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Introduction
The Construction Industry Payment and Adjudication Act 2012 (Act 746) (“CIPAA”) introduced Section 30 which is a recourse and remedy available to the successful claimant in an adjudication claim who has obtained an Adjudication Decision in its favour against the respondent. The winning party may then seek direct payment of the adjudicated amount from the principal of the losing party in the Adjudication Decision.
Section 30 – Direct payment from principal
(Emphasis added)
The High Court in the case of Bumimetro Construction Sdn Bhd v Mayland Universal Sdn Bhd and another appeal [2017] MLJU 2245; [2017] CLJU 1959 (HC) held that the objective of CIPAA is to facilitate regular and timely payment in respect of construction contracts, provide a mechanism for speedy dispute resolution through adjudication and to provide remedies for the recovery of payment in the construction industry. The remedies provided for in Section 30 of CIPAA whereby the winning party in an Adjudication Decision may require the principal of the losing party in the Adjudication Decision to make direct payment shows that Parliament intended an Adjudication Decision to have immediate bite and not just a mere bark.
Overview of Cases/ Authorities
(A) Conditions and Requirements to Invoke Section 30 of CIPAA
The High Court in the case of Murni Environmental Engineering Sdn Bhd v Eminent Ventures Sdn Bhd & Anor and other suits [2016] MLJU 691 (HC) held that:
In the case of B Cor Geotechnics Sdn Bhd v Panzana Enterprise Sdn Bhd [2019] MLJU 1030; [2019] CLJU 1393 (HC), the High Court held that:
The High Court in the case of Glocal Tech Engineering Sdn Bhd v Panzana Enterprise Sdn Bhd [2021] MLJU 474; [2021] CLJU 429 (HC) followed the legal principles enunciated in Murni Engineering (supra) and B Cor Geotechnics (supra), and laid out the following conditions which must be fulfilled before the winning party in an adjudication decision can invoke the remedy in Section 30 of CIPAA:
Please click here to read the full article: https://hhq.com.my/posts/section-30-cipaa-2012-overview-of-authorities-on-direct-payment-from-principal/
About the Authors
Chew Jin Heng
Associate
Dispute Resolution
Halim Hong & Quek
[email protected]
Xean Chew
Pupil-in-Chambers
Dispute Resolution
Halim Hong & Quek
[email protected]
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