Vistamore Sdn Bhd v Geostrength Engineering Sdn Bhd (BA-24C-46-07/2025)

There were two originating summonses before this Court :-

BA-24C-44-07/2025 (“OS 44”) which was an application by Geostrength Engineering Sdn Bhd (“Geostrength”) to set aside an adjudication decision dated 26.6.2025

(ii) BA-24C-46-07/2025 (“OS 46”), an application by Vistamore Sdn Bhd (“Vistamore”) to enforce the same decision under Section 28 of CIPAA.

Both applications were heard together as they arise from the said Adjudication Decision dated 26.6.2025 (“the AD”).

Vide the AD, the Adjudicator awarded Vistamore the sum of RM4,536,570.73 in respect of certified sums, progress claims and retention sum.

On 3.3.2026, this Court dismissed OS 44 with costs of RM8,000.00 (subject to allocator fee) and allowed OS 46 with costs of RM5,000.00 (subject to allocator fee).

Not satisfied, Geostrength appealed against both decisions. I set below my grounds for dismissing OS 44 and allowing OS

46.

The application to set aside the AD pursuant to Section 15 (b) & (d) of CIPAA was made by Geostrength on the grounds that:-

there has been a denial of natural justice; and

(ii) the adjudicator has acted in excess of jurisdiction.

The following Affidavits were filed in respect of OS 44:-

Geostrength’s Affidavit (1) affirmed by Amran bin

(ii) Vistamore’s Affidavit in reply affirmed by Tan Lai Chuan on 20-8-2025 (“Encl. 5”);

(iii) Geostrength’s Affidavit (2) affirmed by Amran bin Mohamad on 3-9-2025 (“Encl. 9”).

It was asserted that the Adjudicator has both denied the principle of natural justice and/or had exceeded her jurisdiction:-

when the Adjudicator rejected Geostrength’s defence of forbearance pursuant to an undertaking dated 15.4.2022 issued by Vistamore and a mutual agreement on 18.4.2022 by parties (Geostrength’s complaint was that it was not given the opportunity to “deal” with the interpretation given by the Adjudicator);

(ii) when the Adjudicator accepted the past conduct and/or practise of Geostrength, instead of the main contractor, issuing the Certificate of Payment for the due payment to Vistamore (outside the purview of the Payment Claim). OS 46

This application is filed by Vistamore to enforce the AD and the relevant cause papers are as follows:-

Vistamore’s Affidavit in support affirmed by Tan Lai Chuan dated 28-7-2025 (“Enc 2”);

(ii) Geostrength’s Affidavit in reply affirmed by Amran bin Mohamad on 26-8-2025 (“Enc 5”); and

(iii) Vistamore’s Affidavit in reply affirmed by Tan Lai Chuan on 3-9-2025 (“Enc 7”).

Contractual Structure

the employer for the D44 Project was the Jabatan

(ii) the main contractor was Puncak Niaga Construction Sdn Bhd (“Puncak Niaga”);

(iii) Geostrength was appointed by Puncak Niaga as a sub-contractor;

(iv) Vistamore was subsequently appointed by Geostrength as a sub-sub-contractor via a Letter of Award dated 3.6.2017 (“the LoA”).

Under this Letter of Award, Vistamore was responsible for supplying materials, machinery, manpower, and executing works relating to Zone 1A sewer network works.

Payment Arrangement and Subsequent Agreement

during the course of the project, payment and certification issues arose between Geostrength and Vistamore;

(ii) to address delayed payments:

on 15.4.2022, Vistamore issued a Letter of Undertaking, agreeing to forbear from commencing legal proceedings in consideration of Geostrength issuing the requisite Certificates of Payment and procuring payment from Puncak Niaga for all outstanding sums under the Certificates of Payment within two months (“Letter of Undertaking”);

this culminated in a Mutual Agreement Letter dated 18.4.2022, where in return for Geostrength’s agreement to issue Certificates of Payment and thereafter manage the payment process involving Puncak Niaga to Vistamore once Puncak Niaga has approved and effected payment to Geostrength, Vistamore agreed not to commence legal or alternative dispute resolution proceedings (“Letter of Mutual Agreement”).

13.

Termination of Upstream Contract Subsequently, the main contract between the employer and Puncak Niaga was terminated triggering the termination of the subcontract between Puncak Niaga and Geostrength; and followed by the termination of the sub-subcontract between Geostrength and Vistamore on 15.11.2023.

Adjudication Proceedings under CIPAA

Following non-payment by Geostrength, on 27.1.2025 Vistamore served a Payment Claim under S. 5 CIPAA for a claim of RM4,542,048.54 comprising of :-

Certificates of Payment No.s 28–32;

Progress Claim No. 32;

Retention Sum

(ii) Geostrength did not serve a Payment Response under s.6 CIPAA and was therefore deemed to have disputed the claim;

(iii) the dispute proceeded to adjudication, culminating in the AD where the adjudicator awarded Vistamore RM4,536,570.73 (after minor deductions), the summary of which is as follows :-

the sum of RM2,511,488.17 under Certificate of

the sum of RM1,129,064.25 under Progress Claim

the sum of RM896,018.30 being the retention sum together with costs and interest. THE LEGAL FRAMEWORK UNDER CIPAA

CIPAA provides a mandatory legal framework in Malaysia to facilitate prompt payment and enable fast, interim dispute resolution through adjudication in the construction industry.

Its distinct feature comes with key principle of a "pay now, argue later" system, prohibits "pay-when-paid" clauses (Section 35), and provides for binding, yet temporary, decisions that can be reviewed via arbitration or litigation.

The adjudication mechanism under CIPAA is to provide a speedy and interim dispute resolution procedure.

In this regard, it is apposite to reproduce the reminder articulated by Mary Lim J (as Her Ladyship then was) in the earlier CIPAA decision of UDA Holdings Bhd v Bisraya Construction Sdn Bhd & Anor [2015] 11 MLJ 499 : “[160] For this, I return to the ethos of CIPAA. Since it is to provide a speedy procedure for the temporary resolution of payment disputes in construction contracts through the introduction of a fresh or new forum called ‘adjudication’, it would be appropriate to say that such legislation is in character, truth and substance, procedural and adjectival legislation…” (emphasis added).

Section 15 of CIPAA provides very limited circumstances in which an adjudication decision may be set aside.

Section 15 of CIPAA provides as follows :-

Improperly Procured Adjudication Decision An aggrieved party may apply to the High Court to set aside an adjudication decision on one or more of the following grounds:

The adjudication decision was improperly procured through fraud or bribery;

There has been a denial of natural justice;

The adjudicator has not acted independently or impartially; or

The adjudicator has acted in excess of his jurisdiction.

Under this provision, the Court is not required to delve into the facts of the dispute and / or look into or review the merits of the case. The Court must adopt a minimal intervention as was highlighted from the words of the Court of Appeal in the case of ACFM Engineering & Construction Sdn Bhd v Esstar Vision Sdn Bhd and another appeal [2016] MLJU 1776, the Court’s function is just simply to look at the manner at which the Adjudicator conducted the hearing and whether the Adjudicator had committed an error of law during that process, such error relates to whether he had accorded procedural fairness to the parties.

Further, Lee Swee Seng J (as he was then) in Enra Engineering and Fabrication Sdn Bhd v Gemula Sdn Bhd and another case [2020] 7 MLJ 482 held that: “[61] In Bina Puri Construction Sdn Bhd v Hing Nyit Enterprise Sdn Bhd [2016] 7 MLJcon 119; [2015] MLJU 941, the High Court dismissed the applicant’s application to set aside the adjudication decision which was granted in favour of the claimant subcontractor in the adjudication proceedings. Ravinthran Paramaguru J observed as follows: [9] … It must be noted that under CIPAA, there is no right of appeal against the decision of the adjudicator which is interim in nature or of temporary finality only. 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 … [12] … As I said earlier, s 15 does not envisage that the decision of the adjudication can be reviewed on its merits. Therefore, it is immaterial if the adjudicator had erred in his finding of facts. The decision of an adjudicator is only of temporary finality pending final settlement of accounts. In the premises, unless there is a clear cut breach of natural justice or excess of jurisdiction, the court should be slow to set aside the decision of the adjudicator.”

It must be emphasised that the grounds for setting aside an adjudication decision under s.15 of CIPAA are restrictive in nature. In this regard, it is instructive to consider the observations of Lee Swee Seng J in PCP Construction Sdn Bhd v Leap Modulation Sdn Bhd and other suits (2017) MLJU 905, where His Lordship elaborated on the governing principles applicable to applications to set aside an adjudication decision: “[22] There are very limited grounds for setting aside an Adjudication Decision under section 15 CIPAA, with the common grounds being that under section 15(b) in that there has been a breach of natural justice or under section 15(d) in that the Adjudicator has acted in excess of his jurisdiction. [27] I agree with the Claimant that an adjudication decision may only be set aside if:

the learned Adjudicator has failed to answer the question referred to her or she has answered a question which was not referred to her; or

the manner in which she has gone about her task is obviously unfair; which may then amount to one of the grounds under Section 15 CIPAA.”

The Court of Appeal in Guangxi Dev & Cap Sdn Bhd V. Sycal Bhd & Another Appeal [2018] MLJU 1542 held: “[32] This brings us to the final issue of whether the breach of natural justice was a material breach. It is accepted law that any breach of natural justice must not be peripheral but must be a material breach affecting the outcome of the resolution of the dispute (see Cantillon Ltd v. Urvasco Ltd [2008] EWHC 282 (TCC). However, in determining this question, it is not necessary to investigate all the facts to decide if the adjudicator would have arrived at a different conclusion if the matters included in the response were considered. All that needs to be considered is whether there was a real possibility of a different conclusion (see CJP Builders Ltd v. William Verry Ltd [2008] EWHC 2015 (TCC))”.

In Ranhill E & C Sdn Bhd v Tioxide (M) Sdn Bhd and other appeals [2015] MLJU 1873, Mary Lim J (as she was then) had referred to a series of English cases which have elucidated on the approach and attitude of the courts in respect of provisions similar to section 15 of the CIPAA, including Cantillon Ltd v Urvasco Ltd [2008] EWHC 282 (TCC) and Balfour Beatty Engineering Services (HY) Ltd v Shepherd Construction Ltd [2009] EWHC 2218 (TCC), before summarising that a denial of natural justice would be occasioned if it can be established, among others, that the adjudicator has failed to bring to the attention of the parties a point or issue which they ought to have been given the opportunity to comment upon if decisive or of considerable potential importance to the outcome of the resolution of the dispute and is not peripheral or irrelevant.

This Court also found reference to the case of Terminal Perintis Sdn Bhd v Tan Ngee Hong Construction Sdn Bhd and another case [2017] MLJU 242 where again Lee Swee Seng J held that the Court would uphold the decision made by the adjudicator unless it can be proven that the said decision was made by the Adjudicator not in compliance within the prescribed law under CIPAA: “[48] I do not think the position under our CIPAA is materially different. Looking at the grounds for setting aside an Adjudication Decision, one can say that a Court of law would uphold the Decision unless it can be shown that it was procured through fraud or bribery, or that there was a breach of natural justice or that the Adjudicator was not independent or impartial or that the Adjudicator had acted in excess of jurisdiction or that the Decision was not in compliance with the provisions of CIPAA.”

In its application to set aside the AD under Section 15(b) and

of CIPAA, Geostrength’s the core issues may be summarised as follows:-

issue on excess of jurisdiction where the Adjudicator had decided on matters outside the Payment Claim where Vistamore had pleaded Clauses 8.2, 8.4 and 9.2 of the LoA but the Adjudicator has relied on “practise” and/or “conduct” which were not pleaded;

(ii) the Adjudicator has no jurisdiction to preside the matter as the claim does not fall within CIPAA;

(iii) breach of natural justice when the Adjudicator rejected the pleaded defence on grounds and/or issues which were not brought by parties.

I shall deal with each issue in turn.

that the Adjudicator had acted in excess of jurisdiction (S. 15(d) of CIPAA)

Geostrength averred that the Payment Claim issued by Vistamore relied on Clauses 8.2, 8.4 and 9.2 of the LoA as the basis for its claims under Progress Claim No. 32, Certificate of Payment No.s 28-32 and Retention Sum respectively.

However, in its Adjudication Claim Vistamore has pleaded, at paragraph 6 :- “6. The Claimant carried out about 95% of the Zone 1A Sewer Network Works and in consequence submitted 32 progress claims to the Respondent, the last of which was the Revised Progress Claim No. 32 on 16.6.2023. However, it was the Respondent who issued the payment certificates instead of the main contractor. Of the 31 progress claims submitted, the Respondent having verified the works done issued 29 certificates of payment. As a result, it is the accepted and agreed practice of the said Project for the Respondent to issue payment certificates.”

Geostrength argued that the basis of Vistamore’s claim has changed, one from contractual terms to another by “practise”.

In rejecting Geostrength’s argument that any Certificate of Payment under the LoA was to be issued by Puncak Niaga and that it has issued the Certificate of Payment No.s 28-32 not for purposes of payment but rather for Vistamore to show to Vistamore’s financier, the Adjudicator at paragraphs 32(a) to (d) of the AD held as follows:- “(a) The interim certificates were all issued by the Respondent and not by the main contractor (Exhibit 1 of the Adjudication Reply). Thus, the Respondent cannot now insist on a strict compliance of Clause 8.4.of the Letter of Award as a reason to dispute the Claimant’s claim for payment based on PC 28- 32.

(b)

It is undisputed that the Respondent had signed PC 28- If the Respondent did not agree with the contents of PC 28- 32, the Respondent would not have signed PC 28-

32.

On a balance of probabilities and contrary to the Respondent’s allegation, the documents and conduct of the parties indicate that PC28-32 is for payment.

In particular, the Respondent has made part-payment of PC 28- 32in the sum of RM300,000.00 (Schedule 2 of the Adjudication Claim, read with paragraphs 17 of the Adjudication Claim and Schedule 4 of the Adjudication Claim). No explanation has been given by the Respondent as to this part-payment which can only mean that the Respondent has admitted to and acted upon PC 28- 32 (which it had signed). The Respondent cannot now claim that PC 28- 32 is not valid or that it fails to reflect the true calculation of work done.”

Further, it was contended by Geostrength that in allowing Vistamore’s claim for the release of the Retention Sum, the Adjudicator did not rely on Clause 9.2 of the LoA but rather again on “conduct” where at paragraph 43(b) of the AD the Adjudicator reasoned that:- “(b) It is artificial and counterintuitive for the Respondent to insist on the issuance of the CMGD prior to the release of the retention sum to the Claimant considering that the Respondent is also seeking its retention sum from the main contractor (which would include the said sum of RM901,497.88). In other words, by conduct, the Respondent agrees that the retention sums ought to be released.”

It is trite that the adjudicator’s jurisdiction is limited to the extent of matters referred in the Payment Claim and Payment Response as prescribed under Section 27(1) CIPAA, which reads:-

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.

Geostrength submitted that when the Adjudicator ultimately referred to and relied on “practise” and “conduct” when determining the adjudication dispute, the Adjudicator has strayed outside Vistamore’s pleaded case in the Payment Claim, i.e. Clauses 8.2, 8.4 and 9.2 of the LoA.

As such, according to Geostrength, the Adjudicator had acted in excess of jurisdiction.

The Court must carefully distinguish whether the Adjudicator has decided the dispute on a contractual basis not relied in the Payment Claim (which may amount to excess of jurisdiction, which then becomes a jurisdictional issue) or the Adjudicator merely interpreted or evaluated the contractual entitlement by reference to surrounding facts and conduct (which is within jurisdiction and is a merit issue).

I find that the subject matter referred to adjudication was clear : non-payment of Certificate of Payment No.s 28- 32, Progress Claim No. 32 and Retention Sum.

The Adjudicator decided precisely those matters in the AD.

The reference to “practise” and “conduct” arose in the course of evaluating whether Geostrength could insist on strict compliance with Clause 8.4 and/or Clause 9.2 of the LoA in the circumstances where all previous Certificates of Payment were issued by Geostrength and not Puncak Niaga, Geostrength had acted inconsistently with the strict certification method prescribed and that the circumstances of the project had evolved.

Reference to “conduct” did not in any way create a new cause of action, a new claim nor did it introduce a new clause and the Adjudicator did not decide a different dispute. It was part of the reasoning process of the Adjudicator in determining whether payment was due under the contractual relationship as performed.

Whether the reasoning is correct is immaterial. Even if erroneous, it is an error within jurisdiction. Since an application under s 15 is not an appeal, the decision of the adjudicator cannot be reviewed on merits (Bina Puri Construction Sdn Bhd v Hing Nyit Enterprise Sdn Bhd [2016] 7 MLJcon 119).

At its highest, the challenge is to the correctness of the findings, which lies beyond the supervisory remit of this Courts.

Accordingly, no excess of jurisdiction is established.

(ii) the Adjudicator has no jurisdiction to preside the matter as the claim does not fall within claim under CIPAA

Geostrength further argues that because the Adjudicator relied on “practise” and/or “conduct”, the claim did not concern payment under the express contractual terms and therefore fell outside CIPAA.

This argument is clearly unsustainable.

The subject matter of the adjudication pertained Certificate of Payment No.s 28- 32, Progress Claim No. 32 and the retention sum arising under a written construction contract, the LoA, which are within the ambit of Sections 2 and 4 of CIPAA.

The complaint that the Adjudicator relied on the parties’ ”practice” or “conduct” does not transform the said dispute into one outside of the matters referred under Sections 5 and 6 of CIPAA as the cause of action remained non-payment under the relevant clauses of the LoA.

The allegation that the Adjudicator lacked jurisdiction “from the outset” is unsustainable. CIPAA plainly applied.

(iii) that there has been denial of natural justice (S. 15(b) of CIPAA)

Geostrength’s complaint under this limb stems from the determination by the Adjudicator on the validity and utility of the Letter of Undertaking in the adjudication dispute.

It is not disputed that the Letter of Undertaking was pleaded by Geostrength in its Adjudication Response as a defence to the claim by Vistamore and vide the Adjudication Reply Vistamore contended at paragraph 6 that the Letter of Undertaking was “not valid and not enforceable in law as there is no consideration given by the Respondent in return for the alleged promise not to take legal action. It is and has always been the Respondent’s obligation to certify the works carried out by the Claimant”. Vistamore further argued at paragraph 7 of the Adjudication Reply that the “pay when paid” concept advanced by Geostrength is contrary to S. 35(1) of CIPAA and is therefore void and unenforceable.

It is noted that no request was made by Geostrength to the Adjudicator to file a Rejoinder to this issue.

In any event, the Adjudicator’s finding on the Letter of Undertaking is as stated at paragraphs 32 (f)- (h) of the AD, which are reproduced below :- “(f) Having scrutinised the Letter of Undertaking dated 15.4.2022 and “Surat Persetujuan Bersama” (Tab 3 of the Adjudication Response), contrary to the Respondent’s contention, I find that the undertaking is not to refrain from filing a legal action indefinitely but to enable the Respondent to liaise with the main contractor to arrange for payment to the Claimant within 2 months…

Thus, as it has been more than 2 months since the issuance of the Letter of Undertaking dated 15.4.2022, such undertaking does not preclude the Claimant from commencing the present adjudication.

Moreover, and in any event, the Respondent’s assertion that the Letter of Undertaking dated 15.4.2022 and “Surat Persetujuan Bersama” were evidence that the Respondent is only obliged to pay the Claimant when they are paid by the main contractor resembles a conditional payment agreement which is made void by Section 35(1) of CIPAA.”

Geostrength contends that there was a denial of natural justice on the basis that the Adjudicator rejected its forbearance defence, construed it as being subject to a temporal limitation, and that the Adjudicator found that such undertaking was in contravention of s.35(1) of CIPAA, all without affording Geostrength a prior opportunity to be heard.

In order to succeed under S. 15 (b) of CIPAA, it is incumbent on Geostrength to show that :-

Geostrength was taken by surprise on a point not argued or put forward by either party;

(ii) the parties were denied an opportunity to address it; and

(iii) the breach was material in that it could realistically have affected the outcome (per Guangxi Dev & Cap Sdn Bhd V. Sycal Bhd & Another Appeal [2019] 1 CLJ 592)

It must be emphasised that the Letter of Undertaking and the Letter of Mutual Agreement were squarely placed before the Adjudicator, in fact by Geostrength in its Adjudication Response. The validity, effect and enforceability of these 2 documents were live issues raised in the Adjudication Response and the Adjudication Reply.

The Adjudicator was then duty bound to scrutinise the documents and interpret them as the core question before the Adjudicator was whether Vistamore was contractually barred from pursuing adjudication, which was raised as a defence by Geostrength in its Adjudication Response.

S. 25 of CIPAA, in particular paragraph (d), confers power upon the Adjudicator to “draw upon his own experience, knowledge, initiative and industry to consider whatever legal propositions that may be relevant as supported by the courts in our jurisdiction or elsewhere” (per Lee Swee Seng J in Terminal Perintis Sdn Bhd v Tan

The interpretation by the Adjudicator that the Letter of Undertaking did not and could not operate indefinitely and it did not bar adjudication was an evaluative conclusion arising from the documents before the Adjudicator.

The assessment was made on the legal effect of the Letter of Undertaking relied by Geostrength, and upon evaluation the Adjudicator was satisfied on the temporal limitation set in the Letter of Undertaking.

This is not the case where the Adjudicator decided the dispute on a factual or legal basis that was never raised nor canvassed.

I am also satisfied that the reference to S.35(1) of CIPAA was also not a “new” point as the same was referenced by Vistamore in its Adjudication Reply.

In any event, even assuming that further submissions should/ might have been invited, Geostrength has not demonstrated how the outcome would realistically have differed. Materiality has not been established.

No material prejudice has been demonstrated; there is no real possibility that further submission would have produced a different outcome.

In my judgment, this ground amounts to disagreement with the Adjudicator’s reasoning and it does not amount to a denial of natural justice.

Thus, the complaint falls short of the threshold required under Section 15(b) of CIPAA. Consequently, the challenge under S.15 (b) of CIPAA fails.

Premised on the above, I am satisfied that Geostrength has not discharged the burden that:

the Adjudicator has acted in excess of jurisdiction;

(ii) the Adjudicator lacked core jurisdiction;

(iii) there was a breach of natural justice.

Accordingly the application to set aside the AD must fail.

Section 28(1) of CIPAA states as follows: 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.

In Inai Kiara Sdn Bhd v Puteri Nusantara Sdn Bhd (2019) 2 CLJ 229, the Court of Appeal held that the court may exercise its discretion to grant leave under S.28(1) and (2) of CIPAA to enforce an adjudication decision if 3 conditions are met :-

the adjudication decision has been made in favour of the party applying for leave;

(ii) the party against whom an adjudication decision has been made, has failed to pay the adjudicated amount on the date specified in the adjudication decision; and

(iii) there is no prohibition on the court’s discretionary power to grant leave to enforce the adjudication decision.

As there are no merits in the setting aside application, the AD remains valid and in force which remained unpaid by Geostrength to Vistamore.

The threshold laid down by the Court of Appeal in Inai Kiara has accordingly been met by Vistamore for an enforcement order under Section 28 of CIPAA.

The following orders were made on 3.3.2026 :-

OS 44 dismissed with costs of RM8,000.00 to be borne and paid by Geostrength to Vistamore, subject to allocator;

(ii) OS 46 allowed with costs of RM5,000.00 to be borne and paid by Geostrength to Vistamore, subject to allocator. Dated : 10th April 2026 t.t ………………………………………… Shahriza Zalina Binti Abdul Shukor Judicial Commissioner Mahkamah Tinggi Malaya Shah Alam For Geostrength : Miss Chan Kai Ling (CK Lim Law Chambers) For Vistamore : Mr. Wong Hai Wai (Tan Swee Im, Siva & Partners)