Pcs Vision Sdn Bhd v R.M. Leopad Sdn Bhd (BA-24C-34-06/2025)

As this Originating Summons has been filed to challenge the decision of Adjudication Proceedings involving both the Applicant and Respondent, for easy reference and understanding, the parties will be referred to with the acronym of “PCS” for PCS Vision Sdn Bhd and “RML” for R.M. Leopad Sdn Bhd henceforth.

This Originating Summons was filed by PCS to set aside the Adjudication Decision dated 4.3.2025 (AD) by the Adjudicator, Sr. Wong Kit Yee pursuant to Section 15(b) and (d) of the Construction Industry Payment and Adjudication Act 2012 (CIPAA 2012) which was commenced by RML as a consequence of non-payment of the claims made by RML to PCS. B.

PCS issued in April 2022 four (4) Purchase Orders dated 26.04.2022 and 28.04.2022 respectively [PO-23514, PO-23515, PO-23516, PO-23528] to RML for scaffolding works within the designated project sites for the LRT3 GS05 Package ("Works"). PCS was terminated from the LRT3 GS05 Package (“Project”) on 23.05.2023.

On 02.10.2024, RML had served the Payment Claim on PCS pursuant to Section 5 of the CIPAA 2012 for the unpaid sum of RM4,012,814.27 arising from various invoices issued by RML to PCS together with interest and costs. PCS did not issue a Payment Response to the Payment Claim issued by RML and as such pursuant to Section 6(4) of the CIPAA 2012, it is deemed that PCS disputed RML’s entire claim.

Since there was no payment forthcoming, RML had commenced Adjudication Proceedings against PCS by serving an Adjudication Claim on 10.12.2024. In turn, PCS had filed and served an Adjudication Response where RML’s claims were disputed in that RML’s claims are over certified and/or excessive.

Through the Adjudication Response, PCS had urged the learned Adjudicator to review or revise the certificates issued by PCS and/or to vary RML’s claims to reflect the set off or deductions of: - i. the charges for dismantle works that was not carried out by RML in the sum of RM35,823.60; and/or ii. the dismantling claims on items erected under the instructions of China Railway 17th Bureau Group (M) Sdn Bhd ("CRCC") the former sub-contractors appointed for the Project and prior to PCS’s involvement in the total sum of RM601,411.28 [RM356,051.16 + RM245,360.12]; and/or iii. the rental charges on items erected under the instructions of CRCC and prior to PCS’s involvement in the total sum of RM2,049,764.00 [RM786,582.46 + RM1,263,181.60]; and/or iv. to reduce the rental imposed by RML by omitting the claims for the period of 02.04.2022 until the date of the first Purchase Order dated 26.04.2022; and/or v. the reduce the claim in accordance with the particulars of discrepancies as stated in Appendix 2 to the Adjudication Response.

The learned Adjudicator determined inter alia that: - i. RML is entitled to be paid the sum of RM1,146,530.57 for the amount due under invoices KVB/lNV2303/007, KVB/lNV2304/001, KVB/lNV2304/002, KVB/lNV2305/002, KVB/lNV2304/005 and KVB/lNV2304/006; ii. RML is not entitled to the amount of RM2,866,283.70 in invoices KVB/lNV2304/003, KVB/lNV2305/001, iii. the adjudicated amount is RM1,146,530.57 and shall be paid by PCS to RML on or before 05.04.2025; iv. PCS shall pay to RML simple interest calculated at the rate of 5% per annum on yearly rest on the following adjudicated amount of RM1,146,530.57 from its respective due dates and continuing until full settlement of the adjudicated amount; and v. in accordance with the principle that costs follow the event, PCS shall bear full costs of the adjudication proceedings comprising RML’s legal fees of RM60,000.00 and Adjudicator's fees and expenses and AIAC's administrative fees of RM28,136.57.

PCS via this Originating Summons raised its challenge against the AD pursuant to Sections 15(b) and (d) of the CIPAA 2012, that the Adjudicator had breached the rules of Natural Justice and had acted in excess of her jurisdiction: - i. the learned Adjudicator failed to exercise her jurisdiction to review or revise the certificates despite finding that RML’s claims are excessive, hence a breach of justice pursuant to Section 15(b) of the CIPAA 2012; and ii. that despite finding that RML's claims are excessive, the learned Adjudicator directed PCS to pay full costs of the Adjudication Proceedings without hearing the parties before making her decision on costs i.e. the Adjudicator had acted in excess of her jurisdiction and there is a denial of natural justice pursuant to Section 15(b) and (d) of the CIPAA 2012. C.

The Plaintiff’s application to set aside the AD pursuant to Sections 15(b) and (d) of the CIPAA 2012 is on the following reasons:

9.1 Section 15(b) of the CIPAA 2012

That the learned Adjudicator failed to exercise her jurisdiction to review or revise the certificates despite finding that RML’s claims are excessive, hence a breach of justice pursuant to Section 15(b) of the

(ii) That the learned Adjudicator had failed to give the opportunity for the parties to submit on costs.

9.2 Section 15(d) of the CIPAA 2012

That despite finding that the Defendant's claims are excessive, the learned Adjudicator directed PCS to pay full costs of the Adjudication Proceedings. D. FINDINGS OF THE COURT I. Section 15(b) of the CIPAA 2012

In this case, PCS contends that the Adjudicator had breached the rules of natural justice when she did not review and revise the certificates which were issued by PCS to RML as PCS claims that the certificates issued were over certified by them. It is PCS’s contention that since there was over certification, it reflects the set off or deductions and as such there is no sum owing and payable by PCS to RML.

It is thus PCS’s allegation in its attempt to set aside the AD that the Adjudicator had breached the 2nd rule of the natural justice i.e. the right to being heard, audi alteram partem. In Adjudication Proceedings, the Adjudicator has the duty to accord procedural fairness to the parties during the course of the proceedings whereby the issues raised by both parties are to be considered and a decision is to be derived therefrom. In the case of ACFM Engineering & Construction Sdn. Bhd. v. Esstar Vision Sdn Bhd & another appeal [2016] 1 LNS 1522; [2016] MLJU 1776, the Court of Appeal held that: “[19] When one speaks of natural justice, it is nothing more than what we call the concept of "procedural fairness" which needs to be accorded to the parties in a dispute of a hearing.”

In Ireka Engineering and Construction Sdn Bhd v. PWC Corp Sdn Bhd and another appeal [2019] CLJU 51; [2019] MLJU 35, Tengku Maimun JCA (former CJ) said: "There are two limbs of the rules of natural justice, the first is that a man should not be the judge in his own cause (rule against bias) and the second is that the judge must hear both sides of the dispute (rule of audi alteram partem/right to be heard). Here we were concerned with the second limb which requires that both parties be accorded the opportunity to advance their case. In the context of section 15(b) of the ClPAA, the function of the court is to look at the manner in which the adjudicator conducted the hearing and whether he had accorded procedural fairness to the appellant.” (Emphasis added)

Justice Wong Kian Kheong (as he then was) in MRCB Builders Sdn. Bhd. v. Wazam Ventures Sdn. Bhd. and another case [2020] 1 LNS 891; [2020] MLJU 208, had stated that it is sufficient to dislodge a complaint of breach of natural justice if the Adjudicator had given just one reason to have arrived to his decision.

In this case, the Learned Adjudicator had clearly deliberated on all the issues raised by both PCS and RML at the Adjudication Proceedings including the set-off and deduction claimed by PCS. Between paragraphs 63 to 91 of the AD, the Adjudicator had reviewed the claims made via 10 invoices which were divided to 2 sets i.e. with certification and without certification. In her findings, she had considered the invoices which were certified by PCS (six

invoices in total) and found that RML was entitled for these claims amounting to RM1,146,530.57.

The total claim of the balance four (4) invoices being RM2,866,283.70 which were not certified, the Adjudicator had found that there was lack of proof for RML to be entitled for the same, hence had dismissed these claims.

Not only there is no allegation against the Learned Adjudicator that she had failed to accord procedural fairness to both parties at the Adjudication Proceedings, based on the preceding paragraphs it has been shown that the Learned Adjudicator had deliberated on all the issues raised by the Plaintiff.

In an application to set aside the AD, it is not for this court to look into the merits of the findings of the Learned Adjudicator, as clearly stated in the case of Bina Puri Construction Sdn. Bhd. v Hing Nyit Enterprise Sdn. Bhd. [2015] 8 CLJ 728: “… Section 15 has provided limited grounds on which the decision of the Adjudicator may be set aside. Since an application under s.15 is not an appeal, the decision of the Adjudicator cannot be reviewed on merits.”

Hence, even if the Adjudicator had answered all the right questions wrongly, it is not for this court to examine the merits of the Adjudicator’s findings and interfere in her decision. Whether the decision of the Adjudicator is acceptable or not to the parties, it cannot form the basis of an application to set aside the same.

In the case of Alpha Galaxy Sdn. Bhd. v Euro Destar (M) Sdn Bhd [2021] 1 LNS 640, errors which may arise in the AD were listed by Justice Wong Kian Kheong (as he then was) and the following was held in regards to such errors: “The above errors and omission by an adjudicator can be remedied by an arbitration or litigation (whichever the case may be) regarding the dispute in question [as provided in s. 13(c) CIPAA] - Econpile, at [67]. [27] As explained in the above paragraph 26, I cannot set aside the AD pursuant to s. 15 CIPAA based on the Adjudicator’s Legal Errors and/or Adjudicator’s Factual Error. Furthermore, by reason of s. 13(c) CIPAA the Adjudicator’s Legal Errors and Adjudicator’s Factual Error can be corrected at Alpha’s Suit.”

Therefore, PCS’s allegation that the Adjudicator had failed to consider the issues raised by it at the Adjudication Proceedings and as such had breached the rules of Natural Justice is totally unsubstantiated and unfounded. As such, PCS has failed to establish Section15(b) of the CIPAA 2012. II. Section 15(d) of the CIPAA 2012

Section 27 of the CIPAA 2012 provides the jurisdiction in which the Adjudicator can conduct the Adjudication Proceedings. Section 27(3) of the CIPAA particularly gives the Adjudicator the discretion to proceed and complete the Adjudication Proceedings not withstanding any jurisdiction challenge, without prejudice to the rights under Section 15 and Section 28 of the CIPAA 2012 accordingly.

It is PCS’s contention that the Adjudicator had acted in excess of her jurisdiction by not allowing the parties to submit on the issue of costs and that since the adjudication sum is only 1/3 of the sum claimed by RML in its Payment Claim, in awarding that PCS has to bear the entire costs of the Adjudication Proceedings, the Adjudicator had acted in excess of her jurisdiction.

PCS had referred this court to the case of Jasmi Yusof & anor v Muhammad Osman Kateran & 2 ors [2025] CLJU 72 ABOA ITAB 7] p 235-237 in its submission. Upon reading through this case, the provision relied upon in this case in ordering costs is Order 59 of the Rules of Court 2012. I am unable to accept the Plaintiff’s argument as in Adjudication Proceedings, the Adjudicator derives his/her powers and jurisdiction in accordance to the CIPAA 2012 and not the Rules of Court 2012. Thus, the power and or jurisdiction to award costs is given to the Adjudicator pursuant to Sections 25 and 18 of the CIPAA 2012.

Based on these 2 sections of the CIPAA 2012, the Adjudicator has the discretion to award costs accordingly. As such, I do not see how the Adjudicator had acted in excess of her jurisdiction as claimed by the Plaintiff.

Clearly, what PCS in this instant case has applied for this court to do is to review the merits of the case. I am of the view that PCS has failed to establish that the Adjudicator had acted in excess of her jurisdiction.

Therefore, this application to set aside the AD is hereby dismissed with cost of RM5,000.00 to be paid by PCS to RML subject to allocatur fee. DATED: 15th OCTOBER 2025 Signed (SUMATHI A/P MURUGIAH) JUDGE HIGH COURT OF MALAYA KUALA LUMPUR Counsel: For the Applicant - PCS Vision Sdn Bhd: Tan Shin Shin Messrs. Shin Shin & Co.