Vkpt Sdn Bhd v LLC Infra Sdn Bhd (W-02(NCC)(A)-171-02/2025)

1 DALAM MAHKAMAH RAYUAN MALAYSIA DALAM BIDANG KUASA RAYUAN SIVIL RAYUAN NO: W-02(NCC)(A)-171-02/2025 ANTARA VKPT SDN BHD [NO. SYARIKAT: 200701018231 (776242-M)] …PERAYU DAN LLC INFRA SDN BHD [NO. SYARIKAT : 197401000125 (17145-K)] …RESPONDEN [Dalam Mahkamah Tinggi di Kuala Lumpur Dalam Wilayah Persekutuan Kuala Lumpur, Malaysia (Bahagian Dagang) No. Petisyen Penggulungan Syarikat : WA-28NCC-878-09/2024 Dalam perkara VKPT Sdn Bhd [No. Syarikat : 200701018231 (776242-M)]; Dan Dalam perkara Seksyen 464(1)(b), 465(1)(e), dan 466(1)(a) Akta Syarikat, 2016 Antara LLC Infra Sdn Bhd [No. Syarikat : 197401000125 (17145-K)] …Pempetisyen Dan VKPT Sdn Bhd [No. Syarikat: 200701018231 (776242-M)] …Responden] 09/07/2026 10:25:43 W-02(NCC)(A)-171-02/2025 Kand. 30 **Note : Serial number will be used to verify the originality of this document via eFILING portal 2 CORAM: MOHD FIRUZ BIN JAFFRIL, JCA. ONG CHEE KWAN, JCA. DEAN WAYNE DALY, JCA. JUDGMENT OF THE COURT Introduction

1. This appeal returns to a fault-line that has divided the Construction Court and the Winding Up Court, and on occasion, this Court itself: the uneasy meeting point between the “pay now, argue later” philosophy of statutory adjudication under the Construction Industry Payment and Adjudication Act 2012 (“CIPAA”) and the equally entrenched principle that winding up is not to be deployed as a debt-collection mechanism under the Companies Act 2016 (“CA 2016”).

2. CIPAA was enacted to address a well-documented malady in the construction industry — the cascading effect of payment default down the contractual chain, which threatens the cash flow and, ultimately, the survival of contractors and sub-contractors alike. To that end, an adjudication decision is, by section 13 of CIPAA, binding and “temporarily final” unless and until set aside, varied, or superseded by arbitration, litigation, or **Note : Serial number will be used to verify the originality of this document via eFILING portal 3 settlement. Temporary finality was conceived precisely so that money could move while disputes were resolved at leisure.

3. Winding up proceedings, by contrast, operate on an entirely different register. They are not, and were never intended to be, a forum for debt recovery. The jurisdiction is discretionary, the consequences drastic and frequently irreversible, and the courts have for over a century guarded against its use as a sword by a creditor seeking to extract payment of a debt that is honestly and substantially disputed.

4. When an unpaid party armed with a CIPAA adjudication decision presents a winding up petition against the paying party, these two regimes collide. The question that lies at the heart of this appeal — and which has generated a body of conflicting first-instance authority — is this: does the temporary finality conferred by section 13 of CIPAA translate into the kind of indisputability that forecloses a debtor company’s right to raise a genuine dispute on substantial grounds under section 466 of the CA 2016? And if the adjudicated sum is to be treated as indisputable for winding up purposes, by what process and at what point does that transformation occur — is it upon the delivery of the adjudication decision, section 28 registration, a curial intervention, or something else?

5. A second, equally consequential question arises: can the respondent company nonetheless resist the petition by asserting that it has a genuine dispute based on substantial **Note : Serial number will be used to verify the originality of this document via eFILING portal 4 grounds and or a cross-claim or set-off equal to or exceeding the adjudicated debt. What is needed to satisfy the genuine disputes based on substantial grounds test?

6. These questions are not academic. Their resolution determines whether CIPAA’s cash flow imperative will be permitted to operate as a back-door mechanism for extinguishing companies that have arguable, and sometimes meritorious, defences never tested on their merits — or whether, conversely, adjudication decisions will be rendered toothless as a practical recovery tool, undermining the very statutory scheme Parliament enacted. It is to this tension, and to the proper reconciliation of the CIPAA and winding up regimes, that this judgment now turns. Background Facts

7. The parties are VKPT Sdn Bhd (“the Appellant”) and LLC Infra Sdn Bhd (“the Respondent”). The Respondent is the sub-subcontractor that the Appellant engaged by a Letter of Award dated 26.7.021 for the Trackwork and Power Conductor Rail Installation Works, Package 2A Mainline Installation Works from GS05 to GS10, in connection with the LRT3 project (“the Sub-Subcontract”). Following disputes between the parties as to the performance of the Sub-Subcontract, the Respondent terminated the Sub-Subcontract on 20.9.2022 pursuant to Clause 15.2(b) of the Letter of Award. The Appellant disputed the validity of that termination. **Note : Serial number will be used to verify the originality of this document via eFILING portal 5

8. Following the termination, the Appellant commenced adjudication proceedings under CIPAA against the Respondent by a payment claim dated 19.4.2023, registered as AIAC/D/ADJ-4939-2023 (“Adj 4939”). By an adjudication decision made on 11.1.2024 (“AD 4939”), the adjudicator dismissed the Appellant’s claims in their entirety and awarded full costs of the adjudication proceedings, including legal costs, in favour of the Respondent in the sum of RM98,300.00, to be paid within 14 calendar days. As the Appellant’s claims were dismissed in full, the adjudicator found it unnecessary to determine the Respondent’s set-off sum of RM45,669,495.46. The Appellant did not apply to set aside AD 4939 under s. 15 of CIPAA. Notwithstanding repeated letters of demand from the Respondent, no payment of the adjudication costs was made.

9. Separately, shortly before Adj 4939 was commenced, the Appellant had filed an ex parte application for a judicial management order in Kuala Lumpur High Court Originating Summons No. WA-28JM-7-03/2023 (“JM 7”). A judicial management order (“JMO”) was granted in favour of the Appellant on 11.5.2023 and extended for a further six months on 9.11.2023. The JMO expired on 10.5.2024. On 8.1.2024, the Respondent applied for leave to intervene in JM 7 and for JM 7 to be struck out. On 20.5.2024 the High Court granted the Respondent leave to intervene and awarded costs of RM2,000.00 plus allocatur of RM80.00 against the Appellant (“the JM7 Costs Order”). A copy of the JM7 Costs Order was **Note : Serial number will be used to verify the originality of this document via eFILING portal 6 served on the Appellant’s solicitors on 11.7.2024 with a demand for payment. By letter dated 16.7.2024, the Appellant’s solicitors informed the Respondent that they no longer represented the Appellant.

10. The Respondent’s debt claim against the Appellant therefore comprised two sums: (a) RM98,300.00 being the costs awarded under AD 4939 (“the Adjudication Costs”); and (b) RM2,080.00 being the costs and allocatur awarded under the JM7 Costs Order (“the JM7 Costs”), for a combined total of RM100,380.00 (“the Debt”). The Respondent did not register AD 4939 as a judgment of the High Court under s. 28 of CIPAA. The significance of this will be elaborated below.

11. On 9.8.2024 the Respondent issued a statutory demand for the Debt pursuant to s. 466(1)(a) of the CA 2016. The Appellant does not dispute receipt of the statutory demand at its registered and business address. The Appellant failed to satisfy the statutory demand within 21 days. On 23.9.2024, the Respondent presented the winding-up petition bearing reference WA-28NCC-878-09/2024 (“the Petition”) against the Appellant.

12. The Appellant opposed the Petition by way of an affidavit in opposition affirmed on 7.11.2024 (“AIO”). In the AIO, the Appellant acknowledged both the Adjudication Costs and the JM7 Costs as having been awarded against it, but stated that it was in the process of finalising and or filing a writ and statement **Note : Serial number will be used to verify the originality of this document via eFILING portal 7 of claim for the underlying construction disputes. No such proceedings had in fact been commenced at that point. In the interim, on 29.11.2024, the Appellant requested the Respondent’s bank account details to effect payment of the JM7 Costs; the Respondent did not respond. On 4.12.2024 the Appellant deposited RM50,000.00 into the client account of its solicitors towards the disputed debt.

13. On 12.11.2024 the Appellant filed Kuala Lumpur High Court Civil Suit No. WA-22C-81-11/2024 (“Suit 81”), seeking a final determination of the underlying construction disputes between the parties, and served the same on the Respondent on 13.11.2024, shortly before the hearing of the Petition. On 26.11.2024 the Appellant separately filed High Court Suit No. WA-24C-190-11/2024 together with an affidavit in support, seeking a stay of the adjudication decision under s. 16 of CIPAA (“the Section 16 Application”). The Appellant also filed an application in the Petition proceedings to stay the winding-up petition (“the WU Stay”) pending the hearing of the Section 16 Application. The Section 16 Application was subsequently withdrawn by the Appellant before this appeal is heard.

14. On 21.1.2025, the learned High Court Judicial Commissioner dismissed the WU Stay and allowed the Petition, making the winding-up order against the Appellant (“the WU Order”). The Appellant now appeals against the WU Order. The appeal is brought under the Appeal No. W-02(NCC)(A)-171-02/2025 (“Appeal 171”). **Note : Serial number will be used to verify the originality of this document via eFILING portal 8 Contentions of the Parties

15. On behalf of the Appellant, it is submitted that the learned High Court Judicial Commissioner fell into serious error of both fact and law in allowing the Petition. The Appellant’s primary submission is that the learned Judicial Commissioner erred in treating Bludream City Development Sdn Bhd v Pembinaan Bina Bumi Sdn Bhd [2024] 4 MLJ 67 (“Bludream”) as establishing an absolute and automatic proposition — described by the learned Judicial Commissioner himself as “CIPAA Indisputability” — to the effect that a debt arising from any adjudication decision becomes indisputable for winding-up purposes immediately upon the making of the decision, irrespective of whether applications under ss. 15 or 16 of CIPAA remain pending and undetermined.

16. The Appellant submits that this reading of Bludream is erroneous. The decision in Bludream must be read contextually and in its factual matrix. That case involved an adjudication decision whose sanctity had already been upheld through multiple prior proceedings, including failed applications to set aside and stay, unsuccessful resistance of enforcement, a failed appeal against the enforcement order, and a dismissed Fortuna injunction application. Further, the Court of Appeal upheld the winding-up order on findings of issue estoppel, lack of bona fide disputes, and independent findings of insolvency. None of those factors are present in this appeal. **Note : Serial number will be used to verify the originality of this document via eFILING portal 9

17. The Appellant submits that the present case differs materially. No application to set aside or stay had been refused, and no issue estoppel had arisen. The Appellant also had not exhausted or failed in multiple prior proceedings. The Appellant relies on the long-established principle, reaffirmed by the Federal Court in Boustead Trading (1985) Sdn Bhd v Arab Malaysian Merchant Bank Bhd [1995] 3 MLJ 331 (“Bowstead Trading”) and by this court in ASM Development (KL) Sdn Bhd v Econpile (M) Sdn Bhd [2021] 8 MLJ 99 (“ASM Devcelopment”), that winding-up proceedings are not a proper vehicle for trying a genuinely disputed debt. The underlying construction disputes involving delays, restricted access, prevention events, variations and disputed termination remain heavily contested and are the subject of Suit 81 filed for final determination. The Appellant accordingly prays that the WU Order be set aside.

18. On behalf of the Respondent, it is submitted that there is no appealable error warranting intervention. The Respondent advances five principal submissions. First, the Appellant has admitted the Debt, both the Adjudication Costs and the JM7 Costs, in its own affidavits filed in the proceedings below, and an admission of debt is fatal to the opposition: Malayan Banking Bhd v Red Box (M) Bhd [2000] 6 CLJ 21 (“Malayan Banking Bhd”).

19. Second, the Debt is indisputable by its nature. The Adjudication Costs arise from AD 4939, which remains valid and binding as **Note : Serial number will be used to verify the originality of this document via eFILING portal 10 it was neither set aside nor stayed. The principle that an adjudication decision remains binding and enforceable unless set aside or finally determined is well established: Inai Kiara Sdn Bhd v Puteri Nusantara Sdn Bhd [2019] 2 MLJ 362 (“Inai Kiara”). The Respondent relies on Bludream for the proposition that a debt created by an adjudication decision when made is indisputable for winding-up purposes. The Respondent further submits that it was not required to register AD 4939 under s. of CIPAA before proceeding with the Petition: Likas Bay Precinct Sdn Bhd v Bina Puri Sdn Bhd [2019] 3 MLJ 244 (“Likas”); Sime Darby Energy Solution Sdn Bhd v RZH Setia Jaya Sdn Bhd [2022] 1 MLJ 458 (“Sime Darby”). As regards the JM7 Costs, the Respondent submits that the JM7 Costs Order is a judgment debt that was neither stayed nor set aside and is therefore indisputable: Pacific & Orient Insurance Co Bhd v Muniammah Muniandy [2011] 1 CLJ 947 (“Pacific & Orient Insurance”).

20. Third, the Appellant has failed to establish a bona fide dispute on substantial grounds. Suit 81, which substantially mirrors the claims already advanced and dismissed in AD 4939, was only filed on 12.11.2024, after the Petition had been presented and shortly before the hearing. At the time the AIO was affirmed on 7.11.2024, Suit 81 had not been commenced; the Appellant merely stated an intention to file proceedings. The Respondent relies on In frame Sdn Bhd v Anjung Bahasa Sdn Bhd [2011] 4 CLJ 416 (“In frame Sdn Bhd”) for the proposition that **Note : Serial number will be used to verify the originality of this document via eFILING portal 11 proceedings filed shortly before the petition hearing are made mala fide for the purpose of stifling the petition.

21. Fourth, the Appellant’s reliance on the Section 16 Application is misconceived. The present appeal is against the WU Order alone. There is no appeal filed against the separate order dismissing the WU Stay. In any event, a pending s.16 application does not alter the binding effect of AD 4939, and the Section 16 Application has since been withdrawn by the Appellant, rendering the point academic. The Respondent accordingly submits that the appeal should be dismissed with costs.

22. Fifth, the AD 4939 pertains only to the Adjudication Costs as the Appellant’s claims were dismissed in their entirety. The disputes brought in Suit 81 do not deal with the Adjudication Costs at all. Accordingly, any determination by the Court in Suit 81 will not result in the Adjudication Costs being set aside or rendered as non-binding under s. 13 of CIPAA. Court’s Analysis and Determination The Statutory Framework

23. Three statutory regimes intersect in this appeal and must be examined in turn. **Note : Serial number will be used to verify the originality of this document via eFILING portal 12

24. Under s. 28 of CIPAA, a party to an adjudication who is entitled to enforce an adjudication decision may apply to the High Court for an order to enforce the decision as if it were a judgment of the High Court. Section 28(3) provides that upon such an order being made, the adjudication decision may be executed in accordance with the rules on execution of judgments of the High Court, including the modes of execution under Order 45 of the Rules of Court 2012.

25. Under s. 16 of CIPAA, a party may apply to the High Court for a stay of an adjudication decision in two circumstances: (a) where an application to set aside the decision under s. 15 has been made; or (b) where the subject matter of the adjudication decision is pending final determination by arbitration or the court. The circumstances are exhaustive: see Econpile (M) Sdn Bhd v ASM Development (KL) Sdn Bhd [2022] 1 MLJ 385 (“Econpile”), where the Federal Court confirmed that the s. regime is a closed provision.

26. Under s. 466(1)(a) of the CA 2016, a company is deemed unable to pay its debts if it fails to satisfy a creditor’s statutory demand for a sum exceeding RM50,000 within 21 days. The unpaid creditor may thereupon present a winding-up petition. It is not a requirement of s. 466(1)(a) that the debt be evidenced by a court judgment [See: Maril-Rionebel (M) Sdn Bhd & Anor v. Perdana Merchant Bankers Bhd and Other Appeals [2001] 4 MLJ 187 (“Maril-Rionebel”)” **Note : Serial number will be used to verify the originality of this document via eFILING portal 13 The Registration under Section 28

27. We address first the foundational question, i.e., must an adjudication decision be registered as a judgment under s. of CIPAA before it becomes indisputable for the purpose of winding-up proceedings?

28. In Likas Bay, the Court of Appeal held that registration under s. 28 is not a precondition to the presentation of a winding-up petition. The language of s. 28 does not require prior registration before a statutory notice under ss. 465(1)(e) and (h) of the CA 2016 is issued. The Court of Appeal held that an adjudication decision itself evinces that the adjudicated sum is due and owing and thereby provides a proper basis for a winding-up petition.

29. Likas Bay has been interpreted by many to mean that an adjudication decision once made is indisputable. This, we hold, is an overstatement of the ratio decidendi of the judgment. We consider that decision requires clarification. While we do not depart from the proposition that registration under s. 28 is not a procedural precondition to commencing winding-up proceedings, we hold that registration under s. 28 has critical substantive consequences for the question of whether the debt may be disputed in those proceedings. The two questions, namely, whether registration is required to present a petition, and whether the absence of registration affects the disputability **Note : Serial number will be used to verify the originality of this document via eFILING portal 14 of the debt, are distinct, and Likas Bay addressed only the former.

30. Section 28(1) of CIPAA provides in express terms that an adjudication decision is enforceable “as if it were a judgment” of the High Court only upon an order being made by the court under that provision. The statutory language is deliberate and significant. Before such an order is made, the adjudication decision is not imbued with the character of a judgment and does not have the force of a judgment. It remains, as the courts have consistently recognised, a decision of temporary final character, binding on the parties unless and until set aside, superseded by arbitration or court, settled, or paid [See: Bina Puri Holdings Bhd v AFG Industries Bhd [2015] MLJU 1983 (“Bina Puri”)].

31. We hold that the status of the debt for winding-up purposes must follow from its legal character. Where an adjudication decision has been registered under s. 28 as a judgment of the High Court, the resulting debt is a judgment debt. A judgment debt is, subject to appeal or stay, indisputable. The party against whom judgment is entered cannot, absent a cross-claim or set-off, deny liability for the judgment debt in collateral proceedings. That is the ordinary and well-established consequence of the character of a judgment as res judicata [See: Eu Finance Bhd v Lim Yoke Foo [1982] 2 MLJ 37] (“Eu Finance”). **Note : Serial number will be used to verify the originality of this document via eFILING portal 15

32. Where, however, the adjudication decision has not been registered under s. 28, the debt retains its character as an adjudicated, but not judicially determined (albeit statutorily created), debt. It has persuasive weight as evidence that the sum is owed, but it does not carry the conclusive force of a judgment. In these circumstances, we hold that the debtor company is entitled to challenge the winding-up petition by demonstrating that the debt is disputed on genuine and substantial grounds.

33. This conclusion draws direct support from the structural logic of CIPAA itself. Section 28 was enacted precisely to provide a mechanism by which the winning party could convert the temporarily final adjudication decision into an instrument of conclusive judicial enforcement. If the legislature had intended an adjudication decision to have, without more, the same force as a court judgment for all purposes, including winding-up, the moment the adjudication decision is made there would have been no need for s. 28 at all. The very existence of s. 28 as a distinct and deliberate enforcement step demonstrates that registration is the watershed between a merely persuasive adjudicated debt and a judicially conclusive one.

34. We find that there is a distinction between situations where an adjudication decision is challenged, in which case the debt may be treated as disputed, and situations where it is unchallenged and accepted, in which case the debt is not disputed. However, the temporarily-final character of adjudication decisions is not **Note : Serial number will be used to verify the originality of this document via eFILING portal 16 displaced merely by the absence of a formal challenge. That characterisation applies with equal force to the period before registration until registration under s. 28. Until then, the decision has not been elevated to the plane of a court judgment and cannot be treated as indisputable.

35. Our holding is also consistent with the treatment of analogous instruments in Malaysian jurisprudence. An arbitral award must be registered under s. 38 of the Arbitration Act 2005 before it acquires the force of a court judgment for execution purposes. In Mobikom Sdn Bhd v Inmiss Communications Sdn Bhd [2007] 3 CLJ 295 (“Mobikom”), the court granted a Fortuna injunction restraining winding-up proceedings premised on an unregistered arbitral award. The principle is the same, namely, the converting act of registration is what clothes the debt with the indisputability of a judgment.

36. We therefore hold, on the first issue, that:

37. We turn to the test to be applied where the debtor company seeks to resist a winding-up petition on the ground that the petition debt based on an adjudication decision is disputed.

38. The traditional formulation in Malaysian winding-up jurisprudence is that where the debt is disputed in good faith on substantial grounds, the court will ordinarily dismiss or stay the petition [See: Hardware Enterprise Pte Ltd v Pacific IMC Sdn Bhd [1982] 1 MLJ 65 (“Hardware Enterprise”); Kin Yuen Co Pte Ltd v Raffles Hotel Ltd [1989] 2 MLJ 35 (“Kin Yuen”). This formulation has been consistently applied in the Malaysian courts and remains the correct standard.

39. In fact, the test has recently received important authoritative endorsement at the highest level. In Sian Participation Corp (In Liquidation) v Halimeda International Ltd [2024] UKPC 16, the **Note : Serial number will be used to verify the originality of this document via eFILING portal 18 Judicial Committee of the Privy Council held that where a petition debt is subject to an arbitration agreement, a winding-up petition will only be stayed or dismissed if the debt is genuinely disputed on substantial grounds. The Privy Council held that winding-up proceedings should not be automatically stayed or dismissed by the court where the disputed debt is subject to an arbitration agreement, and that the correct test is whether the relevant debt is disputed on genuine and substantial grounds. In overruling Salford Estates (No 2) Ltd v Altomart Ltd (No 2) [2014] EWCA Civ 1575 (“Salford Estate”), the Privy Council rejected the proposition that the mere non-admission of a debt was sufficient to require a stay in favour of arbitration, holding that it is not enough for a respondent to raise an insubstantial dispute and require the creditor to go through arbitration as a prelude to seeking a liquidation.

40. Critically for present purposes, the Malaysian Federal Court has now aligned itself with the Sian standard. In V Medical Services

41. The Sian/V Medical Services standard applies with equal, indeed greater, force in the CIPAA context. The “pay now, argue later” philosophy of CIPAA [See: Bina Puri; Bludream] means that the legislature has deliberately chosen to give adjudication decisions binding force even in the face of ongoing substantive disputes. The policy thrust is that insubstantial challenges should not be permitted to delay enforcement. The Sian test, which requires genuine and substantial grounds, is perfectly calibrated to that policy objective. What CIPAA’s “pay now, argue later” philosophy does not support is the elevation of an unregistered adjudication decision to the status of an unimpeachable judgment. That elevation requires the additional step of registration under s. 28. Effect of s.16 Stay Application

42. The Appellant has applied under s. 16(1)(b) of CIPAA for a stay of the adjudication decision on the ground that the subject matter is pending final determination by the court. We are asked to consider whether that application affects the disputability of the Debt for winding-up purposes.

43. In our judgment it does not, for the following reason.

44. As we have held above, the question of disputability in winding-up proceedings turns on whether the debt has been converted into a judgment debt by registration under s. 28. A pending s. 16 application, like a pending s. 15 application, operates within **Note : Serial number will be used to verify the originality of this document via eFILING portal 20 the CIPAA regime and goes to the force and or enforceability of the adjudication decision as an instrument of payment. It does not determine the legal character of the debt for the separate purposes of the winding-up regime under the CA 2016.

45. In any case, this point is now moot since the s. 16 Stay Application has been withdrawn. The Effect of Registration: Cross Claim As The Only Avenue

46. We record, for completeness, the position when an adjudication decision has been registered as a judgment under s. 28. In that event, the debt takes on the conclusive character of a court judgment and the debtor company cannot simply re-open the underlying dispute to resist the winding-up petition. The avenue of challenge that remains available is the demonstration of a cross-claim or set-off that is bona fide, on substantial grounds, and that equals or exceeds the judgment debt: see Maju Holdings Sdn Bhd v Spring Energy Sdn Bhd [2021] MLJU 374 (“Maju Holdings”); Bludream [2024] 4 MLJ 67.

47. The legal principle relating to a cross-claim or counterclaim by the company in answer to a winding up petition filed is stated by this Court in Pontian United Theatre Sdn Bhd v. Southern Finance Berhad (Dahulunya Dikenali Sebagai United Merchant Finance Berhad) [2006] 2 MLJ 602 (“Pontian United”) by Abdul Aziz Mohamad JCA and Zulkefli Makinudin JCA (as he then was) where they said: **Note : Serial number will be used to verify the originality of this document via eFILING portal 21 ‘[19] It is not sufficient for a company facing a winding up petition to merely aver by affidavit the existence of a meritorious counterclaim and exhibit for proof the statement of defence and counterclaim, which is not evidence. Evidence is required. The company must set out in the affidavit the facts on which the counterclaim is based, giving the necessary details so as to lend earnestness and weight to their claim and so that the petitioner will have a fair opportunity to present his side of the story by affidavit and the court, by considering the affidavits, will be able to assess, without actually deciding it, whether the claim has weight or raises a serious issue.’

48. The same principle also applies in the context of an application for a Fortuna Injunction. Indeed in Josu Engineering Construction Sdn Bhd v. TSR Bina Sdn Bhd [2014] 11 MLJ 916 (“Josu Engineering”) at paragraph [49] of the judgment, Mary Lim J (later FCJ) after dealing with all the relevant cases including People Realty Sdn Bhd v. Red Rock Construction Sdn Bhd [2008] 1 MLJ 452 (“People Realty”), Pontian United, Zalam Corporation Sdn Bhd v. Dolomite Readymixed Concrete Sdn Bhd [2011] 9 CLH 705 (“Zalam Corporation”) summarised the position in the following manner: ‘[49] From the above cases, it can first of all be said that where a debt is undisputed, an injunction to restrain the presentation of a petition to wind up a company upon failure to pay upon the debt demanded is generally refused. The arguments challenging the issuance of the s. 218 notice should be also made in the winding up court. Otherwise, **Note : Serial number will be used to verify the originality of this document via eFILING portal 22 the only viable option is to pay up. Secondly, where a debt is undisputed, an injunction may nevertheless be ordered where a genuine cross claim based on substantial grounds is raised. In such a case, the courts recognise that the presentation of such a petition might produce irreparable damage to business and reputation. Thirdly, the burden of proof in both instance of disputed debt and undisputed debt is whether there is a likelihood that the petition to wind up may fail or that it is unlikely that a winding up order would be made; as opposed to a test that the petition is bound to fail’. [emphasis added]

49. Accordingly, the distinction between the pre-registration and post-registration positions of an adjudication decision may be stated as follows:

50. This two-tier framework gives rational structure to the existing case law and reconciles Likas Bay (registration not a procedural precondition) with Bludream (registered decision indisputable) without internal contradiction. Application To the Facts

51. We turn to the application of the foregoing framework to the facts of the present appeal. Before doing so, it is necessary to address a preliminary question of some doctrinal significance upon which the entire analysis in this appeal turns, namely, whether the Adjudication Costs order made in the present case is properly characterised as an “adjudication decision” within the meaning of s. 13 of CIPAA and, as such, subject to the statutory regime governing temporary finality, set-aside, stay, and enforcement registration, or whether it falls outside that regime entirely as a bare procedural order not susceptible to any of those mechanisms.

52. The starting point is the decision of the High Court in Multazam Development Sdn Bhd v Felda Global Ventures Plantations (M) Sdn Bhd [2020] MLJU 606 (“Multazam”), upon which the defendant relies to resist the plaintiff’s attempt to have the costs order treated as an adjudication decision subject to final determination. In Multazam, the claimant in adjudication withdrew its claims after the adjudication response had been filed. The adjudicator made no determination whatsoever on the merits of the underlying payment dispute. In other words, he **Note : Serial number will be used to verify the originality of this document via eFILING portal 24 was not called upon to decide who owed what to whom under the construction contract. His only act was to order that the withdrawing claimant bear the costs of the aborted proceedings pursuant to s. 17(2) of CIPAA. The High Court held that such an order was not an “adjudication decision” within the meaning of s. 13 of CIPAA and was therefore not susceptible to set-aside under s. 15, stay under s. 16, or enforcement registration under s. 28. The court characterised it as an “adjudication order” of a procedural and ancillary nature, unreviewable by the court and enforceable as a free-standing debt obligation capable of grounding a winding-up petition.

53. With respect, we consider that Multazam must be understood and confined to the specific factual and legal circumstances from which it arose, namely the making of a costs order upon withdrawal of adjudication proceedings without any determination of the disputes. The defining feature of Multazam is not that a costs order was made, but that the adjudicator never exercised his adjudicative function on the substantive payment claim. He did not decide on the disputes referred to him. He determined nothing about the parties’ rights under the construction contract. In that confined sense, and only in that sense, was the High Court correct to say that the costs order was not an “adjudication decision”. It was all that the adjudicator did, and what he did was purely procedural. Therefore, the ratio of Multazam does not extend beyond that specific situation. **Note : Serial number will be used to verify the originality of this document via eFILING portal 25

54. The position is materially different where the adjudicator has proceeded to determine the disputes referred to him and has awarded costs as a consequence of and ancillary to that determination. In that situation, which includes the present case, where the adjudicator determined the Appellant’s claims on the merits and dismissed them with costs, that costs form an integral part of the adjudicator’s exercise of his adjudicative function. The determination of the claims and the order as to costs are products of a single adjudicative act, which is the adjudication decision. An order of costs that flows from, and is inseparable from, the determination of the substantive payment dispute is not a bare procedural order made in the absence of any adjudication. It is part of the adjudication decision itself. It is therefore an “adjudication decision” within the meaning of s. of CIPAA and is subject to the full panoply of the CIPAA statutory regime, i.e55 susceptible to set-aside under s. 15, susceptible to stay under s. 16, registrable for enforcement under s. 28, and subject to extinguishment upon final determination under s. 13(c).

55. We therefore hold that the Adjudication Costs order in the present case, made by the adjudicator upon the determination and dismissal of the Appellant’s substantive payment claims, is an “adjudication decision” within s. 13 of CIPAA. It is not governed by Multazam. It carries the temporary finality that attaches to all adjudication decisions under s. 13. It is susceptible to set-aside under s. 15, to stay under s. 16, and to registration under s. 28. And it is subject to supersession under **Note : Serial number will be used to verify the originality of this document via eFILING portal 26 s. 13(c) if and when the underlying disputes are finally determined by the court or arbitration.

56. This characterisation, however, does not automatically resolve the question of whether the Appellant may resist the winding-up petition on the ground that the Debt is disputed. That question requires a careful analysis of the concepts of temporary finality and indisputability and their relationship to the pending court action and to the absence of s. 28 registration. We address those questions in turn. Temporary Finality – Disputability

57. The temporary finality of an adjudication decision is the quality conferred upon it by s. 13 of CIPAA. An adjudication decision is binding on the parties from the moment of its delivery, but it is binding only provisionally. Its binding force is conditional upon none of the three extinguishing events in s. 13 having occurred:

(1) set-aside under s. 15, (2) settlement in writing, or (3) final determination by court or arbitration under s. 13(c). The temporary finality of an adjudication decision is therefore anchored on, and its termination is triggered by, the final determination of the underlying substantive disputes in the appropriate forum. It is the availability and exercise of that right of final determination that gives the adjudication decision its provisional and temporary character. **Note : Serial number will be used to verify the originality of this document via eFILING portal 27

58. Thus, the temporary character of an adjudication decision is what makes it disputable for winding-up proceedings. Because the adjudication decision may be reversed, varied or superseded by a final determination, the debt it represents is not conclusively established as a matter of substantive right. The losing party at adjudication retains the statutory right to pursue a different outcome through court proceedings or arbitration. The existence of that right, and in particular the filing of court proceedings for final determination of the underlying disputes, is precisely the kind of genuine and substantial challenge to the petition debt that the law recognises as a basis for resisting a winding-up petition [See: Sian and V Medical Services]. On this analysis, we hold that an unregistered adjudication decision, against which a court action for final determination has been filed, is a disputable debt for the purposes of a winding-up petition.

59. This proposition requires some reconciliation with the earlier decision of this court in Bludream, where the Court of Appeal seemingly held that an adjudication decision, once delivered constituted an indisputable debt. We hold that Bludream is to be understood in the context of its facts. In that case, the adjudication decision had been registered and enforced as a court order under s. 28. The court’s holding that the debt was indisputable was a direct consequence of the s. 28 registration, which had clothed the adjudicated debt with the force of a court judgment. Bludream does not stand for the proposition that an unregistered adjudication decision is indisputable. Its ratio is **Note : Serial number will be used to verify the originality of this document via eFILING portal 28 confined to the post-registration position, and it has no application to a case, such as the present, where no s. registration has been effected. Registration – Indisputability

60. The indisputability of an adjudication decision is a qualitatively different legal status that is conferred by, and only by, registration under s. 28 of CIPAA. Section 28 provides that the adjudication decision shall be enforceable as if it were a judgment of the High Court. That statutory fiction, the “as if” formulation, is the mechanism by which the temporarily-final adjudication decision acquires the attributes of a court judgment for enforcement purposes. Once registered under s. 28, the adjudicated debt is treated in law as a judgment debt. A judgment debt is, absent appeal or stay, indisputable. The party against whom judgment is entered cannot deny liability for it in collateral proceedings, including a winding-up petition. The s. 28 registration is therefore the legal watershed that converts a disputable adjudicated debt into an indisputable judgment debt. Without it, the adjudication decision retains its temporary finality and disputable character. With it, the adjudicated debt acquires the conclusive and indisputable character of a court judgment.

61. Temporary finality and indisputability therefore operate on entirely separate axes. The former is anchored on s. 13 and the right of final determination. It is extinguished by the final determination under s. 13(c) or by set-aside under s. 15. The **Note : Serial number will be used to verify the originality of this document via eFILING portal 29 latter is anchored on s. 28 and the act of registration as a judgment. It is conferred by the court’s enforcement order and removed only by the setting aside of that order or by the supervening extinguishment of the underlying adjudication decision upon final determination. An adjudication decision that has not been registered remains disputable even though it is temporarily binding. This means that any party with a genuine and substantial basis for challenging the debt may resist a winding-up petition founded upon it. An adjudication decision that has been registered becomes indisputable as a judgment debt, and the only avenue left open to the respondent to a winding-up petition is a cross-claim on substantial grounds equalling or exceeding the registered sum.

62. Applying this framework in the present case, the Respondent has not registered the adjudication decision under s. 28. The Adjudication Costs order, being part of the adjudication decision, has likewise not been registered. The petition is therefore not premised on a judgment debt. The Adjudicated Costs debt is, therefore, a disputable debt. The Appellant is entitled to resist the petition by demonstrating that it is genuinely disputed on substantial grounds, consistently with the Sian/V Medical Services standard above.

63. The Appellant’s ground for treating the Adjudication Costs debt as genuinely disputed is the Suit 81 action that it has filed for the final determination of the underlying contractual disputes. This is the very disputes adjudicated by the adjudicator and **Note : Serial number will be used to verify the originality of this document via eFILING portal 30 dismissed with costs. The argument is that the adjudication decision, including its costs component, has the character of a temporarily-final decision susceptible to reversal by the final determination, and that the pendency of proceedings in which that reversal may be obtained constitutes a genuine and substantial dispute about the adjudicated debt. In other words, an unregistered adjudication decision on determined claims is a disputable debt, and a pending court action for final determination is capable of constituting a genuine and substantial dispute about it.

64. However, whether the Appellant has in fact demonstrated a genuine and substantial dispute on the specific facts of this case, as opposed to merely invoking the right of final determination as a tactical device to resist payment, remains a question that the court must examine on the merits of the underlying claim.

65. We would add, for completeness, that the position would be materially different if the Appellant had successfully obtained a stay of the adjudication decision under s. 16 of CIPAA. Unlike a mere pendency of court proceedings, a s. 16 stay operates within the CIPAA regime to suspend the binding force of the adjudication decision as an enforcement instrument. It does not, however, in itself resolve the question of whether the underlying debt is genuinely disputed; that remains a question for the winding-up court, to be determined by the Sian/V Medical Services standard. **Note : Serial number will be used to verify the originality of this document via eFILING portal 31

66. Applying the foregoing framework to the facts of the present appeal, we are satisfied that there is, on the face of the record, a prima facie genuine and substantial dispute over the Adjudication Costs order that formed the basis of the Petition. Two features of the present case, taken together, compel this conclusion. First, the Respondent did not register AD 4939 as a judgment under s. 28 of CIPAA. As we have held at [30]–[36] above, registration is the legal watershed that converts a disputable adjudicated debt into an indisputable judgment debt. In the absence of registration, the Adjudication Costs order retains the temporarily-final and disputable character that attaches to all unregistered adjudication decisions. Second, the Appellant has filed Suit 81 in the High Court for the final determination of the underlying construction disputes between the parties, which are the very disputes that were the subject of Adj 4939 and that the adjudicator dismissed with costs. The filing of that Suit 81 invokes the s. 13(c) right of final determination which is the defining feature of the temporary finality of an adjudication decision. A party who exercises that right does not merely dispute the adjudicated sum in the abstract, it triggers the statutory mechanism that is specifically designed to supersede the adjudication decision upon a final determination. That is precisely the kind of genuine and substantial challenge to the petition debt that the law recognises as sufficient to resist a winding-up petition founded on an unregistered adjudication decision. **Note : Serial number will be used to verify the originality of this document via eFILING portal 32

67. We address at this point a contention that featured in the submissions of the Respondent and which, if accepted, would sever the Adjudication Costs order from the general principle we have articulated. The contention runs as follows - the final determination in Suit 81 will determine only the substantive payment claims under the construction contract - it will not deal with the question of what costs the adjudicator ought to have awarded in the CIPAA proceedings. Accordingly, whatever the outcome of the final determination, the Adjudication Costs cannot be reversed or set aside by that determination, and they therefore remain indisputable regardless of the pendency of Suit 81.

68. With respect, this contention cannot be sustained, and we reject it for the following reasons.

69. The contention misunderstands the nature and operation of s. 13(c) of CIPAA. Section 13(c) provides that an adjudication decision ceases to be binding upon the making of a final determination by the court or arbitral tribunal of the disputes that were the subject of the adjudication. The language is unqualified and comprehensive: “the adjudication decision” ceases to be binding, not merely the substantive payment award, and not merely those components of the decision that the court or arbitral tribunal chooses to revisit. The extinguishing effect of s. 13(c) operates on the adjudication decision as a whole. It is not selective. When the court or arbitral tribunal makes a final determination of the underlying disputes, the **Note : Serial number will be used to verify the originality of this document via eFILING portal 33 entirety of the adjudication decision, including every part of it, including the costs order that the adjudicator made as a direct consequence of his determination of those disputes, ceases to be binding by statutory operation. The Adjudication Costs order does not enjoy a separate and more durable existence than the rest of the adjudication decision of which it forms an integral part. Once the adjudication decision is extinguished by s. 13(c), the Adjudication Costs order falls with it.

70. For the avoidance of doubt, we held there that a costs order made by an adjudicator upon the determination and dismissal of substantive payment claims is not a bare procedural order of the Multazam variety. It is an integral part of the adjudication decision itself, inseparable from the adjudicator’s exercise of his adjudicative function on the substantive claims. If the costs order is part of the adjudication decision, as we hold it to be, then it must follow that when the adjudication decision ceases to be binding under s. 13(c), the costs order ceases to be binding with it. The Respondent cannot simultaneously argue that the costs order is so closely connected to the adjudication decision that it forms part of that decision for all other purposes (enforcement, set-aside, stay) yet so disconnected from it that the extinguishing mechanism of s. 13(c) leaves the costs order untouched. That is a self-contradictory position. The costs order stands or falls with the adjudication decision of which it is a component part. **Note : Serial number will be used to verify the originality of this document via eFILING portal 34

71. There is a further dimension to the contention that deserves examination. The Respondent’s argument, at its core, is that the adjudicator’s costs order represents a procedural and forensic outcome, as in who bore the costs of the adjudication rather than a substantive determination of the parties’ rights under the construction contract, and that a final determination of those substantive contractual rights therefore cannot logically affect or reverse the costs outcome. There is a surface plausibility to this argument, but it conflates two distinct questions: (a) whether the final determination forum will itself make an order as to the adjudication costs; and (b) whether the extinguishing effect of s. 13(c) is conditional upon the final determination forum engaging with the costs question. The answer to question (a) is that the final determination forum a court or arbitral tribunal seized of the underlying disputes, will generally not make a specific order reversing the adjudicator’s costs award. But the answer to question (b) is that s. 13(c) does not require that engagement: the extinguishment is automatic and self-executing upon the making of the final determination, without any further application or order directed at the costs. The mechanism of s. 13(c) is not triggered by what the final determination court or tribunal does about costs. It is triggered by the making of a final determination of the disputes. Once triggered, its effect on the adjudication decision, including the costs component, is complete and unconditional. **Note : Serial number will be used to verify the originality of this document via eFILING portal 35

72. We turn to an important point of general principle that emerges from the foregoing analysis. In the ordinary case, where a party against whom an adjudication decision has been made subsequently files a court action or commences arbitration for the final determination of the underlying disputes, that act will ordinarily suffice to establish a genuine and substantial ground for disputing the adjudication decision for the purposes of resisting a winding-up petition premised on that decision. This is so because the filing of such proceedings is not merely a tactical manoeuvre, it is the exercise of a statutory right expressly preserved by s. 13(c) of CIPAA, the existence of which is what gives the adjudication decision its provisionally-binding rather than permanently-conclusive character. A party that exercises the s. 13(c) right is by definition asserting, through the appropriate statutory mechanism, that the adjudicated outcome should be tested by a court or arbitral tribunal with full jurisdiction over the underlying merits. That assertion is, in the language of the winding-up test, a genuine and substantial challenge to the debt.

73. The qualification to this general principle is important, however. Not every action filed or arbitration commenced in the wake of a winding-up petition will carry the same weight. The winding-up court retains jurisdiction to examine whether the final determination proceedings were filed genuinely, or whether they were filed collusively and belatedly for the collateral purpose of stifling the petition. Where the petitioner can demonstrate that the final determination proceedings are a **Note : Serial number will be used to verify the originality of this document via eFILING portal 36 device initiated not out of any genuine intention to pursue the underlying claims to a final outcome, but solely or principally as a tactical instrument to defeat the winding-up petition, the court is entitled to treat those proceedings as insufficient to establish a genuine and substantial dispute. The indicia of such a finding may include, amongst others, the very close proximity in time between the commencement of the final determination proceedings and the petition hearing, the absence of any prior steps toward litigation or arbitration despite a considerable lapse of time since the underlying dispute arose, the extent to which the claims in the final determination proceedings merely replicate claims that were already advanced and dismissed in the adjudication without any new basis or evidence, and any other conduct indicative of an absence of genuine intent to pursue the final determination to its conclusion.

74. We find in the present case that the Respondent has not demonstrated that the Appellant’s Suit 81, that is filed for the final determination of the disputes, is not genuine and is filed mala fide, with the view to stifle the winding up petition. The fact that Suit 81 was filed just before the hearing of the Petition, without more, is insufficient in this case since the Appellant had already indicated its intention to challenge the adjudication decision in its AIO. Accordingly, the winding up order made was wrong and is hereby set aside. **Note : Serial number will be used to verify the originality of this document via eFILING portal 37 Guidance for Future Cases

75. In view of the developing and, in some respects, contested state of the law at the intersection of CIPAA and the winding-up regime, we consider it appropriate to synthesise the principles emerging from this judgment in a form that may provide clear guidance for future cases. The following propositions represent the law as we hold it to be.

76. First, withdrawal costs are not an adjudication decision (Multazam confined to its facts). Where adjudication proceedings are withdrawn before the adjudicator has determined the disputes, and the adjudicator makes only a costs order pursuant to s. 17(2) of CIPAA, that order is not an “adjudication decision” within s. 13. The adjudicator has exercised no adjudicative function on the payment claim and the costs order is a purely procedural consequence of the withdrawal. Such an order falls outside the scope of ss. 13, 15, 16 and 28 of CIPAA. It is an unreviewable “adjudication order” that crystallises as a free-standing debt obligation [See: Multazam].

77. Second, a determined adjudication (including a dismissal with costs) produces an adjudication decision. Where the adjudicator has determined the disputes on the merits, whether by awarding the claimed sum, awarding a lesser sum, or dismissing the claim entirely with costs, the resulting award (including any costs component) constitutes an “adjudication **Note : Serial number will be used to verify the originality of this document via eFILING portal 38 decision” within s. 13 of CIPAA. The costs in such cases are an integral part of the adjudicative act, not a collateral procedural order. The award is accordingly subject to set-aside under s. 15, stay under s. 16, enforcement registration under s. 28, and extinguishment upon final determination under s. 13(c).

78. Third, an adjudication decision is disputable. An adjudication decision is of temporary finality. It is binding upon delivery, but its binding force is conditional and provisional. Its temporary character arises from the availability of three extinguishing events under s. 13: set-aside under s. 15; written settlement; and final determination by court or arbitration under s. 13(c). The existence of those avenues makes the adjudicated debt a disputable one as it is not conclusively established as a matter of substantive right until the possibility of those extinguishing events is exhausted.

79. Fourth, a winding-up petition on an unregistered adjudication decision may be challenged on genuine disputes based on substantial grounds. Since an unregistered adjudication decision is a disputable debt, a winding-up petition premised upon it may be resisted by demonstrating that the debt is genuinely disputed on substantial grounds [See: Sian; V Medical Services]. The filing of proceedings for final determination, or the making of a substantive set-aside application under s. 15, may constitute such a genuine disputes on substantial dispute. The decision in Bludream, which held that the debt was indisputable, is confined to its facts, which **Note : Serial number will be used to verify the originality of this document via eFILING portal 39 involved an adjudication decision that had been registered and enforced as a court order under s. 28. Bludream has no application to an unregistered adjudication decision.

80. Fifth, registration under s. 28 confers indisputability. Once registered under s. 28 as if it were a judgment, the adjudication decision acquires the status of a judgment debt. A judgment debt is indisputable for enforcement purposes. The statutory “as if” formulation treats the adjudicated debt as a court judgment, thereby conferring upon it the indisputability that attaches to all court judgments. The s. 28 registration is the legal watershed between a disputable adjudicated debt and an indisputable judgment debt.

81. Sixth, a winding-up petition on a registered adjudication decision can only be challenged by a cross-claim. Where an adjudication decision has been registered under s. 28, the resulting judgment debt is indisputable as to liability. The debtor company may not re-open the underlying dispute to resist the winding-up petition. The only avenue available is a bona fide cross-claim or set-off on substantial grounds that equals or exceeds the registered judgment sum [ See: Maju Holdings], Pontian United, Josu Engineering].

82. Seventh, final determination extinguishes the adjudication decision. Once the court or arbitral tribunal makes a final determination of the underlying disputes, the adjudication decision ceases to be binding by operation of s. 13(c) of CIPAA, **Note : Serial number will be used to verify the originality of this document via eFILING portal 40 without any further application being required. This is a self-executing extinguishment. The adjudication decision (including any costs component forming part of it) is superseded. If the adjudicated sum is confirmed by the final determination, the parties’ positions are unaffected in substance, the judgment replaces the adjudication decision as the operative instrument. If the adjudicated sum is reversed or reduced, the extinguishment of the adjudication decision leaves the losing party at adjudication with a right to recover any overpayment made pursuant to it, whether by counterclaim in the court proceedings, restitution, or set-off.

83. Eighth, a winding-up order made on an adjudication decision may be stayed or annulled if the final determination reverses the adjudicated sum. Where a winding-up order has been made against a company based on an adjudication decision, and the court or arbitral tribunal subsequently makes a final determination reversing the adjudicated sum, the company (or its liquidator) may apply to stay and or terminate or annul the winding-up order. The winding-up order does not fall automatically, it remains in force until actively discharged. The court has power to grant the necessary relief under s. 492, 493 of the CA 2016 and its inherent jurisdiction [See: In re Dynamics Corporation of America [1976] 1 WLR 757; Gan Bee San v Malayan Banking Berhad [2017] CA (unreported, 10 August 2017)]. The jurisdictional foundation of the winding-up petition — the adjudicated debt — having been removed by the final **Note : Serial number will be used to verify the originality of this document via eFILING portal 41 determination, the winding-up order is susceptible to annulment on the application of any interested party. Conclusions

84. For the reasons above, we allow this appeal with costs fixed at RM30,000.00 subject to allocator. The High Court orders are set aside. Dated this 7th day of July 2026 -sgd-ONG CHEE KWAN JUDGE COURT OF APPEAL Counsel for the Appellant :

1. Ganesh A/L Magenthiran; and

2. Suronmani A/P Krishnan. (Messrs. Ganesh Azhar & Associates) Counsel for the Respondent : Tasha Lim Yi Chien (Messrs. Gan Partnership) **Note : Serial number will be used to verify the originality of this document via eFILING portal