Otis Elevator Company (M) Sdn. Bhd. v Desaru Convention Centre Sdn. Bhd. (BA-24C-29-04/2022)

This judgment concerns the following three originating summonses (3

OS no. BA-24C-29-04/2022 (1st OS) has been filed by the plaintiff company (Plaintiff) against Desaru Convention Centre Sdn. Bhd. [Defendant (1st OS)];

the Plaintiff has instituted OS no. BA-24C-30-04/2022 (2nd OS) against Desaru Estate Sdn. Bhd. [Defendant (2nd OS)]; and

OS no. BA-24C-29-04/2022 (3rd OS) has been commenced by the Plaintiff against Desaru Corniche Hotel Sdn. Bhd. [Defendant (3rd B. Background B(1). 1st OS

The Defendant (1st OS) had appointed Malaysian Resources Corporation Bhd. (MRCB) as the main contractor for the construction of “Desaru Convention Centre” [Project (1st OS)].

By way of a “Letter of Acceptance” (LA) dated 26.10.2015, MRCB appointed the Plaintiff to perform certain construction work in the Project (1st OS) [Works (1st OS)]. S/N pij6Q34d8kCMQkfrzZ8Ybg

The Plaintiff had performed the Works (1st OS) but had not been paid by MRCB for the Works (1st OS) [Unpaid Works (1st OS)]. Hence, the Plaintiff claimed from MRCB for the Unpaid Works (1st OS) under the Construction Industry Payment and Adjudication Act 2012 (CIPAA). I shall refer to the adjudication proceedings commenced by the Plaintiff against MRCB regarding the Unpaid Works (1st OS) as “Adjudication Proceedings (1st OS)”.

In the Adjudication Proceedings (1st OS) -

on 14.12.2021, the adjudicator, Mr. Wong Kee Them [Adjudicator (1st OS)], had adjudicated [Adjudication Decision (1st OS)] that, among others, MRCB shall pay to the Plaintiff a sum of RM334,998.21 [Adjudicated Amount (1st OS)] with interest and costs as stipulated in the Adjudication Decision (1st OS); and

upon an application by the Plaintiff’s solicitors, due to a typographical error by the Adjudicator (1st OS), on 11.4.2022, the Adjudicated Amount (1st OS) was amended by the Adjudicator (1st OS) to RM334,988.21 [Amended Adjudicated Amount (1st OS)].

The Plaintiff’s solicitors had sent a demand dated 21.12.2021 [Plaintiff’s Demand-MRCB (1st OS, 21.12.2021)] to MRCB’s representative in the Adjudication Proceedings (1st OS), Contract Solutions-I (CS), for MRCB to pay the Adjudicated Amount (1st OS) with interest and costs as stated in the Adjudication Decision (1st OS). S/N pij6Q34d8kCMQkfrzZ8Ybg

MRCB’s solicitors, Messrs Selva Mookiah Associates, replied to the Plaintiff’s Demand-MRCB (1st

21.

12.2021) in a letter dated 19.1.2022 [MRCB’s Letter (1st OS, 19.1.2022)]. According to MRCB’s Letter (1st OS, 19.1.2022), among others -

the Defendant (1st OS) owed money to MRCB under the main contract between the Defendant (1st OS) and MRCB with regard to the Project (1st OS) {Main Contract [Defendant (1st OS)-MRCB]}; and

MRCB could not pay the Adjudicated Amount (1st OS) to the Plaintiff because MRCB had not received payment from the Defendant (1st OS) pursuant to the Main Contract [Defendant (1st OS)-MRCB]. Attached to MRCB’s Letter (1st OS, 19.1.2022) was MRCB’s letter dated 8.4.2021 to the Defendant (1st OS) which enclosed MRCB’s “Final Account” for the Project (1st OS) [MRCB’s Final Account (1st Project)]. MRCB’s Final Account (1st Project) stated that there was an amount of RM33,799,638.10 due from the Defendant (1st OS) to MRCB for works performed by MRCB under the Main Contract [Defendant (1st OS)- MRCB].

By way of a letter dated 24.1.2022, the Plaintiff’s solicitors demanded for the Defendant (1st OS) [as MRCB’s “principal” for the Project (1st OS) as understood in s 4 CIPAA] to pay to the Plaintiff the Adjudicated Amount (1st OS) with interest and costs as stipulated in the Adjudication Decision (1st OS) {Plaintiff’s Demand [Defendant (1st OS), 24.1.2022]}. The S/N pij6Q34d8kCMQkfrzZ8Ybg Plaintiff’s Demand [Defendant (1st OS), 24.1.2022] was made pursuant to s 30 CIPAA.

The solicitors for the Defendant (1st OS) replied to the Plaintiff’s Demand [Defendant (1st OS), 24.1.2022] in a letter dated 7.2.2022 {Letter [Defendant (1st OS), 7.2.2022]}. According to the Letter [Defendant (1st OS), 7.2.2022], among others -

the Defendant (1st OS) alleged that no sum was due and/or payable from the Defendant (1st OS) to MRCB under the Main Contract [Defendant (1st OS)-MRCB];

MRCB was liable to the Defendant (1st OS) for “substantial damages” due to MRCB’s various breaches of the Main Contract [Defendant (1st OS)-MRCB] {Claim [Defendant (1st OS)-MRCB]}. Even if there was any sum due from the Defendant (1st OS) to MRCB under the Main Contract [Defendant (1st OS)-MRCB], such a sum was “extinguished” by the Claim [Defendant (1st OS)-MRCB]; and

the Claim [Defendant (1st OS)-MRCB] is being arbitrated [Arbitration (Defendants/MRCB)] and the Defendant (1st OS) has claimed substantial damages from MRCB in the Arbitration (Defendants/MRCB).

By way of a letter dated 11.2.2022 from the Plaintiff’s solicitors to MRCB’s solicitors [Plaintiff’s Demand-MRCB (1st OS, 11.2.2022)], among others - S/N pij6Q34d8kCMQkfrzZ8Ybg

the Plaintiff’s solicitors informed MRCB regarding the stand taken by the Defendant (1st OS) in the Letter [Defendant (1st OS), 7.2.2022]. A copy of the Letter [Defendant (1st OS), 7.2.2022] was enclosed in the Plaintiff’s Demand-MRCB (1st OS, 11.2.2022); and

the Plaintiff sought a response from MRCB regarding the position taken by the Defendant (1st OS) {no sum of money was due from the Defendant (1st OS) to MRCB under the Main Contract [Defendant (1st OS)-MRCB]} which was contrary to MRCB’s stand, ie., MRCB could not pay the Adjudicated Amount (1st OS) to the Plaintiff because MRCB had not received payment from the Defendant (1st OS) pursuant to the Main Contract [Defendant (1st OS)-MRCB].

In reply to the Plaintiff’s Demand-MRCB (1st OS, 11.2.2022), MRCB’s solicitors informed the Plaintiff in a letter dated 8.3.2022 [MRCB’s Letter (1st OS, 8.3.2022)] as follows, among others:

MRCB maintained its stand that the Defendant (1st OS) owed money to MRCB under the Main Contract [Defendant (1st OS)-MRCB]; and

MRCB had obtained two adjudication decisions against the Defendant (1st

With regard to the Dispute Resolution Agreement (Defendants-MRCB) -

the Dispute Resolution Agreement (Defendants-MRCB) had been executed by, among others -

the Defendant (1st OS);

the Defendant (2nd OS);

the Defendant (3rd OS); and

MRCB; and

all the parties to the Dispute Resolution Agreement (Defendants-MRCB) agreed to resolve all their disputes by way of Arbitration (Defendants/MRCB).

In support of the position taken by the Defendant (1st OS) that no sum of money was due from the Defendant (1st OS) to MRCB under the Main Contract [Defendant (1st OS)-MRCB], the Defendant (1st OS) exhibited a letter dated 26.8.2021 [KPK’s Letter (26.8.2021)] from KPK Quantity Surveyors (Semenanjung) Sdn. Bhd. (KPK). KPK had been appointed by the Defendant (1st OS) as quantity surveyors (QS) for the Project (1st OS). Attached to KPK’s Letter (26.8.2021) was a “Final Account” for the Project (1st OS) which had been prepared by KPK for the Defendant (1st {Final Account [Defendant (1st OS)]}. The Final Account S/N pij6Q34d8kCMQkfrzZ8Ybg [Defendant (1st OS)] stated that, among others, MRCB owed to the Defendant (1st OS) an amount of RM23,634,922.82 as “Liquidated and Ascertained Damages” (LAD) under the Main Contract [Defendant (1st OS)-MRCB].

By way of a letter dated 18.4.2022, the Plaintiff’s solicitors demanded for the Defendant (1st OS) to pay to the Plaintiff the Amended Adjudicated Amount (1st OS) with interest and costs as stipulated in the Adjudication Decision (1st OS) {Plaintiff’s Demand [Defendant (1st OS), 18.4.2022]} B(2). 2nd OS

MRCB had been appointed by the Defendant (2nd OS) as the main contractor for the construction of “Desa Desaru Resort” [Project (2nd

By way of a LA dated 26.10.2015, MRCB appointed the Plaintiff to perform certain construction work in the Project (2nd OS) [Works (2nd

The Plaintiff alleged that Works (2nd OS) had been completed by the Plaintiff but MRCB had not paid for the Works (2nd OS) [Unpaid Works (2nd OS)]. As such, adjudication proceedings had been commenced by the Plaintiff against MRCB for payment with regard to the Unpaid Works (2nd OS) [Adjudication Proceedings (2nd OS)].

On 10.2.2022, in the Adjudication Proceedings (2nd OS), the adjudicator, Encik Mohd. Suhaimi Bin Md. Noor, had adjudicated [Adjudication Decision (2nd OS)] that, among others, MRCB shall pay to the Plaintiff a S/N pij6Q34d8kCMQkfrzZ8Ybg sum of RM687,936.93 [Adjudicated Amount (2nd OS)] with interest and costs as stipulated in the Adjudication Decision (2nd OS).

The Plaintiff’s solicitors sent a demand dated 21.12.2021 [Plaintiff’s Demand-MRCB (2nd OS, 21.12.2021)] to CS for MRCB to pay the Adjudicated Amount (2nd OS) with interest and costs as stated in the Adjudication Decision (2nd OS).

MRCB’s solicitors replied to the Plaintiff’s Demand-MRCB (2nd OS,

11.2.2022) in a letter dated 19.1.2022 [MRCB’s Letter (2nd OS,

19.1.2022)]. According to MRCB’s Letter (2nd OS, 19.1.2022), among others -

the Defendant (2nd OS) owed money to MRCB under the main contract between the Defendant (2nd OS) and MRCB with regard to the Project (2nd OS) {Main Contract [Defendant (2nd OS)-MRCB]}; and

MRCB could not pay the Adjudicated Amount (2nd OS) to the Plaintiff because MRCB had not received payment from the Defendant (2nd OS) pursuant to the Main Contract [Defendant (2nd OS)-MRCB]. Attached to MRCB’s Letter (2nd OS, 19.1.2022) was MRCB’s letter dated 8.4.2021 to the Defendant (2nd OS) which enclosed MRCB’s “Final Account” for the Project (2nd OS) [MRCB’s Final Account (2nd Project)].

By way of a letter dated 24.1.2022 to the Defendant (2nd OS), the Plaintiff’s solicitors demanded for payment of, among others, the S/N pij6Q34d8kCMQkfrzZ8Ybg Adjudicated Amount (2nd OS) by the Defendant (2nd OS) {Plaintiff’s Demand [Defendant (2nd OS), 24.1.2022]}.

The Plaintiff’s Demand [Defendant (1st OS), 24.1.2022] was denied by the solicitors for the Defendant (2nd OS) in a letter dated 7.2.2022 {Letter [Defendant (2nd OS), 7.2.2022]}. The Letter [Defendant (2nd OS),

7.2.2022] stated as follows, among others:

no sum was due and/or payable from the Defendant (2nd OS) to MRCB under the Main Contract [Defendant (2nd OS)-MRCB];

MRCB was liable for substantial damages to the Defendant (2nd OS) due to MRCB’s various breaches of the Main Contract [Defendant (2nd OS)-MRCB] {Claim [Defendant (2nd OS)-MRCB]}. Even if there was any sum due from the Defendant (2nd OS) to MRCB under the Main Contract [Defendant (2nd OS)-MRCB], this sum would be “extinguished” by the Claim [Defendant (2nd OS)-MRCB]; and

the Claim [Defendant (2nd OS)-MRCB] is being arbitrated in the Arbitration (Defendants/MRCB)] and the Defendant (2nd OS) has claimed substantial damages from MRCB in the Arbitration [Defendants/MRCB].

In view of the contents of the Letter [Defendant (2nd OS), 7.2.2022], the Plaintiff’s solicitors sent a letter dated 11.2.2022 to MRCB’s solicitors [Plaintiff’s Demand-MRCB (2nd OS, 11.2.2022)] which, among others -

informed MRCB regarding the stand taken by the Defendant (2nd OS) in the Letter [Defendant (2nd OS), 7.2.2022]. A copy of the Letter S/N pij6Q34d8kCMQkfrzZ8Ybg [Defendant (2nd OS), 7.2.2022] was enclosed in the Plaintiff’s Demand-MRCB (2nd OS, 11.2.2022); and

sought a response from MRCB regarding the stand taken by the Defendant (2nd OS) {no sum of money was due from the Defendant (2nd OS) to MRCB under the Main Contract [Defendant (2nd OS)- MRCB]} which was contrary to MRCB’s position, ie., MRCB could not pay the Adjudicated Amount (2nd OS) to the Plaintiff because MRCB had not received payment from the Defendant (2nd OS)

MRCB’s solicitors responded to the Plaintiff’s Demand-MRCB (2nd OS,

11.2.2022) in a letter dated 8.3.2022 [MRCB’s Letter (2nd OS, 8.3.2022)]. According to MRCB’s Letter (2nd OS, 8.3.2022), among others -

MRCB reiterated that the Defendant (2nd OS) owed money to MRCB under the Main Contract [Defendant (2nd OS)-MRCB]; and

all legal proceedings and enforcement of adjudication decisions filed by MRCB against the Defendant (2nd OS) had been stayed or withdrawn due to the Dispute Resolution Agreement (Defendants-MRCB) [which had referred all disputes between the Defendant (2nd OS) and MRCB to Arbitration (Defendants/MRCB)].

KPK had also been appointed by the Defendant (2nd OS) to be the QS for the Project (2nd OS).

The Defendant (2nd OS) relied on KPK’s letter dated 17.9.2021 [KPK’s Letter (17.9.2021)] which enclosed a “Final Account” for the Project (2nd S/N pij6Q34d8kCMQkfrzZ8Ybg {Final Account [Defendant (2nd OS)]}. The Final Account [Defendant (2nd OS)] stated that, among others, pursuant to the Main Contract [Defendant (2nd OS)-MRCB], MRCB owed LAD to the Defendant (2nd OS) in a sum of RM20,363,756.23. B(3). 3rd OS

The Defendant (3rd OS) had appointed MRCB as the main contractor for the construction of “Westin Desaru Resort” [Project (3rd OS)].

By way of a LA dated 26.10.2015, MRCB appointed the Plaintiff to perform certain construction work in the Project (3rd OS) [Works (3rd OS)].

The Plaintiff claimed that MRCB had not paid for Works (3rd OS) which had been completed by the Plaintiff [Unpaid Works (3rd Consequently, the Plaintiff instituted adjudication proceedings against MRCB for payment of the Unpaid Works (3rd OS) [Adjudication Proceedings (3rd OS)].

In the Adjudication Proceedings (3rd OS), on 10.2.2022, the adjudicator, Mr. Nadesh Ganabaskaran, had adjudicated [Adjudication Decision (3rd OS)] that, among others, MRCB shall pay to the Plaintiff a sum of RM1,189,663.20 [Adjudicated Amount (3rd OS)] with interest and costs as stipulated in the Adjudication Decision (3rd OS).

The Plaintiff’s solicitors sent a demand dated 11.2.2022 [Plaintiff’s Demand-MRCB (3rd OS, 11.2.2022)] to CS for MRCB to pay the Adjudicated Amount (3rd OS) with interest and costs as stated in the Adjudication Decision (3rd OS). S/N pij6Q34d8kCMQkfrzZ8Ybg

In reply to the Plaintiff’s Demand-MRCB (3rd OS, 11.2.2022), in a letter dated 23.2.2022 [MRCB’s Letter (3rd OS, 23.2.2022)], MRCB’s solicitors stated, among others:

the Defendant (3rd OS) owed money to MRCB under the main contract between the Defendant (3rd OS) and MRCB with regard to the Project (3rd OS) {Main Contract [Defendant (3rd OS)-MRCB]};

MRCB could not pay the Adjudicated Amount (3rd OS) to the Plaintiff because MRCB had not received payment from the Defendant (3rd OS) pursuant to the Main Contract [Defendant (3rd OS)-MRCB]; and

all legal proceedings and enforcement of adjudication decisions filed by MRCB against the Defendant (3rd OS) had been stayed or withdrawn due to the Dispute Resolution Agreement (Defendants-MRCB) [which had referred all disputes between the Defendant (3rd OS) and MRCB to Arbitration (Defendants/MRCB)]. Attached to MRCB’s Letter (3rd OS, 19.1.2022) was MRCB’s letter dated 8.4.2021 to the Defendant (3rd OS) which enclosed MRCB’s “Final Account” for the Project (3rd OS) [MRCB’s Final Account (3rd Project)].

The Plaintiff’s solicitors sent a letter dated 3.3.2022 to the Defendant (3rd OS) which demanded for payment of, among others, the Adjudicated Amount (3rd OS) by the Defendant (3rd OS) {Plaintiff’s Demand [Defendant (3rd OS), 3.3.2022]}. S/N pij6Q34d8kCMQkfrzZ8Ybg

In response to the Plaintiff’s Demand [Defendant (3rd OS), 3.3.2022], the solicitors for the Defendant (3rd OS) sent a letter dated 17.3.2022 {Letter [Defendant (3rd

17.3.2022]}. The Letter [Defendant (3rd OS),17.3.2022] stated as follows, among others:

no amount of money was due and/or payable from the Defendant (3rd OS) to MRCB under the Main Contract [Defendant (3rd OS)- MRCB];

MRCB was liable for substantial damages to the Defendant (3rd OS) due to MRCB’s various breaches of the Main Contract [Defendant (3rd OS)-MRCB] {Claim [Defendant (3rd OS)-MRCB]}. Even if there was any sum due from the Defendant (3rd OS) to MRCB under the Main Contract [Defendant (3rd OS)-MRCB], this sum would be “extinguished” by the Claim [Defendant (3rd OS)-MRCB]; and

the Claim [Defendant (3rd OS)-MRCB] is being arbitrated in the Arbitration (Defendants-MRCB)] and the Defendant (3rd OS) has claimed substantial damages from MRCB in the Arbitration [Defendants/MRCB].

The Plaintiff’s solicitors sent a letter dated 22.3.2022 to MRCB’s solicitors [Plaintiff’s Demand-MRCB (3rd OS, 22.3.2022)]. According to the Plaintiff’s Demand-MRCB (3rd OS, 22.3.2022), among others -

the Plaintiff’s solicitors informed MRCB regarding the contents of the Letter [Defendant (3rd OS), 17.3.2022]. A copy of the Letter S/N pij6Q34d8kCMQkfrzZ8Ybg [Defendant (3rd OS), 17.3.2022] was enclosed in the Plaintiff’s Demand-MRCB (3rd OS, 22.3.2022); and

the Plaintiff’s solicitors requested for a response from MRCB regarding the stand taken by the Defendant (3rd OS) {no sum of money was due from the Defendant (3rd OS) to MRCB under the Main Contract [Defendant (3rd OS)-MRCB]} which was contrary to MRCB’s position, ie., MRCB could not pay the Adjudicated Amount (3rd OS) to the Plaintiff because MRCB had not received payment from the Defendant (3rd OS) pursuant to the Main Contract [Defendant (3rd OS)-MRCB].

MRCB’s solicitors responded to the Plaintiff’s Demand-MRCB (3rd OS,

22.3.2022) in a letter dated 13.4.2022 [MRCB’s Letter (3rd OS,

13.4.2022)]. MRCB’s Letter (3rd OS, 13.4.2022), among others, affirmed that the Defendant (3rd OS) owed money to MRCB under the Main Contract [Defendant (3rd OS)-MRCB].

Reliance had been placed by the Defendant (3rd OS) on KPK’s letter dated 4.10.2021 [KPK’s Letter (4.10.2021)] which enclosed a “Final Account” for the Project (3rd OS) {Final Account [Defendant (3rd OS)]}. According to the Final Account [Defendant (3rd OS)], among others, MRCB owed an amount of RM50,063,519.90 as LAD to the Defendant (3rd OS) under the Main Contract [Defendant (3rd OS)-MRCB]. B(4). Joint hearing of 3 OS S/N pij6Q34d8kCMQkfrzZ8Ybg

As these 3 OS concern common questions of law and fact, all the parties in the 3 OS consent for the 3 OS to be heard and decided together by this court.

Abbreviations For the sake of brevity, the following abbreviations are used: NO. REFERENCES

Defendant (1st Defendant (2nd and Defendant (3rd OS) 3 Defendants (3 OS)

Main Contract [Defendant (1st OS)-MRCB], Main Contract [Defendant (2nd OS)-MRCB] Main Contract [Defendant (3rd OS)-MRCB] 3 Main Contracts (3

Project (1st OS), Project (2nd OS) and Project (3rd OS) 3 Projects (3 Defendants/MRCB) S/N pij6Q34d8kCMQkfrzZ8Ybg

Adjudication

(1st Adjudication Decision (2nd and Adjudication Decision (3rd OS) 3 Adjudication Decisions (Plaintiff/MRCB)

Amended Adjudicated Amount (1st OS), Adjudicated Amount (2nd and Adjudicated Amount (3rd OS) 3 Adjudicated Amounts (Plaintiff/MRCB)

Plaintiff’s Demand [Defendant (1st

18.4.2022], Plaintiff’s Demand [Defendant (2nd

24.1.2022] and Plaintiff’s Demand [Defendant (3rd OS), 3.3.2022] 3 Demands (Plaintiff/3 Defendants)

Dates of receipt of 3 Demands (Plaintiff/3 Defendants) by 3 Defendants (3 OS) 3 Receipt Dates S/N pij6Q34d8kCMQkfrzZ8Ybg

Claim [Defendant (1st OS)- MRCB], Claim [Defendant (2nd OS)-MRCB] and Claim [Defendant (1st OS)-MRCB] 3 Claims (3 Defendants/MRCB)

LAD claims by 3 Defendants (3 OS) against MRCB 3 LAD Claims (3 Defendants/MRCB)

Documents regarding 3 Projects (3 Defendants/MRCB) Project Documents (3 Defendants/MRCB)

KPK’s Letter (26.8.2021), KPK’s Letter (17.9.2021) and KPK’s Letter (4.10.2021) 3 KPK’s Letters 12. Final Account [Defendant (1st OS)], Final Account [Defendant (2nd OS)] and Final Account [Defendant (3rd OS)] 3 Final Accounts (3 Defendants/MRCB) S/N pij6Q34d8kCMQkfrzZ8Ybg 19 13. MRCB’s Final Account (1st Project), MRCB’s Final Account (2nd Project) and MRCB’s Final Account (3rd Project) MRCB’s 3 Final Accounts (3 Projects)

Issues The following questions arise in these 3 OS:

in respect of a chain of construction contracts, namely -

an agreement [Contract (Employer/Main Contractor)] between a project’s employer (Employer) and the main contractor (Main Contractor); and

a contract [Contract (Main Contractor/Sub-Contractor)] between the Main Contractor and sub-contractor (Sub-Contractor) whether an Employer may rely on a “Dispute Resolution Agreement” between the Employer and Main Contractor [Dispute Resolution Agreement (Employer/Main Contractor)] (which stays all disputes, legal proceedings and proceedings under CIPAA between the Employer and Main Contractor pending the resolution of their disputes by way of an arbitration or litigation) to resist an application S/N pij6Q34d8kCMQkfrzZ8Ybg by a Sub-Contractor under s 30 CIPAA against the Employer to enforce an adjudication decision obtained by the Sub-Contractor against the Main Contractor (Sub-Contractor’s Section 30 Application);

does s 13(b) CIPAA provide a defence for an Employer to resist a Sub-Contractor’s Section 30 Application?; and

whether there was any sum “due or payable” from the 3 Defendants (3 OS) to MRCB under the 3 Main Contracts (3 Defendants/MRCB) on the 3 Receipt Dates. In this regard -

can the 3 Defendants (3 OS) refuse to disclose Project Documents (3 Defendants/MRCB) in these 3 OS by relying on s 41A(1) of the Arbitration Act 2005 (AA)?;

whether the 3 Defendants (3 OS) can discharge the evidential burden to prove that there was no sum of money “due or payable” from the 3 Defendants (3 OS) to MRCB pursuant to the 3 Main Contracts (3 Defendants/MRCB) on the 3 Receipt Dates (Evidential Burden); and

can the court draw an adverse inference under s 114(g) of the Evidence Act 1950 (EA) against the 3 Defendants (3 OS) for suppression of Project Documents (3 Defendants/MRCB)? E. Effect of s 30 CIPAA S/N pij6Q34d8kCMQkfrzZ8Ybg

I reproduce below the definition of “principal” in s 4 CIPAA, ss 13(b) and 30 CIPAA: “ “principal” means a party who has contracted with and is liable to make payment to another party where that other party has in turn contracted with and is liable to make payment to a further person in a chain of construction contracts; s 13 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. s 30 Direct payment from principal

If a party against whom an adjudication decision was made fails to make payment of the adjudicated amount, the party who obtained the adjudication decision in his favour may make a written request for payment of the adjudicated amount direct from the principal of the party against whom the adjudication decision is made.

Upon receipt of the written request under subsection (1), the principal shall serve a notice in writing on the party against whom the adjudication decision was made to show proof of payment and to state that direct payment would be made after the expiry of ten working days of the service of the notice. S/N pij6Q34d8kCMQkfrzZ8Ybg

In the absence of proof of payment requested under subsection (2), the principal shall pay the adjudicated amount to the party who obtained the adjudication decision in his favour.

The principal may recover the amount paid under subsection (3) as a debt or set off the same from any money due or payable by the principal to the party against whom the adjudication decision was made.

This section shall only be invoked if money is due or payable by the principal to the party against whom the adjudication decision was made at the time of the receipt of the request under subsection (1).” (emphasis added).

It is not disputed that with regard to the 3 Projects (3 Defendants/MRCB), the 3 Defendants (3 OS) are the “principal” of MRCB (as defined in s 4

It is decided in Cabnet Systems (M) Sdn Bhd v Dekad Kaliber Sdn Bhd & Anor [2020] 3 MLRH 83, at [29], that for the court to allow a Sub-Contractor’s Section 30 Application, the Sub-Contractor has the legal burden under s 30 CIPAA to prove on a balance of probabilities the following four conditions (4 Conditions) against the Employer of the Main Contractor (against whom the Sub-Contractor has obtained an adjudication decision):

the Main Contractor has failed to pay, among others, the adjudicated amount to the Sub-Contractor (1st Condition); S/N pij6Q34d8kCMQkfrzZ8Ybg

the Sub-Contractor has made a demand for the Employer [Sub-Contractor’s Demand (Employer)] to make direct payment of, among others, the adjudicated amount to the Sub-Contractor (2nd Condition);

there was a sum of money “due or payable” from the Employer to the Main Contractor under the Contract (Employer/Main Contractor) on the date of the Employer’s receipt of the Sub-Contractor’s Demand (Employer) (3rd Condition); and

the Employer did not comply with the the Sub-Contractor’s Demand (Employer) by not paying directly, among others, the adjudicated amount to the Sub-Contractor (4th Condition).

In Chong Lek Engineering Works Sdn Bhd v PFCE Integrated Plant and Project Sdn Bhd and another appeal [2021] 2 AMR 601, at [20], the following approach has been applied in respect of the 4 Conditions [Approach (Chong Lek Engineering Works)]: “[20] Regarding the application of the 4 Conditions, I am of the following view:

X (who has obtained an adjudication decision against Y) has the following burdens of proof in a suit against Z under s 30 CIPAA -

X has the legal burden to prove against Z (Y’s principal) on a balance of probabilities the 4 Conditions under s 101(1) and (2) of the Evidence Act 1950 (EA) - please refer to Lilies S/N pij6Q34d8kCMQkfrzZ8Ybg Suraya Bt Abdul Latib & Ors v Khairul Bin Sabri & Others [2020] 4 AMR 365, at [17]; and

X also has the initial evidential burden pursuant to s 102 EA to prove the 4 Conditions against Z - Lilies Suraya;

regarding the 3rd Condition -

if X proves the first, second and fourth conditions (“1st Condition”, “2nd Condition” and “4th Condition”) as explained in Cabnet Systems, the evidential burden (not the legal burden) concerning the 3rd Condition shifts from X to Z. This is due to the application of s 106 EA which provides as follows - “When any fact is especially within the knowledge of any person, the burden of proving that fact is upon him.” (emphasis added). Section 106 EA applies in respect of the 3rd Condition because firstly, X does not have any access to the contract between Y and Z. Nor does X have any access to the documentary evidence regarding the dealings between Y and Z. Whether any sum of money is “due” or “payable” from Z to Y at the time of Z’s receipt of X’s Request, is “especially within the knowledge” of Z. Accordingly, if Z denies that no amount of money is “due” or “payable” from Z to Y at the time of Z’s receipt of X’ Request, by virtue of s 106 EA, Z has the evidential burden to “prove” such a denial. Section 3 EA defines “proved” as follows - S/N pij6Q34d8kCMQkfrzZ8Ybg “ “proved”: a fact is said to be “proved” when, after considering the matters before it, the court either believes it to exist or considers its existence so probable that a prudent man ought, under the circumstances of the particular case, to act upon the supposition that it exists;” (emphasis added). In PCOM Pacific, at [26], Lim Chong Fong J has decided that Z has failed to discharge the evidential onus to prove that no sum of money was due and owing by Z to Y at the material time; and

the application of s 106 EA to the 3rd Condition is in consonance with the object of CIPAA [Object (CIPAA)]. The Object (CIPAA) is to ensure that parties who perform construction work are not deprived of cash flow (the life-blood of the construction industry) - please see the Long Title to CIPAA (CIPAA is to “facilitate regular and timely payment, to provide a mechanism for speedy dispute resolution through adjudication, to provide for remedies for the recovery of payment in the construction industry”) and the judgment of the Federal Court delivered by Mohd. Zawawi Salleh FCJ in Martego Sdn Bhd v Arkitek Meor & Chew Sdn Bhd and another appeal [2019] 5 AMR 516, at [51]; and

in view of the evidential burden on Z regarding the 3rd Condition, if Z suppresses relevant documents with respect to the 3rd Condition in X’s suit against Z under s 30 CIPAA, the court may exercise its discretion to draw an adverse inference under s S/N pij6Q34d8kCMQkfrzZ8Ybg 26 114(g) EA against Z - please see the judgment in the Supreme Court delivered by Mohd. Azmi SCJ in Munusamy v Public Prosecutor [1987] 1 MLJ 492, at 494. I reproduce below s 114(g) EA - “Court may presume existence of certain fact 114. The court may presume the existence of any fact which it thinks likely to have happened, regard being had to the common course of natural events, human conduct, and public and private business, in their relation to the facts of the particular case. ILLUSTRATIONS The court may presume - …

that evidence which could be and is not produced would if produced be unfavourable to the person who withholds it;” (emphasis added). An adverse inference under s 114(g) EA was drawn by Lim Chong Fong J against Z in HSL Ground Engineering, at [37].” (emphasis added). F. Can Employer rely on Dispute Resolution Agreement (Employer/Main Contractor) to resist Sub-Contractor’s Section 30 Application? S/N pij6Q34d8kCMQkfrzZ8Ybg

I am firmly of the view that an Employer cannot rely on a Dispute Resolution Agreement (Employer/Main Contractor) to oppose a Sub-Contractor’s Section 30 Application. My reasons are as follows:

the 4 Conditions do not concern, let alone allude to, the Dispute Resolution Agreement (Employer/Main Contractor);

the Sub-Contractor is not a party to the Dispute Resolution Agreement (Employer/Main Contractor). By virtue of the doctrine of privity of contract, the Sub-Contractor is not bound in any manner by the Dispute Resolution Agreement (Employer/Main Contractor). The following three decisions of our apex courts have applied the doctrine of privity of contract in this country -

the Privy Council’s judgment delivered by Lord Wilberforce in an appeal from Malaysia, Kepong Prospecting Ltd & Ors v Schmidt [1968] 1 MLJ 170, at 174;

the judgment of Gopal Sri Ram JCA (as he then was) in the Federal Court case of Badiaddin bin Mohd Mahidin & Anor v Arab Malaysian Finance Bhd [1998] 1 MLJ 393, at 431; and

the Federal Court’s judgment delivered by Ahmad Fairuz CJ in Suwiri Sdn Bhd v Government of the State of Sabah [2008] 1 MLJ 743, at 751-752; and

an Employer and Main Contractor may enter into a sham Dispute Resolution Agreement (Employer/Main Contractor) to defeat an adjudication decision obtained by a Sub-Contractor against the Main S/N pij6Q34d8kCMQkfrzZ8Ybg Contractor [Adjudication Decision (Sub-Contractor/Main Contractor)]. In this manner, the object of CIPAA [to ensure that parties who have performed construction work are not deprived of cash flow (the life-blood of the construction industry)] and in particular, the purpose of s 30 CIPAA, may not be attained;

In view of the reasons stated in the above paragraph 45, the 3 Defendants (3 OS) cannot rely on the Dispute Resolution Agreement (Defendants-MRCB) to oppose these 3 OS. G. Whether Employer can invoke s 13(b) CIPAA as a defence against Sub-Contractor’s Section 30 Application?

Learned counsel for the 3 Defendants (3 OS) has relied on s 13(b) CIPAA to resist these 3 OS.

I am of the following opinion regarding the application of ss 13(b) and 30

if a Main Contractor has obtained an adjudication decision against the Employer [Adjudication Decision (Main Contractor/ Employer)], according to s 13(b) CIPAA, the Adjudication Decision (Main Contractor/ Employer) cannot be enforced by the Main Contractor against the Employer if there is a written agreement between the Employer and Main Contractor [Settlement Contract (Employer/Main Contractor)] which has settled the subject matter of the Adjudication Decision (Main Contractor/Employer); and S/N pij6Q34d8kCMQkfrzZ8Ybg

if an Adjudication Decision (Sub-Contractor/Main Contractor) has been obtained -

if there is a written contract between a Main Contractor and Sub-Contractor [Settlement Contract (Sub-Contractor/ Main Contractor)] which has settled the subject matter of the Adjudication Decision (Sub-Contractor/Main Contractor) -

by virtue of s 13(b) CIPAA, the Sub-Contractor cannot enforce the Adjudication Decision (Sub-Contractor/Main Contractor) against the Main Contractor; and

(ii) a Sub-Contractor’s Section 30 Application cannot be filed against the Employer because due to the Settlement Contract (Sub-Contractor/Main Contractor), the Main Contractor is not obliged to pay, among others, the adjudicated amount to the Sub-Contractor. In other words, in view of the Settlement Contract (Sub-Contractor/Main Contractor), the 1st Condition cannot be fulfilled; and

if there is no Settlement Contract (Sub-Contractor/Main Contractor), the Settlement Contract (Employer/Main Contractor) cannot bar a Sub-Contractor’s Section 30 Application. This is due to the reasons which have been explained in the above paragraph 45.

In these 3 OS, there is no settlement agreement between the Plaintiff and MRCB to settle the subject matter of the 3 Adjudication Decisions S/N pij6Q34d8kCMQkfrzZ8Ybg (Plaintiff/MRCB). Accordingly, neither s 13(b) CIPAA nor the Dispute Resolution Agreement (Defendants-MRCB) can bar the 3 OS - please refer to the above paragraphs 45 and 48(2).

Fulfilment of 1st, 2nd and 4th Conditions I am satisfied in these 3 OS that the 1st, 2nd and 4th Conditions have been fulfilled by the Plaintiff.

Whether 3 Defendants (3 OS) have discharged Evidential Burden regarding 3rd Condition I adopt the Approach (Chong Lek Engineering Works), namely, upon proof of the 1st, 2nd and 4th Conditions by the Plaintiff, the Evidential Burden regarding the 3rd Condition shifts from the Plaintiff to the 3 Defendants (3 OS). As such, the 3 Defendants (3 OS) have the Evidential Burden to prove that there were no sums of money “due or payable” from the 3 Defendants (3 OS) to MRCB under the 3 Main Contracts (3 Defendants/MRCB) on the 3 Receipt Dates. I(1). Can 3 Defendants (3 OS) refuse to disclose Project Documents (3 Defendants/MRCB) by reason of s 41A(1) AA?

Section 41A AA provides as follows: “s 41A Disclosure of information relating to arbitral proceedings and awards prohibited

Unless otherwise agreed by the parties, no party may publish, disclose or communicate any information relating to - S/N pij6Q34d8kCMQkfrzZ8Ybg

the arbitral proceedings under the arbitration agreement; or

an award made in those arbitral proceedings.

Nothing in subsection (1) shall prevent the publication, disclosure or communication of information referred to in that subsection by a party -

if the publication, disclosure or communication is made -

to protect or pursue a legal right or interest of the party; or

(ii) to enforce or challenge the award referred to in that subsection, in legal proceedings before a court or other judicial authority in or outside Malaysia;

if the publication, disclosure or communication is made to any government body, regulatory body, court or tribunal and the party is obliged by law to make the publication, disclosure or communication; or

if the publication, disclosure or communication is made to a professional or any other adviser of any of the parties.” (emphasis added).

Learned counsel for the 3 Defendants (3 OS) has submitted that by reason of s 41A(1)(a) AA, the 3 Defendants (3 OS) can refuse to disclose Project Documents (3 Defendants/MRCB) as evidence in these 3 OS. I have no hesitation to reject this contention due to the following reasons: S/N pij6Q34d8kCMQkfrzZ8Ybg

s 41A(2)(a)(i) AA allows the 3 Defendants (3 OS) to disclose Project Documents (3 Defendants/MRCB) as evidence in these 3 OS so as to enable the 3 Defendants (3 OS) to “protect or pursue … legal right or interest” of the 3 Defendants (3 OS) in the 3 OS. In this regard, I rely on the following judgment of Darryl Goon Siew Chye J (as he then was) in the High Court case of Dato’ Seri Timor Shah Rafiq v Nautilus Tug & Towage Sdn Bhd [2019] 1 LNS 1452, at [34] to [36] - “[34] Section 41A, and in particular section 41A(2)(a)(i), learned counsel for the Plaintiff maintained, was consonant with the evolved principle at common law. Consent is thus no longer the only exception to the confidentiality imposed. [35] By its opening words, section 41A(2) is in fact drafted in a manner such that the exception is not by way of an exemption from the prohibition imposed by section 41A(1) but rather, that the prohibition imposed does not extend to the circumstances set out under section 41A(2)(a) to (c). [36] Thus, any party to an arbitration may publish, disclose or communicate information relating to that arbitration if it is within the circumstances set out under section 41A(2)(a) to (c), without requiring any prior leave to do so.” (emphasis added);

the reliance on s 41A(1) AA by the 3 Defendants (3 OS) is an afterthought. This is because if the 3 Defendants (3 OS) were S/N pij6Q34d8kCMQkfrzZ8Ybg indeed barred by s 41A(2)(a)(i) AA from providing any Project Document (3 Defendants/MRCB) to the Plaintiff -

the Letter [Defendant (1st OS), 7.2.2022], Letter [Defendant (2nd OS), 7.2.2022] and Letter [Defendant (3rd OS),17.3.2022] would have informed the Plaintiff as such; and

the 3 Defendants (3 OS) would not have provided the Plaintiff with 3 KPK’s Letters and 3 Final Accounts (3 Defendants/MRCB); and

if the Project Documents (3 Defendants/MRCB) have contained confidential information belonging to the 3 Defendants (3 OS) [Alleged Confidential Information (3 Projects)] and if the 3 Defendants (3 OS) genuinely wish to ensure the confidentiality of the Alleged Confidential Information (3 Projects) -

the 3 Defendants (3 OS) could have easily applied for leave of this court to redact the Project Documents (3 Defendants/MRCB) so as to prevent the disclosure of the Alleged Confidential Information (3 Projects) in these 3 OS (Redaction Application). It is decided as follows in Tokai Corporation v DKSH Malaysia Sdn Bhd [2016] MLJU 621, at [25] and [26] - “[25] As stated above, the Plaintiff’s List of Assets (in 2005) (exhibited in the Plaintiff’s 3rd Affidavit), had been redacted by the Plaintiff. Neither the Court nor the S/N pij6Q34d8kCMQkfrzZ8Ybg Defendant knew what had been redacted in the Plaintiff’s List of Assets (in 2005). [26] I am of the following view regarding redaction of documents which are exhibited in affidavits in an OS:

a party should not have unilaterally redacted a document exhibited in an affidavit without leave of the Court under Order 38 rule 2(2) RC. The phrase “unless ... the Court otherwise directs” in Order 38 rule 2(2) RC empowers the Court to allow a party to apply for leave of the Court to redact an exhibit in an affidavit (Redaction Application);

in a Redaction Application, the Court has the power to inspect the unredacted document to ensure that the Redaction Application is made in good faith and for a valid reason, for example, to ensure confidentiality of a party’s information or to avoid publication of offensive, indecent or scandalous material. The party opposing the Redaction Application is not entitled to inspect the unredacted document, unless permitted by the applicant in the Redaction Application; and

if a party has unilaterally redacted a document exhibited in an affidavit without leave of the Court -

the Court is in the dark as to what are the contents of the redaction and is therefore not in a position to decide on the redacted exhibit; and

the opposing party is not in a position to answer regarding the redacted document. Accordingly, no S/N pij6Q34d8kCMQkfrzZ8Ybg adverse inference can be made against the opposing party for his or her failure to reply to a redacted exhibit in an affidavit.” (emphasis added). No Redaction Application had been made by the 3 Defendants (3 OS) in these 3 OS regarding the Alleged Confidential Information (3 Projects); and

as an alternative to a Redaction Application, the 3 Defendants (3 OS) could have applied to the court pursuant to O 92 r 4 RC, the court’s inherent jurisdiction and/or court’s inherent power for a “Protective Order” or “Sealing Order” to protect the confidentiality of the Alleged Confidential Information (3 Projects) [Application (Protective Order)]. In Kingtime International Ltd & Anor v Petrofac E&C Sdn Bhd (No. 2) [2020] 11 MLJ 141, at [18] to [20], I have explained the purpose and procedure for making an Application (Protective Order) as follows - “[18] The Defendant’s learned counsel has contended that the Requested Documents consist of confidential information belonging to, among others Defendant and Petronas (Confidential Information). According to the Defendant’s learned counsel, the Post-Trial Discovery Order compels the Defendant to disclose Confidential Information to the 1st Plaintiff and if the Defendant’s Appeal is subsequently allowed by the Court S/N pij6Q34d8kCMQkfrzZ8Ybg of Appeal, the Defendant will be irreparably prejudiced by the disclosure of the Confidential Information. I am not able to accept such a submission because the confidentiality of Confidential Information can be safeguarded by a Protective Order. [19] I am not able to find a provision of our written law which has expressly conferred power on the court to give a Protective Order. There are however certain provisions in our written law regarding some aspects of a Protective Order which will be elaborated later in this judgment. [20] I am of the following view regarding a Protective Order:

a Protective Order may be granted pursuant to the court’s inherent jurisdiction, court’s inherent power and/or O 92 r 4 RC. Such a power is necessary to ensure that confidential information is disclosed to the court to enable the court to decide justly the case at hand and at the same time, to preserve the confidentiality of the information in question. I rely on the judgment of Lee Seiu Kin J in the Singapore High Court in BBW v BBX & Ors [2016] 5 SLR 755, at [21]- [30], as follows - …

the following UK cases have granted Protective Orders - …

Protective Orders have also been granted in the following Australian cases - … S/N pij6Q34d8kCMQkfrzZ8Ybg

Protective Orders have been granted in many jurisdictions such as Singapore, UK, Australia, United States of America and Canada. It will be an anomaly, if not an injustice, if our courts do not have the power to grant Protective Orders; and

in deciding to grant a Protective Order or otherwise -

the court should balance the following competing considerations -

public interest requires all relevant evidence to be disclosed to the court so as to enable the court to decide justly the case at hand;

(ii) the plaintiff’s right to apply for discovery of all relevant documents in support of the plaintiff’s claim; and

(iii) the need to protect the defendant’s proprietary interest in the confidential information in question;

there is no universal or general formula to be followed - please see the judgment of Russell LJ (as he then was) in Warner-Lambert Co, at p. 362; and

the learned judge should inspect the documents himself or herself to decide whether a Protective Order should be granted or not - please see Mobil Oil Australia, at p. 40. If parts of the confidential information are not relevant to the case in S/N pij6Q34d8kCMQkfrzZ8Ybg question, the court may redact those parts. Such a redacting power is clear from the following cases -

please see the judgment of Lord Wilberforce in the House of Lords in Science Research Council v Nassě BL Cars Ltd (formerly Leyland Cars) v Vyas [1979] 3 All ER 673, at 680; and

(ii) Tokai Corporation v DKSH Malaysia Sdn Bhd [2016] MLJU 621, at [26(1) and (2)].” (emphasis added). In these 3 OS, the 3 Defendants (3 OS) had not filed any Application (Protective Order) with regard to the Alleged Confidential Information (3 Projects). I(2). Nature of documents which may enable Employer to discharge

Evidential Burden In respect of the nature of documents which may enable an Employer to discharge the Evidential Burden, it is decided in Lua Yik Hor v KTCC Mall Sdn Bhd [2022] MLJU 3244, at [21], as follows: “[21] I am of the following view regarding the nature of documents which may be relevant to the 3rd Condition and Evidential Burden in the court’s determination of Z’s application under s 30 CIPAA against X (Z’s Section 30 CIPAA Application): S/N pij6Q34d8kCMQkfrzZ8Ybg

the contract between X and Y [Contract (X-Y)];

the following Project Documents, especially contemporaneous ones, which evidence -

(a)(i) all construction work performed by Y for X in the project; and/or

(a)(ii) all construction materials and/or manpower supplied by Y for X in the project - - up to X’s Receipt Date (Z’s Demand) (Y’s Works/Supplies);

the value and/or valuation of Works/Supplies [Value/Valuation (Y’s Works/Supplies)]; and

all payments made by X to Y in respect of the Value/Valuation (Y’s Works/Supplies) and/or Works/Supplies [X’s Payments (Y)];

the court may consider any defence, set-off and/or counterclaim by which X can resist lawfully Y’s claim for payment for Y’s Works/Supplies on Receipt Date (Z’s Demand) Defence/Set-off/Counterclaim). Defence/Set-off/ Counterclaim should arise from Y’s breach(es) of Contract (X-Y) and may include any one or more of the following matters -

Y’s defective works for which X has to incur cost for rectifying such defects;

liquidated and ascertained damages which may be imposed by X due to delay in Y’s works; S/N pij6Q34d8kCMQkfrzZ8Ybg

any deduction which X is entitled to make regarding Y’s Works/Supplies;

any “back charge” which may be imposed by X on Y in respect of Y’s Works/Supplies;

any cost incurred by X to accelerate works delayed by Y;

if Y did not complete the project, cost expended by X to appoint a third party contractor to complete the project; and

damages which X may claim regarding Y’s breach of Contract (X-Y);

if X’s Defence/Set-off/Counterclaim is raised by X as a defence against Z’s Section 30 CIPAA Application -

the court has to decide on a prima facie basis regarding the validity and credibility of X’s Defence/Set-off/Counterclaim [Validity/Credibility (X’s Defence/Set-off/Counterclaim)]. If the court does not decide on the Validity/Credibility (X’s Defence/Set-off/Counterclaim) on a prima facie basis, baseless or unmeritorious Defence/Set-off/Counterclaim may be raised so as to stifle unlawfully Z’s Section 30 CIPAA Application. This in turn will not only render redundant s 30 CIPAA but will also defeat the object of CIPAA which is to ensure that parties who have performed construction work, such as Z, are not deprived of cash flow (the life-blood of the construction industry) [Object (CIPAA)] …; and S/N pij6Q34d8kCMQkfrzZ8Ybg

in Z’s Section 30 CIPAA Application, the court cannot decide in a final or conclusive manner on the Validity/Credibility (X’s Defence/Set-off/Counterclaim). This is because the Validity/Credibility Defence/Set-off/Counterclaim) can only be finally decided in court or arbitral tribunal (whichever is applicable) in any dispute between X and Y [Litigation/Arbitration (X-Y)]. In other words, the court’s decision in Z’s Section 30 CIPAA Application regarding the Validity/Credibility Defence/Set-off/Counterclaim) cannot estop or bar in any manner the court or arbitral tribunal from deciding in a final manner in respect of the Validity/Credibility Defence/Set-off/Counterclaim) in the Litigation/Arbitration (X-Y); and

unless there is reason to the contrary, the court should attach weight to contemporaneous documents regarding Works/Supplies, Value/Valuation (Y’s Works/Supplies), Payments (Y) and X’s Defence/Set-off/Counterclaim which have been prepared by professional consultants who have been appointed for the project, such as the project’s architect, quantity surveyor (QS) and/or engineer (Project Consultants). This view is premised on the following reasons:

Project Consultants owe contractual duties (to parties who appoint them) and Common Law duty of care to ensure the accuracy of documents prepared by the Project Consultants [Documents (Project Consultants)];

with regard to the truth of the contents of Documents (Project Consultants), ethical duties are owed by Project Consultants to their respective professional bodies; and S/N pij6Q34d8kCMQkfrzZ8Ybg

Project Consultants are supposed to be independent without any interest in the outcome of Z’s Section 30 CIPAA Application.” (emphasis added).

It is the decision of this court that the 3 Defendants (3 OS) have failed to discharge the Evidential Burden. This decision is premised on the following reasons:

the 3 Defendants (3 OS) did not adduce the following documents in these 3 OS -

the 3 Main Contracts (3 Defendants/MRCB); and

Project Documents (3 Defendants/MRCB) which could show -

construction work which had been performed by MRCB for the 3 Defendants (3 in the 3 Projects (3 Defendants/MRCB) up to the 3 Receipt Dates [MRCB’s Works (3 Projects)];

(ii) the value of MRCB’s Works (3 Projects);

(iii) payments made by the 3 Defendants (3 OS) for MRCB’s Works (3 Projects); and

(iv) the 3 Claims (3 Defendants/MRCB), in particular the 3 LAD Claims (3 Defendants/MRCB); S/N pij6Q34d8kCMQkfrzZ8Ybg

the 3 Defendants (3 OS) did not provide any document to rebut the contents of MRCB’s 3 Final Accounts (3 Projects);

the 3 Final Accounts (3 Defendants/MRCB) did not provide any detail regarding the 3 LAD Claims (3 Defendants). It is to be noted that 3 KPK’s Letters had expressly stated that the 3 Final Accounts (3 Defendants/MRCB) were issued “without prejudice to the rights” under the 3 Main Contracts (3 Defendants/MRCB); and

an adverse inference under s 114(g) EA is drawn by the court against the 3 Defendants (3 OS) for their suppression of material evidence as stated in the above sub-paragraphs (1) and (2). J. Whether Plaintiff has discharged legal burden to prove 3rd

Condition As the 3 Defendants (3 OS) have failed to discharge the Evidential Burden (please refer to the above paragraph 55), I unhesitatingly decide that the Plaintiff has succeeded to discharge the legal and evidential burden to prove on a balance of probabilities the 3rd Condition.

Extent of liability of 3 Defendants (3 OS) under s 30 CIPAA I reproduce below ss 12(5), 18(1), 28(1) and (2) CIPAA: “s 12(5) The adjudication decision shall also determine the adjudicated amount and the time and manner the adjudicated amount is payable. S/N pij6Q34d8kCMQkfrzZ8Ybg s 18 Costs of adjudication proceedings

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. s 28 Enforcement of adjudication decision as judgment

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

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

It is decided in Cabnet Systems, at [34], as follows: “[34] I am of the view that the expression “adjudicated amount” in ss 12(5), 30(1) and (3) CIPAA means only the following sums of money:

the Adjudicated Sum claimed by the Plaintiff against SSB;

[Pre-Adjudication Decision] Interest; and

[Post-Adjudication Decision] Interest. In my opinion, the expression “adjudicated amount” in ss 12(5), 30(1) and (3) CIPAA cannot include Adjudication Costs given by the Adjudicator pursuant to s 18(1) CIPAA. This opinion is premised on the following reasons: S/N pij6Q34d8kCMQkfrzZ8Ybg

Parliament has used the words “adjudicated amount” in ss 12(5), 30(1) and (3) CIPAA. The term “costs of the adjudication proceedings” is employed by the legislature in s 18(1) CIPAA. In s 28(1) and (2) CIPAA, Parliament provides that the court may grant leave to “enforce the adjudication decision”. In Lee Lee Cheng v Seow Peng Kwang [1960] 1 MLJ 1, at 3, Thomson CJ (as he then was) has decided in the Federation of Malaya’s Court of Appeal that when different words are used by the legislature in a statute, those different words in the statute are intended by the legislature to refer to different matters. Accordingly, the expression “adjudicated amount” in ss 12(5), 30(1) and (3) CIPAA cannot include adjudication costs as provided in s 18(1) CIPAA; and

if Parliament had intended for a principal to pay the entire sum given in an adjudication decision (both the adjudicated amount and adjudication costs) pursuant to s 30(3) CIPAA, Parliament would have -

expressly stated in s 30(3) CIPAA that the principal shall pay both the adjudicated amount and adjudication costs; or

used the same wording in s 28(1) and (2) CIPAA that the party who has obtained an adjudication decision in his or her favour can enforce the adjudication decision (which includes the adjudicated amount and adjudication costs) against the principal.” (emphasis added).

Premised on Cabnet Systems - S/N pij6Q34d8kCMQkfrzZ8Ybg

the 3 Defendants (3 OS) are only liable to the Plaintiff pursuant to s 30 CIPAA for the 3 Adjudicated Amounts (Plaintiff/MRCB) with interest as stipulated in the 3 Adjudication Decisions (Plaintiff/MRCB) (3 Total Adjudicated Amounts); and

the Plaintiff cannot recover from the 3 Defendants (3 OS) under s 30 CIPAA any adjudication costs as adjudicated in the 3 Adjudication Decisions (Plaintiff/MRCB). L.

Right of recourse of 3 Defendants (3 OS) By virtue of s 30(4) CIPAA, the 3 Defendants (3 OS) have a right to recover the 3 Total Adjudicated Amounts from MRCB as a “debt or set-off” in the Arbitration [Defendants-MRCB]. It is thus clear that no injustice is occasioned to the 3 Defendants (3 OS) if the court allows these 3 OS.

Court’s decision Premised on the above evidence and reasons, I allow the 3 OS with costs. WONG KIAN KHEONG Judge Court of Appeal DATE: 24 APRIL 2023 S/N pij6Q34d8kCMQkfrzZ8Ybg Counsel for Plaintiff (3 OS): Mr. Deepak A/L Mahadevan, Ms. Moganasundari A/P Mahalingam & Ms. Loon Ann Ni (Messrs Azmi Fadzly Maha & Sim) Counsel for 3 Defendants (in 3 OS): Mr. Rajendra A/L Navaratnam, Mr. Raja Kumar A/L Raja Kandan, Ms. Koh Yi Ting & Ms. Ng Chu Yin (Messrs Azman Davidson & Co.) S/N pij6Q34d8kCMQkfrzZ8Ybg