Aliran Asia Sdn Bhd v Astaka Padu Sdn Bhd (WA-24C-80-06/2021)

This is an application to enforce the adjudication decision made pursuant to the Construction Industry Payment and Adjudication Act 2012 (“CIPAA”).

The Plaintiff is a private limited company involved in the project management and construction services business.

The Defendant is also a private limited company in the property business.

The Defendant by a letter of award dated 31 May 2017 (“Contract”) appointed the Plaintiff to design, supply and install the external façade luminaries work for its One Bukit Senyum mixed development project in Johor Bahru (“Project”).

There were payment disputes that arose after the completion of the Plaintiff’s work done pursuant to the Contract.

As the result, the Plaintiff on 2 December 2020 commenced statutory adjudication against the Defendant under the CIPAA. 3

The appointed adjudicator after having accorded due adjudicatorial process to the parties made her decision and ordered the following against the Defendant (“Decision”):

the sum of RM122,375.00 to be paid on or before 4.05.2021;

a finance charge at 10.0% on the sum of RM122,375.00 after 7 days from the Invoice date 11.03.2020 until full and final settlement; and

the sum of RM7,819.27 being the Adjudicator’s fee and the Asian International Arbitration Centre (AIAC’s ) fee and the sum of RM15,000.00 (excluding 6% SST) being Aliran’s consultants’ fees and incidental costs respectively on or before 4.05.2021 with simple interest to run from 4.05.2021 at the rate of 5% per annum until the same is paid. [8] By reason that the Defendant has failed to pay the Plaintiff as so ordered, the Plaintiff on 15 June 2021 commenced this application to enforce the Decision (“Application”). [9] The affidavits which were filed for purposes of the Application are as follows:

Plaintiff’s affidavit in support affirmed by Ang Shii dated 2 July 2021;

(ii) Defendant’s affidavit in reply of Khong Chun Lung (undated and unaffirmed); and 4

(iii) Plaintiff’s affidavit in reply affirmed by Ang Shii dated 27 August 2021. [10] The Application was fixed before me on 9 November 2021. After having read the written submissions filed by the parties and having heard oral arguments of counsel, I grant an order in terms of the Application with costs of RM3,000.00 subject to the usual allocator. [11] I now provide below the grounds of my decision. Contentions and Findings [12] This Application is made pursuant to s. 28 of the CIPAA and Order 69A rules 2 and 5 of the Rules of Court 2012 (“ROC”) which stipulate as follows respectively:

Enforcement of adjudication decision as judgment

A party may enforce an adjudication decision by applying to the High Court for an order to enforce the adjudication decision as if it is a judgment or order of the High Court.

The High Court may make an order in respect of the adjudication decision either wholly or partly and may make an order in respect of interest on the adjudicated amount payable.

The order made under subsection (2) may be executed in accordance with the rules on execution of the orders or judgment of the High Court. 5

Application under the Act (O. 69A r. 2)

An application to which this Order applies may be made by originating summons in Form 5 which shall-

state in its intitulement any provision of these Rules and any provision of the Act under which the Court is being moved;

include a concise statement of-

the remedy claimed; and

(ii) any question on which the applicant seeks the decision of the Court;

state the grounds in support of the originating summons;

show that any statutory requirements have been met;

specify the section of the Act under which the application is made;

specify the respondents on whom the originating summons is to be served, stating their role in the adjudication; and

identify against which, if any, respondents an order of costs is sought.

The applicant shall file by affidavit, written evidence on which he intends to rely when he files his originating summons.

Unless the Court orders otherwise, an originating summons and the affidavit shall be served on the respondents specified in subparagraph (1)(f), within thirty days from the date of issue.

Where relevant, rules 3 to 5 shall additionally apply. …

Application for the enforcement of an adjudication decision (O. 69A r. 5)

An application for permission to enforce an adjudication decision, either wholly or partly, in the same manner as a judgment or an order of the High Court under section 28 of the Act may be made by originating summons in Form 5.

The originating summons shall, in addition to the matters stated in subrule 2(1)- 6

state the name and the usual or last known place of business of the applicant and the respondent against whom it is sought to enforce the adjudication decision, respectively; and

state either the adjudication decision has not been complied with or the extent to which it has not been complied with at the date of the application.

The applicant shall file by affidavit, written evidence on which he intends to rely when he files his originating summons, including exhibiting the original adjudication decision or a certified true copy and if the adjudication decision is in a language other than the national language or in English language, a translation of it in the English language, duly certified as a correct translation by a sworn translator.

The originating summons and affidavit must be served on the respondent. [13] The Defendant did not file a setting aside application pursuant to s. 15 of the CIPAA. [14] In Tan Eng Han Construction Sdn Bhd v Sistem Duta Sdn Bhd [2018] 12 MLJ 395, Lee Swee Seng J (now JCA) held as follows: “[38] In a case where there is no application to set aside an Adjudication Decision, the Court upon being asked to enforce the Adjudication Decision would ordinarily grant an order in terms of the application to enforce unless there is patent non-compliance with the requirements of the CIPAA such as the following:

That the dispute is not one within the core or original jurisdiction of the Adjudicator;

That the Decision is a void Decision under section 12(3) of the CIPAA being made outside the period specified in section 12(2);

That the Decision is not in writing and does not contain reasons for such Decision under section 12(4) of the CIPAA;

That the Decision has not determined the adjudicated amount and the time and manner the adjudicated amount is payable. 7 … [41] Even though this application is not being opposed this Court would still be concerned that the matter decided upon by the Adjudicator must be one ostensibly falling within the core or original jurisdiction of the CIPAA. [42] The reason is obvious enough: if the Adjudicator has no jurisdiction over the dispute then the Decision given is null and void and unenforceable. [43] The Court's chief concern when presented with an enforcement application would be to ask if the matter adjudicated upon is one falling within the core or original jurisdiction of the CIPAA. It is within the core jurisdiction of the CIPAA if it is a matter falling with the Application provision under section 2 and that it does not fall within the Non-application provision under section 3 and further that it is not falling within the exemption provision under section 40 of the CIPAA and the Exemption Order made thereunder.” [15] The cause papers filed by the Plaintiff for purposes of the Application are in order as required by the CIPAA and ROC. In addition, I am satisfied that the dispute between the parties arose from a construction contract in writing and the Project works were wholly carried out in Malaysia. The subject matter does not fall with s. 3 of the CIPAA as well as that the dispute does not fall within the exemption provision under s.40 of the CIPAA or the exemptions made thereunder. [16] The Defendant resisted the Application by contending that the Defendant had referred the dispute for final determination via arbitration. If the Application is allowed, the Defendant would be deprived of the opportunity to fully ventilate and settle the dispute between the parties at the proper venue. Furthermore, a parallel enforcement application with an on-going arbitration would cause distress to the Defendant placing it an unfair position in prosecuting its claims via arbitration. 8 [17] It is plain as provided in s.13 of the CIPAA that the Decision is binding unless settled by the parties, set aside or finally determined. Additionally, the Decision is enforceable unless stayed by the Court pursuant to s. 16 of the CIPAA. [18] In Inai Kiara Sdn Bhd v Puteri Nusantara Sdn Bhd [2019] 2 MLJ 362 CA, Mary Lim JCA (now FCJ) held as follows with emphasis added by me: “[41] In our view, from a proper reading of ss. 13, 15, 16 and 28, the binding effect of the adjudication decision is automatic; hence the need for any dissatisfied or aggrieved party to first apply to set aside the adjudication decision. This is evident from the terms of s. 15 which requires an aggrieved party to file an application before the jurisdiction of the court under s. 15 may be invoked. In that application, the aggrieved party must specify in a supporting affidavit, the ground(s) relied on. It is important to note that s. 15 envisages an exhaustive list of grounds as found in paras. (a) to (d). Arguably, the court has no jurisdiction to entertain any other ground. … [43] We must point out that even in an application for stay of an adjudication decision under s. 16, an application under s. 15 to set aside the adjudication decision must still first be filed - see s. 16(1)(a). Unless and until there is a positive challenge to the adjudication decision on any or all of the grounds statutorily provided under s. 15, the respondent, at best, can only oppose the appellant's application for enforcement. Even then, the basis for opposing the enforcement application ought to be confined to the matters that we had averted to earlier. This construction is necessary so that the adjudication scheme may work effectively within the object and purpose of the Act. … [56] It is our opinion that a dismissal of the appellant's application for enforcement on the ground of excess of jurisdiction without at the same time, setting aside that adjudication decision would not only give a construction and interpretation which will defeat the purpose of CIPAA 2012, but would leave the parties and the court in an incongruous and untenable position. That is unpalatable. On the one hand, a refusal to grant an enforcement order because it is purportedly an improperly procured adjudication decision; and on the other hand, the binding effect of that adjudication decision. 9 [57] The law gives the aggrieved party, the respondent, the option of filing an application to set aside the adjudication decision on any or all of the grounds provided in s. 15. Unless that option is exercised, the respondent must comply with the decision. This is regardless the complaint of jurisdiction, whether it is of core jurisdiction, competence jurisdiction or contingent jurisdiction, challenges on jurisdiction which are within the scope of s. 15.” [19] I therefore find that the Defendant’s failure to apply to set aside the Decision is fatal to its attempt to oppose or resist the Application. [20] Moreover, it is irrelevant that the Defendant has commenced arbitration proceedings to finally determine the dispute and has been put to distress. That notwithstanding, enforcement of the Decision would not prevent or prejudice the Defendant in any way from pursuing or proceeding with the arbitration as a matter of law. [21] The only viable recourse presently available to the Defendant is apply for a stay of the Decision pursuant to s. 16(b) of the CIPAA. However, reference to arbitration merely prequalifies the application but does not guarantee it; see Subang Skypark Sdn Bhd v Acradius Sdn Bhd [2015] 11 MLJ 818. [22] In the circumstances, the Application is meritorious and must accordingly be allowed. 10 Conclusion [23] It is for the foregoing reasons that I allowed the Application as so ordered. Dated this 12 November 2021 t.t. LIM CHONG FONG JUDGE CONSTRUCTION COURT 1 HIGH COURT KUALA LUMPUR COUNSEL FOR THE PLAINTIFF: FOO JOON LIANG (TASHA LIM YI CHIEN WITH HIM) SOLICITORS FOR THE PLAINTIFF: GAN PARTNERSHIP COUNSEL FOR THE DEFENDANT: KAMRAJ NAYAGAM (CHRISTINA LAU ZHI YAN WITH HIM) SOLICITORS FOR THE DEFENDANT: MAH KAMARIYAH AND PHILIP