Angsana Tunas Sdn Bhd v Instant Option Resources Sdn Bhd (WA-24C-235-12/2022)

Instant Option Resources Sdn Bhd (‘IO’) pursuant to ss 12(5) and 15(a), (b) and (d) and paragraphs 16(1)(a) and (b) of the Construction Industry Payment and Adjudication Act 2012 [Act 746] (‘CIPAA’) in Originating Summons No. WA-24C-233- 12/2022 (‘O.S. No. 233’) to set aside and stay the Adjudication Decision dated 28.11.2022 (‘AD’) by the learned Adjudicator, Ms. Victoria Loi Tien Fen (‘Adjudicator’) (hereinafter referred to as the ‘Setting Aside and Stay Application’, or the ‘Setting Aside Application’ or ‘Stay Application’ as the context requires); and

Angsana Tunas Sdn Bhd (‘Angsana’) pursuant to s 28 of the CIPAA in O.S. No. WA-24C-235-12/2022 (‘O.S. No. 235’) to enforce the AD (‘Enforcement Application’). [2] Both suits were heard together with the consent of the parties. After having given due consideration to the cause papers and the submissions by the parties, I dismissed the Setting Aside and Stay Application and allowed the Enforcement Application. [3] The full grounds for the decision are set out in the succeeding part of this judgment. THE CAUSE PAPERS [4] The cause papers for each application, except for the O.S., are as follows:

IO’s Affidavit In Support (‘AIS’) affirmed by its Operation Manager, James Selvam a/l S. Sandanasamy on 12.12.2022 (encls. 2 - 11);

Angsana’s Affidavit In Reply (‘AIR’) affirmed by its Director, Boon Kai Onn @ Mong Kai Hon on 13.1.2023 (encl. 13);

IO’s AIR affirmed by the same deponent on 25.1.2023 (encl. 14);

IO’s Further Affidavit affirmed by the same deponent on 27.4.2023 (encl. 30);

Angsana’s AIR (No 2) affirmed by the same deponent on 15.5.2023 (encl. 31); and

IO’s AIR (No. 2) affirmed by the same deponent on 26.5.2023 (encl. 32).

Angsana’s AIS affirmed by the same deponent on 30.12.2022 (encl. 2);

IO’s AIR affirmed by the same deponent on 27.1.2023 (encl. 4);

Angsana’s AIR affirmed by the same deponent on 8.2.2023 (encl. 5);

IO’s Notice of Intention to use Affidavit (encls. 2 - 11 and 14 in O.S. No. 233) dated 9.2.2023 (encl. 6); and

Angsana’s Notice of Intention to use Affidavit (encl. 13 in O.S. No. 233) dated 6.4.2023 (encl. 10). BACKGROUND FACTS [5] IO is a private limited company with its registered and business addresses at No. 502, Tingkat 5, Blok A, Menara PJ, Pusat Perdagangan Amcorp, No. 18, Jalan Persiaran Barat, 46050 Petaling Jaya, Selangor. Its nature of business is, among others, electrical engineering works, general trading and transport services. [6] Angsana is also a private limited company and having its registered address at 10-2B, Jalan Puteri 2/3, Bandar Puteri, 47100 Puchong, Selangor and business address at Lot 555, Jalan 2C, Kampung Baru Subang, 40150 Shah Alam, Selangor. Angsana’s nature of business is in trading of construction materials and sub-contractor works. [7] IO was the main subcontractor for the project known as “CADANGAN TAMBAHAN DAN PERUBAHAN SERTA MENAIKTARAF KEPADA STESEN MONORAIL HANG TUAH YANG SEDIA ADA DI ATAS LOT 790 DAN LOT PT 140, SEKSYEN 56 DI JALAN HANG TUAH, WILAYAH PERSEKUTUAN KUALA LUMPUR UNTUK TETUAN BBCC DEVELOPMENT SDN BHD TRANSIT HUB PACKAGE IF1A WORKS” (‘Project’). [8] By the Letter of Award dated 21.1.2020 (‘LoA’), IO appointed Angsana as the sub-contractor for the supply, delivery and installation of facade works as detailed in the Bill of Quantities in Appendix A to the LoA (‘Sub-Contract Works’) for the contract sum of RM1,750,000.00. [9] Clause 7.2 of the LoA provides that the Sub-Contract shall be based on the Agreement and Conditions of PAM Contract 2006 (With Quantities) (‘PAM Contract’) subject to the Amendments, Amplications and Supplementary Clauses of the Main Contract. [10] Angsana issued Progress Claim Nos. 2 to 11 dated 26.2.2021,

31.3.2021, 27.4.2021, 21.5.2021, 26.6.2021, 30.7.2021, 30.8.2021,

29.9.2021, 30.10.2021 and 23.11.2021 for the total sum of RM2,549,485.16. [11] Angsana claimed that IO only certified a sum of RM1,315,749.25 based on Certificate No. 6 dated 27.7.2021. After taking into account the sum of RM165,767.81 which was paid by IO on behalf of Angsana to the suppliers, Angsana alleged that a sum of RM980,468.10 was due and owing by IO. A Payment Claim was duly served on IO on 27.6.2022 for this amount. [12] IO, vide the letter dated 28.7.2022, replied to the Payment Claim by objecting to the validity of the Payment Claim and advising Angsana that it was in the midst of preparing the final certificate and expects the same to be ready within 10 working days from the date of the letter provided that none of its staff is quarantined due to Covid-19. [13] Subsequently, the Notice of Adjudication was issued on 19.7.2022, the Adjudication Claim on 5.9.2022, Adjudication Response on 20.9.2022 and Adjudication Reply on 27.9.2022. [14] In paragraph 98 of the AD, the Adjudicator decided and ordered that: “(a) The adjudicated sum is RM581,953.36;

The cost of this adjudication is RM37,706.94;

The Respondent shall pay the adjudicated sum and the costs of this adjudication to the Claimant within 14 days from the date of this adjudication decision;

The Respondent shall pay to the Claimant interest at the rate of 5% per annum on the adjudicated sum from 8.1.2021 [sic] until full and final settlement; and

The Respondent shall pay to the Claimant interest at the rate of 5% per annum on the costs of this adjudication from the date of this adjudication decision until full and final settlement.”. In the course of hearing of the applications, Mr. G. Nadesh, in submitting for IO, had raised the error in subparagraph 98(d) of the AD where the date should be “8.1.2022”, and not “8.1.2021”. Mr. KH Chan, who appeared for Angsana, immediately conceded that there was such an error in the AD, which had not been corrected on the Adjudicator’s own initiative or at the request of any party under sub-s 12(7) of the CIPAA. ANALYSIS AND FINDINGS OF THE COURT I. O.S. No. 233: THE SETTING ASIDE AND STAY APPLICATION - The Setting Aside Application [15] On the hearing date, the learned counsel for IO withdrew the ground to set aside the AD pursuant to sub-s 12(5) CIPAA for the failure by the Adjudicator to provide the manner of payment of the Adjudicated Sum. [16] The remaining grounds were thus pursuant to limbs (a), (b) and (d) of s 15 CIPAA which read as follows: “Improperly procured adjudication decision

An aggrieved party may apply to the High Court to set aside an adjudication decision on one or more of the following grounds:

the adjudication decision was improperly procured through fraud or bribery;

there has been a denial of natural justice;

…; or

the adjudicator has acted in excess of his jurisdiction.”. [17] Based on s 13 of the CIPAA, the AD is binding unless – “…

it is set aside by the High Court on any of the grounds referred to in section 15;

the subject matter of the decision is settled by a written agreement between the parties; or

the dispute is finally decided by arbitration or the court.”. 1st Ground: Whether Angsana has improperly procured the AD through fraud, thereby allowing IO to set aside the AD under s 15(a) of the CIPAA [18] In paragraph 4 of the Adjudication Claim, Angsana stated that “The LOA also incorporated the Agreement and Conditions of PAM Contract 2006 (‘PAM Contract’).”. [19] IO retorted in the Adjudication Response that Angsana has misled the Adjudicator by misinterpreting the Sub-Contract by enclosing an unsigned or blank version and the wrong Conditions of Contract (‘CoC’) to support Angsana’s contention that the parties had incorporated the PAM Contract. IO took the firm position that the parties had never executed the PAM Contract and based on Clause 7.2 of the LoA, the CoC shall be based on the CoC of the Main Contract which was signed by BBCC Development Sdn Bhd as the owner and Syarikat Murni (M) Sdn Bhd as the main contractor i.e. the amended PAM Contract 2006 version (‘Amended PAM Contract’). [20] IO submitted, with reference to paragraph 15 of the judgment in Gumi Asli Elektrikal Sdn Bhd v Dazzling Electrical (M) Sdn Bhd [2020] MLJU 314, that Angsana’s conduct in concealing material information or making false allegation in the Adjudication Claim amounts to improperly procuring the adjudication decision through fraud or bribery within the meaning of s 15(a) of the CIPAA and therefore, the Adjudicator should decline to award Angsana the claims sought (see paragraphs 79 - 83 of the Adjudication Response). [21] Angsana then responded that the incorporation of the amendments to the conditions of the PAM Contract was not disclosed to Angsana. Hence, the applicable provision is Clause 30.4 of the PAM Contract without amendments resulting in IO being disentitled to set-off against Angsana’s claim because IO did not comply with the conditions to submit complete details of the set-offs for costs incurred and to send a written notice specifying IO’s intention to set-off the amount and the basis for the set-offs within 28 days before any set-off is deducted from any payment (see paragraphs 37 - 45 and 58 of the Adjudication Reply). [22] The Adjudicator dealt with the juxtaposed arguments of the parties in paragraphs 44 - 52 of the AD. She first stated the common stance of the parties that they did not execute the PAM Contract, but nevertheless, the PAM Contract has been incorporated by virtue of Clause 7.2 of the LoA. The Adjudicator then identified the main point of difference between the parties whereby Angsana claimed that the PAM Contract without amendments applies whereas IO contended that the Amended PAM Contract applies. [23] The Adjudicator agreed with IO that, based on Clause 7.2 of the LoA, the Amended PAM Contract applies. However, she found that IO’s accusation of Angsana having concealed material information or making false allegation as not established. [24] In this Court, IO submitted that the Adjudicator had taken the wrong position by deciding that Angsana’s conduct, and statements do not amount to fraud. [25] This Court has dealt with a similar issue in JEKS Engineering Sdn Bhd v PALI PTP Sdn Bhd and another case [2022] 9 MLJ 541 (the appeals to the Court of Appeal was discontinued in April 2023). The relevant passage from the judgment in that case is re-produced below: “[32] As at the date of hearing and decision of the setting aside application, the only Malaysian case on s 15(a) of the CIPAA and where the judgment in SG South was cited is Gumi Asli Elektrikal Sdn Bhd v Dazzling Electrical (M) Sdn Bhd and another case [2020] MLJU 314; [2020] 1 LNS 189. [33] At the time of writing these grounds of judgment, this court has delivered the full reasons for the decision in the case of KPF Niaga Sdn Bhd v Vigour Builders Sdn Bhd and another case [2021] MLJU 229; [2021] 1 LNS 141. In that case, this court was guided by the propositions as expounded in SG South and followed by the High Court in Gumi Asli Elektrikal in construing the word ‘fraud’ in s 15(a) of the CIPAA. Gumi Asli Elektrikal and SG South were discussed in the following excerpt from the grounds of judgment in KPF Niaga: “[58] Unlike limbs (b) and (d) under s 15 CIPAA where there is an ever-growing collection of Malaysian cases, the only known decision on limb (a) is Gumi Asli Elektrikal. In that case, the High Court was confronted with the issue of whether the adjudication decision had been improperly procured through fraud when (i) Dazzling Electrical (M) Sdn Bhd (‘Dazzling’) purportedly misrepresented to Gumi Asli Elektrikal Sdn Bhd (‘Gumi’) that Dazzling would withdraw the adjudication material facts from the Adjudicator in the form of two letters. With regards to

(ii), the Court decided that it could not allow Gumi to rely on the two letters as these were not exhibited in Gumi’s affidavit. As for (i), the court held, among others, that there was no documentary evidence to support the alleged misrepresentation; no fraud had been committed by any party as explained in SG South; and even if fraud had been committed, Gumi had failed to prove that the adjudication decision had been improperly procured through fraud. … [60] The relevant passages from the judgment by Akenhead J in SG South, with my added emphasis, read as follows: 20 Some basic propositions can properly be formulated in the context albeit only of adjudication decision enforcements:

Fraud or deceit can be raised as a defence in adjudications provided that it is a real defence to whatever the claims are; obviously, it is open to parties in adjudication to argue that the other party’s witnesses are not credible by reason of fraudulent or dishonest behaviour.

If fraud is to be raised in an effort to avoid enforcement or to support an application to stay execution of the enforcement judgement, it must be supported by clear and unambiguous evidence and argument.

A distinction has to be made between fraudulent behaviour, acts or omissions which were or could have been raised as a defence in the adjudication and such behaviour, acts or omissions which neither were nor could reasonably have been raised but which emerge afterwards. In the former case, if the behaviour, acts or omissions are in effect adjudicated upon, the decision without more is enforceable. In the latter case, it is possible that it can be raised but generally not in the former.

Addressing this latter case, one needs to differentiate between fraud which directly impacts on the subject matter of the decision and that which is independent of it. Examples of the first category are where it is later discovered that the certificate upon which an adjudication decision is based is discovered to have been issued by a certifier who has been bribed or by a certifier who has been fraudulently misled by the contractor into issuing the certificate by a fraudulent valuation. Examples of the second category are fraud on another contract or cross claims arising on the contract in question which can only be raised by way of set off or cross claim. Whilst matters in the first category can be raised, generally those in the second category should not be. The logic of this is that it is the policy of [HGCRA] that decisions are to be enforced but the Court should not permit the enforcement directly or at least indirectly of fraudulent claims or fraudulently induced claims; put another way, enforcement should not be used to facilitate fraud; fraud which does not impact on the claim made upon which the decision was based should not generally be deployed to prevent enforcement. 21 In formulating and applying these propositions, courts need to be aware and take into account what goes on construction sites up and down the country. On numerous occasions, contractors and subcontractors and even consultants will submit bills or invoices which are or are believed by the recipient to overstate the entitlement. Whilst there are some ‘cowboy’ and fraudulent builders who prey on the public, it will only rarely be the case that one can presume fraud to have taken place where an invoice or bill is overstated. The claiming party may believe that it is entitled to what it is claiming; there may be a simple and honest mistake in the formulation of the claim; the claim may be based on a speculative but arguable point of law or construction of the contract. In none of these cases can it be said that there was fraud on the part of the claiming party. The Court should be astute and cautious on adjudication enforcement applications in assessing pleas of fraud by the party against whom the adjudication decision has been made. I doubt very much whether there will be any significant number of challenges to enforcement on the basis of fraud. [61] Wong Kian Kheong J expressed His Lordship’s view as to the scope of the court’s power under s 15(a) CIPAA in the following terms: [15] …

a party (X) applying to set aside an AD on the ground that the AD has been improperly procured through fraud under s 15(a) CIPAA has to prove the following two matters cumulatively –

fraud has been committed. In this respect, the fraud in question need not be committed by the party in whose favour the AD is given (Y). Section 15(a) CIPAA does not require fraud to have been committed by the adjudicator. Nor is it required to be proven that Y or the adjudicator is complicit in the fraud; and

the AD has been ‘improperly procured’ through fraud, either directly or indirectly. On the wording of s 15(a) CIPAA, even if X can prove the commission of fraud but if X cannot prove that an AD has improperly procured through fraud, the court should not exercise its discretion to set aside the AD. Having said that, if fraud has been committed, the court should not exercise its discretionary power to grant leave to Y to enforce the AD under s 28(2) CIPAA…;

… In construing the word ‘fraud’ in s 15(a) CIPAA, I accept the above judgment by Akenhead in SG South;

X has the legal burden to satisfy the court that an AD has been improperly procured through fraud. Y has no legal onus to prove that the AD has not been improperly procured through fraud; and

X is only required to prove that an AD has been improperly procured through fraud on a balance of probabilities (not beyond all reasonable doubt) — please see the Federal Court’s judgment delivered by Richard Malanjum CJ (Sabah and Sarawak) (as he then was) in Sinnaiyah & Sons Sdn Bhd v Damai Setia Sdn Bhd [2015] 1 MLJ 1, at [48]–[53]. [62] Section 17 of the Contracts Act 1950 [Act 136] (‘CA 1950’) describes the acts that could be committed by a party to a contract or by his agent so as to amount to ‘fraud’ and which renders a contract voidable under sub-s 19(1) at the option of the party whose consent was caused by such fraud. However, for purposes of s 15(a) CIPAA, ‘fraud’ has a distinctive meaning as compared to the definition in the context of contract law as set out in s 17 CA 1950. In the circumstances, this Court is very much assisted by the legal principles as propounded in SG South which can be applied to the present application.”. [34] It is indisputable that the fraudulent behavior or acts raised by PALI in the setting aside application fall under the category of fraudulent behavior or acts which were raised as a defence in the adjudication proceedings and was adjudicated upon by the adjudicator. In such circumstances, the AD would, in general, be enforceable. The court is also mindful of the reminder in SG South of the need to be alert and vigilant when assessing claims of fraud made by PALI being the party against whom the AD was made.” (see too, SG South Ltd v King's Head Cirencester LLP & Anor [2009] EWHC 2645 (TCC); [2010] BLR 47). [26] IO has not established a case of fraud because, akin to JEKS Engineering’s case, the alleged fraudulent behaviour or act by Angsana was raised in the adjudication proceedings and deliberated upon by the Adjudicator where she found that, based on Clause 7.2 of the LoA, the Amended PAM Contract applies. This is exactly the position as propounded by IO. [27] IO’s argument that Angsana had improperly procured the AD through fraud is absolutely baseless. The 1st Ground to set aside the AD must be rejected. 2nd Ground: Whether the Adjudicator acted in excess of jurisdiction by:

Re-writing the terms of the Sub-Contract [28] Sub-s 27(1) of the CIPAA provides that: “Jurisdiction of adjudicator

27.

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.

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.

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).”. [29] An allegation that an adjudicator has acted in excess of jurisdiction may be raised even after an adjudication decision has been made. It is immaterial that the complaint of excess of jurisdiction was not raised during the adjudication proceeding itself (see Giatreka Sdn Bhd v SGW Engineering Construction Sdn Bhd (and Another Originating Summons) [2020] 1 AMR 193 and Dekinjaya Builder Sdn Bhd v Chong Lek Engineering Works Sdn Bhd and another case [2020] MLJU 2455; for the types of jurisdiction, see Terminal Perintis Sdn Bhd v Tan Ngee Hong Construction Sdn Bhd and another case [2017] MLJU 242 and View Esteem Sdn Bhd v Bina Puri Holdings Bhd [2018] 2 MLJ 22). [30] Although IO did not raise all its defences to Angsana’s claim in the Payment Response, this does not prevent IO from raising them in the Adjudication Response and the Adjudicator is obliged to consider the same [see View Esteem (supra)]. [31] In paragraph 81 of the AD, the Adjudicator decided that: “81. Considering the evidence and arguments before me, I find and hold that the Respondent has not established its entitlement to back charges in the sum of RM662,577.52 for the following reasons:

The procedure for set-off pursuant to Clause 30.4 of the Amended PAM Contract has not been complied with (namely the requirements for complete details of assessment of the set-off and for prior notice). The particulars of set-off were only disclosed to the Claimant in the Adjudication Response by the said letter dated 20.9.2022. On this ground alone, the Respondent’s attempt to set-off a sum of RM662,577.52 must fail; …”. [32] IO submitted that the Adjudicator has exceeded her jurisdiction as she has erroneously interpreted the provisions in the Sub-Contract and decided that IO must provide complete details of assessment of the set-off and prior notice to Angsana (‘Procedure’) before IO is entitled to back charge and/ or set-off. [33] IO asserted that the Procedure was never incorporated in the Sub-Contract and by imposing the same on IO, the Adjudicator has, in effect, re-written the provisions of the Sub-Contract, contrary to Clauses 14.3 and 15.2 of the LoA which provide as follows: “14.3 The quality of works and workmanship shall be in accordance with the specification of the Main-contract. The Sub-Contractor must ensure that the Works, finishes and products for the project shall be in accordance with the Main-contract. Decisions as to the quality of materials and workmanship in cases of disputes shall rest solely with the Architect / Consultants. Should the Sub-Contractor fail to comply to the above, the Main Sub-Contractor shall reserve the right to arrange for making good all works not in compliance to the required quality standards and the cost of all such remedial works shall be borne by the Sub-Contractor and shall be deducted from any sum due or to become due to them (i.e. monthly progress payment). …

15.2 The Sub-contractor shall forthwith comply with any instruction issued to him by the Main Sub-contractor in regards to any matter of which the Owner is expressly empowered by virtue of this clause to issue instructions and the Subcontractor shall comply with all instructions issued to him by the Main Subcontractor. If the Sub-contractors failed to comply with the instructions given within three (3) days upon receipt of the written instruction/notice from Main Sub-contractor, the Main Sub-contractor may without prejudice to any other rights or remedies available to him under this Sub-contract to undertake the Works or employ and pay other Sub-contractors or other persons to continue and complete any outstanding works left over by you which may be necessary to give effect to such instruction and all costs (including any loss and expense) incurred by the Main Sub-contractor in connection with such measures or employment may be deducted from amount due to the sub-contractor for the item(s) carried out by others under this Sub-contract or recoverable from the Sub-contractor as a debt if the amount deducted is insufficient.”. [34] IO argued that the Procedure is not prescribed in Clauses 14.3 and 15.2 of the LoA. On the contrary, these provisions allow IO to employ and pay a third party to continue and complete any outstanding works left over by Angsana and the costs incurred thereby may be deducted from the amount due to Angsana. Hence, the Adjudicator had wrongly relied on Clause 30.4 of the PAM Contract. [35] In paragraph 37 of the Adjudication Reply, Angsana stated the following with regards to IO’s claim for back charges: “The requirements for the Respondent to have a valid set-off has been expressly mentioned in clause 30.4 of the PAM Contract: “30.4 The Employer shall be entitled to set-off the amount of all cost incurred and loss and expense where it is expressly provided under Clauses 2.4, 4.4, 5.1,

6.5(e), 6.7, 14.4, 15.3(b), 15.3(c), 15.4, 15.5, 19.5 and 20.A.3. No set-off under this clause may be made unless:

30.4(a) the Architect (on behalf of the Employer) has submitted to the Contractor complete details of their assessment of such set-off; and 30.4(b) the Employer or the Architect has given the Contractor a written notice delivered by hand or by registered post, specifying his intention to set-off the amount and the grounds on which such set-off is made. Unless expressly stated elsewhere, such written notice shall be given not later than twenty-eight (28) Days before any set-off is deducted from any payment by the Contractor. Any set-off by the Employer shall be recoverable from the Contractor as a debt or from any monies due or to become due to the Contractor under the Contract and/or from the Performance Bond. If the Contractor after receipt of the written notice from the Contractor, disputes the amount of set-off, the Contractor may within twenty one (21) Days of receipt of such written notice, send to the Contractor by hand or by registered post a statement setting out the reasons and particulars for such disagreement. If the parties are unable to agree on the amount of set-off within a further twenty one (21) Days after the receipt of the Contractor’s response, either party shall refer the dispute to adjudication under Clause 34.1. The Employer shall not be entitled to exercise any set-off unless the amount has been agreed by the Contractor or the adjudicator has issued his decision.”. [36] By reading paragraphs 76 to 82 of the AD, it is obvious that the Adjudicator had considered Clauses 14.3 and 15.2 of the LoA as raised by IO in paragraphs 57 and 62 of the Adjudication Response, and Clause 30.4 of the PAM Contract as submitted by Angsana in paragraph 37 of the Adjudication Reply. Having decided that the applicable PAM Contract is the one as amended by the Main Contract i.e. the Amended PAM Contract, the Adjudicator then found that the procedure for set-off pursuant to Clause 30.4 of the Amended PAM Contract must be complied with. [37] Clause 30.4 of the Amended PAM Contract is the same as Clause 30.4 of the PAM Contract except for the third paragraph which was amended to read as follows: “If the Contractor after receipt of the written notice from the Contractor, disputes the amount of set-off, the Contractor may within twenty one (21) Days of receipt of such written notice, send to the Contractor by hand or by registered post a statement setting out the amount disputed, reasons and particulars for such disagreement. If the parties are unable to agree on the amount of set-off within a further twenty one (21) Days after the receipt of the Contractor’s response, either party shall refer the dispute to adjudication under Clause 34.1. The Employer shall not be entitled to exercise any set-off unless the amount has been agreed by the Contractor or the adjudicator has issued his decision. Notwithstanding the right of set-off, the Contractor’s liabilities under the Contract shall not be reduced.”. The requirements for prior notice and complete details, or the Procedure, are therefore applicable under the original Clause 30.4 and its amended version. [38] The issue of whether Clauses 14.3 and 15.2 of the LoA or Clause 30.4 of the PAM Contract or the Amended PAM Contract applies was a live issue before the Adjudicator and she acted well within her jurisdiction when she considered these contractual provisions in arriving at her findings and conclusions on this issue. [39] IO’s unhappiness at the outcome of the Adjudicator’s analysis goes to the merits of her decision. It is trite that a setting aside application is not an appeal to the High Court against the AD and nor is it a judicial review of the AD. This Court cannot review the merits of the AD in the instant application (see the numerous case authorities on this point, among others, ACFM Engineering & Construction Sdn Bhd v Esstar Vision Sdn Bhd & another appeal [2016] MLJU 1776 (CA), Bina Puri Construction Sdn Bhd v Hing Nyit Enterprise Sdn Bhd [2015] MLRHU 192, Naza Engineering & Construction Sdn Bhd v SSL Dev Sdn Bhd [2019] MLJU 1885, Samado Sdn Bhd v. Kerajaan Malaysia & Another Case [2020] 5 MLRH 165 and Cescon Engineers Sdn Bhd v Pesat Bumi Sdn Bhd and another case [2022] 9 MLJ 79). [40] The challenge against the AD based on Ground 2(a) is misconceived and is similarly, rejected.

Awarding interest on the costs of adjudication [41] In the Payment Claim, Angsana sought, among others, for interest pursuant to Clause 30.17 of the PAM Contract. This was repeated in subparagraph 6(b) of the Notice of Adjudication. [42] In subparagraphs 21(b) and (c) of the Adjudication Claim, Angsana sought “interest” and “cost”. [43] IO accepted that under ss 18 and 25(o) of the CIPAA, as quoted below, the Adjudicator has the power to award costs of the adjudication proceedings. “Costs of adjudication proceedings

18.

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.

Subsection (1) shall prevail over any agreement made by the parties prior to the commencement of the adjudication proceedings by which one party agrees to pay the other party's costs or bear the adjudicator's fees and expenses.” “Powers of the adjudicator

The adjudicator shall have the powers to — …

award financing costs and interest; and …”. [44] However, the learned counsel for IO argued that the Adjudicator acted in excess of her jurisdiction by awarding interest on costs of the adjudication because –

there is no statutory power conferred on the Adjudicator to award interest on costs of the adjudication proceedings. IO cited paragraph 32 of the judgment in Martego Sdn Bhd v Arkitek Meor & Chew Sdn Bhd and another appeal [2018] 4 MLJ 496 (CA) in contending that the Adjudicator’s source of power is the CIPAA and if the legislature intended for interest to be awarded on costs of the adjudication, express words to that effect would have been included in the CIPAA akin to O. 59, r. 4 of the Rules of Court

Reference was also made to the decisions by this Court in Bond M&E Sdn Bhd v Pali PTP Sdn Bhd [2022] 11 MLJ 58 [which was reversed on appeal, see Pali PTP Sdn Bhd v Bond M&E Sdn Bhd and another appeal [2023] 6 MLJ 176 (CA)] and ATSA Architects Sdn Bhd v Teguh Majuria Sdn Bhd and another case [2022] MLJU 3329 (the parties recorded a Consent Order in the

Angsana clearly did not claim for such interest in the Payment Claim. Reliance was placed on paragraphs 27 - 29 of the judgment in Naza Engineering (supra). However, it is observed that in Naza Engineering, the adjudicator awarded pre-adjudication decision interest. In the instant case, the award of interest on the costs of adjudication is post-AD interest. [45] The power of an adjudicator to award interest on the costs of adjudication was dealt with by the High Court in Integral Acres Sdn Bhd v BCEG International (M) Sdn Bhd and other cases [2021] MLJU 1889 where Wong Kian Kheong J (now JCA) said: “[19] Mr. Foo had sought to persuade me that by virtue of s 17(4)(a) CIPAA, the Adjudicator did not have “jurisdiction” to award Costs and Fees (1st Adjudication) in favour of BCEG against IASB. I am not able to accept this submission in toto. I am of the following opinion:

as explained in the above paragraphs 14 and 15, s 18(1) CIPAA does not concern an adjudicator’s “jurisdiction” to adjudicate a claim. Section 18(1) CIPAA only confers a “power” (not “jurisdiction”) on adjudicators to award costs of adjudication proceedings after adjudicators have “jurisdiction” in the first place to adjudicate the matters in question and after they have concluded adjudication proceedings; …”. His Lordship then exercised his discretion pursuant to sub-s 28(1) and

of the CIPAA to order enforcement of parts of the adjudication decision including interest at the rate of 5% per annum on costs incurred by the claimant in the adjudication. [46] The learned counsel for Angsana highlighted that this Court has allowed applications made pursuant to s 30 of the CIPAA where direct payment from the principal was sought, including for the award of interest on costs of the adjudication proceedings [see Zedelta Sdn Bhd v Mayland Supreme Sdn Bhd [2023] 10 MLJ 95 (the appeal was discontinued on 30.3.2023) and Progress Centre Engineering Sdn Bhd v Desaru Corniche Hotel Sdn Bhd & Anor [2023] 12 MLJ 597 (at the time of writing these grounds, the parties had recorded a Consent Order in the Court of Appeal on 9.7.2024)]. [47] The importance in appreciating the distinction between the jurisdiction of an adjudicator and the powers of an adjudicator is borne out by Ground 2(b) of the Setting Aside Application. Although IO framed the issue relating to Ground 2(b) as one of jurisdiction of the Adjudicator, in reality, it turns on the powers of the Adjudicator. [48] In this respect, I am inclined to agree with Angsana’s submission that the proper construct of the powers of the adjudicator under section 25(o) of the CIPAA includes the power to grant interest on the costs of adjudication. Therefore, the Adjudicator did not act in excess of her jurisdiction by awarding interest at the rate of 5% per annum on the costs of the adjudication as per subparagraph 98(e) of the AD. 3rd Ground: Whether the Adjudicator breached the rules of natural justice by:

Failing to provide reasons in respect of the alleged fraud perpetrated by Angsana in procuring the AD [49] Sub-s 12(4) of CIPAA provides that “The adjudication decision shall be made in writing and shall contain reasons for such decision unless the requirement for reasons is dispensed with by the parties.”. [50] IO referred to paragraph 52 of the AD and submitted that the Adjudicator had merely copied and pasted the submissions of the parties to make it look as though she had considered the arguments raised by the parties and followed with her conclusion on the issues in dispute. However, this exercise could not conceal the fact that the Adjudicator had given her decision without any reasoning at all as shown in subparagraph 52(b) of the AD. [51] IO found support from the judgment in MRCB Builders Sdn Bhd v Wazam Ventures Sdn Bhd and another case [2020] MLJU 208 where the court said: “[23] Secondly, it is decided by Mary Lim Thiam Suan J (as she then was) in Ranhill E & C, at [70], as follows: “[70] Subsection 12(4) further requires the decision to be in writing. It must also contain “reasons for such decision unless the requirement for reasons is dispensed with by the parties”. I would not construe the requirement of “reasons” here to be one that must be full as one would generally see in judgments of the Court or even arbitration awards. What would be required is, at the very least, a statement of the adjudicator’s reasons for coming to the decision reached. Brevity is not a reason for complaint. The reasons may be succinct, enough or sufficient to show that the adjudicator has dealt with the very issues remitted to him and what his conclusions are on those issues. The reasons may be wrong on the facts or even the law but I do not believe that is enough cause to interfere. The Courts must exercise considerable restraint when invited to set aside an adjudication decision reached in very exacting circumstances and conditions. So much so that it will only be in rare and extreme circumstances that the reasons, brief or otherwise, are found wanting.” [24] I am of the following view regarding s 12(4) CIPAA:

the use of the mandatory term “shall” in s 12(4) CIPAA clearly shows that this provision is intended by the legislature to be mandatory. Having said that, as explained in Ranhill E & C, an adjudicator complies with s 12(4) CIPAA if he or she provides at least one reason, however brief, for the adjudication decision;

if an adjudicator does not give any reason for an adjudication decision, this is a breach of s 12(4) CIPAA which may support a contention that the adjudicator has breached the 2nd Rule by his or her failure to consider a possible defence (as required by View Esteem and Guangxi Dev & Cap); and

if an adjudicator has given at least one reason for an adjudication decision, the court cannot review the legality, correctness and adequacy of the reason. …”. [52] In Ranhill E & C Sdn Bhd v. Tioxide (Malaysia) Sdn Bhd & Other cases [2016] 5 MLRH 472, the learned Judge had also referred to a string of English authorities which have elucidated on the approach and attitude of the courts in respect of provisions similar to s 15 of the CIPAA. Her Ladyship had quoted passages from the decisions in Carillion Construction Ltd v. Devonport Royal Dockyard Ltd [2005] EWHC 778 and Balfour Beatty Engineering Services (HY) Ltd v. Shepherd Construction Ltd [2009] EWHC 2218 before stating that an applicant who claims that there has been a denial of natural justice by an adjudicator must show, inter alia, – “a) that the adjudicator has failed to bring to the attention of the parties a point or issue which they ought to have been given the opportunity to comment upon if decisive or of considerable potential importance to the outcome of the resolution; b) that the adjudicator has gone off on a frolic of his own, ie, deciding a case based on a factual or legal basis which has not been argued or put forward by either side; c) that the adjudicator has decided on an issue or issues outside his jurisdiction; d) that the adjudicator deliberately took an enormously restrictive view of his own jurisdiction with the result that he decides not to consider an important or material element of the dispute referred to him”.”. [see too, Cescon Engineers (supra)]. [53] In my considered view, IO’s contention is unfounded as the entire section in the AD on “Contract Documents”, specifically paragraphs 44 to 52, constitute the Adjudicator’s reasoning. IO had wrongly chosen to only highlight subparagraph 52(b) of the AD in putting forth Ground 3(a) of the Setting Aside Application. The Adjudicator has dealt with the issues remitted to her and although her reasons may be brief, brevity is not a reason for complaint. [54] I find and hold that Ground 3(a) has not been established.

Going on a frolic of her own in awarding interest which was not pleaded by Angsana or argued by the parties [55] In paragraphs 35 and 37 of the AIS, IO averred that –

at all material times, the issues which shall be decided by the Adjudicator were, amongst others, whether IO is entitled to a total set-off for the sum of RM935,577.52 in the Adjudication Response, including the sum of RM662,577.52 as back charges and RM273,000.00 as liquidated ascertained damages (‘LAD’), which were raised by IO in paragraphs 55 - 70 and 95 of the Adjudication Response, and not whether IO is entitled to the total set-off in the sum of RM662,577.52 only; and

the Adjudicator has failed to decide on the issue of whether IO is entitled to LAD for the sum of RM273,000.00 at subparagraph 11(b) of the AD although it was raised by IO at paragraphs 55(b), 67 - 70 and 95 of the Adjudication Response. [56] Clearly, IO’s sole contention is that the Adjudicator had failed to consider its arguments relating to LAD where the Adjudicator is alleged to have erroneously referred to only the issue of IO’s set-off amounting to RM662,577.52 in subparagraph 11(b) of the AD. [57] However, in the Written Submission, IO argued that by awarding interest on the costs of adjudication, which was not raised by Angsana, the Adjudicator had gone on a frolic of her own, unjustly enriched Angsana Tunas and contravened ss 5, 6 and 27 of the CIPAA. [58] Angsana has, in my view, correctly pointed out that IO has changed the basis for the submission for Ground 3(b) of the Setting Aside Application from a failure by the Adjudicator to consider the LAD related arguments to one surrounding the issue of interest on the costs of adjudication. Hence, this Court would be justified in not giving any consideration to IO’s submission. Nevertheless, as outlined earlier, the Court is not convinced that there is a denial of natural justice as s 25(o) of the CIPAA gives the power to the Adjudicator to award “interest”. In interpreting this word, IO has not given any persuasive reasons as to why it should exclude interest on the costs of the adjudication. [59] Furthermore, even if the Court was to consider IO’s affirmations on LAD, the Adjudicator had dedicated two sections of the AD to address the matters relating to IO’s set-off, namely paragraphs 76 - 82 of the AD on the back charges amounting to RM662,577.52, and paragraphs 83 - 88 of the AD on the LAD in the sum of RM273,000.00. [60] The Adjudicator had undoubtedly considered the issue of LAD and IO’s attempt to set aside the AD on this ground is unmeritorious.

Failing to consider the supporting documents in paragraph 64 of the Adjudication Response, specifically Appendix 1 to 9 in TAB 10 [61] In paragraph 64 of the Adjudication Response, IO stated that: “In the said Appendix 1 – 8 of the Respondent’s supporting documents for the backcharge cost, the Learned Adjudicator would note that the payments were made by the Respondent in respect of the Claimant’s scope of works, to third parties as a result of the Claimant request for the same or their blatant disregard to carry out the said Works. Further, Appendix 1 – 8 is also complete with proof of purchase orders, delivery orders and / or payment proof in respect of the said Works.”. [62] IO believes that all documents contained in Volume 2 of its Bundle of Documents in the adjudication are material and if the Adjudicator had considered all the documents therein, it clearly shows all works done, costs or payments incurred by IO in the sum of RM662,577.52 as back charges, and the Adjudicated Sum of RM581,953.36 which was allowed by the Adjudicator in subparagraph 98(a) of the AD can be extinguished or set-off. [63] On one hand, it appears as though it has conveniently escaped IO’s attention that the Adjudicator has evidently considered all the documents contained in Tab 10 of IO’s Adjudication Response when she said the following: “79. The Claimant disputes the back charges. In summary, the Claimant states that: ...

Tab 10 of the Respondent’s Bundle of Documents consists of random documents without any explanation as to why such costs were incurred or proof that the Claimant was at fault; … …

Considering the evidence and arguments before me, I find and hold that the Respondent has not established its entitlement to back charges in the sum of RM662,577.52 for the following reasons: …

In any event, the Respondent has not shown on the balance of probabilities how the works done and/or costs incurred as shown in the documents at Tab 10 of the Respondent’s Bundle of Documents are attributed to the Claimant and/or caused by or were as a result of default on the part of the Claimant.”. On the other hand, IO itself referred to the above excerpts from the AD in paragraph 75 of its Written Submission in this Court. [64] Ground 3(c) of the Setting Aside Application is, in my opinion, nothing more than IO’s attempt to attack the merits of the AD rather than on any failure by the Adjudicator to accord procedural fairness to IO. [65] For the reasons as aforesaid, IO did not establish any of the grounds in the Setting Aside Application on a balance of probabilities resulting in an order that the Setting Aside Application is dismissed. - The Stay Application [66] The issue which arises is whether IO has established its case for a stay of the AD under paragraphs 16(1)(a) and (b) CIPAA which provide that: “Stay of adjudication decision

16.

A party may apply to the High Court for a stay of an adjudication decision in the following circumstances:

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

the subject matter of the adjudication decision is pending final determination by arbitration or the court. …”. [67] It is undisputed that IO has met the threshold requirement for a stay of the AD under paragraph 16(1)(a) CIPAA as prayer [1] in O.S. No. 233 is for a “declaration”, albeit it is more accurate to pray for an “order”, that the AD be set aside. However, following the decision of the Court in dismissing the Setting Aside Application, IO’s application pursuant to paragraph 16(1)(a) CIPAA is rendered academic. [68] As regards IO’s reliance on paragraph 16(1)(b) CIPAA, IO averred that it has initiated a suit in the Session Court against Angsana on 1.12.2022 (‘SC Suit’) to claim back charges for various breaches and non-compliance with the Sub-Contract and LAD. As at the date of hearing of the Setting Aside and Stay Application, the SC Suit was pending pre-trial case management directions. [69] Hence, IO has similarly fulfilled the threshold requirement for a stay of the AD under paragraph 16(1)(b) CIPAA. However, the onus remains on IO to show that there are clear and unequivocal errors in the AD or that the justice of the case warrants a stay of the AD [see View Esteem (supra)]. [70] IO argued that its application for stay of the AD is justified because –

there was a breach of natural justice by the learned Adjudicator in the AD. This ground is basically a regurgitation of the ground pursuant to s 15(b) CIPAA, which has been rejected by the Court;

there was a clear and unequivocal error by the Adjudicator in making the AD. The reasons why IO makes this assertion are, again, the same as the submissions in respect of s 15(b) CIPAA which have been dealt with in the preceding part of this judgment; and

it is in the interest of justice. This ground is further dealt with below. [71] In Zeta Letrik Sdn Bhd v JAKS Sdn Bhd and other cases [2022] MLJU 2734, this Court said: “[63] The leading case which has elucidated on the legal principles in the determination of an application of this nature is, of course, the oft quoted decision of the Federal Court in View Esteem where it was held that a stay of the enforcement of an adjudication decision may be allowed where there are clear and unequivocal errors in the said decision or in order to meet the justice of the individual case (see para 82 of the judgment). [64] Among the cases which have discussed how the tests of clear and unequivocal errors and justice of the case are to be applied in the exercise of the discretion of the court whether to grant a stay or otherwise are EA Technique (M) Sdn Bhd v. Malaysia Marine And Heavy Engineering Sdn Bhd [2020] 1 LNS 1851, Maju Holdings Sdn Bhd v. Spring Energy Sdn Bhd [2020] 1 LNS 1194 and [2021] 1 LNS 367, Pinnacle Supreme Sdn Bhd v. DSG Projects Malaysia Sdn Bhd [2021] 1 LNS 852, Sun Plaza Development Sdn Bhd v. Hejingkang Sdn Bhd [2021] 1 LNS 629 and CRCC Malaysia Bhd v M101 Entity Sdn Bhd and other cases [2021] MLJU 1305. [65] In CRCC Malaysia (supra), this Court said: “[56] In Maju Holdings Sdn Bhd v Spring Energy Sdn Bhd and other cases [2020] 7 AMR 147 at p 153, the High Court stated as follows as regards the View Esteem case: “[17] Clear error has not been defined. Obviously, it is fact sensitive depending on the circumstances of each case as to how the adjudicator reasoned his findings in the adjudication decision. In my view, the error must be so grave that it pricks my conscience if I left it unrectified. In a way, it is subjectively objective. [57] As for the phrase “to meet the justice of the individual case”, this Court in Genbina Sdn Bhd v. Bina Puri Construction Sdn Bhd and another appeal [2020] 2 MLRH 101 at p 111 said that the determination as to what is right and fair must necessarily be dependent on the factual matrix and circumstances arising in each case whilst in EA Technique (M) Sdn Bhd v Malaysia Marine and Heavy Engineering Sdn Bhd [2021] 1 AMR 594 at p 603, Lim Chong Fong J expressed the following view: “[27] Furthermore in the View Esteem case, it is also stated that the financial status is not the sole factor in determining the grant of the stay. The stay may be allowed to meet the justice of the individual case aside from clear error. They seem to be disjunctive as explained in the Leap Modulation case. Justice of the case is of course even more subjectively objective. It involves the exercise of discretion. However in light of the caveat of caution mentioned in the View Esteem case, I am also only minded to grant the stay if my conscience is pricked in the special circumstances of the case. Beyond that, it is incapable of definition or illustration. [28] The bottom line is that considerations of both clear error as well as justice of the individual case to justify the stay of an adjudication decision have to be stringently applied as this would otherwise defeat the statutory intent of the CIPAA to ensure cash flow in the construction industry; see Subang Skypark Sdn Bhd v Arcradius Sdn Bhd [2015] 1 CLJ 801.”. (see too, Wabina Constructions & Engineering Sdn Bhd v Fulloop Sdn Bhd and other cases [2022] MLJU 2744, Marvesco Sdn Bhd v Apex Communications Sdn Bhd and another case [2022] MLJU 1276 and RA Suria Sdn Bhd v Cedy Third Contracting and Trading (M) Sdn Bhd and other cases [2023] MLJU 247). [72] IO contended that is in the interest of justice to grant a stay due to the following reasons:

IO has a bona fide right to claim for back charges and LAD against Angsana for the total sum of RM935,577.52, which is in excess of the Adjudicated Sum. The error or failure on the part of the Adjudicator had deprived IO of its defence against Angsana’s claims in the adjudication proceedings. In my considered view, IO’s contention cannot be accepted because it is, in essence, disputing the merits of the Adjudicator’s findings.

A sum of RM450,888.16 has been overpaid to Angsana. It is unreasonable for Angsana to assert that it has been deprived of its purported entitlement to the monies. Instead, it is prejudicial to IO because Angsana is benefitting at the expense of IO and this also amounts to unjust enrichment. A perusal of the AIS shows that there is no affirmation by IO as to the fact that Angsana has been overpaid and no evidence was produced to support this position. The only averment on the issue of “interest of justice” is in paragraph 65, AIS as re-produced below: “I am advised by the Plaintiff’s solicitors and I verily believe and state that, owing to all paragraphs above, justice will not be achieved if the Adjudication Decision is not stayed and/or set aside. I further state that it shall be prejudicial against the Plaintiff if the Adjudication Decision is not stayed as it is clear that the Adjudication Decision is erroneous, the Plaintiff’s application to set aside the Adjudication Decision and the Plaintiff’s abovementioned Civil Suit against the Defendant are still pending, and most importantly, it is clear that the Defendant was acted in bad faith and/or fraud in bringing this Adjudication Proceeding.”. IO has, yet again, made submissions on matters which are not raised in the AIS for the Setting Aside and Stay Application and are therefore submissions from the Bar. Accordingly, on the authority of Ng Hee Thong & Public Bank Bhd [1995] 1 MLJ 281, these submissions are disregarded by the Court.

There exists bona fide issues to be tried in the SC Suit such as whether there has been an overpayment of Angsana’s claims; IO is entitled to back charge Angsana Tunas the sum of RM622,577.52; time for completion was set at large or validly extended; IO has the right to impose LAD of RM273,000.00 on Angsana; and IO is entitled to be repaid the sum of RM450,888.16 being overpayment made to Angsana. Moreover, Angsana has imposed the same or similar back charges on HL Glass Aluminium Sdn Bhd (‘HL Glass’), the sub-subcontractor appointed by Angsana to carry out works for the Project, in Adjudication Reference No.: AIAC/D/ADJ-4516-2022 (‘Adjudication 4516’) between HL Glass as the claimant and Angsana as the respondent. The adjudication decision for Adjudication 4516 was delivered by the learned Adjudicator, Ms. Christine Toh Hung Mei on 27.2.2023 (‘27.2.2023 AD’) whereby it was determined, among others, that Angsana is to pay HL Glass the adjudicated sum of RM897,152.76 with interest, and adjudication costs of RM36,746.72. On 11.4.2023, IO received a letter from Messrs. Tan Kah Kiat & Co (‘TKK’), HL Glass’s solicitors pursuant to s 30 of the CIPAA requesting payment in the sum of RM933,899.48 which Angsana is liable to pay HL Glass under the 27.2.2023 AD. On 28.4.2023 Angsana’s solicitors wrote to TKK and enclosed 21 post-dated cheques made to HL Glass according to the settlement terms stipulated in TKK’s letter dated 21.4.2023. TKK replied on 11.5.2023 that the legal proceedings against Angsana and IO will be kept in abeyance subject to the full clearance of all cheques in the sum of RM933,899.48. The letters dated 28.4.2023 and 11.5.2023 in exhibits “D-1” and “D-2” of Angsana’s AIR (No. 2), encl. 31 are not marked “Without Prejudice” or “Strictly Without Prejudice” and therefore, contrary to the submission by IO, are admissible as evidence that the dispute between Angsana and HL Glass has been settled. IO’s allegation that the purported settlement is an afterthought by Angsana with the sole intention to undermine the Setting Aside and Stay Application is irrelevant as the fact remains that Angsana has issued 21 cheques in HL Glass’s name as payment of the sums as per the 27.2.2023 AD. Hence, Angsana has proven, on a balance of probabilities, that it has settled its dispute with HL Glass. In addition, IO submitted that it is unconscionable for Angsana to take contradictory positions in Adjudication 4516 and the adjudication which led to the AD i.e. Angsana imposed back charges and LAD against HL Glass in Adjudication 4516 while in the adjudication which is the subject of the instant application, Angsana denied the back charges and LAD imposed by IO. However, I agree with Angsana’s arguments, as supported by its averments in AIR (No. 2), encl. 31, particularly in paragraphs 10 and 11, that –

the back charges and LAD imposed by Angsana against HL Glass is based on a separate contract with different terms;

(ii) the back charges imposed on HL Glass were included in Adjudication 4516 on the basis of ex abundati cautela to protect the best interests of Angsana and in any case it is irrelevant because the back charges, and the LAD claims, were not allowed by the adjudicator; and

(iii) Angsana has never admitted that the back charges imposed by IO are valid and no evidence was produced by IO to show the purported admission. The mere imposition of back charges and LAD by Angsana against HL Glass does not amount to an admission by Angsana against the claims made by IO. The issues raised in the SC Suit are the same issues which were raised by IO in the adjudication proceeding which led to the AD. The ongoing SC Suit does not warrant a stay of the AD. Sub-s 37(1) of the CIPAA provides that “A dispute in respect of payment under a construction contract may be referred concurrently to adjudication, arbitration or the court.” (see the discussion on this provision in Tenaga Nasional Bhd v. Malaysian Resources Corporation Bhd & Other Cases [2024] 8 CLJ 134, a case which was decided by this Court on 28.7.2023). IO has not established any error or injustice that is apparent to justify an order to stay the AD. In fact, a stay of the AD would not be in the interest of justice as it runs counter to the CIPAA principle of “Pay First, Argue Later” [see Pwc Bina Sdn Bhd v Ideal City Development (M) Sdn Bhd and another suit [2017] MLJU 2029, UDA Holdings Bhd v. Bisraya Construction Sdn Bhd & Anor and Another Case [2015] 5 CLJ 527 and Marvesco (supra)].

IO submitted that Angsana’s financial status is a material consideration in determining whether the AD ought to be stayed [see paragraph 84 in View Esteem (supra)]. In this regard, IO contended that Angsana is not in a good financial position and thus, there is a real risk of Angsana not being able to repay the Adjudicated Sum to IO in the event that IO is successful in the SC Suit. Further indicia of Angsana’s weak finances are said to be its inability to settle the sum of RM922,528.76 to HLGlass resulting in a statutory demand under sub-s 466(1)(a) of the Companies Act 2016 [Act 777] being served on Angsana. It was also alleged that it is probable that Angsana will spend the monies obtained from IO to settle the outstanding sums due and owing by Angsana to other parties and nothing will be left for IO to recoup. Whilst Angsana’s financial position is a relevant consideration in the Stay Application, I am not persuaded by IO’s arguments that Angsana is unable to repay IO because –

based on the SSM search for financial year ending 31.3.2021, Angsana has: • Non-current assets amounting to RM8,554,637.00; • Current assets amounting to RM6,219,038.00; • Retained earnings amounting to RM599,596.00; • Revenue of RM8,956,403.00; • Profit before tax of RM267,363.00; and • Profit after tax of RM173,033.00. In my view, Angsana is capable of paying off any debt due to be paid to Angsana by IO pursuant to the AD, which as at 15.12.2022 amounts to RM676,030.17, in the event IO is successful in the SC Suit.; and

(ii) IO has failed to prove Angsana’s inability to repay IO as IO has not adduced any evidence to show that Angsana is commercially insolvent. IO is only relying on the fact that there is a claim by HL Glass against Angsana, which has been settled by both parties. Presently, Angsana is not involved in any other suits or proceedings apart from the ones against IO. [73] In the premises, I find and hold that IO has not proven the Stay Application as there are no clear and unequivocal errors and nor is a stay warranted to meet the justice of this case. II. O.S. No. 235: THE ENFORCEMENT APPLICATION [74] Angsana’s Enforcement Application is made pursuant to s 28 CIPAA which reads as follows: “28. (1) 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.”. [75] In its submission, IO accepts that the determination of the Enforcement Application would turn on IO’s application to set aside the AD as “… the outcome of the applications are at the flipside on one another.”. [76] As the AD has not been set aside or stayed and there is no written settlement of the subject matter between the parties and nor is there a final decision rendered on the payment claim in an arbitration proceeding or by a court of law, the order to enforce must be granted (see Inai Kiara Sdn Bhd v Puteri Nusantara Sdn Bhd [2019] 1 MLRA 207; [2019] 2 MLJ 362; [2019] 2 CLJ 229 (CA) and as applied by this Court in numerous cases such as Tecnicas Reunidas Malaysia Sdn Bhd v. Petrovietnam Engineering Consultancy JSC (PVE) & Other Cases [2021] MLRHU 2128 and Office 2 Go (M) Sdn Bhd v Probina Projek Sdn Bhd and another case [2021] MLJU 2009). [77] As the Court was not persuaded by IO’s arguments in respect of the Setting Aside and Stay Application and have dismissed these applications, it is a foregone conclusion that the Enforcement Application must be allowed. [78] In the light of the typographical error in subparagraph 98(d) of the AD, I directed that when the Order for the Enforcement Application is drawn up, the date “8.1.2022” is to be used for interest on the Adjudicated Sum. CONCLUSION [79] Premised on the aforesaid considerations, the Setting Aside and Stay Application was dismissed with costs of RM10,000.00 and the Enforcement Application was allowed with costs of RM5,000.00, both subject to allocatur. Dated: 17 September 2024 (ALIZA SULAIMAN) Judge High Court in Malaya (NCvC2) Kuala Lumpur Counsels/ Solicitors: For the Plaintiff in O.S. No. 233 and the Respondent in O.S. No. 235: Nadesh Ganabaskaran Messrs. Malek, Gan & Partners Advocates & Solicitors B-03-03 Gateway Corporate Suites Gateway Kiaramas No. 1 Jalan Desa Kiara Mont Kiara 50480 Kuala Lumpur For the Applicant in O.S. No. 235 and the Defendant in O.S. No. 233: Chan Kheng Hoe (Wong Sheng Wei with him) Messrs. Chong + Kheng Hoe Advocates & Solicitors A3-3-6 Block A3 Solaris Dutamas 1 Jalan Dutamas 1 50480 Kuala Lumpur Cases, legislation and other sources referred to in the submissions by learned counsels and in the Grounds of Judgment: Cases: ACFM Engineering & Construction Sdn Bhd v Esstar Vision Sdn Bhd & another appeal [2016] MLJU 1776 (CA) AJS v JMH and another appeal [2022] 1 MLJ 778 Antara Vista Sdn Bhd v Rumaya Properties Sdn Bhd [2017] MLJU 2247 ASM Development (KL) Sdn Bhd v Econpile (M) Sdn Bhd and other appeals [2022] 6 MLJ 392 ATSA Architects Sdn Bhd v Teguh Majuria Sdn Bhd and another case [2022] MLJU 3329 Auseanlink Management Services Sdn Bhd v Teratai Sumber Sdn Bhd & Ors [2020] MLJU 718 Balfour Beatty Engineering Services (HY) Ltd v. Shepherd Construction Ltd [2009] EWHC 2218 Benjamin William Hawkes v Public Prosecutor [2020] 5 MLJ 417 Bina Puri Construction Sdn Bhd v Hing Nyit Enterprise Sdn Bhd [2015] MLRHU 192 Bond M&E Sdn Bhd v Pali PTP Sdn Bhd [2022] 11 MLJ 58 Bursa Malaysia Securities Bhd v Mohd Afrizan bin Husain [2022] 3 MLJ 450 Carillion Construction Ltd v. Devonport Royal Dockyard Ltd [2005] EWHC 778 Cescon Engineers Sdn Bhd v Pesat Bumi Sdn Bhd and another case [2022] 9 MLJ 79 China Construction Yangtze River (M) Sdn Bhd v Gold Mart Sdn Bhd [2022] MLJU 1789 Dekinjaya Builder Sdn Bhd v Chong Lek Engineering Works Sdn Bhd and another case [2020] MLJU 2455 Dusun Desaru Sdn Bhd & Anor v Wang Ah Yu & Ors [1999] 5 MLJ 449 EA Technique (M) Sdn Bhd v Malaysia Marine and Heavy Engineering Sdn Bhd and another case [2020] 11 MLJ 353 Econpile (M) Sdn Bhd v. IRDK Ventures Sdn Bhd & Another Case [2016] 5 CLJ 882 Gary Teh Chin Yeong v Kwong Yan Loy & Anor [2019] MLJU 1879 Giatreka Sdn Bhd v SGW Engineering Construction Sdn Bhd (and Another Originating Summons) [2020] 1 AMR 193 Gumi Asli Elektrikal Sdn Bhd v Dazzling Electrical (M) Sdn Bhd and another case [2020] MLJU 314 Heavenly Land Sdn Bhd v Ms Elevators Engineering Sdn Bhd and another civil [2019] MLJU 1271 Inai Kiara Sdn Bhd v Puteri Nusantara Sdn Bhd [2019] 1 MLRA 207; [2019] 2 MLJ 362; [2019] 2 CLJ 229 (CA) Integral Acres Sdn Bhd v BCEG International (M) Sdn Bhd and Others [2021] MLJU 1889 JEKS Engineering Sdn Bhd v PALI PTP Sdn Bhd and another case [2021] 9 MLJ 541 KPF Niaga Sdn Bhd v Vigour Builders Sdn Bhd and another case [2021] MLJU 229 Lin Kai Lam & Anor v Lin Kai Wing & Anor [2021] MLJU 382 Lion Pacific Sdn Bhd v Pestech Technology Sdn Bhd [2022] 6 MLJ 967 Malayan Banking Bhd v Foo See Moi [1981] 2 MLJ 17 Martego Sdn Bhd v Arkitek Meor & Chew Sdn Bhd and another appeal [2018] 4 MLJ 496 (CA) Marvesco Sdn Bhd v Apex Communications Sdn Bhd and another case [2022] MLJU 1276 Mecomb Malaysia Sdn Bhd v. VST M&E Sdn Bhd [2018] 8 CLJ 380 Merck Sharp & Dohme Corporation & Anor v Hovid Bhd [2022] MLJU 16 MRCB Builders Sdn Bhd v Pembinaan Mitrajaya Sdn Bhd and another case [2023] MLJU 52 MRCB Builders Sdn Bhd v Wazam Ventures Sdn Bhd and another case [2020] MLJU 208 Mudajaya Corporation Bhd v KWSL Builders Sdn Bhd and other cases [2022] MLJU 1931 Naza Engineering & Construction Sdn Bhd v SSL Dev Sdn Bhd [2019] MLJU 1885 Ng Hee Thong & Public Bank Bhd [1995] 1 MLJ 281 Office 2 Go (M) Sdn Bhd v Probina Projek Sdn Bhd and another case [2021] MLJU 2009 Otis Elevator Company (M) Sdn Bhd v Castmet Sdn Bhd and another case [2020] MLJU 2306 Ou Yang Chow Min (berniaga sebagai Ou Yang Architect) v Alfa Lagenda Sdn Bhd and another case [2021] MLJU 130 Pali PTP Sdn Bhd v Bond M&E Sdn Bhd and another appeal [2023] 6 MLJ 176 (CA) Pasukhas Sdn Bhd v Empire Multiple Sdn Bhd and another appeal [2019] MLJU 1393 PCP Construction Sdn Bhd v Leap Modulation Sdn Bhd and other suits [2017] MLJU 905 Pembinaan BLT Sdn Bhd v Sharikat Galian Razak Sdn Bhd [2018] MLJU 1111 Progress Centre Engineering Sdn Bhd v. Desaru Corniche Hotel Sdn Bhd & Anor [2023] 1 LNS 790 Public Prosecutor v Mohd Saifuddin bin Ab Rahman and another appeal [2021] 2 MLJ 629 Pwc Bina Sdn Bhd v Ideal City Development (M) Sdn Bhd and another suit [2017] MLJU 2029 PWC Corp Sdn Bhd v Ireka Engineering & Construction Sdn Bhd and another appeal [2018] MLJU 812 RA Suria Sdn Bhd v Cedy Third Contracting and Trading (M) Sdn Bhd and other cases [2023] MLJU 247 Ranhill E & C Sdn Bhd v Tioxide (M) Sdn Bhd and other appeals [2015] MLJU 1873; [2016] 5 MLRH 472 RC Asia Engineering Sdn Bhd v Lion Pacific Sdn Bhd [2021] 1 LNS 1667 Roxwell Group Sdn Bhd v Iris Corporation Berhad & Ors [2020] MLJU 38 Samado Sdn Bhd v. Kerajaan Malaysia & Another Case [2020] 5 MLRH 165 Samsung C&T Corporation UEM Construction JV Sdn Bhd v Global Wall (Malaysia) Sdn Bhd [2023] MLJU 48 SEF Construction Pte Ltd v Skoy Connected Ptd Ltd [2010] 1 SLR 733; [2009] SGHC 257 SG South Ltd v King's Head Cirencester LLP & Anor [2009] EWHC 2645 (TCC); [2010] BLR 47 Shinning Crest Sdn Bhd (appointed receiver and manager) & Ors v Malaysia Building Society Bhd [2018] 10 MLJ 491 Sinnaiyah & Sons Sdn Bhd v. Damai Setia Sdn Bhd [2015] 7 CLJ 584 Skyworld Development Sdn Bhd v Zalam Corp Sdn Bhd and other appeals [2019] MLJU 162 Subang Skypark Sdn Bhd v Arcradius Sdn Bhd [2015] 11 MLJ 818 Syarikat T.D. Sdn Bhd v JEKS Engineering Sdn Bhd [2019] 1 LNS 2108 Tan Eng Han Construction Sdn Bhd v Sistem Duta Sdn Bhd [2018] 12 MLJ 395 Tecnicas Reunidas Malaysia Sdn Bhd v. Petrovietnam Engineering Consultancy JSC (PVE) & Other Cases [2021] MLRHU 2128 Tenaga Nasional Bhd v. Malaysian Resources Corporation Bhd & Other Cases [2024] 8 CLJ 134 Terminal Perintis Sdn Bhd v Tan Ngee Hong Construction Sdn Bhd and another case [2017] MLJU 242 UDA Holdings Bhd v. Bisraya Construction Sdn Bhd & Anor and Another Case [2015] 5 CLJ 527 View Esteem Sdn Bhd v Bina Puri Holdings Bhd [2018] 2 MLJ 22 Wabina Constructions & Engineering Sdn Bhd v Fulloop Sdn Bhd and other cases [2022] MLJU 2744 Zedelta Sdn Bhd v. Mayland Supreme Sdn Bhd [2023] 3 CLJ 977 Zeta Letrik Sdn Bhd v JAKS Sdn Bhd and other cases [2022] MLJU 2734 Legislation: Companies Act 2016, s 466 Construction Industry Payment and Adjudication Act 2012, ss 5, 6, 12, 13, 15, 16, 18, 25, 27, 28, 30 & 37 Contracts Act 1950, s 17 Evidence Act 1950, s 23 Rules of Court 2012, O. 59, r.