Samsung C&T Corporation Uem Construction Jv Sdn Bhd v Global Wall(Malaysia) Sdn Bhd (WA-24C-163-10/2023)

Enclosure 1 in Originating Summons No. WA-24C-162-10/2023 (OS 162) (Enclosure 1 OS 162) is an application by Samsung C&T Corporation UEM Construction JV Sdn Bhd (Samsung JV) to set aside the Adjudication Decision dated 2.10.2023 (“AD”). There is also enclosure 5 in OS 162 which is the inter parties hearing for a stay of the AD pending disposal of Enclosure 1 OS 162 (Enclosure 5 OS 162).

In Originating Summons No. WA-24C-163-10/2023 (OS 163) Samsung JV is applying in enclosure 1 to stay the AD (Stay Application) pending the final determination of the matter in the Arbitration proceedings (Enclosure 1 OS 163). Enclosure 2 is Samsung JV’s application to stay the AD pending disposal of Enclosure 1 OS 163 (Enclosure 2 OS 163)

Originating Summons No. WA-24C-165-10/2023 (OS 165) on the other hand is Global Wall (Malaysia) Sdn Bhd (“GWM”) application S/N HIiq9eut60q7AwePliU1pw **Note : Serial number will be used to verify the originality of this document via eFILING portal 6 for the Court to grant an order to recognise and enforce the AD as a judgment in accordance with section 28 CIPAA.

On 14.12.2023 this Court had granted an Order pursuant to enclosure 83 of OS 162 that the AD be stayed pending the disposal of enclosure 5 in OS 612 (Plaintiff’s Application therein for a Stay of the AD pending the disposal of the Setting Aside Application under Enclosure 1 thereto) on the condition that the sum of RM37,486,898.68 (consisting of the sum of RM34,399,678.89 together with costs and interest up to 29.11.2023) be paid into the joint account to be held by both the solicitors for Samsung JV and GWM as stakeholders on or before 8.1.2024 (14.12.2023 Order).

The respective Originating Summon’s were heard together as it contains the same facts and relates to the same AD.

The first CIPAA Proceedings led to an Adjudication Decision dated 23.9.2022 in favour of Global Wall for a sum of RM20,356,764.78 plus interest and costs (“1st CIPAA Adjudicated Amount”). After numerous court proceedings both at the High Court and Court of Appeal, eventually, SUJV fully paid the Adjudicated Amount on 18.5.2023.

The second CIPAA Proceedings (which is the subject matter of the present court actions) concern IPA 65 dated 25.8.2022 which has been due for payment since 3.11.2022. S/N HIiq9eut60q7AwePliU1pw **Note : Serial number will be used to verify the originality of this document via eFILING portal 7 [8] After having considered all material and relevant submissions that were submitted in the Adjudication, the Adjudicator delivered an Adjudication Decision dated 2.10.2023 in favour of GWM. The amount due and payable by SUJV to GWM pursuant to the Second CIPAA Adjudication Decision is RM37,486,898.68 which is as follows:

8.1 RM34,399,678.89;

8.2 RM26,954.27, being the interest on the sum of RM34,399,678.89 at the rate of 7.15% per annum calculated from 3.11.2022 until 6.11.2022;

8.3 RM1,269,301.03, being the interest on the sum of RM34,399,678.89 at the rate of 7.40% per annum calculated from 7.11.2022 until 7.5.2023;

8.4 RM1,485,218.80 (as at 29.11.2023) and continuing at RM7,209.80 per day (from 30.11.2023 onwards), being the interest on the sum of RM34,399,678.89 at the rate of 7.65% per annum calculated from 8.5.2023 until full and final settlement of RM34,399,678.89;

8.5 RM250,000.00, being legal and expert costs; and 8.6 RM55,745.69, being Global Wall’s share of the AIAC administrative fee and the Adjudicator fee and expenses. Analysis & Findings Stay Application [9] In relation to OS 163 i.e the Stay Application, Samsung JV had put forth a number of reasons in support of the same which are as follows:-

9.1 the financial position of GWM which relates to their probable inability to repay the AD sum if so paid to GWM; and 9.2 the AD contains clear and unequivocal errors. [10] In support of the issue with regards the financial impecuniosity of GWM, Samsung JV has relied on the alleged fact that GWM is commercially insolvent and its present lack of presence in the industry here. Samsung JV points to the alleged fact that GWM current liabilities exceeds its current assets by RM22,936,016.00. [11] I have examined the Companies Commission of Malaysia (“CCM”) search report dated 19.10.2022 at enclosure 76 and find that GWM’s current assets as it stands at the financial year ending 31.3.2021 are in the sum of RM81,260,795 with its current liabilities at RM91,379,072.00 and with a revenue for the said term at RM84,554,806. GWM’s profit after tax for the same period was stated as RM1,720,569.00. [12] I have also compared this with the CCM search report dated 19.10.2023 also found at enclosure 76 and find that GWM’s share capital stands at RM40,750,000.00 and its current assets the financial year ending 31.3.2023 was in the sum of RM22,324,450.00 with its current liabilities at RM45,260,466.00, but there were no current liabilities whatsoever for the said period and with a revenue for the said term at RM19,846,374. GWM’s profit after tax for the same period was stated however to be at a loss of RM33,594,071.00. S/N HIiq9eut60q7AwePliU1pw [13] I have also been referred to by counsel for GWM to its Audited Report 2023 at enclosure 76 and to note 4 and 12 therein where the notes respectively state that the shareholders “has indicated their willingness to provide continued financial support to the company to enable it to continue as a going concern in the forseeable future” and that GWM’s holding company owes as at the year 2023 is the sum of RM17,407,147.00 which after setting off the amount owed by GSM to its holding company, the sum stands at RM1,825,083.00 which is owed by the holding company to GWM and compared this to the statement by the auditors of GWM re the ‘uncertainty of the company as a going concern in the Financial Statements as seen in enclosure 73 of OS 162. [14] I have also noted that GWM has been involved in a number of other small projects in this jurisdiction and that it had made various payment obligations to its sub contractors and suppliers to the tune of RM30,838,274.74 since its termination by Samsung JV as shown in exhibit CH 31 in OS 162 which I find that it is perfectly entitled to do. [15] Following from my assessment of all of the above with regards GWM’s financial position, I am also minded that had Samsung JV paid GWM the Adjudicated Sum, GWM’s financial position would greatly enhance GWM’s financials. For the record, this was also the finding of this Court in the stay application filed by Samsung JV which can be seen in Samsung C&T Corporation UEM Construction Jv Sdn Bhd V Global Wall (Malaysia) Sdn Bhd [2023] MLJU 48 where this Court made a finding of fact, and which was subsequently affirmed on appeal by the Court of Appeal, that GWM’s weak financial position S/N HIiq9eut60q7AwePliU1pw was due to or contributed by Samsung JV failing to pay the sums under the First CIPAA Adjudication. I hereby take a similar view as my finding in the aforesaid case referred to. [16] At the end of the day, based on the facts above and my findings thereto, I do find GWM as being financially solvent, although I would surmise that GWM’s financial position is not the sole factor which would determine this Court’s decision with regards the Stay Application. [17] Be that as it may the Court is also minded that pending Arbitration proceedings are itself not an automatic ground for a Stay Application under section 16 of CIPAA. [18] For the record, GWM’s learned counsel had also submitted that the Application for a Stay Pending Arbitration had not complied with Order 69A rule 2, rule 4(2) of the Rules of Court 2012. The said rules provide: “Rule 2

An application to which this Order applies may be made by originating summons in Form 5 which shall

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 summons is to be served, stating their role in the adjudication; and

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

An application to which this rule applies must be made

where an action under rule 3 is pending, by way of notice of application in the action; and

in any other case, by originating summons.” [19] I am aware that under rule 4(2) the words therein states ‘must be made’ and that in the Federal Court case of Duli Yang Amat Mulia Tunku Ibrahim Ismail Ibni Sultan Iskandar Al-Haj V. Datuk Captain Hamzah Mohd Noor & Another Appeal [2009] 4 CLJ 329 the Apex Court had held the word "must" is to be construed as having the same effect as "shall", and makes compliance with the prerequisites mandatory. [20] In the circumstances I do hold that the Stay Application in OS 163 ought to have been filed as a Notice of Application in OS 162, and ought on this ground alone be dismissed. S/N HIiq9eut60q7AwePliU1pw [21] Should I be in error as to my decision on this issue, I will also give my reasons for the other applications in OS 162 and OS 165. Cause Of Action [22] In looking at the AD, it is not this Court’s function to peruse the same ‘with a fine tooth comb’ as stated by the Federal Court in Martego Sdn Bhd v Arkitek Meor & Chew Sdn Bhd and another appeal [2020] 6 MLJ 224. [23] I note that in the dispute between the parties, there has been three CIPAA proceedings with two of the same decided in favour of GWM on 23.9.2022 (CIPAA 1) and 2.10.2023 (CIPAA 2) and that the third CIPAA proceedings was launched sometime in November 2023 by GWM against Samsung JV. [24] In this CIPAA proceedings before me, it was submitted by Samsung JV’s counsel to this Court that there is an excess of jurisdiction which surrounds a defective claim which has not complied with the requirements under CIPAA and for which Samsung JV further submits is fatal. [25] Samsung JV contends that the Payment Claim is predicated upon Interim Payment Application No. 65 (IPA 65) where there are no cause of action identified and no details given as well as no reference to the provisions relied upon. [26] Upon perusal of the Payment Claim at enclosure 2 exhibit P-2 in OS 162, I have observed that the same does refer to the progress claim S/N HIiq9eut60q7AwePliU1pw clause at clause 14.6 of the General Conditions of Subcontract (as amended by the Particular Conditions of Subcontract) and that GWM had claimed for part of the under certified and unpaid amount under IPA 65 which is the sum of RM87,247,773.50. In the said Payment Claim, a tabulation of how the figure was arrived at is also provided by GWM and the due date for payment i.e 3.11.2022 was also stated. [27] Based on my findings above, the Payment Claim shows that it did set out the nature and description of GWM’s claim and had thus in fact complied with section 27(1) CIPAA which states: “(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.” [28] For the sake of completeness sections 5 and 6 reads as follows:- “Section 5 Payment Claim

An unpaid party may serve a payment claim on a non-paying party for payment pursuant to a construction contract.

The payment claim shall be in writing and shall include:-

the amount claimed and due date for payment of the amount claimed;

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

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

a statement that it is made under this Act.

A non-paying party who admits to the payment claim served on him shall serve a payment response on the unpaid party together with the whole amount claimed or any amount as admitted by him.

A non-paying party who disputes the amount claimed in the payment claim, either wholly or partly, shall serve a payment response in writing on the unpaid party stating the amount disputed and the reason for the dispute.

A payment response issued under subsection (1) or (2) shall be served on the unpaid party within ten working days of the receipt of the payment claim.

A non-paying party who fails to respond to a payment claim in the manner provided under this section is deemed to have disputed the entire payment claim.” [29] I hold that Samsung JV cannot from the circumstances before me claim that they we confused as to which provision or the cause of action was relied on. I am supported on my decision on this point in that Samsung JV had and were able by their Payment Response, which went to almost 133 pages in total, to extensively and comprehensively respond to the Payment Claim. Thus, in my view both the requirements in View Esteem Sdn Bhd v. Bina Puri Holdings Bhd [2019] 5 CLJ 479 FC and JKP Sdn Bhd V. Anas Construction Sdn Bhd & Another Appeal [2022] 10 CLJ 528 were complied with via a vis the ingredients and requirements in CIPAA on the “pleadings”. S/N HIiq9eut60q7AwePliU1pw [30] I therefore hold that there is thus on this issue of the pleadings not being sufficient, no excess of jurisdiction occurring. Were There New Claims In The GWM’s Expert’s Assessment [31] I have also considered the argument by Samsung JV that GWM’s expert’s assessment by Nicholas Ian Powell was repeated in the Adjudication Claim which Samsung JV submits once again that there is no identification of the cause of action and no details given as well as no reference to the provisions relied upon. [32] I have after reading the Adjudication Claim as well as GWM’s Expert Report found that the contention is misconceived and that no new claims were introduced by GWM’s said Expert. [33] The portion of GWM’s Expert Report which can be found at exhibit P 6 of enclosure 4 in OS 162 supports my decision on this where at page 12 of his Report under the heading “Background’ which related to only IPA 65, its issuance thereto and the differences in both sides assessment of the same as well as the details of the CIPAA Claim. To this end, I note that the said Expert’s report on the ‘abortive costs’, “redesign 3D Model, fabrication drawing and MR” were admitted by GWM as a genuine mistake and was in fact not considered by the Adjudicator. [34] I have also found that the reference to ‘idling costs’ in GWM’s Expert Report was in fact part of IPA 65 under the sub heading “Time Related Preliminaries” and the Payment Claim and the adjudicator S/N HIiq9eut60q7AwePliU1pw had in the AD found that these were not new claims but that different descriptions were given by GWM’s Expert in his Report. For added support to this issue, I have noted that Samsung JV’s expert did it his own Expert Report on quantum, noted that GWM’s Expert had ‘separated his assessment on time related preliminaries into two sections i.e standby/idling costs… and prolongation costs…”. Therefore, I do not find any merit in Samsung JV’s contention that these issues of inter alia loss and expense, time related preliminaries, prolongation costs were new claims outside the sphere of IPC 65. [35] I accordingly agree with counsel for GWM that the above GWM’s Expert Report is thus merely a review and a tidying up of the description which relates to IPA 65 and I do find that GWM’s expert did in his said Expert Report assess and gave his independent professional opinion on GSM’s claims. This issue does not warrant the AD to be set aside and does not in my decision amount to an excess of jurisdiction by the Adjudicator. There has been in my decision no issue of the claim being defective based on the contentions raised by GWM. Back Charges [36] As to the issue of wrongful back charges of RM8,046,404.58 which was contended by Samsung JV to be based on CIPAA 1 and were therefore improperly deducted from IPC 65. I have found that the Adjudicator did address and consider this issue, which I might add was raised in the Adjudication Claim, in the AD whereby the Adjudicator then determined that the same was to be allowed. S/N HIiq9eut60q7AwePliU1pw [37] In the AD at exhibit P3 of enclosure 3 of OS 162, the Adjudicator had in his findings on the same, after reviewing both parties positions, accepted that the back charge amounts in CIPAA 1 were contained in Schedule C of the Adjudication Response and found that Samsung JV was not entitled to deduct these amounts again as a set off in IPC 65 and therefore held that GWM as entitled to claim the said sum of RM8,046,404.58 which he held was improperly deducted in IPC 65. [38] Based on the Adjudicator’s line of reasoning as stated above, be it right or wrong, I therefore cannot agree that the Adjudicator was essentially enforcing CIPAA 1 and was going on a frolic of his own. It must be emphasized here that the Court in considering OS 162 to set aside the AD is not acting in an appellate capacity or to review the merits of the Adjudicators decision but is merely considering and deciding whether there has been a denial of natural justice or the adjudicator has acted in excess of his jurisdiction by his decision in the AD pursuant to section 15 (b) or (d) of CIPAA. [39] The said Adjudicator’s finding is a finding of fact which the Adjudicator is entitled or empowered to do so. Any error thereto in his findings, if any, is merely as to such finding which I hold is not a breach of natural justice. So long as the Adjudicator has asked himself the right question, the fact that the answer may be erroneous is not a ground to nullify the AD or be deemed a breach of natural justice, see cases such as BM City Realty & Construction Sdn Bhd v Merger Insight (M) Sdn Bhd [2016] MLJU 1567. [40] I am also guided in my decision herein by the Court of Appeal in ACFM Engineering & Construction Sdn Bhd v Esstar Vision Sdn Bhd S/N HIiq9eut60q7AwePliU1pw and another appeal [2016] MLJU 1776 where it was held amongst others that: “.. it cannot be the function of the Court to look into or review the merits of the case or to decide the facts of the case. The facts are for the adjudicator to assess and decide on. The Court’s function is simply to look at the manner in which the adjudicator conducted the hearing and whether he had committed an error of law during that process. Such error of law relates to whether he had accorded procedural fairness to the Appellant In the context of this case, the complaints of the Appellant were nothing but complaints of factual findings of the adjudicator which in our view cannot be entertained by us.” [41] I am well aware that Samsung JV have now raised that this amount of RM8,046,404.58 had been made to GWM as per its Affidavit in Reply at enclosure 59 of OS 162 and that GWM has submitted that this is a new allegation which should have been raised in the Adjudication proceedings in CIPAA 2 and that Samsung JV had failed to allege this or produce documents to support their said contention in CIPAA 2 and cannot now raise this new allegation to fault the Adjudicator. I have however found that GWM has not categorically denied that Samsung JV has paid this amount on 18.5.2023. [42] There are cases such as the decision of Lee Swee Seng J (as he then was) in BM City Realty & Construction Sdn Bhd (supra), the decision of Aliza Sulaiman J in MRCB Builders Sdn Bhd V Swim Resources Sdn Bhd And Another Case [2021] MLJU 1856 and the decision of Anand Ponnudurai J in Setia Fontaines Sdn Bhd V Pro S/N HIiq9eut60q7AwePliU1pw Tech Enterprise Sdn Bhd And Another Case [2022] MLJU 2865 where the Courts have found that the affected parts of an AD can be severed. [43] I find that the sum of RM8,046,404.58 had been made to GWM has been made to GWM by Samsung JV and that this fact has not been denied. In the circumstances I do hold that this part of the AD pertaining to the backcharges of RM8,046,404.58 can be severed from the AD based on the authorities above and that this Court has the power under section 28 of CIPAA to enforce only a part of the AD. [44] This Court therefore varies the AD or severs the AD so as to enforce only those part of the AD which does not include the said sum of RM8,046,404.58. Decision for OS 162 (Setting Aside of AD) & 163 (Stay of AD pending Arbitration) [45] To surmise, this Court does not find any ‘clear errors’ with regards the AD before this Court. All in based on my aforesaid reasons, I do not find that the AD was a nullity. [46] After considering all of the above issues and my findings thereto, I therefore do not find any circumstance to justify a stay of the AD pending Arbitration as per the application in enclosure 1 of OS 163. In this instance, Enclosure 2 is now academic and is also dismissed with costs. S/N HIiq9eut60q7AwePliU1pw [47] I therefore further hold that both Enclosure 1 OS 162 and Enclosure 5 OS 162 is to be dismissed. [48] Consequently, I dismiss both OS 163 and OS 162 with costs. Enforcement Application OS 165 [49] As I find no impediments with regards the AD and that the sum specified in the AD has yet to be paid by Samsung JV, I hereby subject to the amount of RM8,046,404.58 which Samsung JV had paid to GWM for the backcharges, make an order that:

prayer 1 in enclosure 1 of OS 165 be allowed in part subject to (b) below

that the sum in prayer 2 (a) of RM34,399,678.89 be subject to the deduction of RM8,046,404.58 with interests as per prayers

(b), (c) and (d) be on the sum after deduction

prayer (2) (e) and (f) be allowed

prayers (3), (4) and (5) also be allowed. [50] I further make an order that the sum as per the 14.12.2023 Order be held in the Joint Stakeholders Account be released to GWM to such extent as to comply with my order above within ten working days from the date of this Order. Dated: 2nd day of August 2024 S/N HIiq9eut60q7AwePliU1pw sgd. NADZARIN WOK NORDIN HIGH COURT JUDGE CONSTRUCTION COURT 1 COUNSEL FOR THE PLAINTIFF: Darshendev Singh (Messrs Lee Hishammuddin Allen &Gledhill] COUNSEL FOR THE DEFENDANT: Alicia Ng Yan Ying, Shasha Chin Sim Cheng and Tan Joon Meng (Messrs Gananathan Loh]