CESCON ENGINEERS SDN. BHD. PESAT BUMI SDN. BHD.

CESCON ENGINEERS SDN. BHD. PESAT BUMI SDN. BHD.

The setting aside application succeeds: the adjudicator relied on undisclosed SSM company search results and drew an adverse "not at arm's length" inference about related shareholders/directors which materially affected his findings (notably reinstatement of sums in VO7) without showing the search results or affording the parties an opportunity to comment; that material breach of natural justice required setting aside the adjudication decision and consequently dismissal of the enforcement application.

Citation
WA-24C-163-07/2020 & WA-24C-176-08/2020 (Mahkamah Tinggi)
Parties
Plaintiff in WA 24 C 163 07/2020; Defendant in WA 24 C 176 08/2020: Cescon Engineers Sdn. Bhd.; Defendant in WA 24 C 163 07/2020; Plaintiff in WA 24 C 176 08/2020: Pesat Bumi Sdn. Bhd.
Court
High Court
Jurisdiction
Malaysia
Judgment Date
24 December 2020
Case Number
WA-24C-163-07/2020 & WA-24C-176-08/2020 (Mahkamah Tinggi)
Procedural Posture
Originating Summons Proceedings Under the Construction Industry Payment and Adjudication Act 2012 (cipaa) / Hearing of Concurrent Applications to Enforce, Set Aside and Stay an Adjudication Decision; High Court Judgment Delivered
Outcome
Setting Aside Application allowed; Enforcement Application dismissed; Stay Application dismissed
Legal Topics
Adjudication Under CIPAA, Setting Aside Adjudication Decision (s 15), Natural Justice (audi Alteram Partem), Enforcement of Adjudication Decision (s 28), Adjudicator Impartiality and Disclosure, Stay of Adjudication Decision (s 16)
Source Language
Malay/English
Construction Law Administrative Law Civil Procedure Contract Law Adjudication Under CIPAA Setting Aside Adjudication Decision (s 15) Natural Justice (audi Alteram Partem) Enforcement of Adjudication Decision (s 28) +2 more

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Parties

Cescon Engineers Sdn. Bhd.

Plaintiff in WA 24 C 163 07/2020; Defendant in WA 24 C 176 08/2020

Pesat Bumi Sdn. Bhd.

Defendant in WA 24 C 163 07/2020; Plaintiff in WA 24 C 176 08/2020

Procedural Posture

Originating Summons Proceedings Under the Construction Industry Payment and Adjudication Act 2012 (cipaa) / Hearing of Concurrent Applications to Enforce, Set Aside and Stay an Adjudication Decision; High Court Judgment Delivered

Legal Issues

  1. 1 Whether the adjudicator breached the rules of natural justice by relying on undisclosed company search results and drawing adverse inferences without giving parties an opportunity to respond
  2. 2 Whether the adjudicator acted without independence or impartiality
  3. 3 Whether the adjudicator exceeded jurisdiction

Ratio Decidendi

The setting aside application succeeds: the adjudicator relied on undisclosed SSM company search results and drew an adverse "not at arm's length" inference about related shareholders/directors which materially affected his findings (notably reinstatement of sums in VO7) without showing the search results or affording the parties an opportunity to comment; that material breach of natural justice required setting aside the adjudication decision and consequently dismissal of the enforcement application.

Court Disposition

Setting Aside Application allowed; Enforcement Application dismissed; Stay Application dismissed

Orders

  • Setting Aside Application (O.S. No. WA-24C-176-08/2020) allowed; adjudication decision set aside
  • Enforcement Application (O.S. No. WA-24C-163-07/2020) dismissed