Mercu Binaraya Sdn Bhd v Jetson Construction Sdn Bhd (WA-24C-201-12/2023)

Jetson Construction Sdn Bhd (‘Jetson’) pursuant to s 15(b) and

of the Construction Industry Payment and Adjudication Act 2012 [Act 746] (‘CIPAA’) in Originating Summons No. WA-24C- 195-11/2023 (‘O.S. No. 195’) to set aside the Adjudication Decision dated 6.11.2023 (‘AD’) by the learned Adjudicator, Sr. Nik Hasbi Fathi (‘Adjudicator’) (‘Setting Aside Application’); and

Mercu Binaraya Sdn Bhd (‘Mercu’) pursuant to s 28 of the CIPAA in O.S. No. WA-24C-201-12/2023 (‘O.S. No. 201’) to enforce the AD (‘Enforcement Application’). [2] After having considered the affidavit evidence and the submissions of the parties, I had dismissed the Setting Aside Application and allowed the Enforcement Application. [3] The full grounds for the decision are set out in the succeeding part of this judgment. S/N TT/Dfe17Uk26aIHq8h/gxw The Cause Papers [4] The cause papers for each application are as follows:

Jetson’s O.S. dated 29.11.2023 (encl. 1);

Jetson’s Affidavit In Support (‘AIS’) affirmed by its Chief Executive Officer, Ong Shau Soo on 29.11.2023 (encl. 2);

Mercu’s Affidavit In Reply (‘AIR’) affirmed by its Director, Masyaizawaty Binti Mohamadon 26.12.2023 (encls. 4 and 5); and

Jetson’s AIR affirmed by the same deponent on 9.1.2024 (encl. 7).

Mercu’s O.S. dated 4.12.2023 (encl. 1);

Mercu’s AIS affirmed by the same deponent on 4.12.2023 (encl. 2);

Jetson’s AIR affirmed by its Assistant General Manager, Kenny Loh Yong Sing on 26.12.2023 (encl. 4);

Mercu’s Notice of Intention to Use Affidavit in O.S. 195 dated 10.1.2024 (encl. 6); and

Mercu’s AIR affirmed by the same deponent on 10.1.2024 (encl. 7). Background Facts [5] Jetson is a private limited company incorporated in Malaysia with its business address at Tingkat 11, Menara Tokio Marine Life, No. 189 Jalan Tun Razak, 50400 Kuala Lumpur. [6] Mercu is a private limited company incorporated in Malaysia with its business address at No. 6B, Jalan BP 6/6, Bandar Bukit Puchong, 47120 Puchong, Selangor. [7] Jetson was appointed by the Asia Pacific University Sdn Bhd (‘Employer’) as the main contractor for the project known as “Cadangan Pembangunan Institusi Pengajian Tinggi Swasta Yang Merangkumi 3 Fasa iaitu:-

Fasa 5: 12 Tingkat Blok K1 Kediaman Pelajar, 10 Tingkat Blok

(ii) Fasa 6: 7 Tingkat Blok C: Bengkel & Makmal Kejuruteraan, Bilik Kuliah, Tutorial & Perbincangan, Dewan Pameran Di Atas Lot P.T. 13825, Taman Teknologi Malaysia, Mukim Petaling, Bandaraya Kuala Lumpur, Wilayah Persekutuan”. S/N TT/Dfe17Uk26aIHq8h/gxw [8] By way of the Letter of Award dated 20.3.2020 (‘LoA’), Jetson accepted Mercu’s offer for the Mechanical and Engineering Works for the above said project together with part of Phase 3 for the parking lots at Levels 1 and 2 (‘Project’) for the sub-contract sum of RM23,432,483.77. [9] Clause 6.0 of the LoA provides that the sub-contract shall be based on the Agreement and Conditions of PAM Contract 2018 (With Quantities) (‘PAM Contract’) subject to such Amendments, Amplifications and Supplementary Clauses that are set out in the Tender Documents issued to Mercu. [10] On 7.1.2022, Jetson and Mercu entered into a supplemental agreement to amend the LoA (‘Supplemental Agreement’) (the LoA, PAM Contract and the Supplemental Agreement shall hereinafter be collectively referred to as the ‘Sub-Contract’). [11] According to Clause 4.0 of the LoA, Mercu’s scope of work is the supply of materials, skilled labour, plant and equipment, approved dump site permit etc. for the execution, construction and completion of the Mechanical and Engineering Works (Phase 3) as per the construction drawings, specification, bills of quantities and instruction given by the Project Manager or Site Representative. [12] On 14.2.2022, Mercu issued a Notice of Default to Jetson pursuant to Clauses 26.1(a) and 26.2 of the PAM Contract for alleged non-payment and non-certification of the works done by Mercu. S/N TT/Dfe17Uk26aIHq8h/gxw [13] Following the purported failure by Jetson to rectify the alleged default, Mercu determined the Sub-Contract by way of a Notice of Determination dated 14.3.2022 in accordance with Clause 26.2 of the PAM Contract. [14] Based on the meeting held on 16.3.2022, Jetson accepted Mercu’s determination and this was recorded in Mercu’s letter dated 17.3. 2022. In the same letter, Mercu invited Jetson to conduct a joint site evaluation together with the consultants. [15] Payment disputes arose between the parties in respect of the following:

unpaid certified sum for work done for an amount of RM183,666.32;

retention sum of RM510,609.92;

Performance Bond for the sum of RM911,822.96; and

under-certified or under-valuation of the Final Claim for the sum of RM1,138,429.64. [16] As no payment of the total outstanding sum of RM2,744,528.84 was forthcoming from Jetson, Mercu served its Payment Claim to Jetson on 18.1.2023 pursuant to s 5 CIPAA. S/N TT/Dfe17Uk26aIHq8h/gxw [17] Jetson did not serve its Payment Response. Hence, it is deemed to have disputed the entire Payment Claim (see sub-s 6(4) CIPAA). [18] Mercu subsequently issued a Notice of Adjudication on 9.2.2023. [19] As both parties were unable to agree on the appointment of an adjudicator, Mercu wrote to the Director of the Asian International Arbitration Centre (‘AIAC’) on 25.7.2023 to request for an appointment of an adjudicator. Sr. Nik Hasbi Fathi was appointed as the Adjudicator on 31.7.2023 and he accepted the appointment on 1.8.2023. [20] By way of the letter dated 4.8.2023, the Adjudicator proposed his terms of appointment for the agreement of the parties. By way of the letter dated 9.8.2023, Mercu responded to the Adjudicator’s proposed terms but Jetson did not. [21] On 15.8.2023, the Adjudicator issued Form 6 setting out the terms of appointment to the parties. Directions were given to both parties for the preparation and service of the Adjudication Claim, Adjudication Response and Adjudication Reply. [22] Following the Adjudicator’s direction, on 29.8.2023, Mercu submitted its Adjudication Claim dated 29.8.2023 together with the supporting documents to Jetson and the Adjudicator. [23] Jetson had 10 working days to submit its Adjudication Response i.e. by 13.9.2023. It requested for an extension of time (‘EoT’) to file the S/N TT/Dfe17Uk26aIHq8h/gxw Adjudication Response vide its letter dated 7.9.2023, which was received by the Adjudicator on 12.9.2023. [24] The Adjudicator rejected Jetson’s request for EoT and proceeded to decide the dispute without referring to the Adjudication Response which the Adjudicator received on 22.9.2023. [25] Ultimately, the Adjudicator made the following determination: “O: DETERMINATION

Based on the above findings, I now come to the following determination: O1. On the relief and remedies sought by the Claimant

For the payment of the outstanding amount of RM2,744,528.84, I allow a sum of RM1,062,833.01

(ii) For interest on late payment of certified sum I allow an amount of in the sum of RM6,176.28

(iii) For costs arising from and/or in connect ion with this adjudication proceeding I allow a sum of RM86,912.74 O2. On the relief and remedies sought by the Respondent S/N TT/Dfe17Uk26aIHq8h/gxw

The Respondent did not submit the Adjudicate Response thus there was no relief and remedies to be considered.

I hereby decide that the Respondent shall pay the following:

The Adjudicator ’s fee of RM31,537.14

The AIAC fees and charges as follow:

Registration of Adjudication matter of RM265.00

(ii) Appointment fee to appoint an Adjudicator of RM424.00

(iii) Adjudication Administrative fee (including GST at 6%) of RM6,686.00

Claimant ’s Cost of RM48,000.00

The outstanding underpaid amount of RM1,062,833.01

Interest on late payment of certified sum of RM6,176.28 S/N TT/Dfe17Uk26aIHq8h/gxw

Costs arising from and/or in connect ion with this adjudication proceeding of RM86,912.74

All of the above costs mentioned in the foregoing paragraphs (1) to (6) shall be payable within fourteen

days from the date of this Decision.

Having regard to the deposits that have been made by the parties to AIAC, the balance thereof, if any, shall be returned to the parties, or any further amount required to be made, shall be made within fourteen (14) days from the date of this Decision.

I f any part of the adjudicated amount is not paid within the time directed, the party owing shall also pay simple interest to the other party being owed, on the unpaid amount at five per centum (5%) per annum calculated from the expiry of fourteen (14) days from the date of this Decision, until full settlement of the unpaid amount.”. The Setting Aside Application [26] The AD is binding on the parties unless it is set aside by this Court pursuant to the Setting Aside Application by Jetson, the subject matter of the AD is settled by a written agreement between the parties or the dispute is finally decided by arbitration or the court (see s 13 CIPAA). S/N TT/Dfe17Uk26aIHq8h/gxw [27] Jetson cited limbs (b) and (d) of s 15 CIPAA as the basis for the Setting Aside Application and these limbs 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: …

there has been a denial of natural justice; …

the adjudicator has acted in excess of his jurisdiction.”. [28] The three types of jurisdiction in the context of s 15(d) CIPAA viz. core jurisdiction, contingent jurisdiction or competent jurisdiction were explicated by the High Court in Terminal Perintis Sdn Bhd v Tan Ngee Hong Construction Sdn Bhd (and Another Originating Summons) [2017] 7 AMR 887 and endorsed by the Federal Court in View Esteem Sdn Bhd v Bina Puri Holdings Berhad [2018] 2 MLJ 22. Numerous cases have discussed and applied the legal principles in determining whether an adjudicator has acted in excess of jurisdiction (see the leading textbooks Construction Adjudication In Malaysia, Third Edition, S/N TT/Dfe17Uk26aIHq8h/gxw Sweet & Maxwell, 2022 by the learned authors Lam Wai Loon and Ivan YF Loo at pp 430 - 471 and Law, Practice And Procedure Of Adjudication, Volume 1, Lexis Nexis, 2023 by Datuk Professor Sundra Rajoo, Leong Hong Kit and Cindy Wong Xien Yee at pp 644 - 699). [29] As regards s 15(b) CIPAA, the words “natural justice” as used therein refer to the second pillar of natural justice that the parties must be given adequate notice and opportunity to be heard. Basically, the line of enquiry which is undertaken by the courts in determining whether there is a denial of natural justice is to consider the manner in which the adjudicator conducted the hearing and whether he has accorded procedural fairness to the parties (see among others, ACFM Engineering & Construction Sdn Bhd v Esstar Vision Sdn Bhd and another appeal [2016] MLJU 1776, Bauer (Malaysia) Sdn Bhd v. Jack-In Pile (M) Sdn Bhd and Another Appeal [2018] 10 CLJ 293, Ireka Engineering and Construction Sdn Bhd v. PWC Corporation Sdn Bhd & Another Appeal [2019] 1 LNS 51, Meridian Contracts Sdn Bhd v Bauer (Malaysia) Sdn Bhd and another summon [2020] MLJU 1405, MRCB Sentral Properties Sdn Bhd v GSIB Sdn Bhd and another case [2021] MLJU 2249 and Hong Xin Construction Sdn Bhd v Rebana Maju Sdn Bhd [2024] MLJU 1907). S/N TT/Dfe17Uk26aIHq8h/gxw 1st Ground: Whether the Adjudicator had acted in excess of his jurisdiction as Mercu is not an “unpaid party” within the meaning of s 4 CIPAA [30] The jurisdiction of an adjudicator is provided in s 27 CIPAA, which provides as follows: “27. (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.

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).”. [31] Section 5 of the CIPAA governs the Payment Claim and it states, among others that – S/N TT/Dfe17Uk26aIHq8h/gxw “5.

An unpaid party may serve a payment claim on a nonpaying party for payment pursuant to a construction contract. …”. [32] The words “unpaid party” are defined in s 4 CIPAA to mean “a party who claims payment of a sum which has not been paid in whole or in part under a construction contract”. [33] Jetson submitted that Mercu is not an “unpaid party” because it has a set-off or counterclaim against Mercu for the sum of RM20,085,244.33 and the same would extinguish the entire sum of RM2,744.528.84 that may be due to Mercu). Jetson’s set-off or counterclaim consist of the following:

RM19,059,060.00 as liquidated ascertained damages for the delay that Jetson is being exposed to the Employer;

RM2,448,617.21 as the total additional costs incurred by Jetson to complete the balance of the Works due to Mercu’s unlawful and unilateral termination and breach of the Sub-Contract; and

RM1,861,310.00 and RM587,306.96 as the additional costs for Bill No. 9 works which were carried out by third party contractors to rectify Mercu’s defective works and to complete the Fire Protection Installation Works and CWSP Works, respectively. S/N TT/Dfe17Uk26aIHq8h/gxw [34] As there is no payment due to Mercu, Jetson contended that it is factually not in breach of an obligation to pay Mercu and the Adjudicator had acted outside his jurisdiction in allowing Mercu’s claim as per the AD. [35] Mercu submitted that Jetson is not consistent because in the AIS, Jetson averred that the Adjudicator failed to consider the Adjudication Response, which was submitted after the Adjudicator had disallowed Jetson's application for EoT, whereas in the written submission, Jetson argued that Mercu is not an “unpaid party”. [36] In this regard, I have examined the grounds in support of the Setting Aside Application in encl. 1 and I find that the grounds which are expressly stated as the Adjudicator having acted in excess of his jurisdiction are when he –

failed to consider the fact that Mercu’s claim is premature and beyond the jurisdiction of the “Tribunal”;

erred in law by giving the AD without considering the fact that Jetson has made all payments which are owing to Mercu and no other payment has accrued at the date of filing of Mercu’s claim;

erred in law by applying sub-s 27(3) CIPAA to use his discretion in making the award in favour of Mercu without considering Jetson’s submission in the Adjudication Response; and

failed to consider that Jetson had validly appointed a third party to complete the works which were neglected by Mercu and thereby suffered losses that cannot be restored. [37] In the AIS, it is observed that, although Jetson has identified three separate grounds to set aside the AD, namely, the Adjudicator had acted in excess of jurisdiction, the AD has violated the principle of natural justice and Mercu’s claim is premature, the ground in relation to excess of jurisdiction is actually premised on a combination of limbs

and (d) of the CIPAA. The main complaint is the rejection of Jetson’s application for EoT to serve the Adjudication Response which resulted in the Adjudicator making a unilateral decision without taking into consideration Jetson’s case as set out in the Adjudication Response. [38] Next, in Jetson’s Written Submissions (encl. 8), the argument on the Adjudicator having acted in excess of jurisdiction was framed as Mercu not qualifying as an unpaid “party” within the meaning of the CIPAA. [39] O. 69A, rr. 2 and 3 of the Rules of Court 2012 provide for the rules of procedure in relation to applications made under the CIPAA in these terms: “Application under the Act (O. 69A, r. 2)

2.

An application to which this Order applies may be made by originating summons in Form 5 which shall — S/N TT/Dfe17Uk26aIHq8h/gxw

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

include a concise statement of —

the remedy claimed; and

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

state the grounds in support of the originating summons;

show that any statutory requirements have been met;

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

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

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

The applicant shall file by affidavit, written evidence on which he intends to rely when he files his originating summons. …” “Application to set aside an adjudication decision (O. 69A, r. 3)

3.

In every application to set aside an adjudication decision under section 15 of the Act, the originating summons shall, in addition to the matters stated in subrule 2(1) —

give details of the adjudication decision challenged;

identify which part or parts of the adjudication decision are challenged; and

specify the grounds on which it is contended that the adjudication decision should be set aside.

The applicant shall file by affidavit, written evidence on which he intends to rely when he files his originating summons, including a copy of the adjudication decision. S/N TT/Dfe17Uk26aIHq8h/gxw …”. [40] Hence, in determining the Setting Aside Application, the Court must consider the grounds in support of the O.S. or on which Jetson contended that the AD should be set aside as stated in encl. 1 and the written evidence on which Jetson intends to rely when it filed the O.S. as affirmed in the AIS (encl. 2). [41] Judging by the grounds as stated in encl. 1 and the affidavit evidence in encl. 2, the convergence in the basis of setting aside the AD pursuant to limb (d) of s 15 CIPAA would be that the Adjudicator did not consider the Adjudication Response in arriving at this decision. In my opinion, it is more appropriate to frame this ground as a breach or denial of the rules of natural justice (see the 2nd Ground below) rather than an argument on excess of jurisdiction. [42] Nevertheless, I have considered Jetson’s averments in the AIS and in my view, the Adjudicator’s decision in rejecting Jetson’s application for EoT to submit the Adjudication Response and in not making any reference to the Adjudication Response, which was served beyond the time as directed by the Adjudicator, does not invalidate the jurisdiction of the Adjudicator to adjudicate the dispute. [43] Section 10 CIPAA reads as follows: “Adjudication response S/N TT/Dfe17Uk26aIHq8h/gxw

10.

The respondent shall, within ten working days from the receipt of the adjudication claim under subsection 9(1), serve a written adjudication response which shall answer the adjudication claim together with any supporting document on the claimant.

The respondent shall provide the adjudicator with a copy of the adjudication response together with any supporting document within the time specified under subsection (1).

If the respondent fails to serve any adjudication response, the claimant may proceed with the adjudication after the expiry of the time specified under subsection (1).”. [44] In Mammoth Empire Construction Sdn Bhd v STAM Engineering Sdn Bhd and Another Case [2019] 10 MLJ 58, one of the three grounds put forth to set aside the adjudication decision was that the adjudicator had breached the rules of natural justice and/ or acted in excess of jurisdiction when he dismissed the respondent’s solicitors request for hearing in order for the respondent to submit some documents and evidence in support of the adjudication response and also to call witnesses. Vazeer Alam J (now FCJ) held, among others, that the respondent chose not to comply with the statutory rights prescribed in sub-s 10(1) and (2) CIPAA by serving all the supporting documents that it intends to rely on. Hence, the respondent has to live with this choice and cannot be heard to complain about breach of natural justice or the adjudicator having acted in excess of jurisdiction. S/N TT/Dfe17Uk26aIHq8h/gxw [45] Similarly, in the instant case, Jetson chose not to comply with the Adjudicator’s direction on the submission of the Adjudication Response, which was in accordance with the time frame as provided under sub-s 10(1) CIPAA. This failure was to Jetson’s detriment and it cannot now whine that the Adjudicator had acted in excess of his jurisdiction. [46] Moreover, Jetson did not identify whether the purported excess of jurisdiction is of core jurisdiction, contingent jurisdiction or competent jurisdiction [see Terminal Perintis (supra) and View Esteem (supra)]. [47] In sum, there is simply no basis for Jetson to claim that the Adjudicator had acted in excess of his jurisdiction and it is my finding that Jetson has not established the 1st Ground on a balance of probabilities. 2nd Ground: Whether there is denial of the rules of natural justice when the Adjudicator decided not to refer to the contents of the Adjudication Response [48] In summary, Jetson’s contention that there is a denial of the rules of natural justice is premised on the following:

Jetson had applied for EoT to submit the Adjudication Response before the expiry of the time limit to do so. Jetson also gave valid reasons in its application;

the Adjudicator’s refusal of Jetsons application for EoT and the appeal against his decision in rejecting the said application solely on the ground that the Adjudicator has to strictly follow the timeline as provided under sub-s 10(1) CIPAA to ensure a speedy resolution of the dispute between the parties;

s 25(p) CIPAA gives the power to the Adjudicator to “extend any time limit imposed on the parties under this Act as reasonably required.”. Yet, the Adjudicator refused to exercise his discretion under s 25(p) CIPAA by allowing an EoT of merely three days. The Adjudicator decided not to refer to the Adjudication Response and treated the adjudication proceedings as if it is an ex-parte application (see paragraphs 43 and 73 of the AD). This had greatly prejudiced Jetson. If the Adjudication Response was accepted, it would have guided the Adjudicator to reach a fair and just decision as opposed to a unilateral one as stated by the Adjudicator himself; and

there is no payment due to Mercu. The AD, which amongst others, instructed Jetson to pay Mercu, had denied natural justice to Jetson. [49] In analysing the 2nd Ground, the chronology of events as narrated below, must first be appreciated. [50] On 7.9.2023, Jetson’s solicitors wrote to the Adjudicator requesting for an EoT to submit the Adjudication Response as follows: S/N TT/Dfe17Uk26aIHq8h/gxw “… 2) We wish to put on record that we were recently appointed as the Respondent's Representative for the above. adjudication matter. 3) Our clients received the Adjudication Claim (Form 7) from the Claimant on 29.8.2023 for which the Adjudication Response (Form 8) to be served on or before the 13.9.2023 (10 working days). 4) In the light of the Voluminous documents served, we humbly seek for an extension of time of 14 days from 13.9.2023 for us to take brief and to reply the Adjudication claim accordingly.”. The physical copy of this letter was received by the Adjudicator only on 12.9.2023 (see paragraph 48 of the AD). [51] Mercu’s solicitors sent a letter dated 11.9.2023 to the Adjudicator to object to Jetson’s application with reasons. Notwithstanding the position taken by Mercu, it further submitted that, in the event the Adjudicator was minded to grant an EoT, the EoT should be a maximum of two working days and the same time extension be granted to Mercu for the submission of the Adjudication Reply. [52] On 11.9.2023, the Adjudicator wrote to both solicitors and stated that: S/N TT/Dfe17Uk26aIHq8h/gxw “Response to Letter from Claimant Today, I received by hand delivery at my office, the letter from the Claimant’s representative ref … dated 11.9.2023. Foremost, I would like to inform that on 7.9.2023, at 4:41pm, I received a telephone call from a person claiming to be a representative of the Respondent. Having highlighted of the irregularity of the adjudicator receiving phone calls, I kept the conversation brief, asking the caller to refer to the Act on whatever the subject matter he was trying to convey to me verbally. I reminded as well that if he were to write, he should disclose that particular phone call for transparency. Understandably, I was not in a position to advise any party on any matter, let alone verbally and without disclosure. I thus decided that the best thing to do is to wait for any official written notification before I make a disclosure of that call. Since the Claimant’s representative has broached on the subject, I take this opportunity to divulge the incident. As at the close of business today, I have yet to receive any written communication from anyone on this case other than from AIAC and from the Claimant's representative, the latest being the letter I received today by email and hand delivered as per s.38 of CIPAA 2012. So, I take the content of the S/N TT/Dfe17Uk26aIHq8h/gxw learned counsel’s letter as an information and nothing further. The letter also refers in paragraph 1, to a letter dated 7.9.2023 purportedly from the Respondent’s representative. Because I have not received the purported letter dated 7.9.2023, I do not have any means of verifying some of the facts stated in the Claimant’s counsel's letter. I could surmise that the Claimant’s learned counsel represented their disagreement over what appears to be a request for an extension of time to serve the Adjudication Response. I am not privileged to neither that letter of 7.9.2023 nor its contents, let alone to verify if there was any such request and to whom it was addressed to. Under the circumstances, the adjudication should proceed as per the Act. I am refrained from deliberating this matter further and reserve my privilege to address all issues pertaining to this adjudication in the adjudication decision. ...”. [53] The Adjudicator again wrote to both solicitors on 12.9.2023 to inform them of the following: “Response to Letter from Respondent Requesting for EOT S/N TT/Dfe17Uk26aIHq8h/gxw I have had the benefit of receiving mid-day today, a hand delivered letter from the Respondent’s representatives dated 7.9.2023 ref ... I understand that this is the letter referred to by the Claimant’s representative in their letter dated 11.9.2023, to which I gave my prompt response on even date. The letter was emailed for advance information to both the Claimant’s representative and the email address of the Respondent as provided to me by AIAC. Unfortunately, the Respondent’s email was returned for some reason. Since the Respondent has now appointed their representatives Messrs Gregory, Yusran & Associates (GYA), I extend that letter to GYA. At the material time (when I replied to the Claimant’s representative), I did not have the benefit of sighting GYA’s letter as I only received it by hand today:

GYA may not have known that at the start of the case, I sent my terms of reference to the parties, among which, asking for an agreement to accept email as a recognized means of service per s.38(d) of CIPAA 2012, and to let one of my personnels to handle the mails. The Claimant promptly agreed to it unreservedly, whilst there was no response whatsoever from the Respondent. That led me to issue Form 6 in the manner it was.

Having noted the Respondent’s request via GYA, it is admitted that the Claimant received Form 7 as far back as 29.8.2023, and with knowledge that the Act stipulates 10 working days for the Adjudication Response to be served, ie by 13.9.2023.

The Respondent has had the opportunity to get representation (if they deem necessary) even before that, as the Notice of Adjudication has been served prior to the appointment of the adjudicator.

The fact that the learned counsels for the Respondent was only ‘recently appointed’ is a matter between the Respondent and their counsels, which the adjudicator should not have any interest. It is within the Respondent's knowledge that CIPAA provisions apply to both the Claimant and the Respondent, with or without representation.

I have perused the Adjudication Claim furnished to be by the Claimant. The matter of it being voluminous is a subjective assessment and I do not find any irregularity in the nature of the Claim for it to merit what I deem to be of any special circumstance. I believe the learned counsels are also familiar with the case laws on the subject matter.

The Respondent may wish to take note of the status quo on communication I stated in para 1 above. In the light of what I have written yesterday in response to the Claimant's letter, the formal receipt of GYA's letter today is such that it enabled me to only consider this request at the eleventh hour, giving me not much room to formally invite the Claimant to advance their opinion.

Since the Claimant has indeed responded, I note their objections nonetheless. Request for extension of time, notwithstanding the merit of the case should be made timeously to give fair opportunity for all the stakeholders to air their views, what's more considering the instantaneous means of service has been deprived. Despite the request for extension having been made, until a formal extension is granted, the Respondent should take the position that CIPAA timeline provisions still apply.

Having considered all factors and the expediency intended by CIPAA, I do not find merit in order for me to exercise my power under section 25 to extend the time of service. The Respondent's request is denied and the adjudication should proceed as per the Act. I reserve my privilege to deliberate on this issue further in the Adjudication Decision. ...”. S/N TT/Dfe17Uk26aIHq8h/gxw [54] Jetson appealed against the decision of the Adjudicator in rejecting the application for EoT to file the Adjudication Response vide its solicitors’ letter dated 13.9.2023. Jetson requested the Adjudicator to reconsider his decision for an EoT of three working days from 14.9.2023 for Jetson to complete and serve the Adjudication Response as it has a plausible response to Mercu’s claims. [55] By way of Mercu’s solicitors’ letter dated 13.9.2023, Mercu reminded Jetson of its non-compliance with s 38 CIPAA as to the service of notices and documents. Mercu again objected to Jetson’s EoT request/ appeal and emphasised that the due date for Jetson to submit its Adjudication Response was on 13.9.2023. [56] The Adjudicator replied to both solicitors on 13.9.2023 by saying – “Response to Respondent’s Appeal for Extension of Time (EOT) At 4:26pm today, I received, from the Respondent’s representatives letter dated 13.9.2023 ref ... This is in response to my letter of 12.9.2023, declining the 13-day extension of time sought by the Respondent. The Respondent at this eleventh-hour is appealing for a 3-day EOT, citing that the Claimant has allegedly agreed on a 2-day extension. S/N TT/Dfe17Uk26aIHq8h/gxw I am mindful of the Respondent’s request that came after I have made my decision not to grant any EOT for reasons I have addressed; and I note that one of the grounds sought in this application is what the Respondent interpreted as an agreement by the Claimant to a 2-day EOT. I differ in my interpretation of what the Respondent referred to as the Claimant’s ‘agreement’. The bulk of the Claimant’s letter is their client’s objection to the EOT, reasons of which I have taken cognisance, the 2-day being the Claimant’s opinion should I decide to grant the EOT. Parties should be mindful that the granting of EOT is the decision of the Adjudicator under the powers conferred by section 25 of the Act; and not a form of consent agreement between parties, and not a matter as of right; although the adjudicator may solicit views from the parties. In this instance I note that Respondent’s grounds are premised on the alleged agreement of a 2-day extension by the Claimant, and that the Respondent having a plausible response to the Claimant’s claim, both of these I have also now considered. I would like to bring to the attention of the parties that this letter was served to my office at 4:26pm today, and today being the deadline for serving the Adjudication Response. I also note the Respondent's appreciation for an “early reply”. S/N TT/Dfe17Uk26aIHq8h/gxw Given the timeline, even if a reply from me is expected in the affirmative, the conveyance of my reply via the mode other than instantaneous communication (that has not been consented by the Respondent) will at best be conveyed after the deadline to serve the Adjudication Response. It will thus be a moot point by the time proper and orderly communication has been conveyed. I thus stand by my decision not to grant any extension and turn down the Respondent's second application for an extension of 3 working days. I reserve my privilege to address this matter in the Adjudication Decision. ...”. [57] On 14.9.2023, Mercu’s solicitors informed the Adjudicator that it did not receive the Adjudication Response by close of business on 13.9.2023 and pursuant to paragraph 12(2)(b) CIPAA, the 45 working days period for the delivery of the adjudication decision would end on 16.11.2023. [58] Mercu received the Adjudication Response dated 21.9.2023 on the same date by e-mail and without any cover letter or letter of service. [59] On 22.9.2023, Mercu’s solicitors sent a letter to the Adjudicator stating that the Adjudication Response was filed out of time and Jetson’s unilateral submission of the Adjudication Response, without the Adjudicator’s permission, ought not to be considered by the Adjudicator. Mercu had also put on record that Jetson attempted to S/N TT/Dfe17Uk26aIHq8h/gxw serve its Adjudication Response at the solicitors’ office on 22.9.2023, but as at the date to file an adjudication response has long passed, and the 45 working days for the delivery of the AD has commenced, Mercu’s solicitors do not have instruction to accept service of the same. [60] Based on the foregoing chronology of events as evident from the correspondence between the Adjudicator and the parties, it is indisputable that Jetson did not comply with the strict timeline as set out under s 10 CIPAA 2012 for the submission of the Adjudication Response. Jetson’s reason that its solicitors had just been appointed was considered by the Adjudicator and in his view, this is a matter between Jetson and its counsels, which the Adjudicator should not have any interest. Significantly, the CIPAA has been in force for many years now and those in the construction industry like Jetson should be well aware of the provisions in the CIPAA, including the strict timelines, and that these provisions apply to Mercu and Jetson equally, irrespective of whether they are represented by a firm of solicitors or otherwise. [61] The Adjudicator’s letters as quoted above show that he had given due consideration to the parties’ positions on the issue of the late submission of the Adjudication Response and he was inclined to reject Jetson’s application for EoT and later, its appeal, with justification. The rejection of the application for EoT and the appeal and the refusal to exercise the power under s 25(p) CIPAA by the Adjudicator do not amount to a breach of the rules of natural justice (see Citiwall Safety Glass Pte Ltd v Mansource Interior Pte Ltd [2015] SGCA 42, Permintex JSK Resources Sdn Bhd v Follitile (M) Sdn Bhd and another case S/N TT/Dfe17Uk26aIHq8h/gxw [2017] MLJU 377, AMT Engineering Service v Ah Design Communication Sdn Bhd and another appeal [2018] MLJU 1860, Encorp Iskandar Development Sdn Bhd v Konsortium Ipmines Merz Sdn Bhd and another [2020] MLJU 1503, MKP Builders Sdn Bhd v PC Geotechnic Sdn Bhd and another case [2020] MLJU 1927, MRCB Engineering Sdn Bhd v Triumphant Gallery Sdn Bhd and another case [2022] MLJU 770 and Yuen Keong Construction & Renovation Sdn Bhd v Trendzone Engineering & Construction (Malaysia) Sdn Bhd and another case [2023] MLJU 1257). [62] The refusal to extend time for the Adjudication Response to be served involves the discretion of the Adjudicator and the exercise of such discretion is rarely questioned by the courts unless it is perverse [see MRCB Engineering (supra)]. In my considered view, there is nothing perverse surrounding the exercise of the Adjudicator’s discretion in the adjudication proceedings. [63] Therefore, I concluded that there is no merit in the 2nd Ground to set aside the AD and to the Setting Aside Application as a whole, which must accordingly be dismissed. [64] As conveyed to the learned counsel for Jetson at the end of the hearing, in the circumstances of this case, Jetson’s recourse is to refer the dispute to arbitration as there is an arbitration agreement between the parties. The AD is only of interim finality whereas a final determination of the issues can be made at the end of an arbitration proceeding. S/N TT/Dfe17Uk26aIHq8h/gxw [65] Before proceeding to the Enforcement Application, it must be mentioned that Jetson attempted to raise its defences or responses to Mercu’s claims through the Setting Aside Application. It is a fundamental principle that Jetson must prove the grounds in support of its application within the four corners of s 15 CIPAA as the High Court does not sit in an appellate capacity to review the findings of the Adjudicator or the merits of the case before the Adjudicator. II. The Enforcement Application [66] Mercu’s application was made pursuant to s 28 CIPAA which reads as follows: “Enforcement of adjudication decision as judgment

28.

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. S/N TT/Dfe17Uk26aIHq8h/gxw

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.”. [67] The test on whether an adjudication decision should be enforced or otherwise was elucidated in Inai Kiara Sdn Bhd v Puteri Nusantara Sdn Bhd [2019] 2 CLJ 229 and applying the same to the instant application, –

the AD has been rendered in favour of Mercu;

there has been non-payment of the Adjudicated Sum by Jetson to date; and

there is no prohibition to the grant of the order that is sought in that the AD has not been set aside or stayed, there is no written settlement of the subject matter between the parties or there is no final decision rendered on the Payment Claim whether made in arbitration or by a court of law. [68] As I have decided to dismiss the Setting Aside Application and Mercu has fulfilled the criteria as set out in Inai Kiara (supra) as applied in a long line of cases by the courts of first instance and at the appellate level, it is inevitable that the Enforcement Application must be allowed. S/N TT/Dfe17Uk26aIHq8h/gxw Conclusion [69] Premised on the aforesaid reasons, the Setting Aside Application was dismissed with costs of RM6,000.00 and the Enforcement Application was allowed with costs of RM3,000.00, both subject to allocator. Dated: 23 January 2025 (ALIZA SULAIMAN) Judge High Court in Malaya Kuala Lumpur Counsels/ Solicitors: For the Applicant in O.S. No. 195 and for the Defendant in O.S. No. 201: Jagesh Mehalingam (Syairah Zamri with him) Messrs. Gregory Yusran & Associate Advocates & Solicitors No. 2-3A, Jalan PJU 5/9 Kota Damansara 47810 Petaling Jaya Selangor S/N TT/Dfe17Uk26aIHq8h/gxw For the Plaintiff in O.S. No. 201 and for the Respondent in O.S. 195: Felicia Lai Wai Kim Messrs. Harold & Lam Partnership Advocates & Solicitors Suite 32-5, Tingkat 32 Oval Damansara No. 685, Jalan Damansara 60000 Kuala Lumpur