Bertam Development Sdn Bhd v R&C Cergas Teguh Sdn Bhd (WA-24C-55-03/2017)

that the Plaintiff is liable to pay the Defendant a sum of RM4,657,267.73 consisting of:

the amount of the unpaid interim certificates Nos. 23, 24, 25, 26, 27 & 29 for RM2,404,394.84 (“unpaid certified amount”) and

(ii) the amount for Works not certified but duly completed for the sum of RM2,252,872.89 (“the uncertified amount”).

the Defendant is liable for LAD from 11.9.2015 until 23.10.2015 which is for a sum of RM546,000.00.

in summary, the Plaintiff is liable to pay the Defendant the sum of RM4,111,267.73 (Adjudication Sum) together with interest at the rate of 7.65% per annum based on Maybank Base Lending Rate from 27.5.2016 until full payment of the Adjudication Sum and costs. 6 [13] The LAD amount was reduced by the Adjudicator to 42 days amounting to RM546,000.00 after the Adjudicator had allowed the second Extension of Time (“EOT”) application that was rejected earlier by the Architect. [14] The Plaintiff sought to set aside the whole of the Adjudication Decision on ground of excess of jurisdiction under section 15(d) CIPAA. Principles [15] Section 15 CIPAA under which the Plaintiff has made this application to set aside the Adjudication Decision reads as follows: “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;

The adjudicator has not acted independently or impartially, or

The adjudicator has acted in excess of his jurisdiction.” (emphasis added) 7 [16] As the focus is on issues relating to the Adjudicator having acted in excess of jurisdiction under section 15(d) CIPAA, this Court shall deal with these issues in the discussion below. Whether the Adjudicator has exceeded his jurisdiction by invoking the default provision of section 36 CIPAA with respect to the uncertified claims [17] Learned counsel for the Plaintiff submitted that the Adjudicator had exceeded his powers with respect to the uncertified claims for Variation Works when he had ignored the opening words of Section 36(1) of CIPAA that reads “unless otherwise agreed by the parties” and also that the default provision in Section 36 of the CIPAA could only be invoked when contractual terms as to payment are not to be found in writing. [18] It was pointed out that the PAM written contract which had clearly set out the mechanism for making payment to the Defendant, which the parties had contractually agreed. It was argued that the Adjudicator could not determine the terms for payment as if such terms of payment were not found in the PAM Contract. The Adjudicator therefore could not have invoked Section 36(1) of CIPAA when the terms of payment were already found in the written contract of the parties as in the case before this Court. 8 [19] The Plaintiff contended that the process by which the decision of assessing the uncertified amount was done by the Adjudicator in reliance on section 36 of CIPAA was flawed and it was done in excess of his jurisdiction. [20] The Plaintiff said that the Defendant were bound by the PAM Contract and it was wrong to allow the Defendant to resile from the agreed terms of certification of payment as agreed and provided under the PAM written contract entered into with the Plaintiff. Learned counsel for the Plaintiff maintained that the Defendant could not, as Claimant in the Adjudication, refer the uncertified amount to the Adjudication when the Defendant had agreed to the payment mechanism to be determined as provided under the PAM Contract. In other words, according to learned counsel for the Plaintiff, the Defendant was bound to follow the terms of the PAM Contract to secure certification for payment for works done through the mandate of the Architect. [21] Learned counsel for the Plaintiff had summarized the terms for certification and payment as found in Clause 30.1 of the PAM Contract as follows: i) The right to certify payment was agreed to be done by the Architect under the said clause of the PAM Contract. 9 ii) The interim certification could only be issued as and when the amount could be ascertained by the Architect in the event where the Certificate of Practical Completion has been issued. iii) This means it was contractually agreed that after the certificate of practical completion, interim certificate could only be issued by the Architect when the Architect was able to ascertained the amount payable as provided under the said clause of the PAM Contract. [22] I must say that the above summary of what is contained in Clause 30.1 of the PAM is not quite accurate. The relevant parts of Clause 30.1 of the PAM Contract reads: “The Contractor shall submit a payment application at the Interim Claim Interval stated in the Appendix with complete details and particulars, the Architect shall, within twenty one (21) Days from the date of receipt of the Contractor’s application, issue an Interim Certificate to the Employer with a copy to the Contractor, and the Employer shall thereafter pay the amount certified to the Contractor within the Period of Honouring Certificates...” [23] The above submission is completely misplaced. This is a case where the Architect had for reasons best known to himself, failed to certify 10 the amount outstanding under the Variation Works. Surely the Architect and the Employer cannot rely on their own breach of Clause 30.1 to refuse to make payments to the Main Contractor for the Variation Works done. Otherwise Employers and Architects could always refuse to certify claims for Works done and then contend that until the Architect do certify, there is no claim due and no payment need to be made! [24] Little wonder that under the broad powers of an Adjudicator, he is empowered under section 25(n) CIPAA to decide or declare on any matter notwithstanding no certificate has been issued in respect of the matter. [25] This is also a case where the Architect had issued the CPC on 23.10.2015 and the Payment Claim was only served on 5.7.2016. As the claim for uncertified Variation Works was duly made in the Payment Claim and as there was no Payment Response filed, the Respondent in the Adjudication is deemed to have disputed this Claim and thus it falls within the jurisdiction of the Adjudicator to decide on whether the Claimant is entitled to the whole of the uncertified Variation Works or a part of it or none at all. [26] His jurisdiction is carved out by the Payment Claim served under section 5 CIPAA and the Payment Response (none here) under section 6 CIPAA and he must confine himself to the matters raised in the Payment 11 Claim and Payment Response (none here) for these are the 2 documents that confer jurisdiction on him. Section 27(1) CIPAA declares as follows: “27. Jurisdiction of Adjudicator 1) 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.” [27] This is not a case, as contended by the Plaintiff, where the Adjudicator had in assessing the uncertified amount in the sum of RM2,252,872.89, re-written the contract between the parties. Where the Architect has failed or refused to certify or has certified an amount that the Claimant is disputing, it is open to the Adjudicator to harness and deploy his vast powers under section 25 CIPAA to decide the dispute. Section 25(m) CIPAA as referred by the Adjudicator is also relevant. It reads that an Adjudicator shall have the powers to: “(m) Review and revise any certificate issued or to be issued pursuant to a construction work contract, decision, instruction, opinion or valuation of the parties or contract administrator relevant to the dispute;” (emphasis added) [28] Neither is it a case, as contended by the Plaintiff, where the Adjudicator has exceeded his jurisdiction by altering the agreement of the 12 parties found under Clause 30.1 of the PAM Contract. Much less is it a case where the Adjudicator could only assume the function of the Architect if both parties had mutually agreed to avoid the application of Clause 30.1 of the PAM Contract by submitting as an agreed issue under Section 27(2) CIPAA. [29] To be clear section 27(2) CIPAA provides as follows: “(2) 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.” (emphasis added) [30] As the issue of the validity of the claim for uncertified Variation Works is a matter referred to in the Payment Claim and hence within the jurisdiction of the Adjudicator to decide, there is no need for a further Agreement in writing of the parties to confer jurisdiction on the Adjudicator to decide as it were, in place of the Architect. It is precisely because of non-certification by the Architect and with that no payment by the Plaintiff as Employer that we have here a reference to Adjudication with respect to a Payment Claim consisting of the amount certified in the various Interim Certificates of Payment and the amount in the uncertified Variation Works. 13 [31] The uncertified amount for Variation Works comes within the meaning of a “Payment Claim” as a “Payment” in section 4 CIPAA is defined as a claim for work done or services rendered under the express terms of a construction contract. [32] A “Payment Claim” under section 5(2) shall be in writing and shall include: “(a) The amount claimed and due date for payment of the amount claimed;

Details to identify the cause of action including the provision in the construction contract to which the payment relates;

Description of the work or services to which the payment relates; and

A statement that it is made under this Act.” (emphasis added) [33] The presence or issuance of a Certificate of Payment is not a pre-requisite of a Payment Claim. It was a finding of fact of the Adjudicator at para p) of page 27 of the Adjudication Decision that the Architect’s Instruction (AI) No. 6 issued on 18.6.2015 is basically to reaffirm the Engineer’s Instructions pertaining to the Variation Works. In addition to the AI No. 6, the Adjudicator also found few other instructions were issued to the Contractor and copied to the Respondent’s Architect and he 14 summarized the 14 instructions of the Architect, M&E Engineer and Civil Engineer at pages 28-29 of the Adjudication Decision together with the various dates of the instructions, the type of instruction and the description of the instructions. [34] The Adjudicator had also at para q) at page 29 of his Decision listed out the 8 submissions made by the Claimant to the Respondent’s Architect on the estimated costs and time implication on Variation Works arising out of the instructions issued by the Architect, M&E Engineer and Civil Engineer and the dates of submission from 28.5.2014 to 8.11.2015. [35] The Adjudicator found as a matter of fact at para r) of page 29 of his Decision that the Claimant had been submitting diligently his estimation on the Variation works since 28.5.2014 and sufficient notification had been provided to the Respondent’s Architect on the costs implication arising out of the Variation Orders. [36] In answer to the objection raised by the Respondent that the Contractor had failed to give his written notice of his intention to claim for additional expenses within 28 days from the date of the AI or CAI giving rise to his claim under Clause 11.7(a) and to submit particulars of his claim for such Variations within 28 days of completing the Variations under Clause 11.7(b) and as such the Contractor is deemed to have waive his rights to any such additional expenses, the Adjudicator made 15 the following finding of facts at para s) of the Decision at page 29 as follows: “As such, the Adjudicator is able to CONCLUDE that the Claimant’s Variation Order submission dated 8.11.2015 is not a NEW SUBMISSION arising out of the Architect’s Instruction No. 6 dated 18.6.2015. The Claimant had already submitted the Variation Orders on 28.5.2014, 26.1.2015 and 11.5.2015 to the Respondent’s Architect and the Variation Order dated 8.11.2015, in particular the summary of Variation Order and the summary of the Variation Order found in the Variation Order dated 11.5.2015 are essentially the same. The Claimant in fact is just summarizing the previous Variation Order dated 11.5.2015.” [37] The Adjudicator concluded in para t) at page 30 of the Decision as follows: “Hence, the Adjudicator CONCURS with the Claimant that sufficient notification on the costs estimation arising out of the Variation Orders has been given to the Respondent’s Architect in accordance with the Clause11.7 of PAM Agreement and therefore, the Adjudicator accepts the fact that the Variation Orders were made in timely manner and shall be payable in accordance with section 36(1)(c) subject to final valuation and approval from the 16 Respondent’s Architect as provided for under Clause 11.2 PAM Agreement.” [38] The Adjudicator had properly relied on section 36(1)(c) CIPAA as the Respondent’s Consultants appeared not to be able to agree on the rates for the Variation Works. The Adjudicator unknotted the conundrum as follows, expressing his bewilderment, baffled as to the conduct of the various Consultants at para i) of page 33 of his Decision: “i) The intriguing questions are why the Respondent’s Consultants comprising M&E Engineer, Civil Engineer and Architect did not raise any objections to the earlier submissions if they have found that the Variation Orders are being overpriced as alleged by the Respondent? And why did the Respondent’s Architect had to wait until 22.3.2016 before rejecting the Claimant’s Variation Order s submission made on 8.11.2015 and also the previous submissions? Why did the Respondent’s Architect allow the Variation Works to be continued by the Claimant upon realizing the unit rates are unacceptable?” (emphasis added) [39] These are fair questions to raise. The Adjudicator then undertook the arduous task of going through meticulously each and every of the 16 Variation Orders at page 35 of his Decision with the methodology employed at page 34 of his Decision as follows: 17 “m) After reviewing the Architect’s valuation report dated 22.3.2016, the Adjudicator finds that the Civil Engineer has adopted JKR & JPS Rate Year 2015 which the Adjudicator has no objection since the variation works were carried out during the same period of time. As such, the Adjudicator also agrees with Civil Engineer’s method to establish build up rates based on the JKR & JPS Rate for Year 2015 and to be adopted in the re-valuation. Meanwhile, on the valuation done by the M&E Engineer, the Adjudicator finds the unit rates adopted are much lower than the rates originally used in the contract. The Adjudicator disagrees with the M&E Engineer method to adopt lower rates to calculate VO addition and meanwhile using higher rates to calculate VO omission, despite the nature of works still remain same.” [40] It was thus an exercise of his powers under section 25(m) and (n) and falling back on the default provision of section 36(1)(c) and 36(2)(b) CIPAA in arriving at a fair value on what was being disputed with respect to the Variation Works; the dispute being not on the certified quantities of the Variation Works but merely on the rates. As pointed out by the Adjudicator in para n) of page 34 of his Decision, in carrying out this exercise of determining the reasonable rates or work he was also guided by Clause 11.6(a) & (b) of the PAM Contract as follows: 18 “11.6(a) where work is of a similar character to, is executed under similar condition as, and does not significantly change the quantity of work as set out in the Contract Documents, the rates and prices in the Schedule or Rates shall determine the valuation;

11.6(b) where work is of a similar character to work as set out in the Contract Documents but not executed under similar conditions or is executed under similar conditions but there is significant change in the quantity of work carried out, the rates and prices in the Schedule of Rates shall be the basis for determining the valuation which shall include a fair adjustment in the rates to take into account such differences;” [41] The end result was that the Adjudicator allowed only a sum of RM2,252,872.89 out of the sum of RM3,414,158.24 claimed. It is to be noted that the Architect had in his Report dated 22.3.2016 submitted a lower sum of RM1,004,686.18 as particularized at para [98] at page 30 of his Decision with a comparison with the same items as submitted and claimed by the Claimant. [42] Section 36 CIPAA reads as follows: “36 Default Provisions in the Absence of Terms of Payment 19

Unless otherwise agreed by the parties, a party who has agreed to carry out construction work or provide construction consultancy services under a construction contract has the right to progress payment at a value’ calculated by reference to—

The contract price for the construction work or construction consultancy services;

Any other rate specified in the construction contract;

Any variation agreed to by the parties to the construction contract by which the contract price or any other rate specified in the construction contract is to be adjusted; and

...

In the absence of any of the matters referred to in paragraphs

(1)(a) to (d), reference shall be made to:

fees prescribed by the relevant regulatory board under any written law; or

If there are no prescribed fees referred to in paragraph

(a), the fair and reasonable prices or rates prevailing in the construction industry at the time of the carrying out of 20 the construction work or the construction consultancy services.

The frequency of progress payment is:

Monthly, for construction work and construction consultancy services; and

Upon the delivery of supply, for the supply of construction materials, equipment or workers in connection with a construction contract.

The due date for payment under subsection (3) is thirty calendar days from the receipt of the invoice.” (emphasis added) [43] As can be seen, the provisions of Section 36(1)(c) and (2)(b) encapsulate the methodology and principle captured by Clauses 11.6(a) and 11.6(b) of the PAM Contract in determining the rates of Variation Works when parties cannot agree. This then is undisputedly a finding of fact and even if it be wrong, that is to be corrected not in a setting aside under section 15 CIPAA for this is not an appeal on merits but to be corrected in Arbitration if the parties are minded to proceed. There is singularly no merits in the argument of the Plaintiff as Respondent in the Adjudication, that by deciding on the matter of a dispute on the sum due 21 under the uncertified Variation Works, the Adjudicator had exceeded his jurisdiction. Whether the Adjudicator had exceeded his jurisdiction by deciding on the number of days that should have been granted following a Second Application for EOT [44] Learned counsel for the Plaintiff submitted that the matter for determining the application for an EOT was also agreed contractually to be determined by the Architect in the terms agreed under the said PAM Contract, being the written contract of the parties. He further argued that on the one hand the Adjudicator had ignored the fact that the matter of the second EOT application was not even an issue that was agreed to be raised or referred to the Adjudicator under Section 27(2) of CIPAA. Learned counsel for the Plaintiff pointed out that, on the other hand, the Adjudicator had wrongly exercised his powers to review the second EOT application that was rejected by the Architect when the Adjudicator had no power to do so under the provisions of the law in CIPAA unless it was agreed in writing to be an issue to be referred pursuant to Section 27(2) of CIPAA, which provision was not complied with. [45] Strictly speaking the Respondent’s Defence of a cross claim or Counterclaim raised as a set-off should not even be considered as it was not raised in the Payment Response; there being no Payment Response 22 filed. The Claimant was right to have followed the dicta of Justice Mary Lim (now JCA) in View Esteem Sdn Bhd v Bina Puri Holdings Sdn Bhd [2015] MLJU 695 where her Ladyship observed: “[60] Subsection 27(1) limits the Adjudicator’s jurisdiction to the matters referred to adjudication pursuant to sections 5 and 6; namely the claims in the Payment Claim and the responses or defences in the Payment Response. This limitation is subject to subsection 27(2) which allows the parties to the adjudication to extend that jurisdiction by written agreement to matters beyond or outside sections 5 and 6. In the absence of such agreement, the Adjudicator’s jurisdiction does not extend to or include matters in the Adjudication Claim and the Adjudication Response or even Adjudication Reply found in sections 9, 10 and 11. It is obvious from subsections 27(1) and (2) that where the parties feel that the Adjudicator’s jurisdiction is insufficient to deal with their particular dispute; the parties can sit down and agree on extending that jurisdictional cover. In the present case, the parties could have dealt with this through a written agreement amongst themselves. There was no such effort; and the Court is not required to look into the reasons for the lack of such an effort. View Esteem could easily have brought up these three additional defences, responses or 23 matters in its Payment Response; but it chose not, for whatever reason it may have. Having exercised that option, it is not open to View Esteem to now complain.” [46] This proposition has the further support of Justice Ravinthran Paramaguru J in Bina Puri Construction Sdn Bhd v Hing Nyit Enterprise Sdn Bhd [2015] MLJU 941 where it was ruled that because the Respondent did not file a Payment Response to refer the issue of Counterclaim, the Adjudicator’s jurisdiction is limited to the dispute raised in section 27(1) of CIPAA, hence the Adjudicator did not have the jurisdiction to decide on the counter claim. [47] However the Adjudicator had exercised his discretion to allow the Defence of set-off to be raised even though there was no service of a Payment Response following an application by the Respondent made on 22.12.2016 pursuant to section 26(1) and (2)(b)/(c) of CIPAA to deal with matters not raised through a Payment Response. Specifically it was for the Respondent to raise the Cross/Counter Claim No.1 of RM1,937,000.00 and Cross/Counter Claim No.2 of RM469,296.96. [48] The Adjudicator took the cue from and found his courage in the dicta of the Court of Appeal in View Esteem Sdn Bhd v Bina Puri Holdings Sdn Bhd [2016] 6 MLJ 717 in the dicta of Justice Prasad 24 Abraham JCA (now FCJ) with respect to the approach to be taken under a section 26 CIPAA application as follows: “[45] In any application made to the adjudicator under section 26 of CIPA, the approach in my view to be taken would be akin with the methodology taken by the courts in its approach to Order 2 Rules of High Court 1980 the predecessor of Rule of Court 2012 ... ... [48] It is my view that Section 26(1) of CIPA is wide in terms and covers all aspects of the act including adjudication proceedings. Section 26(2) deals specifically with non-compliance in respect of adjudicator proceedings and the powers reserved to the adjudicator are wide as set out in 2(a)(b) or (c).” [49] The Adjudicator had set out the factors he took into consideration in allowing the set-off of the LAD and claim for late delivery damages by third parties Purchasers to be raised in the Adjudication Proceedings at para h) page 38 of his Decision. The Adjudicator derived his confidence in following this approach from the comments made by Justice Prasad Abraham JCA (now FCJ) in View Esteem (supra) at para 43 as follows: “The Appellant should have moved the adjudicator formally to allow matters not raised under the payment response pursuant to s 25 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 ...” [50] Such an exercise of an Adjudicator’s discretion, as observed above, is cushioned from any interference from the Court in a section 15 CIPAA application. Once that Defence of set-off is allowed to be raised, then it is well within the Adjudicator’s jurisdiction to decide on whether the whole of the LAD had been proved or that only so much of it should be allowed taking into consideration an EOT that should be allowed. [51] This is a case where to decide on one matter i.e. the LAD would inextricably relate to another matter, the EOT that ought to be given. Thus the LAD claimed by the Respondent may be appropriately reduced if the corresponding factor of an EOT ought to have been granted. [52] Once the issue of an LAD claim is raised as a Defence of set-off then the Adjudicator would have to consider the related issue of the application for EOT as that would invariably have an effect on the number of days of LAD that the Respondent could claim. It is like the flip side of the same coin with one impinging on and inextricably affecting the outcome of the other. 26 [53] It was held in Cantillon Ltd v Urvasco Ltd [2008] 117 ConLR 1 as follows: "[67] ... As the authorities established that the responding party can put forward any arguable defence in adjudication, ... it must follow that the adjudicator can rule not only on that defence but also upon the ramifications of the defence to the extent that it is successful in so far as it impacts upon the fundamental dispute." (emphasis added) [54] It would be grossly unfair if the Respondent be allowed to raise the Defence of a set-off for the first time in its Adjudication Response pursuant to an application under section 26 CIPAA but that the Claimant cannot raise in its Adjudication Reply to be considered the reasons why its second EOT application should be allowed. [55] The Adjudicator had gone through with a fine toothcomb on the causes and effects of delays as tabulated in events No.2.1 - 2.4 at pages 44-45 of his Decision. His conclusion is a finding of fact well within his jurisdiction and a matter that I should not disturb as this is not an appeal on merits. He only allowed an LAD at the rate of RM13,000.00 per day for late delivery by the Claimant of 42 days from 11.9.2015 until 23.10.2015 (date of CPC) amounting to RM546,000.00. The Respondent had claimed LAD from 1.6.2015 (Completion Date after the first EOT) until 27.10.2015 27 (date of Certificate or Completion and Compliance) of 149 days at the rate of RM13,000.00 per day amounting to RM1,937,000.00. [56] As stated, once a matter is within his jurisdiction, as this matter of an LAD Defence is, then he can exercise all or any of his powers under section 25 to arrive at a fair and reasonable decision of interim finality and in this case it was perfectly proper for him to exercise his powers under section 25(m) and (n) CIPAA for the legitimate purpose of deciding the dispute before him. [57] His Adjudication Decision is not cast in concrete as it is provisional in nature and having the element of temporary finality; regard being had to the overall justice of the case and perhaps even a rough justice at that. Whilst the refined justice may be pursued in arbitration, in the meanwhile the Adjudication Decision is to be respected. [58] The Plaintiff as Respondent in the Adjudication is obviously not happy with the Decision of the Adjudicator for they had claimed LAD for 149 days of days of delay from 1.6.2015 (Completion Date after the first EOT) to 27.10.2015 (Date of Certificate of Completion and Compliance) amounting to RM1,937,000.00. [59] The Adjudicator had asked himself the right question with respect to how much of the LAD claim raised as a set-off should be allowed. Even if 28 he has given the wrong answer where quantum is concerned, it is not for this Court to interfere and intervene on ground of excess of jurisdiction. That is to be taken up in arbitration and parties must attune themselves to live with the Adjudication Decision until it is fully and finally resolved in Arbitration or Litigation. [60] It would be opportune to recall the dicta of the English Court of Appeal in Bouygues UK Ltd v Dahl-Jensen UK Ltd [2000] EWCA Civ 507 where Lord Justice Chadwick observed as follows: “27. The first question raised by this appeal is whether the adjudicator's determination in the present case is binding on the parties - subject always to the limitation contained in section 108(3) and in paragraphs 4 and 31 of the Model Adjudication Procedure to which I have referred. The answer to that question turns on whether the adjudicator confined himself to a determination of the issues that were put before him by the parties. If he did so, then the parties are bound by his determination, notwithstanding that he may have fallen into error. As Knox J put it in Nikko Hotels (UK) Ltd v MEPC PLC [1991] 2 EGLR 103 at page 108, letter B, in the passage cited by Buxton LJ, if the adjudicator has answered the right question in the wrong way, 29 his decision will be binding. If he has answered the wrong question, his decision will be a nullity.

I am satisfied, for the reasons given by Buxton LJ, that in the present case the adjudicator did confine himself to the determination of the issues put to him. This is not a case in which he can be said to have answered the wrong question. He answered the right question. But, as is accepted by both parties, he answered that question in the wrong way. That being so, notwithstanding that he appears to have made an error that is manifest on the face of his calculations, it is accepted that, subject to the limitation to which I have already referred, his determination is binding upon the parties.” (emphasis added) [61] In Macob Civil Engineering Ltd v Morrison Construction Ltd [1999] BLR 93 at page 97 the provisional nature of an Adjudication Decision was explained as follows: "It is clear that Parliament intended that the adjudication should be conducted in a manner which those familiar with the grinding detail of the traditional approach to the resolution of construction disputes apparently find difficult to accept. But Parliament has not abolished arbitration and litigation construction disputes. It has merely introduced an intervening provisional stage in the dispute resolution 30 process. Crucially, it has made it clear that decisions of adjudicators are binding and are to be complied with until the dispute is finally resolved." [62] That was precisely why there is specifically provided for in section 13 CIPAA as follows: “Effect of Adjudication Decision The adjudication decision 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.”(emphasis added) [63] Parliament is well conscious of the fact that an Adjudication Decision might not be on all fours with an Arbitral Award or a judgment of a Court after a full trial. It would be expecting too much for a decision that is to be made within a tight time frame in Adjudication to have all the elements of a masterpiece that might be expected of an Arbitral Award or a full Judgment of a Court, with every point of law raised being considered from different perspectives and evidence being weighed and accorded 31 due weight; often after days and weeks and even months of hearing witnesses and a further adjournment for Decision after clarification of written submissions. Depending on the quality of the Adjudication, it may well approximate towards what is to be had in arbitration or litigation. [64] Parliament in its wisdom has set out section 37 CIPAA, setting out the relationship between Adjudication on the one hand and Arbitration and Litigation on the other so that there would be less misapprehension and more ready acceptance of a process that is not perfect but serves a designed purpose of easing cashflow for the unpaid party that has done the work and bore the brunt of the burden and toil under the sun. Section 37 CIPAA reads: “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. 32

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.” (emphasis added) [65] The advice of Lord Justice Chadwick in the English Court of Appeal case of Carillion Construction Ltd v Devonport Royal Dockyard Ltd [2005] EWCA Civ 1358 in the context of their compulsory Adjudication under The Housing Grants, Construction and Regeneration Act 1996, which came into force on 1st May 1998, should resonate well even under our scheme of statutory Adjudication under CIPAA: “80 The objective which underlies the Act and the statutory scheme requires the courts to respect and enforce the adjudicator’s decision unless it is plain that the question which he has decided was not the question referred to him or the manner in which he has gone about his task is obviously unfair. It should be only in rare circumstances that the courts will interfere with the decision of an adjudicator. The courts should give no encouragement to the approach adopted by DML in the present case; which (contrary to DML’s outline submissions, to which we have referred in paragraph 66 of this judgment) may, indeed, aptly 33 be described as “simply scrabbling around to find some argument, however tenuous, to resist payment”. 81 It is only too easy in a complex case for a party who is dissatisfied with the decision of an adjudicator to comb through the adjudicator’s reasons and identify points upon which to present a challenge under the labels “excess of jurisdiction” or “breach of natural justice”. It must be kept in mind that the majority of adjudicators are not chosen for their expertise as lawyers. Their skills are as likely (if not more likely) to lie in other disciplines. The task of the adjudicator is not to act as arbitrator or judge. The time constraints within which he is expected to operate are proof of that. The task of the adjudicator is to find an interim solution which meets the needs of the case. Parliament may be taken to have recognised that, in the absence of an interim solution, the contractor (or sub-contractor) or his sub-contractors will be driven into insolvency through a wrongful withholding of payments properly due. The statutory scheme provides a means of meeting the legitimate cash-flow requirements of contractors and their subcontractors. The need to have the “right” answer has been subordinated to the need to have an answer quickly. The scheme was not enacted in order to provide definitive answers to 34 complex questions. Indeed, it may be open to doubt whether Parliament contemplated that disputes involving difficult questions of law would be referred to adjudication under the statutory scheme; or whether such disputes are suitable for adjudication under the scheme. We have every sympathy for an adjudicator faced with the need to reach a decision in a case like the present. 82 In short, in the overwhelming majority of cases, the proper course for the party who is unsuccessful in an adjudication under the scheme must be to pay the amount that he has been ordered to pay by the adjudicator. If he does not accept the adjudicator’s decision as correct (whether on the facts or in law), he can take legal or arbitration proceedings in order to establish the true position. To seek to challenge the adjudicator’s decision on the ground that he has exceeded his jurisdiction or breached the rules of natural justice (save in the plainest cases) is likely to lead to a substantial waste of time and expense – as, we suspect, the costs incurred in the present case will demonstrate only too clearly.” (emphasis added) 35 Pronouncement [66] For all the reasons given above, the Adjudication Decisions remains intact and unassailable. The Adjudicator had acted well within his jurisdiction. [67] This application to set aside the Adjudication Decision stands dismissed with costs of RM5,000.00 to be paid by the Plaintiff to the Defendant. Dated: 13 October 2017. - signed - Y.A. LEE SWEE SENG Judge Construction Court Kuala Lumpur For the Plaintiff : S. Ashok (Messrs Leela A. Sanghrajka & Associates) For the Defendant : J S Lim (Messrs T G Lee & Associates) Date of Decision: 29 May 2017.