Preamble
Pursuant to Clause 5.1 of the DA, the Gross Development Costs for the Project is estimated at RM 467,313,579.39. [10] Upon the Respondent’s appointment under the DA, the Respondent had undertaken and carried out preliminary construction works in accordance with the terms and conditions of the DA and had incurred costs and expenses. [11] On 22.2.2019, the Applicant issued a Notice of Termination3 to the Respondent, terminating the DA on grounds of national or public interests pursuant to Clause 26.1 of the DA. In the same letter, the Applicant had expressly stated that it was aware of the consequences of such termination as provided for under Clauses 26.2.1 and 26.2.2 of the DA. However, the Applicant did not specify and / or indicate the particulars of national or public interest relied on to terminate the DA. [12] Despite being surprised by the termination and the fact that no reason was given by the Applicant for the same, by way of letter dated 26.2.2019, the Respondent accepted the Applicant’s termination and expressly informed the Applicant that it would submit its claims for all costs and expenses incurred by it for the construction works done as provided for under Clauses 26.2.1 and 26.2.2 of the DA. [13] Following a meeting held on 19.3.2019 between the Applicant and the Respondent, the Respondent issued a letter dated 29.4.20195 to the Applicant claiming for a sum of RM 15,615,863.47 for works done up to the date of termination of the DA by the Applicant. This claim was supported by supporting documents which were inspected by Messrs. AZM Perunding Ukur Bahan (“Quantity Surveyor”). [14] After the Respondent submitted its claim, parties attended series of discussions and meetings wherein the Applicant acknowledged that construction works were indeed undertaken and carried out by the Respondent and that payment was due to the Respondent. The discussions and concessions were recorded in, among others, the Respondent’s letter to the Applicant dated 1.8.2019, 7 where it was recorded that vide a meeting held on 25.7.2019, the Applicant had informed the Respondent that it had inspected the Respondent’s claims and had offered a sum of RM 10,000,000.00, as settlement for the termination of the DA. [15] Another meeting was held between the parties on or about 12.9.2019 wherein the parties agreed to deviate from Clause 26.2.1 of the DA by appointing an Independent Valuer to evaluate the value of works done by the Respondent instead of a Joint Auditor. This arrangement was recorded vide the Respondent’s letter dated 13.9.20198 to the Applicant. It was also recorded that if parties were unable to agree on the valuation by the Independent Valuer, the valuation should be carried out as per the terms of the DA (i.e., that the valuation be done by Joint Auditors and in the event the Joint Auditors cannot agree on the value of the Construction Works completed within one month of their appointment, reference of the matter to the Dispute Resolution Committee). [16] Vide a letter dated 4.10.2019,9 the Applicant had informed the Respondent that it had begun the process of appointing an Independent Valuer and that the appointment would be finalised within 6 weeks (i.e., by 15.11.2019). The Applicant had also informed the Respondent that it would be immediately notified once the Laporan Semakan had been prepared by the said Independent Valuer. [17] However, the Applicant had failed, neglected, and / or refused to appoint the Independent Valuer within the specified time frame thereby delaying the valuation of the payment due to the Respondent. In this regard, the Applicant had acknowledged its own delay vide its letter dated 9.7.2020 to the Respondent, where the Applicant informed the Respondent that it was still in the process of appointing an Independent Valuer and that the appointment was expected to be concluded by the end of August 2020. [18] However, the Applicant had, once again, failed, neglected and / or refused to appoint the Independent Valuer in accordance with its own extended timeline. Vide letter dated 21.4.2022, the Respondent highlighted the Applicant’s failure, neglect, and / or refusal to appoint an Independent Valuer and informed the Applicant, inter alia, that if the said appointment was not completed within 1 month of the date of the letter (i.e., by 21.5.2022), the Respondent would have no choice but to enforce its rights. [19] On 28.6.2023, due to the Applicant’s persistent failure, neglect, and/or refusal to evaluate and/or pay the Respondent the monies which it is lawfully entitled to under the DA, the Respondent’s solicitors had issued a Letter of Demand to the Applicant demanding for the claimed cost of RM 15,615,863.47 based on the valuation carried out by the Quantity Surveyor. [20] Parties had then attended a series of discussions and meetings, where it was subsequently agreed that the Respondent would proceed with its claim for works done pursuant to clause 26.2.1(a) of the DA, and as recorded in the Respondent’s letter dated 11.10.2023 to the Applicant, parties had agreed to the appointment of Joint Auditors to evaluate the value of works done by the Respondent for the Project. In that regard, the Applicant had informed the Respondent that it had met with the Ministry of Finance on or around early August 2023 regarding the appointment of a Joint Auditor and that the process would take up to approximately 88 working days. [21] Vide letter dated 13.10.2023,14 the Applicant informed the Respondent that it had done a “Semakan Awal” on the documents provided by the Respondent and requested the Respondent to provide it with the original documents for purposes of valuation within 1 month of its letter. In this regard, the Respondent submits that the “Semakan Awal” by the Applicant does not negate the Applicant’s obligation to appoint the Joint Auditor pursuant to the DA. [22] In reply to the Applicant, the Respondent vide letter dated 20.10.2023 stated, inter alia, that the original documents had already been handed over to the Applicant since 30.4.2019 (please refer to letter dated 29.4.2019) and that the Applicant had acknowledged receipt of the said documents and informed the Respondent by way of letter dated 13.6.2019 that the said documents were being checked / verified by the Applicant’s Finance Department. [23] However, the Applicant still failed and / or refused and / or neglected to evaluate and / or to pay to the Respondent the claimed costs and expenses of RM 15,517,001.01 (“Outstanding Sum”) incurred by the Respondent for construction works done up to the termination of the DA. [24] By way of a Payment Claim dated 5.8.2024 and a Notice of Adjudication dated 9.9.2024, the Respondent commenced Adjudication proceedings against the Applicant for, inter alia, payment of the outstanding sum of RM15,517,001.01. [25] Having taken into consideration all issues, evidence and submissions by the Applicant and the Respondent, the Learned Adjudicator subsequently issued the Adjudication Decision, whereby, he made the following orders: “(a) The Respondent pay the Claimant, within 10 working days, the adjudicated amount of RM15,517,001.01.