Syarikat Pembenaan Yeoh Tiong Lay Sdn Bhd v Tsr Bina Sdn Bhd (WA-24C-8-02/2021)

(a) the application by TSR Bina Sdn Bhd (‘TSR’) pursuant to s 28 of the Construction Industry Payment and Adjudication Act 2012 [Act 746] (‘CIPAA’) and O. 69A, r. 5 of the Rules of Court 2012 (‘RC 2012’) and/ or the inherent jurisdiction of the court in Originating Summons No. WA-24C-249-12/2020 (‘O.S. No. 249’) to enforce the Adjudication Decision dated 5.2.2020 (‘AD’) by the learned Adjudicator, Mr. Norman Tai Lik Young (‘Adjudicator’) (‘Enforcement Application’); and

(b) the application by Syarikat Pembenaan Yeoh Tiong Lay Sdn Bhd (‘YTL’) pursuant to ss 15 and 16 CIPAA, O. 69A, r. 3 RC 2012 and/ or the inherent jurisdiction of the court in O.S. No. WA-24C- 8-02/2021 (‘O.S. No. 8’) to set aside the AD or alternatively, to stay the enforcement of the AD pending the disposal of the arbitration proceedings between the parties (‘Setting Aside/ Stay Application’). [2] After having considered the cause papers and submissions by the parties, the Court had allowed YTL’s application to set aside the AD with costs of RM8,000.00 and had dismissed TSR’s Enforcement Application with costs of RM2,000.00 with both orders as to costs being made subject to the payment of the standard allocatur fees. [3] TSR, being aggrieved with the aforesaid decision, has since appealed against the same. The entire reasons for the decision are elaborated below. The Cause Papers [4] The cause papers for both applications are as follows: The Enforcement Application:

(a) TSR’s O.S. dated 18.12.2020 (encl. 1);

(b) TSR’s Affidavit In Support (‘AIS’) affirmed by its Project Director, Dato’ How Pooi Gen on 18.12.2020 (encl. 2);

(c) YTL’s Affidavit In Reply (‘AIR’) affirmed by its Executive Director, Yeoh Keong Yuan on 4.2.2021 (encls. 4 - 16); and

(d) TSR’s AIR affirmed by the same deponent on 12.3.2021 (encl. 17). The Setting Aside/ Stay Application:

(a) YTL’s O.S. dated 2.2.2021 (encl. 1);

(b) YTL’s Affidavit In Support (‘AIS’) affirmed by the same deponent on 3.2.2021 (encls. 2 - 13);

(c) TSR’s Affidavit In Reply (‘AIR’) affirmed by the same deponent on 12.3.2021 (encl. 14); and

(d) YTL’s AIR affirmed by the same deponent on 5.4.2021 (encls. - 16). Background Facts [5] TSR is a company incorporated in Malaysia under the Companies Act 1965 [Act 125] with its business address at Level 16, Menara TSR, 12 Jalan PJU 7/3, Mutiara Damansara, 47810 Petaling Jaya, Selangor Darul Ehsan. [6] YTL is similarly a company incorporated in Malaysia under Act 125 with its business address at 11th Floor, Yeoh Tiong Lay Plaza, 55, Jalan Bukit Bintang, 55100 Kuala Lumpur. [7] The Government of Malaysia and CRCC CREC CCCC Consortium Sdn Bhd (‘Main Contractor’) entered into a main contract dated 27.10.2016 for the design, construction, supply, installation, completion, testing, commissioning and maintenance of the electrified double track from Gemas to Johor Bahru (‘Project’). [8] The Main Contractor and SIPP-YTL JV (the unincorporated joint venture formed between SIPP Rail Sdn Bhd and YTL) entered into a Sub-Contract dated 31.11.2017 for carrying out of the whole works in respect of the Project. [9] Subsequently, pursuant to the Letter of Award dated 4.1.2019 (‘LoA’) and the Sub-Contracting Agreement dated 9.5.2019 (‘Sub-Contract’), YTL as the Main Sub-Contractor, engaged TSR to undertake and complete the “Section 5 Civil Works - Site Clearance and Embankment Earthwork With All Associated Works” for the Project (‘Works’) for the sum of RM307,306,227.05 exclusive of Sales and Service Tax. [10] On 21.6.2019, YTL issued a Notice of Default to TSR claiming, among others, that TSR failed to execute and complete the Works in accordance with the Sub-Contract and that TSR failed or neglected to proceed with the Works with reasonable care, skill, diligence or due expedition. [11] This was followed with the issuance of the Notice of Termination dated 1.7.2019 which was served on TSR on 2.7.2019. [12] Thereafter, TSR commenced three separate adjudication proceedings against YTL. O.S. No. 8 was filed in respect of the first adjudication proceeding commenced by TSR on 13.8.2019 (‘1st adjudication’). At the same time, TSR also initiated an arbitration proceeding against YTL by issuing a Notice of Arbitration dated 14.8.2019. [13] Apart from the 1st adjudication and the arbitration proceeding as above mentioned, TSR had also commenced adjudication proceedings against YTL on 20.9.2019 (‘2nd adjudication’) and 21.10.2019 (‘3rd adjudication’). TSR Bina’s claim was partially allowed in the 1st adjudication and 2nd adjudication on different grounds and was dismissed in the 3rd adjudication. At the time of hearing of the present applications, the arbitration proceeding was pending before a different panel of three arbitrators. [14] In the 1st adjudication, TSR’s Payment Claim dated 18.7.2019 consists of the following claims against YTL:

(a) the sum of RM976,100.00 for the total value of works done from 26.2.2019 to 25.3.2019 as certified on 25.4.2019; and

(b) the sum of RM767,200.00 for the total value of works done from 26.3.2019 to 25.4.2019 as certified on 25.5.2019. [15] YTL disputed the total sum of RM1,743,300.00 in its Payment Response dated 2.8.2019 on the grounds that TSR had breached the LoA and Sub-Contract by failing to provide the Performance Bond (‘PB’) and having committed events of default as set out in Clause 36.1 of the Sub-Contract; that as a result of the termination of the Sub-Contract, YTL had suffered losses and damages of approximately RM20 million which are to be set-off against TSR’s claims; and that YTL was entitled to liquidated ascertained damages (‘LAD’) for TSR’s failure in attaining the Key Access Handover Date of the relevant Sections of the Project on or before the dates as stipulated in Appendix 2 of the Sub-Contract. [16] As previously stated, the Notice of Adjudication was issued on 13.8.2019 and as per the usual process, the Adjudication Claim was then submitted by TSR on 11.11.2019 followed by YTL’s Adjudication Response on 25.11.2019 and finally, TSR’s Adjudication Reply dated 5.12.2019. [17] Based on the information and evidence submitted before the Adjudicator, it was decided in para 5.1 of the AD that: “5.1.1 The total adjudicated amount is RM1,106,503.46 (Ringgit Malaysia: One Million One Hundred Six Thousand and Five Hundred and Three and Sen Forty-Six Only).

5.1.2 The adjudicated amount must be paid by the Respondent to the Claimant on or before 19th February 2020 in the manner of secured financial instrument.

5.1.3 Pursuant to section 25(o) of the CIPAA, I would order the Respondent to pay interest to the Claimant in the manner of secured financial instrument accordingly and it shall be applied from the date of the award i.e. 5th February 2020 at the rate of 5 percent (5%) per annum as set by the courts of Malaysia (the Chief Justice of Malaysia’s Practice Direction 1 of 2012) on any part of the adjudicated amount which remain unpaid until the same is paid.

5.1.4 Pursuant to section 18(1) of CIPAA, and in accordance with the principle that costs follow the event, the Respondent shall pay the costs of the adjudication proceedings. The costs of the adjudication proceedings include the Adjudicator’s fees (amounting to RM27,622.77); Expenses (amounting to RM80.95); AIAC’s administrative fee (amounting to RM5,524.55); 6% of Services Tax (amounting to RM331.47). The total cost of the adjudication proceedings amounting to RM33,559.74 (Ringgit Malaysia: Thirty-Three Thousand Five Hundred Fifty-Nine and Sen Seventy-Four Only) shall be paid on or before 19th February 2020 in the manner of secured financial instrument.”. [18] Just over 10 months after the AD was delivered, TSR sought for an order to enforce the same. I. O.S. No. 8: The Setting Aside/ Stay Application [19] In para (f) of O.S. No. 8, TSR stated that one of the grounds for the Setting Aside/ Stay Application was that there has been a breach of principles of natural justice by the Adjudicator, failure by the Adjudicator to act independently and impartially and the Adjudicator has acted in excess of his jurisdiction. TSR was thus clearly relying on limbs (b), (c) and (d) of s 15 CIPAA in its attempt to set aside the AD. [20] TSR and YTL had filed extensive written submissions in addressing YTL’s numerous grounds of challenge against the AD. In para 12 of TSR’s Written Submission (encl. 21), these grounds as affirmed in para 24 of the AIS were placed into the following broad categories:

(a) there has been a denial of natural justice when the Adjudicator denied YTL’s request to submit a further response/ rejoinder;

(b) the Adjudicator had gone on a frolic on his own in deciding on matters which were not raised by TSR or argued by either party by –

(i) ruling that it is not acceptable for YTL to issue the Interim Payment Certificate (‘IPC’) No. 1 late; and

(c) there has been a failure by the Adjudicator to consider and/ or take into account, or he had misinterpreted, the following:

(i) the provisions relating to TSR’s obligation to submit the PB;

(d) the Adjudicator had erred when he –

(i) deviated from the Sub-Contract in relation to TSR’s obligation to submit the PB and the rights and discretion of YTL to withhold payment;

(A) when he ruled that TSR has failed to observe the conditions precedent for entitlement to EoT and therefore has waived its right to any entitlement to EoT;

(B) although he was of the view that YTL was unable to sufficiently substantiate and justify its entitlement to EoT; and

(C) on the ground to ease TSR’s cash flow issues;

(v) dismissed YTL’s defence and contractual right to set-off RM20 million incurred by YTL on the grounds that YTL had failed to substantiate and prove its losses and damages, notwithstanding that the Adjudicator agreed and ruled that it is lawful for YTL to exercise its right to terminate the Sub-Contract due to the events of default committed by TSR; and

(a) the Adjudicator failed to act independently and impartially as he did not give YTL the opportunity to respond to new issues, allegations and documents;

(b) the Adjudicator had acted beyond his jurisdiction in making findings of facts and laws on issues which were not pleaded;

(c) TSR had acted mala fide in referring the disputes to both adjudication and arbitration; and

(d) the Adjudicator had made unequivocal errors in the AD. [22] Upon careful scrutiny of the above-mentioned grounds in the light of the affidavit evidence and submissions by YTL and TSR, this Court finds that there is merit in YTL’s argument that a breach of natural justice was occasioned when the Adjudicator rejected YTL's request for further submissions after the Adjudication Reply and that the pronouncement of the Court on this sole issue would suffice to dispose the Setting Aside/ Stay Application. [23] With regards to the other contentions by YTL, the broad findings of the Court are that –

(a) the Adjudicator did not go on a frolic of his own when he made certain observations as to the late issuance of IPC No. 1 (see paras 4.1.3, 4.1.5, 4.1.13 and 4.1.14 of the AD). The Court accepts TSR’s submission that the Adjudicator is entitled to draw the necessary inferences from the documents before him and to make the observations as stated in the AD, and further, that taken at its highest, YTL’s allegation of a denial of natural justice is merely peripheral in nature and does not justify the setting aside of the AD (see Pasukhas Sdn Bhd v Empire Multiple Sdn Bhd and another appeal [2019] MLJU 1393);

(b) the assertion that the Adjudicator failed to act independently and impartially in not providing YTL the opportunity to respond are akin to a fair number of previous applications brought before this Court where similar allegations were simply thrown in by the applicants/ plaintiffs without any thought as to the seriousness of the accusations and without addressing the applicable legal principles/ test in determining whether the adjudicator lacked independence and impartiality within the meaning of s 15(c) CIPAA. Applicants surely need not be reminded that just because the adjudicator did not decide in their favour does not automatically equate to the adjudicator having failed to act independently and impartially;

(c) the contention that the Adjudicator acted beyond his jurisdiction in making findings of facts and laws on issues which were not pleaded and for the other reasons as averred in paras 24 and 25 of the AIS are unsupported by the well-established principles on “excess of jurisdiction” as expounded in Terminal Perintis Sdn Bhd v Tan Ngee Hong Construction Sdn Bhd and another case [2017] MLJU 242 and endorsed in View Esteem Sdn Bhd v Bina Puri Holdings Bhd [2018] 2 MLJ 22. YTL’s grounds for alleging that there is a case to be made under limb (d) of s 15 CIPAA are in actuality complaints related to limb (b) of s 15 CIPAA;

(d) YTL’s submissions that the Adjudicator had committed errors of fact and/ or law in the AD are an attempt to re-open the merits of the AD. It is trite that the grounds on which an adjudicator’s decision may be set aside are as circumscribed in s 15 CIPAA and an application under the said provision is not an appeal. As such, the AD cannot be reviewed on merits (see, among others, Bina Puri Construction Sdn Bhd v Hing Nyit Enterprise Sdn Bhd [2015] MLJU 941, ACFM Engineering & Construction Sdn Bhd v Esstar Vision Sdn Bhd and another appeal [2016] MLJU 1776, Mei He Development Sdn Bhd v. Eosh Industries Sdn Bhd & Another Case [2021] MLRHU 2554; and Samado Sdn Bhd v. Kerajaan Malaysia & Another Case [2020] 5 MLRH 165);

(e) TSR did not adopt any tactical manoeuvre by not addressing, in the Adjudication Claim, the defences raised by YTL in the Payment Response for the reason as submitted by TSR, namely that it would be premature for TSR to do so since YTL is entitled, in the Adjudication Response, to withdraw, add and/ or amend the statements which first appeared in the Payment Response (see the decision of the Federal Court in View Esteem (supra) where it was held, inter alia, that all defences raised by the respondent in an adjudication proceeding, including additional defences raised for the first time in the adjudication response, must be considered by the adjudicator lest the adjudicator is found to have breached the rules of natural justice). Thus, no fault is to be attributed to TSR for waiting until the Adjudication Reply to respond to the issues raised by YTL; and

(f) TSR did not act mala fide or in an oppressive manner when it referred the dispute to both adjudication and arbitration or when it did not enforce the AD until the filing of the Enforcement Application. Section 37 CIPAA clearly allows a dispute in respect of payment under a construction contract to be referred concurrently to adjudication, arbitration or the court while s 13 of the same Act provides that the adjudication decision is binding unless it is set aside by the High Court on any of the grounds referred to in s 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. As at the date of filing of the Enforcement Application, none of the events as stipulated in s 13 CIPAA had occurred. Whether there is a breach of natural justice when the Adjudicator rejected YTL's request for further submissions after the Adjudication Reply [24] One of the duties and obligations of the Adjudicator as statutorily provided is that he shall comply with the principles of natural justice (see s 24(c) CIPAA). This basically means that the parties must be given adequate notice and an opportunity to be heard. Transcending this principle are the notion of fairness and a decision which is made only after a full and fair hearing is afforded to the parties (see Gas & Fuel Corp of Victoria v Wood Hall Ltd & Leonard Pipeline Contractors Ltd [1978] VR 385. See too, among others, ACFM Engineering (supra), Ireka Engineering And Construction Sdn Bhd v. PWC Corporation Sdn Bhd & Another Appeal [2019] 1 LNS 51, Genting Malaysia Berhad v PLM Interiors Sdn Bhd and another case [2020] MLJU 344, Naza Engineering & Construction Sdn Bhd v SSL Dev Sdn Bhd [2020] 4 AMR 65 and Geoforce East Sdn Bhd v. Melati Evergreen Sdn Bhd & Another Case [2020] MLRHU 811. [25] In order to fully appreciate YTL’s submissions on this point, the correspondence between the parties and the Adjudicator at the material time is relevant. It begins with the letter dated 9.12.2019 (exhibit “YKY-8” in encl. 16) when YTL’s solicitors wrote to the Adjudicator to highlight that there are some new issues and allegations raised by TSR in the Adjudication Reply that warrant further response or submissions from YTL. These new issues and allegations, among others, are –

(a) new documents and detailed explanations given by TSR as to the reasons for the non-submission of the PB;

(b) TSR’s reference to new documents and detailed explanation on the reasons for delay in the progress of the Works to justify its application for EoT;

(c) TSR’s allegations on wrongful and unlawful termination of the Sub-Contract; and

(d) TSR’s further and detailed explanation disputing YTL’s entitlement to LAD as a valid defence and set-off to TSR’s claim. [26] In connection to the new issues, arguments, allegations, explanation and/ or documents (hereinafter shall collectively be referred to as the ‘New Issues’) raised by TSR in the Adjudication Reply, YTL’s solicitors said that the New Issues were raised earlier in the Payment Response and as such, ought to have been raised and included in the Adjudication Claim. By raising the New Issues only in the Adjudication Reply, TSR was effectively depriving YTL of the opportunity to respond vide the Adjudication Response. [27] Hence, YTL’s solicitors requested for leave from the Adjudicator to exercise its power under s 25(j) CIPAA to allow YTL to serve a Further Response to the New Issues within five working days from the date leave is granted. [28] The vast powers of the Adjudicator are enumerated in s 25 CIPAA and para (j) provides the power to issue any direction as may be necessary or expedient. [29] On 11.12.2019, TSR’s solicitors objected to YTL’s request on the grounds, amongst others, that –

(a) YTL had failed to identify what is the “new documents” before the Adjudicator;

(b) non-submission of the PB and delay in the progress of the Works are not new issues raised by TSR and are not new to YTL;

(c) the issues of termination, EoT, LAD and delay are intertwined with each other and are not new to YTL;

(d) any deprivation of opportunity to respond to the New Issues are self-inflicted;

(e) all the New Issues have been raised by TSR and responded by YTL in the Notice of Arbitration and the Response to the same; and

(f) in the Adjudicator’s email dated 4.12.2019, he stressed that “… the Adjudication Process shall not be further delayed…” and if TSR’s request was allowed, what would be the effect on an adjudication decision that is not delivered within the period specified in sub-s 12(2) CIPAA. [30] YTL’s solicitors wrote to the Adjudicator again on 11.12.2019 in response to the above letter from TSR’s solicitors. The gist of the contents of the lengthy letter is that:

(a) some of the documents are communications between TSR and third parties i.e. banks which YTL was not privy to;

(b) all new documents and arguments introduced by TSR for the non-submission of the PB are new points/ issues raised for the first time in the Adjudication Reply, for e.g. in paras 29 - 42 and 45 - 70;

(c) all the documents in CBD (3), CBD (4), CBD (5), CBD (6), CBD

(d) whether the issues of termination, EoT, LAD and delay are intertwined or otherwise, the fact remains that the New Issues in relation to these matters were not raised in the Payment Claim and/ or Adjudication Claim although YTL had raised them in the Payment Response;

(e) until and unless TSR raises the issues in its Adjudication Claim or Adjudication Reply, YTL cannot be expected to speculate and/ or foresee each argument or issue that TSR intends to raise. TSR intentionally did not raise any of the New Issues in the Adjudication Claim to deprive YTL of the right to respond to the same in the Adjudication Response; and

(f) relying on the case of Guangxi Dev & Cap Sdn Bhd v Sycal Bhd [2018] MLJU 1542, a request or an oral hearing cannot be denied purely on the ground that time is limited especially in a case where the application to do so had been made at the earliest opportunity. [31] TSR’s solicitors responded vide the letter dated 12.12.2019 to the Adjudicator citing the decisions in Tidalmarine Engineering Sdn Bhd v. Conlay Construction Sdn Bhd & Another Case [2018] 2 CLJ 376 and TYL Land And Development Sdn Bhd v. SIS Integrated Sdn Bhd & Another Case [2018] 1 LNS 145 as authorities for the proposition that there is no breach of natural justice by the adjudicators for not allowing further submissions to respond to the Adjudication Reply. Guangxi Dev’s case was distinguished because TSR’s objection to YTL’s request is not purely on the ground that time is limited as was the case in Guangxi Dev. [32] The Adjudicator wrote to the parties’ solicitors on 16.12.2019 rejecting YTL’s request for further submission after the Adjudication Reply. The salient excerpt from the said letter is re-produced below: “2. After having reviewed and considered both parties’ submissions including respective Adjudication Claim, Adjudication Response and Adjudication Reply, I pursuant to sections 25(a) of the CIPAA 2012, reject the request of Respondent’s representative for further submissions after the Adjudication Reply submitted by the Claimant based on the grounds as listed below: - a) Both Parties have been allowed fairly and accordingly for their submissions under the provisions of the CIPAA 2012. i.e. the Adjudication Claim by the Claimant, the Adjudication Response by the Respondent and the Adjudication Reply by the Claimant; b) All the submissions now are clear and satisfied for me to make the Adjudication Decision; c) I will issue further directive under the provisions of the CIPAA 2012 for additional submissions if there is a necessity

Therefore, for this matter, in accordance with section 12(2a) of the CIPAA 2012, the Adjudication Decision shall be issued within forty-five (45) working days from the service of the Adjudication Reply.”. [33] YTL contended that, from the broad examination of the course of events that transpired following the submission of the Adjudication Reply, the limited timeline for decision to be delivered has been the forefront of the Adjudicator’s reasoning in rejecting YTL’s request to submit a further response. [34] However, based on the Adjudicator's letter dated 16.12.2019, I am of the view that –

(a) the Adjudicator has considered the submissions of the parties in respect of YTL's request as set out in YTL’s letters dated 9 and 11 December 2019 and TSR's letters dated 11 and 12 December 2019; and

(b) the reasons for rejecting the request are as stated in subparas 2(a) to (c) of the Adjudicator’s letter and not on the ground of limited timeline to deliver the decision as contended by YTL. Para 12(2)(c) of the CIPAA allows the adjudicator to decide the dispute and deliver the adjudication decision within such further time as agreed to by the parties and this provision has been invoked in the situation where the adjudicator exercises his powers under s 25 of the CIPAA to, among others, conduct any hearing or request for further submissions. Hence, I do not think that the key reason for rejecting YTL's request is premised on the 45 working days requirement in para 12(2)(a) CIPAA. [35] YTL had also highlighted on the length and depth of the New Issues raised by TSR in the Adjudication Reply and which were not raised in the Adjudication Claim by way of the following table: Volume of documents submitted in Adjudication Proceeding Adjudication Claim (submitted with TSR’s Bundle of Documents Vol 1, containing 27 documents) 18 pages (35 paragraphs) Adjudication Response 30 pages (59 paragraphs) Adjudication Reply (submitted with TSR’s Bundle of Documents Vol 2 to 9, containing 149 documents excluding authorities) 51 pages (98 paragraphs) [36] An Index of the 149 documents which were submitted with the Adjudication Reply can be seen in ANNEXURE A to YTL’s Written Submissions (encl. 18) and these are divided into the main categories of the seven arbitration related documents, 32 PB documents, 22 CBD

(a) the chronology of events relating to the PB;

(b) TSR’s reliance on certain events which allegedly caused the delay in the progress of the Works such as Fiberail Encroachment, late issuance of drawings and issues on R&R Depth and Setting Out, Box Culvert Extensions and Banned Access; and

(c) the prevention principle. [38] Upon thorough inspection of the parties’ respective affirmations and submissions regarding the New Issues, the Court finds that there is merit in YTL’s contentions surrounding the question as stated in subpara 37(b) above and its impact on TSR’s application for EoT and YTL’s assessment of the EoT application, and ultimately the Adjudicator’s findings on LAD in YTL’s quest to set aside the AD under limb (b) of s 15 CIPAA. [39] The complaint that TSR had failed to attain the Access Handover of Sub-Section 5.1 at Locations 1, 2 and 4, or by the Key Access Handover Date of 17.4.2019, was first raised by YTL in para 1(c) of the Payment Response as one of the alleged events of default. YTL claimed that this failure by TSR entitled YTL to impose LAD pursuant to Clauses 32.5.2 and 32.7 of the Sub-Contract whereby, a sum of RM320,000.00 was deducted as LAD under IPC No. 2. YTL contended that, as at the date of termination on 2.7.2019, a total sum of RM2,170,000.00 was due and owing by TSR as LAD. TSR did not respond to these matters in its Adjudication Claim. [40] YTL then repeated and elaborated on this purported event of default and the claim for LAD in paras 3(c), 21(c), 27(ii), 36 - 51, 52(b) and 54 of the Adjudication Response. [41] TSR gave a lengthy and detailed response on the issue of events of default, EoT and LAD in paras 44 - 74 and 89 - 91 of the Adjudication Reply. Among TSR’s response was that the failure to attain Access Handover for TTD01 and TTD02 was due to –

(a) the late issuance of the revised Alignment, Plan & Profile and Cross Section drawings, and the revised Ground Treatment Schedule, Alignment, Plan & Profile and Cross Section drawings for all TTDs; and

(b) the revision of the TTD01 and TTD02 alignment which incorporates a new alignment and the issuance of an addition TTD01A track drawings which connects TTD01 and TTD02. [42] In para 46 of the Adjudication Reply, TSR stated that the details of the aforesaid events which caused delay in the handing over of TTD01 by TSR to YTL can be found in CBD(4) - TTD01 which “clearly shows the timelines of the above events/ issues that occurred and how have the Claimant had addressed the above events/issues to the Respondent and how long it took for the Respondent to revert back to the Claimant.”. [43] TSR further emphasised in the Adjudication Reply as to the event of Fiberail Encroachment in relation to TTD01. [44] Ms. K. Sarasvathi fervently submitted for YTL that the Adjudicator had adopted three different inconsistent views leading to an erroneous decision on the issue of EoT. Firstly, in para 4.2.6 of the AD, the Adjudicator “… could not find any evidence of EOT Notice had been submitted by the Claimant except a letter of EOT application dated 16th April 2019, therefore I would agree with the Respondent that the Claimant did not observe the provisions of Sub-Contract for EOT application which require to give a written notice to the Respondent for any potential event that may entitle EOT before submitting formal EOT application i.e. cl 31.2 …”. The Adjudicator then concluded that pursuant to Clause 31.5 of the Sub-Contract, TSR is “… deemed to have waived any entitlement to an EOT and their application for EOT.”. [45] However, in the next para of the AD which is para 4.2.7, the Adjudicator said “Nevertheless, after having reviewed and considered all submissions, even though the Claimant might have waived any entitlement to an EOT and their application for EOT due to non-compliance with the EOT application process in accordance with provisions of Sub-Contract, I found that it would be fair and agreeable for some events were actually entitled for EOT, those events were such as revised designs at later stage (revised construction drawings), fiberail encroachment, revised length of tracks work, banned access issue and etc. (emphasis added)”. [46] This was followed with Tabulation No. 4.2.7 showing the EoT as applied by TSR and the EoT as granted by YTL accompanied with the opening statement in para 4.2.8 that “Notwithstanding the above, the Respondent had reconsidered and re-evaluated the Claimant’s EOT application and granted EOT for 3 locations i.e. TD01, TD02 and TD 03 in their letter dated 29th June 2019. …”. [47] The Adjudicator went on to say: “4.2.9 Based on the information submitted, I found that the evidence as submitted by both parties were not able and sufficient to substantiate and justify for neither the entitlement of EOT as claimed by the Claimant nor also the same for the EOT as granted by the Respondent are reasonable or justifiable.

4.2.10 With the nature and characteristic of a CIPAA adjudication decision where it is of interim finality for the intention to ease the cash flow of the parties. After having reviewed and considered all submissions, in the interim, it is my determination that the Claimant should be entitled for EOT for those critical events as listed in the following tabulation no. 4.2.10.a and the evaluation of the EOT in the tabulation no. 4.2.10.b: - …” (emphasis added). [48] Whilst I agree with YTL that there are inconsistencies in the Adjudicator's reasoning for Issues No. 2 on IPC and LAD as identified in the AD, however the decision of the Court that there is a denial of natural justice is premised on the Adjudicator’s determination that TSR should be entitled for the critical events as listed in Tabulation No.

4.2.10.a and the evaluation of the EoT in Tabulation No. 4.2.10.b, particularly for Location TTD01 and TTD02. This is because the determination was made by considering the New Issues in the Adjudication Reply without affording YTL any opportunity to submit further as to whether the events, which included Fiberail Encroachment and Banned Access, constitute critical events of delay or, are on the critical path for the Project and specifically, Locations TTD01 to TTD04. [49] After Tabulation No. 4.2.10.a and Tabulation No. 4.2.10.b in para 4.2.10 in the AD, the Adjudicator said: “It should be noted that my EOT evaluations above are based on the difference days between the original start work date which the final set construction drawings should be received or issues should be resolved for the intended work to be commenced. E.g. Sub-Contractor starts works on 25th February 2019 and they should have received the construction drawings on or before 25th February 2019 but they only received final set construction drawings for the works on 16th March 2019, hence, they should be entitled EOT of 19 days. Besides that, the EOTs determined above were considered as without overlapping among those critical events allowed as they are considered as critical paths for the project. It seems to me that it is unreasonable and unfair if no EOT to be given to the Contractor who carries out the works in any construction contract when there are events like design changes (revised construction drawings) as requested by the Client, no access issue, encroachment issue and etc. and which are not due to the Contractor’s defaults or failures in carrying out his works but yet have disrupted and delayed the construction works. In those circumstances, the Contractor should be entitled for EOT to their works. Therefore, it is my determination that the EOT entitlements for the Claimant are as indicated in tabulation no.

4.2.9 below …

4.2.11 Based on the determination above, the LAD deduction in IPC no. 2 shall to be adjusted accordingly to reflect the determined EOT as shown above.” (emphasis added). [50] In the final analysis, TSR’s EoT entitlement for Locations TTD01 and TTD02 as decided by the Adjudicator is more than the EoT submitted by TSR for YTL’s consideration as shown in the following table: Location EoT applied by TSR EoT granted by YTL Adjudicator’s determination of EoT entitlement TTD01 63 days 39 days 107 days TTD02 84 days 10 days 88 days TTD03 44 days 7 days 19 days TTD04 70 days 0 days 47 days [51] Mr. Andrew Heng submitted for TSR that the EoT application dated 16.4.2019 does not include the events of delay which occurred subsequent to that date and TSR had raised all the necessary issues of further delaying events such as the TTD01A Drawing, which was only made available on 15.6.2019. Hence, the parties had submitted the issue of further delaying events for the Adjudicator’s determination, and he was clothed with the jurisdiction to decide on the same. [52] Although the Court agrees with the learned counsel that the Adjudicator was clothed with the jurisdiction to decide on the issues of delay, EoT and LAD, however under the column on “Critical Event” in Tabulation No. 4.2.10.a and Tabulation No. 4.2.10.b, the Adjudicator has obviously considered that the Construction Drawings – Alignment Setting Out Data, Cross Section and TTD01A constitute critical events of delay for Locations TTD01 and TTD02. The Fiberail Encroachment was also accepted by the Adjudicator as one of the critical events with regard to Location TTD01. [53] In subpara 39.2 of YTL’s AIR (encl. 15), averments were made as regards the TTD01A Drawings which the Adjudicator had taken into account as a critical event to merit an EoT to be given to TSR beyond the duration applied for by TSR. Specifically, YTL “… denies that the issuance of the TTD01A Drawings is an event of delay to the Sub-Contract Works related to TTD01A and TTD02. I reiterate and emphasize that the TTD01A Drawings is irrelevant and unrelated to the contractual obligation of the Defendant to complete the Sub-Contract Works at TTD01 and TTD02 by its respective Key Access Handover Dates and in any event, the Defendant did not commence any works in accordance with the TTD01A Drawings at all.”. [54] Furthermore, a scrutiny of the corrected IPC No. 1 for the valuation period 26.2.2019 to 25.3.2019 (pp 339 - 340, encl. 3) shows that YTL did not make any deductions for LAD. In IPC No. 2 for the valuation period 26.3.2019 to 25.4.2019 (pp 428 - 429, encl. 3), a sum of RM320,000.00 was deducted as LAD “… as a result of failing to achieve KAHD for TD1 to TD4 in accordance with Clause 31.2 of the Agreement.”. [55] In Tabulation No. 4.2.11 in the AD, the Adjudicator decided to grant a total determined LAD of RM540,000.00 based on RM10,000.00 per day for TTD01 to TTD04 and by taking the “Date of Actual Key Access Handover or Date of Termination” (emphasis is my own) of 1.7.2019 as the last date for computing the number of days of delay. However, as early as the Payment Response [see para 1(l)], YTL had contended that, as at the date of termination on 2.7.2019, a total sum of RM2,170,000.00 was due and owing by TSR as LAD. In this regard, the difference of one day in the Adjudicator’s calculation (1.7.2019) as compared to YTL’s calculation (2.7.2019) is de minimis. [56] YTL’s calculation as to how the figure of RM2,170,000.00 is derived was explained in para 45 of the Adjudication Response (with the detailed breakdown of LAD provided at Tab 16, p 1085 of YTL’s Bundle of Documents Volume 4) as follows: “45. Therefore, the Respondent is entitled to impose the LAD from the Revised Key Access Handover Date until the Date of Key Access Handover or the date of termination of the Sub-Contract (being 2/7/2019) for each respective Sections as follows:-

(a) Location 1 (TD1): 26/5/2019 - 2/7/2019 - 37 days delay = RM370,000.00

(b) Location 2 (TD2): 27/4/2019 - 2/7/2019 - 66 days delay = RM660,000.00

(c) Location 3 (TD3): 24/4/2019 - 1/6/2019 - 38 days delay = RM380,000.00

(d) Location 4 (TD4): 17/4/2019 - 2/7/2019 - 76 days delay = RM760,000.00 TOTAL LAD RM2,170,000.00”. [57] YTL submitted to the Adjudicator that, in the event any of TSR’s claims under IPC No. 1 and IPC No. 2 are found to be due or payable, such amount should be set off with, among others, the LAD of RM2,170,000.00 in diminution or extinction of TSR’s claims (see para 52 of the Adjudication Response). [58] The Adjudicator’s finding on YTL’s submission is that: “4.2.12 With regard to the total LAD of RM2,170,000.00 as submitted by the Respondent, it is my determination that the LAD shall be adjusted accordingly as shown below tabulation no. 4.2.11. Besides that, it is fair for the date of termination for the LAD computation to be determined as 1st July 2019 as per the date of letter of notice of termination issued instead of 2nd July 2019 as submitted by the Respondent.”. [59] The adjustment of the LAD was made in accordance with the Adjudicator’s earlier findings on the number of days which TSR was entitled to an EoT and upon which the New Issues were taken into consideration. This resulted in the total determined LAD of RM540,000.00 as compared to YTL’s contention of RM2,170,000.00 as tabulated below: Location YTL Adjudicator Days of delay LAD (RM) Days of delay LAD (RM) TTD01 37 370,000.00 0 - TTD02 66 660,000.00 0 - TTD03 38 380,000.00 26 260,000.00 TTD04 76 760,000.00 28 280,000.00 TOTAL LAD 2,170,000.00 540,000.00 [60] The Adjudicator then deducted the total determined LAD of RM540,000.00 from the total net certified amount of IPC No. 1 and IPC No. 2 as allowed by him in the sum of RM1,646,503.46. The adjudicated amount of RM1,106,503.46 was thus derived. [61] In the oft quoted guidelines as to breach of natural justice, Akenhead J in Cantillon Ltd v Urvasco Ltd 117 ConLR 1 said: “… I conclude as follows in relation to breaches of natural justice in adjudication cases: (a) it must first be established that the adjudicator failed to apply the rules of natural justice;

(b) any breach of the rules must be more than peripheral; they must be material breaches; (c) breaches of the rules will be material in cases where the adjudicator has failed to bring to the attention of the parties a point or issue which they ought to be given the opportunity to comment upon if it is one which is either decisive or of considerable potential importance to the outcome of the resolution of the dispute and is not peripheral or irrelevant; (d) whether the issue is decisive or of considerable potential importance or is peripheral or irrelevant obviously involves a question of degree which must be assessed by any judge in a case such as this; (e) it is only if the adjudicator goes off on a frolic of his own, that is wishing to decide a case upon a factual or legal basis which has not been argued or put forward by either side, without giving the parties an opportunity to comment or, where relevant put in further evidence, that the type of breach of the rules of natural justice with which the case of the Balfour Beatty Construction case was concerned comes into play.” (emphasis added). [62] Lim Chong Fong J in Genting Malaysia (supra) explicated that: “[31] Put it simply in another way in a practicable manner, I find that the principle of procedural fairness in relation to statutory adjudication proceedings has to be construed contextually. There is therefore no uniform exactness in its application as it would be case sensitive depending on the facts of each case. …”. [63] By applying the legal principles as laid down in the foregoing case authorities to the facts in this case, and although the Adjudicator did not impose any limit on the length of the Adjudication Claim, Adjudication Response and Adjudication Reply and there is no automatic right to YTL to file a rejoinder and/ or a further reply to the Adjudication Reply (see MRCB Builders Sdn Bhd v Wazam Ventures Sdn Bhd and another case [2020] MLJU 208), it is evident that the Adjudicator did not provide YTL with the opportunity to respond, comment and clarify on the New Issues in the Adjudication Reply, which he was obliged to do under s 24(c) CIPAA. The TTD01A Drawings was raised by way of TSR's Adjudication Reply but YTL was not given the chance to provide its submission to the Adjudicator on the matter as affirmed in subpara 39.2 of YTL’s AIR. [64] The New Issues, which formed part of the Adjudicator’s findings on critical events of delay and TSR’s entitlement to EoT, have considerable importance on the outcome of the dispute between the parties, and especially the determined LAD. It is my considered view that the breach of natural justice in this case is material to the AD and not merely peripheral (see Ranhill E & C Sdn Bhd v. Tioxide (M) Sdn Bhd & other cases [2015] 1 LNS 1435). [65] If YTL’s application to the Adjudicator for further response/ submissions was allowed, there is a real possibility that the Adjudicator would have arrived at a different conclusion on the issues of whether there are delay events; which delay events are on the critical path; which party had caused the critical delay events; the number of days of EoT which TSR is entitled to; the number of days of delay in respect of TTD01 to TTD04; and ultimately the total sum for LAD. [66] This Court therefore finds and holds that YTL was deprived of the right and the opportunity to present a complete defence, in violation of the audi alteram partem rule of natural justice and this justifies the setting aside of the AD pursuant to s 15(b) CIPAA. II. O.S. No. WA-24C-249-12/2020: The Enforcement Application [67] It necessarily follows from the decision to set aside the AD for the reasons as elaborated in the preceding part of this judgment that TSR’s Enforcement Application would have to be dismissed. Pronouncement [68] Based on the aforesaid considerations, YTL’s Setting Aside/ Stay Application was allowed and TSR’s Enforcement Application was dismissed. [69] On the issue of costs, the Court agreed with Ms. K. Sarasvathi that RM10,000.00 as global cost is appropriate and that the apportionment should be RM8,000.00 for O.S. No. 8 and RM2,000.00 for O.S. No. 249 with both order as to costs being subject to the payment of the standard allocatur fees. Dated: 25 November 2022 (ALIZA SULAIMAN) Judge Construction Court 2 High Court Kuala Lumpur Counsels/ Solicitors: For the Applicant in O.S. No. WA-24C-249-12/2020 and the Defendant in O.S. No. WA-24C-8-02/2021: Andrew Heng Yeng Hoe (Lee Kai Jun and Abdullah Syamil with him) Messrs. Zain Megat & Murad Advocates & Solicitors D2-5-1 to D2-5-3A, Block D Solaris Dutamas No. 1, Jalan Dutamas 1 50480 Kuala Lumpur For the Plaintiff in O.S. No. WA-24C-8-02/2021 and the Respondent in O.S. No. WA-24C-249-12/2020: Sarasvathi Kulaveerasingam (Lim Kong Soon with her) Messrs. Dorairaj, Low & Teh Advocates & Solicitors 3rd Floor, Wisma Maran 28 Medan Pasar 50050 Kuala Lumpur Cases, legislation and other sources referred to in the submissions by learned counsels and in the Grounds of Judgment: Cases: ACFM Engineering & Construction Sdn Bhd v Esstar Vision Sdn Bhd and another appeal [2016] MLJU 1776 Balfour Beatty Construction Ltd v Lambeth London Borough Council 84 ConLR 1 Barr Ltd v Klin Investment UK Ltd [2010] SCLR 33 Bina Puri Construction Sdn Bhd v Hing Nyit Enterprise Sdn Bhd [2015] MLJU 941 BM City Realty & Construction Sdn Bhd v. Merger Insight (M) Sdn Bhd & Another Appeal [2016] MLRHU 914 Boustead Trading (1985) Sdn Bhd v Arab-Malaysian Merchant Bank Bhd [1995] 3 MLJ 331 Bumimetro Construction Sdn Bhd v Mayland Universal Sdn Bhd and another appeal [2017] MLJU 2245 Cantillon Ltd v Urvasco Ltd 117 ConLR 1 Econpile (M) Sdn Bhd v. IRDK Ventures Sdn Bhd & Another Case [2016] 5 CLJ 882 Enterprise Managed Services Ltd v Tony McFadden Utilities Ltd [2011] 1 BCLC 414 Euroland & Developments Sdn Bhd v Tack Yap Construction (M) Sdn Bhd and other appeals [2018] MLJU 1453 Gas & Fuel Corp of Victoria v Wood Hall Ltd & Leonard Pipeline Contractors Ltd [1978] VR 385 Gazzriz Sdn Bhd v Hasrat Gemilang Sdn Bhd [2016] MLJU 1054 Genting Malaysia Berhad v PLM Interiors Sdn Bhd and another case [2020] MLJU 344 Geoforce East Sdn Bhd v. Melati Evergreen Sdn Bhd & Another Case [2020] MLRHU 811 Guangxi Dev & Cap Sdn Bhd v. Sycal Bhd & Another Appeal [2019] 1 CLJ 592; [2018] MLJU 1542 Inai Kiara Sdn Bhd v Puteri Nusantara Sdn Bhd [2019] 2 MLJ 362 Ireka Engineering And Construction Sdn Bhd v. PWC Corporation Sdn Bhd & Another Appeal [2019] 1 LNS 51 Ireka Engineering & Construction Sdn Bhd v Tri Pacific Engineering Sdn Bhd and another summons [2020] MLJU 548 Leap Modulation Sdn Bhd v PCP Construction Sdn Bhd and another appeal [2019] 1 MLJ 334 Mei He Development Sdn Bhd v. Eosh Industries Sdn Bhd & Another Case [2021] MLRHU 2554 MRCB Builders Sdn Bhd v Wazam Ventures Sdn Bhd and another case [2020] MLJU 208 Naza Engineering & Construction Sdn Bhd v SSL Dev Sdn Bhd [2020] 4 AMR 65 Ong Ah Long v Dr S Underwood [1983] 2 MLJ 324 Pasukhas Sdn Bhd v Empire Multiple Sdn Bhd and another appeal [2019] MLJU 1393 Primus Build Ltd v Pompey Centre Ltd and another 126 ConLR 26 Punj Lloyd Sdn Bhd v Ramo Industries Sdn Bhd & Anor and another case [2019] 11 MLJ 574 PWC Corp Sdn Bhd v Ireka Engineering & Construction Sdn Bhd and another appeal [2018] MLJU 152 Ranhill E & C Sdn Bhd v. Tioxide (M) Sdn Bhd & other cases [2015] 1 LNS 1435 Redwing Construction Ltd v Wishart 135 ConLR 119 Roe Brickwork Ltd v Wates Construction Ltd [2013] EWHC 3417 (TCC) Samado Sdn Bhd v. Kerajaan Malaysia & Another Case [2020] 5 MLRH 165 Sarakoppes Sdn Bhd v. Redha Services Sdn Bhd [2019] 1 LNS 630 SKS Pavillion Sdn Bhd v. Tasoon Injection Pile Sdn Bhd [2019] 1 LNS 1548 Skyworld Development Sdn Bhd v. Zalam Corporation Sdn Bhd & other cases [2019] 1 LNS 173 Subang Skypark Sdn Bhd v. Arcradius Sdn Bhd [2015] 10 CLJ 801; [2015] 11 MLJ 818 Syarikat Bina Darul Aman Berhad & Anor v Government of Malaysia [2017] MLJU 673 Terminal Perintis Sdn Bhd v Tan Ngee Hong Construction Sdn Bhd and another case [2017] MLJU 242 Tidalmarine Engineering Sdn Bhd v. Conlay Construction Sdn Bhd & Another Case [2018] 2 CLJ 376 TYL Land and Development Sdn Bhd v SIS Integrated Sdn Bhd and another case [2018] MLJU 217 View Esteem Sdn Bhd v Bina Puri Holdings Bhd [2018] 2 MLJ 22 Legislation: Construction Industry Payment and Adjudication Act 2012, ss 12, 13, 15, 16, 24, 25, 27, 28 & 37 Rules of Court 2012, O. 7, O. 28, O. 69A, rr. 3 and 5 & O. 92, r. Other sources: Lam Wai Loon and Ivan YF Loo, Construction Adjudication in Malaysia, Second Edition, Sweet & Maxwell, 2018