant is that the Adjudicator committed an error by holding that he had no jurisdiction under the CIPAA to decide on the applicant’s counterclaim of RM13,544,690.45. Counsel for applicant submitted that this alleged error resulted in a breach of natural justice as well as in a jurisdictional error. He said that the Adjudicator took a restrictive view of his jurisdiction and did not consider the counterclaim which was related to the overpayment defence. Counsel for applicant submitted that Adjudicator came to this conclusion because the applicant had not served any Payment Claim in respect of the 16 counterclaim to the respondent under section 5 of CIPAA. Counsel for applicant said that the applicant had no opportunity to address this point as it was not raised by the parties. He said that the Adjudicator could have invoked section 25 of CIPAA which grants wide ranging powers to the Adjudicator before he decided that he had no jurisdiction to consider the counterclaim. Counsel for applicant even submitted that under section 25, the Adjudicator could have appointed an independent expert to determine technical matters. With due respect, I disagree that the Adjudication Decision is tainted with “excess of jurisdiction” merely because the Adjudicator refused to decide on the counterclaim of the applicant that was raised in the Adjudication Response. My reasons are as follows. Section 27(1) of CIPAA clearly circumscribes the jurisdiction of the Adjudicator. It reads as follows:

Jurisdiction of adjudicator

Subject to subsection (2), the adjudicator’s jurisdiction in relation to any dispute is limited to the matter referred to adjudication by the parties pursuant to sections 5 and 6. [11] The dispute raised in the Payment Claim is in respect of the payments allegedly due under the said Interim Claims. The 17 applicant did not file a Payment Response to raise the issue of counterclaim of RM13,544,690.45. In the premises, as the Adjudicator does not possess inherent jurisdiction, his jurisdiction is limited to the dispute raised under section 5 and 6, ie the Payment Claim and the Payment Response. Sub-section (2) provides for the enlargement of the jurisdiction of the Adjudicator by agreement. It reads as follows:

The parties to adjudication may at any time by agreement in writing extend the jurisdiction of the adjudicator to decide on any other matter not referred to the adjudicator pursuant to sections 5 and 6. However, in the instant case, it is common ground that the parties did not execute an agreement pursuant to the above provision to extend the jurisdiction of the Adjudicator to enable him to decide the counterclaim of the applicant. In the premises, the Adjudicator cannot be faulted for holding that he had no jurisdiction to decide the counterclaim of the applicant that was raised belatedly in the Adjudication Response. Counsel for applicant also submitted that he had no opportunity to argue the said point as it was not raised in the submissions and there it resulted in a breach of natural justice. The limits of jurisdiction of 18 the Adjudicator is a matter that is governed by law, ie section 27 of CIPAA. Therefore, there can be no breach of natural justice if the Adjudication had referred to the correct law to properly direct himself as to what he can or cannot do. In any event, although the Adjudicator declined to decide the counterclaim of the applicant that was only raised in the Adjudication Response, he considered the overpayment defence which is related to the counterclaim of the applicant. I shall consider it below." (emphasis added) [30] I agree with learned counsel for SQA that the Adjudicator had clearly not exceeded its jurisdiction in not determining the set-off and/or counterclaim as these were not pleaded by Luxor in a payment response, and therefore is outside the scope of section 27(1) CIPAA. The Adjudicator had stayed within jurisdiction and confined himself to the dispute and matters raised for his decision in the Payment Claim, there being no Payment Response filed. [31] The Adjudicator had decided the Payment Claim on its merits and so this being not an appeal, this Court would not interfere with such a Decision. Whether there was a Breach of Natural Justice when the Adjudicator did not hear the defence of counterclaim and set off 19 raised for the first time in the Adjudication Response, there being no Payment Response filed [32] Luxor had also alleged that by failing to consider its LAD claim, there was a breach of natural justice and therefore the Decision ought to be set aside. The Court of Appeal in ACFM Engineering (supra) had laid out the principles with regard to an allegation of breach of natural justice in the context of CIPAA by stating that ‘when one speaks of natural justice, it is nothing more than what we call the concept of “procedural fairness” which needs to be accorded to the parties in dispute of a hearing’. [33] In the case of Cantillon Ltd v Urvasco Ltd [2008] EWHC 282 (TCC) the Court held inter alia that it is only a breach of natural justice 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 or, where relevant, put in further evidence. If either party has argued a particular point and the other party does not come back on the point, there is no breach of the rules of natural justice in relation thereto. [34] Luxor had relied on two main grounds in its allegation that there has been a breach of natural justice, namely: 20 a. Failure to consider Luxor’s LAD claim and/or counterclaims; b. Failure to allow Luxor to be heard. [35] Learned counsel for Luxor referred to the case of Thermal Energy Construction Limited v AE & E Lentjes UK Limited [2009] EWHC 408 (TCC) (High court), where His Lordship Davies J, at paragraphs 16, 26 & 37, observed as follows: “16. ... What Mr. Furst has submitted is that this is a case where the Defendant, having raised the defence of set-off and counterclaim, was entitled to have the Adjudicator consider that question, and the Adjudicator was indeed obliged to consider that question as being one of the matters raised by the Defendant in its defence. He submits that by failing to do so, that failure being evidenced by an absence of any reasons given in relation to that element of the defence, the Adjudicator failed to comply with his obligations under the contractual adjudication scheme. ...

It seems to me that in those circumstances, the position is that the Adjudicator has not, evidently, dealt with this issue at all, and he has not given any reasons which would indicate that 21 he has dealt with this issue. That this is therefore one of those cases, one envisages rare, where the Adjudicator has failed to comply with his obligations. ...

For all these reasons I have reached the conclusion that this is one of those relatively rare cases where the Court must decline to enforce the decision of the Adjudicator.” (emphasis added) [36] In the case of PC Harrington Contractors Limited v Tyroddy Construction Limited [2011] EWHC 813 (TCC) (High Court), His Lordship Akenhead J, in paragraphs 21(e) & (g), decided that: “(e) It seems to me, therefore, that, by wrongly deciding that this was a matter outside his jurisdiction, he put himself in the position whereby he did not consider the final account evidence and argument in any detail or indeed really at all. He has, therefore, put himself in a comparably similar position to the adjudicators in the CJP v William Verry and the Humes Building Contractors cases in that, by ruling on his jurisdiction in such a way that he has denied himself the opportunity to consider the merits of the exercise which 22 Harrington had asked him to determine, he has committed a breach of natural justice.” (emphasis inherent) ...

These points are material and certainly more than peripheral breaches of the rules of natural justice. ... The consequence of the above is that on this ground the decisions of the Adjudicator should not be enforce.” (emphasis added) [37] In the case of Paul Boardwell t/a Boardwell Construction v k3D Property Partnership Ltd [2006] Adj. C.S. 04/21 (High Court), His Lordship HHJ Raynor, QC, decided that: “... The Defendant relied upon paragraph 49 of Quietfield Ltd v Vascroft Contractors Ltd [2006] EWHC 174 (TCC) and more particularly paragraph 51 – “... the adjudicator ought to have considered Vascroft’s substantive defence, but he failed to do so. In those circumstances, as Quietfield have fairly conceded, the adjudicator’s decision cannot be enforced because he failed to abide by the rules of natural justice.” (emphasis added) 23 [38] The Court refused to uphold the Adjudicator’s decision in the Claimant’s favour. [39] A similar decision can be found in the case of Buxton Building Contractors Ltd v Govenors of Durand Primary School [2004] EWHC 733 (TCC) (High Court). [40] According to learned counsel for Luxor, based upon the aforesaid cases, it is clear that the failure of the Adjudicator to consider and determine the Luxor's counterclaim and/or set-off for the defective works and LAD, is/are a breach of the principles of natural justice, i.e. the audi alteram partem rule. As such, the Adjudication Decision ought to be set aside. [41] Those cases referred to by learned counsel for Luxor are cases where the defence of counterclaim and set-off had been properly raised before the Adjudicator. Where these have been properly raised and pleaded, it would be a breach of natural justice for the Adjudicator not to have considered the defence altogether. [42] Furthermore the UK scheme of statutory adjudication does not have the equivalent of our section 27(1) with respect to restricting matters that an Adjudicator has jurisdiction to decide to matters raised in the Payment Claim and the Payment Response. In the UK jurisdiction 24 the matters and disputes for the adjudicator to decide is found in the Notice of Adjudication and the Referral Notice served by the referring party under Regulation 1(1) of the Schedule to The Scheme for Construction Contracts (England and Wales) Regulations 1998 for cases where the construction contract does not comply with the requirements of Section 108(1)-(4) of the Housing Grant, Construction and Regeneration Act 1996 ("HGCRA"). What is stated in Regulation 1(3) with respect to the contents of the Notice of Adjudication is similar to our section 5(2) of our Payment Claim. [43] Under Regulation 7(1) where an adjudicator has been selected the Referring Party shall not later than seven days from the date of the Notice of Adjudication, refer the dispute in writing ("the Referral Notice") to the Adjudicator. The Adjudicator under Regulation 13 may take the initiative in ascertaining the facts and the law necessary to determine the dispute. He shall consider any relevant information submitted to him by any of the parties to the dispute and shall make available to them any information to be taken into account in reaching his decision. The other relevant regulation is Regulation 20 where the adjudicator shall decide the matters in dispute and "may take into account any other matters which the parties to the dispute agree should be within the scope 25 of the adjudication or which are matters under the contract which he considers are necessarily connected with the dispute..." [44] The emphasis in the Schedule to The Scheme for Construction Contracts (England and Wales) Regulations 1998 under the HGCRA seems to be to ascertain the scope of the dispute as carved out in the Notice of Adjudication and the Referral Notice and that the Respondent may dispute the claim in the documents that the adjudicator would direct the Respondent to file. [45] The Adjudicator had acknowledged these set-offs and/or counterclaims raised by Luxor in its Adjudication Response at paragraphs 19 to 22 of the Adjudication Decision but decided that as there was no Payment Response filed by Luxor pursuant to section 6 CIPAA, the set-offs and/or counterclaim would not fall within his jurisdiction pursuant to section 27(1) CIPAA. There is no equivalent in the UK of a Payment Response to be served before the adjudicator is appointed where the reasons for disputing the Payment Claim must be set out, for otherwise the non-paying party is deemed to have disputed the whole of the Payment Claim. [46] There is no question of procedural unfairness in the Adjudication proceedings as Luxor was given the opportunity to file its Payment Response within 10 working days from the receipt of the Payment Claim. 26 The importance of the filing of payment response was set out by his Lordship Sundaresh Menon CJ in the Singapore Court of Appeal case of WY Steel Construction Pte Ltd v Osko Pte Ltd [2013] SGCA 32. This case was quoted in the Malaysian Court of Appeal case of View Esteem Sdn Bhd v Bina Puri Holdings [2016] 6 MLJ 717 as follows: “[49]… I find the decision of the Court of Appeal Singapore in WY Steel Construction Pte Ltd v Osko Pte Ltd [2013] SGCA 32 provides useful guidance on the point and I quote from the judgment of Lordship Sundaresh Menon CJ:

…A respondent is given a chance to respond to a payment claim by producing, first, a payment response and then (if the claimant proceeds to apply for adjudication of his payment claim) an adjudication response. If he fails to provide a payment response and if, as a result, the adjudicator is mandated not to consider material that he seeks to introduce later, he has not been denied his right and opportunity to be heard. Rather, he has simply chosen not to exercise it and the rules of natural justice cannot then be called in aid. Simply put, in such a scenario, the respondent has had his opportunity, for the purposes of the hearing that culminates in the provisional 27 ruling that has temporary finality, to make his case and he has failed to take that opportunity."(emphasis added) [47] Luxor had also alleged that it was not given the right to be heard on its set-offs and/or counterclaims. I agree with the Claimant SQA that it is unclear from the affidavits filed by Luxor on the exact reason for this ground as there was no specific request from Luxor for an oral hearing before the Adjudicator. In fact natural justice does not necessarily mean the decision-maker has to meet the parties face to face – "Natural justice does not generally demand orality". See Rok Building Ltd v Celtic Composting Systems Ltd (No.2) (2010) 130 Con LR 74 at 87; R. (Morgan Grenfell & Co. Ltd.) v Special Commissioner of Income Tax [2001] EWCA Civ 329, [2002] 2 W.L.R. 255 at 286 and the case of Permintex JSK Resources Sdn Bhd v Follitile (M) Sdn Bhd & another case [2017] MLJU 377 at para [66]. [48] Furthermore, there was no obstruction or limitation imposed by the Adjudicator on the submission of evidence or documents by the Respondent Luxor in its Adjudication Response. The Respondent was given every opportunity to file in its Payment Response and Adjudication Response and the Adjudicator had taken into consideration both parties’ arguments and decided the SQA’s claims on its merits. 28 [49] There is no automatic or inherent right for an oral hearing in an adjudication proceeding under CIPAA as was held in Martego Sdn Bhd v Arkitek Meor & Chew Sdn Bhd & Anor case [2017] 1 CLJ 101. The Adjudicator has broad powers to conduct an Adjudication proceeding under section 25 CIPAA and part of which is reproduced below: "25. Powers of the Adjudicator The adjudicator shall have the powers to—

Establish the procedures in conducting the adjudication proceedings including limiting the submission of documents by the parties; ...

Call for meetings with the parties;

Conduct any hearing and limiting the hearing time; ..." [50] The Court would be slow to interfere with the way the Adjudicator went about in conducting the hearing unless the way he went about it was grossly unfair or blatantly a breach of natural justice in that the parties were not heard at all or that only one party was heard. An oral hearing is not a requirement of natural justice. 29 [51] The above principle of course cannot be stretched out of context in requiring that a matter must be heard orally even though that matter is not within the jurisdiction of the Adjudicator in that it was not properly raised under section 27(1) CIPAA. [52] Surely it cannot be a breach of natural justice not to hear a matter not properly raised in the Payment Claim and Payment Response for if it were a breach of natural justice, then to avoid that by hearing the matter not so raised, the Adjudicator would be acting in excess of jurisdiction under section 27(1) CIPAA! Parliament had not intended a situation where for the same issue, the Adjudicator would be damned if he does not hear and damned if he does hear. [53] If Luxor's complaint is that they should be heard before the ruling of the Adjudicator on the issue of jurisdiction, then there is no indication that they had requested for this other than that they have put in their Adjudication Response and that in the Adjudication Reply of SQA the objection on jurisdiction had been raised. [54] In any event this Court on an issue of jurisdiction in a setting aside application under section 15(b) and (d) CIPAA would hear the issue afresh, independent of and unfettered by the reasons given by the Adjudicator on his ruling on jurisdiction. 30 [55] This is not a case where the Adjudicator heard one party and not the other on a jurisdictional challenge. This is one where the matter having been raised by the Claimant, the Adjudicator inquired into his jurisdiction and decided accordingly. It has not been shown how his ruling on jurisdiction has been wrong and so this ground of setting aside on breach of natural justice is totally devoid of merits. Whether there has been contravention of section 6(4) and 26(1) CIPAA by the Adjudicator [56] Luxor in its setting aside application had also raised that the Adjudicator's decision in not considering the counter-claims and/or set-offs in SQA’s claim due to the absence of a Payment Response is in breach of the provisions of Section 6(4) and 26(1) of CIPAA. [57] As stated section 6(4) is there to prevent a default Adjudication Decision from being given by the Adjudicator. Granted even the Claimant itself may serve a Payment Claim without the same being drafted by solicitors or be served by solicitors on their letterhead, the non-paying party receiving it might not perceive it as a legal document requiring a response in writing within 10 working days of receipt of it if the non-paying party is disputing the Payment Claim. 31 [58] All that section 6(4) says is that the non-paying party is deemed to have disputed the whole of the Payment Claim. In other words the unpaid party is then put to proof of its Payment Claim and the Adjudicator must be satisfied as to the validity and veracity of the claim before allowing it. [59] I cannot see how section 6(4) CIPAA had been breached in this case as the Adjudicator proceeded to consider the Payment Claim on its merits by analysing the documents submitted to see if the Payment Claim is substantiated. [60] Learned counsel for Luxor referred to the case of Cantillon Ltd v Urvasco Ltd [2008] EWHC 282 (TCC) (High Court), where His Lordship Akenhead J, at pages 18 & 19, decided that: “[54] It is, I believe, accepted by both parties, correctly in my view, that whatever dispute is referred to the adjudicator, it includes and allows for any ground open to the responding party which would amount in law or in fact to a defence of the claim with which it is dealing. Authority for that proposition includes KNS Industrial Services (Birmingham) Ltd v Sindall Ltd (2001) 75 ConLR 71. 32 [55] ... In my view, one should look at the essential claim which has been made and the fact that it has been challenged as opposed to the precise grounds upon which it has been rejected or not accepted. Thus it is open to any defendant to raise any defence to the claim when it is referred to adjudication or arbitration. ...The adjudicator or arbitrator must then resolve the referred dispute, which is essentially the challenged claim or assertion but can consider any argument, evidence or other material for or against the disputed claim or assertion in resolving that dispute.” (emphasis added) [61] The provisions in the UK is of course different from our CIPAA. In that case, the Court was referring to a defence that was properly raised as disputing the Claimant's claim and so therefore in such a case the defence raised must be considered by the Adjudicator. [62] Learned counsel for Luxor also referred to the case of Quartzelec Limited v Honeywell Control Systems Limited [2008] EWHC 3315 (TCC) (High Court), where His Lordship Stephen Davies J, in paragraph 30, observed as follows: “I respectfully agree with what is said by Akenhead J (i.e. paragraphs 54 and 55 above). Where the dispute referred to adjudication by a claimant is one which involves a claim to be 33 paid money, it is difficult to see why a respondent should not be entitled to raise any defence open to him to defend himself against the claim, regardless of whether or not it was raised as a discrete ground of defence in the run-up to the adjudication, and subject to any considerations of natural justice. The adjudicator has jurisdiction to, and should, consider any such defence.” (emphasis added) [63] He rounded up with his trilogy of cases by citing the case of Quietfield Ltd v Vascroft Contractors Ltd [2006] EWHC 174 (TCC) (High Court), where His Lordship Jackson J, at page 40, affirmed that: “[49] ... Vascroft was entitled in this adjudication to advance any available defence, irrespective of whether that defence had been notified when the relevant dispute arose (see William Verry (Glazing Systems) Ltd v Furlong Homes Ltd [2005] EWHC 138 (TCC).” (emphasis added) [64] I have no quarrel with the proposition that a non-paying party should be allowed to advance any ground which would amount in law or in fact to a defence of the claim provided always that under our scheme of statutory adjudication it is raised under section 6 and subject to the conferring and confining jurisdiction provision under section 27(1) CIPAA. 34 [65] With regard to Luxor’s allegation of a breach of Section 26(1) and

of CIPAA, SQA submitted at the outset that this was never pleaded by Luxor during the adjudication proceedings proper. [66] SQA referred to the Court of Appeal judgment of Justice Dr. Prasad Sandosham Abraham JCA in View Esteem Sdn Bhd v Bina Puri Holdings Bhd [2016] 6 MLJ 717 at p 748 wherein His Lordship held that: “[42] To come within the purview of section 26(1), a party must invoke the provisions of section 26(2) of CIPA relying on the subsection most suitable to the facts of the dispute before the adjudicator. [43] The appellant should have move the adjudicator formally to allow matters not raised under the payment response pursuant to Section 26(2)(b)/(c) of the said section. The adjudicator would have had to deal with that question and rule accordingly and such a ruling would not in my view be reviewable. If the adjudicator had refused to entertain the application on a point of jurisdiction, then the same would be subject to review” [67] From the facts of the case, the appellant in the case had in fact submitted a payment response and was seeking to add further 35 counterclaims. This is very much different from the facts of this adjudication where Luxor did not file any payment response and also did not make a formal application to the Adjudicator during the course of the proceedings pursuant to section 26 CIPAA. As such, I agree that Luxor’s allegation that there has been a breach of section 26 is clearly baseless and without merits. [68] Even if the Respondent Luxor in the Adjudication had asked the Adjudicator to invoke his power under section 26(2) CIPAA, it is doubtful if the Adjudicator could extend his jurisdiction to consider matters not raised in the Payment Claim and Payment Response otherwise than by agreement in writing of the parties under section 27(2) CIPAA. [69] It would appear that an Adjudicator would only have the discretion to exercise his powers under section 26 CIPAA if in the first place he already has the jurisdiction under section 27(1) or 27(2) CIPAA. As stated, vast as his powers are, where his jurisdiction is concerned, he cannot venture outside the Payment Claim and Payment Response unless the parties agree in writing to extend his jurisdiction. It is only when the Adjudicator has jurisdiction that he can venture to exercise his powers under section 26 to waive irregularities or to abridge time for compliance with the filing or service of documents. 36 Whether being a final claim with the completion of the works the Claimant should not have proceeded with Adjudication but with Arbitration [70] Luxor had also in its setting aside application averred that the said Adjudication Decision ought to be set aside as parties ought to have referred the dispute to arbitration instead, in accordance to the Contract. [71] I agree with SQA that its right to refer a payment dispute under the Contract is a statutory right created under the introduction of CIPAA and should not be circumvented by the operation of Clause 34.1 of the PAM Form of Contract 2006. In any event, section 37 CIPAA provides that an adjudication proceeding, arbitration and court litigation may proceed concurrently and in parallel. [72] In the case of Martego Sdn Bhd v Arkitek Meor & Chew Sdn Bhd, (supra)this Court observes at paragraph 88 and 89 as follows: “[88] To accede to Martego’s argument would mean that where there is an arbitration clause in a construction contract which is no different from an arbitration clause provided for in the Architect’s Act, then there can be no adjudication of a payment claim under CIPAA. That can only lead to a disastrous situation for almost all standard form construction contract would have an arbitration 37 clause and surely that cannot mean that as arbitration is the agreed mode of dispute resolution then adjudication cannot apply at all. [89] Statutory adjudication does not require the agreement of the parties to commence the process and prevails over any contractual agreements to the contrary between the parties. Statutory adjudication stand alone and aloof of all other alternative modes of dispute resolution like arbitration or litigation. In Ranhill E&C Sdn Bhd v Tioxide (Malaysia) Sdn Bhd [2015] 1 LNS 1435 the High Court held at paragraph [40] of the judgment that “…the right to refer to adjudication is a statutory right the (SIC) cannot be rendered meaningless by reason of a good contractual promise to arbitrate” (emphasis added)” [73] No where in the Act is it stated that a Claimant is prohibited from proceeding with Adjudication under CIPAA if the claim is based on a final certificate or that the works have been completed. [74] The meaning of a "Payment Claim" is wide enough under CIPAA to cover even a claim based on a final certificate or claim. "Payment" is defined under section 4 to mean a "payment for work done or services rendered under the express terms of a construction contract." So long as 38 a Payment Claim complies with the requirements of section 5 CIPAA, one would be entitled to bring a claim in Adjudication whether it be a final certificate or claim. [75] Even if the definition is such that it is doubtful whether a claim based on a final certificate or claim is within the scope of CIPAA, then one may be permitted to look at the purpose of CIPAA. The long title to the Act encapsulated its purpose as follows: "An Act to facilitate regular and timely payment, to provide a mechanism for speedy dispute resolution through adjudication, to provide remedies for the recovery of payment in the construction industry and to provide for connected and incidental matters." (emphasis added) [76] I do not accept that a final certificate or final progress claim is not related to a regular or timely payment and that it does not fall within the purview of CIPAA 2012. It is only too obvious that a progression in a continuum of claim would end with a final claim either under a final progress claim or certificate. [77] The purpose of CIPAA is not just in facilitating regular and timely payment for construction works but rather for the construction industry as a whole. The Act is concerned with the construction industry as a 39 whole and not just claims as arising out of construction works done for a construction project which the Respondent Luxor now says is not affected as the works have been completed. It would be an awfully artificial distinction if one were to take the view that as the works or project has been completed, the protection of recovery of payment is no longer present. [78] It would be difficult to tell a contractor that as he has been more resourceful in sourcing for funding perhaps even at a high interest rate to complete the project and that he has been more persevering in completing the works and in patiently waiting for the last payment to come with the issuance of the final certificate or final progress claim, he has no protection under CIPAA. Neither is it realistic to expect a contractor to have only one project at a time and that should he be successful in completing one project, he will just have to patiently wait for the payment due under the final certificate or final progress claim for that claim is not one that is amenable to the speedy resolution of dispute under CIPAA. [79] In Singapore, in the case of Tiong Seng Contractors Pte Ltd v Chuan Lim Construction Pte Ltd [2007] 4 SLR 364, where the issue to be decided on was whether the term “progress payment” includes “final progress payment”, the High Court held as follows at page 5-6: 40 “[27] Looking at the structure and wording of the provision, it appears that an exclusion of “final payment” from the ambit of the Act can only be justified by express wording to that effect. It would not suffice to infer a legislative intention to exclude simply on the basis that “final payments” were not included in a non-exhaustive supplementary definition, ostensibly provided for clarification. If the Legislature had intended to exclude final claims from the adjudicatory ambit of the Act, it could have clearly included a proviso or provision to that effect. In the absence of such express exclusion, the primary broad-ranging definition in the main limb must be determinative. [28] In addition, a plain reading of “a payment that is based on an event or a date” or a “single or one-off payment” clearly encompasses final payments. Such a conclusion is vindicated by the fact that the Act at no time makes any distinction between “final claims” and “non-final claims”. Implying such a distinction from the supplementary limb would severely impair the protection afforded by the Act, as it would create a carte blanche for contractor to renege on the final stages of payment, which would have an equally deleterious effect on cash flow affecting other ongoing construction projects.” 41 ... ... [33] From the above extract, it appears that the Act is primarily directed at safeguarding the continued financial viability of contractors who are victims of payment delays or disputes made in bad faith perpetuated by upstream contracting parties. From this perspective, it makes no sense to draw an artificial distinction between allegedly “final” and “non final” payments, as the withholding of either would create the exact same downstream ripple effect intended to be “deterred and weeded out” by the Act.” (emphasis added) [80] The Singapore Court of Appeal in Lee Wee Lick Terence (alias Li Weili Terence) v Chua Say Eng (formerly trading as Weng Fatt Construction Engineering) and another appeal [2013] 1 SLR 401 in affirming that their Security of Payment Act applied to a final claim held as follows at page 438: “95 The other point to note in this case is that PC6 was a final claim for payment and not a progress payment. The Act is expressed to apply to progress payments (s 5). The expressions “progress payment” is defined in s 2 as follows: 42 ... Even though no argument has been made to us on whether a final payment is a progress payment as defined, it seems to us that the definition is wide enough to include a final payment as it is payment, albeit final, to which a person is entitled for the carrying out of construction works (see also Tiong Seng Contractors (Pte) Ltd v Chuan Lim Construction Pte Ltd [2007] 4 SLR (R) 364 at [27].” [81] Under the Singapore Building and Construction Industry Security of Payment Act (Chapter 30B) a "progress claim" under its section 2 means a payment to which a person is entitled for the carrying out of construction work, or the supply of goods or services, under a contract, and includes -

a single or one-off payment; or

a payment that is based on an event or a date... [82] I see no good reason why the Payment Claim that includes a final progress claim or certificate should be outside the jurisdiction of the Adjudicator to decide. 43 [83] Learned counsel for Luxor raised the fear of multiplicity of proceedings but that fear has been addressed in section 37 which reads as follows: "37. Relationship Between Adjudication and Other Dispute

A dispute in respect of payment under a construction contract may be referred concurrently to adjudication, arbitration or the court.

Subject to subsection (3), a reference to arbitration or the court in respect of a dispute which is being adjudicated shall not bring the adjudication proceedings to an end nor affect the adjudication proceedings.

An adjudication proceeding is terminated if the dispute being adjudicated is settled by agreement in writing between the parties or decided by arbitration or the court. [84] It would be an infantile fixation to fear of multiplicity of proceedings when Parliament had intended the decision in arbitration or the court of the same dispute to override that of adjudication. A speedy dispute resolution mechanism in Adjudication producing a decision of temporary 44 finality cannot be said to be the precursor to a multiplicity of proceedings simply because they operate on separate tracks. [85] This Court was informed by Luxor in their written submission that the costs of the present Adjudication Decision alone, as decided by the Adjudicator, is RM55,306.70. Luxor then submitted that it is obviously wrong, for the parties to incur, at least, another RM55,306.70 for the fresh Adjudication or Arbitration proceeding on the said defective works and LAD. [86] Luxor has failed to see it from the contractor's perspective in that had Luxor paid based on the Interim Certificates issued, there would have been no necessity for this Adjudication for work already done by the Claimant and so the parties only need to proceed with arbitration for the rectification works and LAD claim if there is still a dispute. As it is arbitration has not even commenced with a Notice to Arbitrate whereas the Adjudication has been concluded. The speedy and swift mechanism through Adjudication to facilitate regular and timely payment for work done is certainly working. Whether the Adjudicator should not have decided on the jurisdictional challenge raised and instead should have proceeded to complete the adjudication proceedings as if he had jurisdiction 45 [87] Learned counsel for Luxor submitted that it is trite law that an Adjudicator has no jurisdiction to decide his own jurisdiction. He cited the following cases in support of the said proposition: a) PC Harrington Contractors LTD v Systech International Ltd [2012] EWCA Civ 1371 (Court of Appeal). Davis MR, in paragraph 31, inter alia, decided that: “31. ... Even the adjudicator’s decision on the jurisdiction issue to which I referred at para 3 above was of no value in itself. It did not produce a decision which was binding in any future adjudication: it well established that an adjudicator does not have inherent power to decide his own jurisdiction: see Coulson, Construction Adjudication (2nd edition) at para 7.09.” (emphasis added) b) Pegram Shopfitters Ltd v Tally Weijl (UK) Ltd [2003] EWCA Civ 1750 (Court of Appeal), May LJ, in paragraph 10, inter alia, decided that: “10. ... that the adjudicator has no jurisdiction to decide his own jurisdiction ...” c) Lorraine Lee v Chartered Properties (Building) Limited [2010] EWHC 1540 (TCC) (High Court), Akenhead J, in paragraph 23, inter alia, decided that: 46 “23. ... I disagree because he (Adjudicator) had no authority or jurisdiction to decide his own jurisdiction.” [88] The rationale, it seems, for an Adjudicator to have no jurisdiction to decide his own jurisdiction is because no one may be a judge in his own cause, i.e. nemo judex in causa sua. [89] Learned counsel for Luxor then sought to persuade this Court that the Adjudicator’s decision on his own jurisdiction as shown in paragraph 34 of the Adjudication Decision, is void ab initio and ultra vires. Consequently, he submitted that the said Adjudication decision ought not to be enforced and indeed, ought to be set aside. [90] That is not the position in UK under their scheme of statutory adjudication if learned counsel is saying that each time an Adjudicator decides on the issue of his own jurisdiction then the Court must ipso facto set aside his decision, rightly or wrongly made, because to begin with the Adjudicator cannot decide on that issue at all. [91] Coulson J himself explained the position of a jurisdictional challenge and an adjudicator's decision in the matter in Pilon Ltd v Breyer Group Plc [2010] EWHC 837 (TCC) as follows "4. Was the adjudicator’s decision on his own jurisdiction binding on the parties? 47 11 On behalf of Pilon, Ms Gough contended that the adjudicator’s decision, to the effect that he did not have the jurisdiction to consider the alleged overpayment on batches 1-25, was temporarily binding on the parties. She submitted that the parties had debated the question of jurisdiction before the adjudicator, and he had reached a decision on it, so that, whether he was right or wrong, that decision was at least temporarily binding on the parties and therefore the court. Thus, she argued, the jurisdiction point now taken by Breyer was simply not open to them on this application for summary judgment. 12 I am unable to accept that submission. The law on this topic is clear. Jurisdictional issues often arise during the course of an adjudication, and it is usually sensible for the parties to ask the adjudicator to investigate the issue and state his conclusion. But, unless the parties have also agreed to be bound by the result of the adjudicator’s investigation into his own jurisdiction, his ruling on that issue will not be determinative, and the challenger can defeat any subsequent enforcement proceedings by showing a respectable case that the adjudicator had reached an erroneous conclusion as to jurisdiction: see, in particular, para 10 of the judgment of May LJ 48 in Pegram Shopfitters Ltd v Tally Weijl (UK) Ltd [2003] EWCA Civ 1750; [2004] 1 WLR 2082; [2004] 1 All ER 818."(emphasis added) [92] To be sure section 27(3) reads as follows: "(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)." (emphasis added) [93] What is obvious is that a discretion is vested in the Adjudicator with respect to whether he may proceed to decision or not to proceed at all or to proceed only with respect to matters that he is clear he has jurisdiction to decide. If Parliament had wanted the Adjudicator to proceed to completing the Adjudication without deciding on the issue of his jurisdiction then the word used would have been "shall." Otherwise an Adjudicator who is convinced that based on the submissions filed, he should decline jurisdiction, he must nevertheless doggedly decide to continue to completing the Adjudication because section 27(3) bars him from deciding this issue of his jurisdiction and compels him to disregard the jurisdictional challenge raised other than to record it and to decide the dispute as if he has jurisdiction. 49 [94] Thus if a jurisdictional challenge is raised in that a counterclaim and set-off is outside the jurisdiction of the Adjudicator for non-compliance with section 27(1) CIPAA, then the Adjudicator may proceed to decide if that is indeed so, for if he does not have jurisdiction, then he would have exceeded his jurisdiction if he should proceed to decide on matters not raised in the Payment Claim and the Payment Response. [95] If the issue is too difficult for him to decide, he may proceed as if he does have jurisdiction and leave it to the party aggrieved with his decision to set it aside under section 15(d) CIPAA. [96] I do not think CIPAA requires of the Adjudicator to act against his conviction and conscience when considering the issue of jurisdiction and that he should snuff and suppress that and proceed to decide on the assumption he has jurisdiction. [97] To be clear there is no prohibition against him deciding on a jurisdictional challenge. For example if the challenge is raised that the Adjudicator should decline jurisdiction as there was evidence before him that there are circumstances likely to give rise to justifiable doubts as to his impartiality and independence in spite of his earlier declaration in writing under section 24 CIPAA, then I think if he is satisfied that the concern is justified, he should decline jurisdiction. 50 [98] I cannot say that the Act requires of him especially section 27(3) that he must proceed irrespective of the concerns raised by one of the parties and that even if he is satisfied that the jurisdictional challenge raised is valid he must nevertheless act against his conscience and conviction that he should decline jurisdiction. [99] There are also cases where the jurisdictional challenge is obvious such as in a case where the claimant is a natural person and the dispute is with respect to a building less than four storeys high which is wholly intended for his occupation under section 3 CIPAA. [100] Clearly we do not expect the Adjudicator to pretend and assume he has jurisdiction and to continue to complete the adjudication, only to have it set aside. It would be a waste of time and resources to continue when it is obvious that the Adjudicator has no jurisdiction. There would also be the corresponding question as to whether he would be entitled to his fees and who would bear the costs and expenses of the adjudication if the matter that is so obvious is confirmed by the Court in a setting aside application as in that the Adjudicator had no threshold or core jurisdiction to begin with as in the adjudication could not even be set on train. [101] I can understand that where the jurisdictional challenge raised is a difficult one with respect to threshold or core jurisdiction in some matters 51 like whether the contract is one a construction contract in that it is a ship that has been converted into a Floating Production Storage and Off-loading ("FPSO") platform and work is being done on that FPSO with respect to oil and gas production and the jurisdictional challenge that the FPSO is a ship and so the work done on a ship is not construction work. See the case of MIR Valve Sdn Bhd v TH Heavy Engineering Berhad [2017] AMEJ 0538. [102] An Adjudicator has a strict time frame to complete the Adjudication Proceedings and deliver his Decision and in that sense he is not required to, as it were, crack his head over a complex issue of jurisdiction if he is not minded to. The saving grace is found in section 27(3) CIPAA in that any party aggrieved by his decision given in excess of jurisdiction may apply to set it aside under section 15(d) CIPAA. [103] I cannot see how an Adjudicator could have committed as it were an unpardonable sin merely because he decided on the jurisdictional challenge correctly but because he should not have decided it, that decision made whilst correct where jurisdiction is concerned has nevertheless to be set aside, only to have it re-adjudicated again! [104] Justice Mary Lim J (now JCA) while sitting in the Construction Court in Kuala Lumpur had occasion to address this in Ranhill E&C Sdn 52 Bhd v Tioxide (M) Sdn Bhd & other appeals [2015] MLJU 1873 as follows: "[41] But first, let me say that this issue of the jurisdiction of the adjudicator to hear and determine the dispute to start with is one that may or may not be disposed of by the adjudicator. The fact that an adjudicator decides on the issue, as was the case with Adjudicator Leon, or declines to do so, as was the case with Adjudicator Murali, is no reason to say that either is wrong or right. [42] This issue of jurisdiction in any sense, whether that of the adjudicator’s competence to hear the dispute, or whether the dispute concerned a matter that was within CIPAA 2012, may be brought up and dealt with at the adjudication proceedings. The fact that it was not; or, if brought up, how it was dealt with, does not deprive any party from raising the same issue again in proceedings in Court, be it in the setting aside application; or any other proceedings. [43] The reasons are quite simple: at the time of the adjudication proceedings, the adjudicator should be allowed to get on with the substantive issues given the strict and limiting conditions that adjudication operates within. The fact that section 15 recognises the ground of excess of jurisdiction, without defining 53 the meaning of ‘jurisdiction’, indicates that a challenge of jurisdiction is not lost if it was not raised in the adjudication proceedings; or if raised, cannot be brought up again. In either of our present situations, and we have two contrasting approaches, the adjudicators were not wrong; neither were the parties." (emphasis added) [105] An Adjudicator is not required to stop the whole proceedings and refer the jurisdictional challenge to the Court for decision or that the party raising the jurisdictional challenge is entitled to stay the proceedings and have the matter referred to Court before the Adjudicator may validly proceed. That would be to defeat the purpose of CIPAA with its speedy procedure to determine the issue of the unpaid party's claim. [106] Parliament deems it faster and neater for the Adjudicator to exercise his discretion to proceed as if he has jurisdiction without having to contradict himself and for the issue of jurisdiction to be raised afresh during the setting aside application under section 15 CIPAA where the Court hearing the issue of jurisdictional challenge will decide independently without being bound by the reasons given by the Adjudicator in deciding either way and also where he has not decided at all. 54 [107] Viewed in that light, there really is no difficulty if the Adjudicator should rule on the jurisdictional challenge raised if it is a case where he should be careful to confine himself to the jurisdiction conferred on him by virtue of section 27(1) CIPAA. Having delineated and defined his jurisdiction under section 27(1) I do not think that Parliament wanted him to disregard his jurisdiction under section 27(1) the moment a party should raise a jurisdictional challenge as in contending that a matter is within or without his jurisdiction. In a difficult case he may understandably proceed without deciding but in a clear case, he would risk having exceeded his jurisdiction if he were to decide on the assumption that he has jurisdiction. At any rate the ruling he made on a jurisdictional challenge is a non-binding ruling in that when raised in a setting aside application under section 15(d) CIPAA, the Court would consider the matter afresh and not be fettered in any way by the reasons given by the adjudicator for deciding one way or the other on jurisdiction. [108] Indeed the Court of Appeal in View Esteem Sdn Bhd v Bina Puri Holdings Bhd [2016] 6 MLJ 717 would discourage any matter arising in the course of an Adjudication to be brought to the High Court for determination other than under a section 15 application to set aside or a section 16 application for stay of the adjudication decision and 55 understandably so, for the strict timeline might be scuttled otherwise. His Lordship Hamid Sultan JCA expounded as follows: "[20] Once the adjudication is triggered, the only way to challenge the adjudication award in Malaysia is to make an application to set aside the award. There is no provision unlike the Arbitration Act 2005 (‘the AA 2005’) to make separate challenges on the issue of jurisdiction, biasness, qualification of adjudicator, etc. That is to say, there cannot be an application as in the instant case to challenge the jurisdiction of the adjudicator purportedly under s 41 of the CIPAA 2012. We take the view that the learned trial judge ought to have dismissed the purported s 41 application at limine. The purported s 41 complaint (if any) can only be raised in an application to set aside the adjudication award. The provisions in statutes and case laws in other jurisdiction may differ. [21] Unlike the AA 2005, the CIPAA 2012 does not provide active or passive remedy. The one and only remedy to question the adjudicator or adjudication process or jurisdiction, etc is pursuant to s 15 to be read with s 13 of the CIPAA 2012. These are the hallmark sections of the CIPAA 2012 to demonstrate that it is a summary process and the court jurisdiction is limited to setting aside of the award and/or stay of the award under s 16. 56 There is no jurisdiction for the court to hear a purported application under s 41 of the CIPAA 2012." (emphasis added) [109] His Lordship also considered the Singapore position under their system of Statutory Adjudication by referring to the Singapore Court of Appeal case in Lee Wee Lick Terence (alias Li Weili Terence) v Chua Say Eng (formerly trading as Weng Fatt Construction Engineering) and another appeal [2013] 1 SLR 401 as follows: "[28] Chan Sek Keong CJ, delivering the judgment of the Court of Appeal related to the jurisdiction or power of the adjudicator, had this to say: "36. In our view, if the respondent’s objection to the jurisdiction or power of the adjudicator to conduct the adjudication is based on an invalid appointment, such a jurisdictional issue should be raised immediately with the court and not before the adjudicator. The reason is that since the objection is against the adjudicator’s jurisdiction as an adjudicator, he has no power to decide if he has jurisdiction or not. He cannot decide his own competency to act as an adjudicator when such competency is being challenged by the respondent. An adjudicator who decides the issue may face one or other of the following 57 consequences. If he accepts the respondent’s objection and dismisses the payment claim, the claimant may commence court proceedings against him to compel him to adjudicate the payment claim. If he dismisses the respondent’s objection and makes an award, the respondent could still raise the same objection in enforcement proceedings with respect to his award. Accordingly, the adjudicator should proceed with the adjudication and leave the issue to the court to decide." (emphasis added) [110] His Lordship also issued a cautionary note when interpreting similar provisions in other jurisdictions with a scheme of statutory adjudication as follows: "[26] It is also essential to note that the equivalent Act related to CIPAA 2012 in other countries such as England, Australia, New Zealand, Singapore, etc. are not similarly worded though it provides a summary process to secure interim payments for construction related works (see ‘Statutory Construction Adjudication: Analysis of the New Zealand and Malaysian Legislations’ by Noushad Ali Nassem Amer Ali (PhD Thesis)). For example, Singapore Building and Construction Industry Security of Payment Act (‘the BCISP 2005’) does not have a specific provision 58 to set aside the adjudication award and/or the grounds to do so in contrast to our s 15 and/or a provision to stay the award as per our s 16. However, Singapore has provision to review the adjudicator’s award but not by the courts. Their s 27(5) impliedly recognises that the adjudication award can be set aside but with a condition of payment into court the adjudicated sum (see ss 18, 19 and 27 of the Building and Construction Industry Security of Payment Act 2005)..." [111] The Adjudication Society of the U.K. in their publication "Construction Adjudication Practice Guideline - Jurisdiction of the U.K. Construction Adjudicator", last revised 1.1.2016 accessible at www.adjudication.org tackles the question of jurisdiction head-on in their Practice Guideline as follows at page 28: "5. Adjudicator’s power to decide whether or not he has jurisdiction 5.1 The general rule is that, in the absence of agreement to the contrary, an adjudicator does not have the power to make a binding ruling on his own jurisdiction. Whilst it has been said that there is an exception where “substance and jurisdiction overlap”, this is doubtful. 59 5.2 Whilst an adjudicator does not generally have the power to make a binding ruling on his own jurisdiction, the courts have confirmed that it is not appropriate for an adjudicator to refuse to deal with a jurisdictional challenge on the basis that the adjudicator cannot make a binding decision. It is therefore best practice to deal expressly with any jurisdictional challenge.

Dealing with jurisdictional challenges 6.1 An adjudicator should not be entirely passive when it comes to determining his jurisdiction and should satisfy himself that he appears to have jurisdiction at the beginning of the process by asking himself the questions outlined in the section on threshold jurisdiction above... ...

6.3 If a challenge to an adjudicator’s jurisdiction is made by one of the parties (typically the respondent) then he should investigate the matter as soon as possible. An adjudicator should ensure he avoids becoming too jaundiced as a result of the challenge and should apply common sense when dealing with it. Depending on the nature of the objection, such an investigation could involve 60 asking for written submissions, holding a meeting or holding a teleconference.

6.4 If an adjudicator concludes that the challenge is well-founded, he must decline to act. Alternatively, if he finds that the challenge is weak, he must continue with the substance of the adjudication. The courts have approved of adjudicators continuing to act if they believe it is at least arguable they have jurisdiction on the basis that to do otherwise would undermine the objective of the HGCRA. As outlined above, whilst an adjudicator should continue with the adjudication, his decision as regards his jurisdiction will not be binding on the parties unless the parties agree to be bound by it." (emphasis added) [112] The above approach is supported by a wealth of authorities in the UK under their scheme of statutory adjudication. In the case of Fastrack Contractors Ltd v Morrison Construction Ltd [2000] BLR 168, Judge Thornton QC gave the following guidance to Adjudicators when a jurisdictional challenge is raised: "5.3. When a Jurisdictional Challenge Arises on the Grounds that there is no Dispute 61

It is first necessary to consider the nature of the jurisdictional dispute that arises when a party contends that there is no underlying dispute that can be referred to an adjudicator. If it is contended that there is no dispute at all since, for example, the whole of the subject-matter of the proposed adjudication has not been claimed, notified or rejected, the dispute raises a genuine jurisdictional dispute since, if that challenge is made out, there is no statutory power to appoint the adjudicator. If, on the other hand, the essence of the complaint is that what has been referred is broadly the same dispute as pre-existed the challenge but that there have been amendments of detail and degree, the challenge is not to jurisdiction since within the matters referred is a common core of disputed material which can legitimately form the subject-matter of a potentially valid adjudication. It would then be for the adjudicator, assisted by the referral notice, to identify that common core and adjudicate upon it whilst deciding that the residue should be dismissed or should not be determined at all. The second alternative is possible since the Scheme only requires the adjudicator to decide "the matters in dispute" (paragraph 20) and this residue would not consist of matters "in dispute". 62

If a party challenges the entire jurisdiction of the adjudicator, as Morrison does, it has four options. Firstly, it can agree to widen the jurisdiction of the adjudicator so as to refer the dispute as to the adjudicator's jurisdiction to the same adjudicator. If the referring party agrees to that course, and the appointed adjudicator accepts the reference to him of this second dispute, the jurisdiction of the adjudicator could then be resolved as part of the reference. The challenging party could, secondly, refer the dispute as to jurisdiction to second adjudicator. This would not put a halt to the first adjudication, if that had already led to an appointment, since the adjudicator has a statutory duty, unless both parties agree otherwise, to decide the reference in a very short timescale. The challenging party could, thirdly, seek a declaration from the court that the proposed adjudication lacked jurisdiction. This option is of little utility unless the adjudicator has yet to be appointed or the parties agree to put the adjudication into abeyance pending the relatively speedy determination of the jurisdiction question by the court. The Technology and Construction Court can, for example, resolve questions of that kind within days of them being referred to it. Fourthly, the challenging party could reserve its position, participate in the adjudication and then challenge any attempt to enforce the adjudicator's 63 decision on jurisdictional grounds. That is the course adopted by Morrison.

The adjudicator can, of course, investigate any partial or entire jurisdictional challenge. He could, if he was satisfied it was a good one, decline to adjudicate on the part of the reference he regarded as lacking jurisdiction. Alternatively, he could decide that the challenge was a bad one and proceed with the substance of the adjudication. That is what happened in this adjudication. However, unless the parties have vested the jurisdictional dispute in the hands of the adjudicator in addition to the underlying dispute, the adjudicator cannot determine his own jurisdiction and the challenging party may seek to avoid enforcement proceedings by showing that the sum claimed was decided upon without jurisdiction. The court would give appropriate weight to any findings of fact relevant to that jurisdictional challenge but would not be bound by them and would either have to bear out the challenge with evidence or, if that was not necessary, determine the challenge and either enforce or decline to enforce the whole of part of the adjudicator's decision depending on the decision reached as to jurisdiction. The role of the court in a jurisdictional challenge 64 summarised here is supported by recent decisions in the Technology and Construction court, particularly the decision of my own in Sherwood & Casson Ltd. v Mackenzie, unreported, 30 November 1999; The Project Consultancy Group v The Trustees of the Gray Trust, unreported, 16 July 1999, Dyson J.; and dicta in Macob Civil Engineering Ltd. v Morrison Construction Ltd., [1999] Building Law Reports 93, Dyson J."(emphasis added) [113] I would conclude that based on the authorities cited, whilst generally an Adjudicator may not decide on his own jurisdiction, he may nevertheless inquire into it. He may proceed in some clear cases and on matters involving his conscience to make a non-binding ruling on his lack of jurisdiction or that for valid reasons, he ought to decline jurisdiction. He may similarly give reasons why he thinks he has jurisdiction and proceed to complete the adjudication with delivering the decision. The party challenging his jurisdiction, if aggrieved by his decision, would be at liberty to apply to set it aside under section 15(d) CIPAA and the Court will decide the issue of his jurisdiction or the lack of it unfettered by any reasons he may have given in support of his decision either way. 65 Whether jurisdiction of an Adjudicator may be extended by applying the analogous principle applicable to pleadings in litigation [114] Learned counsel for Luxor submitted that even in a Court of law, one of the exceptions is where evidence, when presented and developed in argument during trial will have the effect of curing the absence of such plea, or in other words, the effect of overcoming such defect in pleading. [115] At the outset, I must observe that factually, as soon as the defence of a counterclaim and set-off was raised in the Adjudication Response, the Claimant SQA had already objected to it in the opening paragraph of their Adjudication Reply filed in paragraph 8 and further in paragraphs 14 and 27. This is thus not a case where the Claimant by conduct had not objected to the evidence of a counterclaim and set-off introduced by the Respondent Luxor. [116] Learned counsel for Luxor referred to the case of Ang Koon Kau & Anor v Lau Piang Ngong [1985] CLJ (Rep) 24 (Federal Court), His Lordship Wan Suleiman, FJ, at page 27, decided that: 66 “... Evidence given at the trial can therefore in appropriate circumstances overcome defects in the pleadings where the net result of such evidence is to prevent the other side from being taken by surprise. The same consideration was again the basis of the decision in K.E.P. Mohamed Ali v K.E.P. Mohamed Ismail [1981] 2 MLJ 10 where, although the statement of claim was statute barred on 11 April 1974 there had been an acknowledgment of the debt in 1976. Although the acknowledgment was not pleaded in the statement of claim or the reply, this Court held that the case has been satisfactorily presented and developed in the proceedings before the High Court and that there was therefore sufficient evidence on record from which a decision to that effect could be arrived at.” (emphasis added) [117] Again I have no quibble nor quarrel with such a proposition as the High Court of law and superior courts are courts of unlimited jurisdiction, limited only by statute with respect to the subject matter and remedies by statute. Its jurisdiction is not conferred by or confined to the pleadings of the parties. Even then the general rule is still that it cannot decide on matters outside the pleadings and certainly not in breach of statute. In the Federal Court case of Badiaddin Bin Mohd Mahidin & Anor v 67 Arab Malaysian Finance Bhd [1998] 1 MLJ 393 at p 426 it was observed as follows: "It is one thing to say that an order of a court of unlimited jurisdiction must be obeyed until it is set aside. It is quite a different thing to say that a court of unlimited jurisdiction may make orders in breach of written law. Isaacs v Robertson is certainly not authority for the latter proposition. I take it to be well settled that even courts of unlimited jurisdiction have no authority to act in contravention of written law. Of course, so long as an order of a court of unlimited jurisdiction stands, irregular though it may be, it must be respected. But where an order of such a court is made in breach of statute, it is made without jurisdiction and may therefore be declared void and set aside in proceedings brought for that purpose. It is then entirely open to the court, upon the illegality being clearly shown, to grant a declaration to the effect that the order is invalid and to have it set aside. It is wrong to assume that such an order may only be corrected on appeal." (emphasis added) [118] Statutory Adjudication is a creature of statute i.e. CIPAA 2012. Adjudicators appointed under CIPAA must confine themselves to the jurisdiction to decide only on matters raised in section 5 Payment Claim 68 and section 6 Payment Response as provided expressly by section 27(1) CIPAA unless his jurisdiction has been extended by agreement in writing by all the parties to the Adjudication. Where CIPAA has provided the mode and mechanism for extending the Adjudicator's jurisdiction to cover matters not stated in the Payment Claim and the Payment Response, the Respondent cannot bypass the agreement in writing and by a backdoor way persuade the Adjudicator to assume jurisdiction over a matter or issue or dispute not raised in the Payment Claim and Payment Claim. For an Adjudicator to succumb to such an approach in contravention of section 27(1) CIPAA would be exceed his jurisdiction and the Decision arrived at would be liable to be set aside under section 15(d) CIPAA. [119] Learned counsel for Luxor also referred to similar decisions found in the following cases: a) K.E.P. Mohamed Ali v K.E.P. Mohamed Ismail [1981] 2 MLJ 10 (Federal Court), at page 12; and b) O.C.B.C. Ltd v Philip Wee Kee Puan [1984] 1 CLJ (rep) 25 (Privy Council), at page 28. 69 [120] In the present case, Luxor's counterclaim and/or set-off for the defective works and LAD were not raised and presented in the Payment Response and were only raised for the first time in the Respondent Luxor's Adjudication Response. [121] Learned counsel for Luxor said that this Court must take cognizance that, recently on 05.01.2017, the Federal Court granted leave to View Esteem Sdn Bhd to appeal against the Court of Appeal and High Court decisions in View Esteem Sdn Bhd's case (supra). [122] While the scope of section 6(4) CIPAA might still be alive, this Court has to apply the law as currently expounded by the Court of Appeal. [123] Luxor further argued that estoppel should apply as SQA is currently doing rectification works in Lot 1. It was further submitted that at the moment, it cannot be ascertained with any degree of certainty, whether after the said rectification works, there is any amount due, either from the Luxor or SQA, or vice versa. By Luxor's very own submission then, a complete cause of action had not arisen where rectification works is concerned! 70 [124] As has been said ever so often, the scheme of statutory yields a result of interim finality. Luxor is not precluded from bringing its claim for damages for rectification works or for LAD in arbitration. Strangely while Luxor made much fuss that the issues should be more conveniently and completely resolved in arbitration, it has not taken any steps to commence arbitration even at the date of subsequent application for stay of the Adjudication Decision pending arbitration. [125] Any attempt to stay the Adjudication Decision until arbitration must at least meet the threshold condition under section 16(1)(b) CIPAA in that the subject matter of the Adjudication Decision is pending final determination by arbitration or the court. Here not only has the threshold condition not been met, there has been no evidence adduced by way of affidavit that if the Adjudicated Sum is paid now, there is reasonable apprehension that the Claimant SQA would not be able to repay back should the arbitration be in favour of Luxor. See Subang Skypark Sdn Bhd v Arcradius Sdn Bhd [2015] 11 MLJ 818. [126] I had therefore dismissed the application to stay the Adjudication Decision. 71 Pronouncement [127] For the reasons given above, the application for setting aside the Adjudication Decision was dismissed and correspondingly the application to enforce the Adjudication Decision was allowed with a single costs of RM15,000.00. Dated: 31 May 2017 Sgd YA LEE SWEE SENG Construction Court High Court Kuala Lumpur For the Plaintiff in WA-24C-133-11/2016 : (Enforcement applications) : Lam Wai Loon together with Serene And for the Defendant in : Hiew WA-24C-151-12/2016 : (Messrs Harold and Lam Partnership) (Setting aside) : For the Defendant in WA-24C-133-11/2016 : Manpal Singh Sachdev together with (Enforcement applications) : Ee Kim Hau 72 And for the Plaintiff in : (Messrs Manjit Singh Sachdev, WA-24C-151-12/2016 : Mohammad Radzi & Partners) (Setting aside) :