GD BUILDERS SDN BHD CTY FACADE BUILDER SDN BHD

WA-24C-215-11/2022 Kand. 16 16/05/2023 15:13:55 IN THE HIGH COURT OF MALAYA IN KUALA LUMPUR (CONSTRUCTION COURT) ORIGINATING SUMMONS NO: WA-24C-202-10/2022 In the matter of Construction Agreement between CTY Façade Builder Sdn Bhd and GD Builders Sdn Bhd dated 24.7.2020 And In the matter of the Adjudication Reference No: AIAC/D/ADJ-4283- 2022 between CTY Façade Builder Sdn Bhd as Claimant and GD Builders Sdn Bhd as Respondent at the Asian International Arbitration Centre And In the matter of Adjudication Decision dated 23.9.2022 by Ang Boon Pin, Adjudicator And In the matter of Sections 12, 13 and/or 28 of the Construction Industry Payment and Adjudication Act 2012 (Act 746) And 1 S/N tWGWFVqEtEa8DkfIDis/Q **Note : Serial number will be used to verify the originality of this document via eFILING portal In the matter of Order 69A and Order 92 Rule 4 of the Rules of Court 2012 BETWEEN CTY FAÇADE BUILDER SDN BHD (No. Company: 74519-U) … PLAINTIFF AND GD BUILDERS SDN BHD (No. Company: 935185-K) … DEFENDANT Heard together with IN THE HIGH COURT OF MALAYA IN KUALA LUMPUR (CONSTRUCTION COURT) ORIGINATING SUMMONS NO: WA-24C-216-11/2022 In an Adjudication Reference No: AIAC/D/ADJ-4283-2022 between CTY Façade Builder Sdn Bhd (Claimant) and GD Builders Sdn Bhd as (Respondent) under the Construction Industry payment and Adjudication Act 2012 And 2 S/N tWGWFVqEtEa8DkfIDis/Q **Note : Serial number will be used to verify the originality of this document via eFILING portal In the matter of the Adjudication Decision dated 23.9.2022 and Correction of Adjudication Decision dated 11.10.2022 by Ang Boon Pin, Adjudicator And In the matter of the Letter of Appointment between CTY Façade Builder Sdn Bhd and GD Builders Sdn Bhd dated 24.7.2020 And In the matter of the Agreement And Conditions of PAM Sub-Contract 2006 (For Use Where the Sub-Contractor is Nominated Under the PAM Contract 2006) between CTY Façade Builder Sdn Bhd and GD Builders Sdn Bhd And In the matter of Section 15(b) and/or (d) of the Construction Industry payment and Adjudication Act 2012 And In the matter of Order 7, 28, 69A and Order 92 Rule 4 of the Rules of Court 2012 3 S/N tWGWFVqEtEa8DkfIDis/Q **Note : Serial number will be used to verify the originality of this document via eFILING portal BETWEEN GD BUILDERS SDN BHD (No. Company: 935185-K) … PLAINTIFF AND CTY FAÇADE BUILDER SDN BHD (No. Company: 74519-U) … DEFENDANT And Also Heard together with IN THE HIGH COURT OF MALAYA IN KUALA LUMPUR (CONSTRUCTION COURT) ORIGINATING SUMMONS NO: WA-24C-215-11/2022 In an Adjudication Reference No: AIAC/D/ADJ-4283-2022 between CTY Façade Builder Sdn Bhd (Claimant) and GD Builders Sdn Bhd (Respondent) under the Construction Industry Payment and Adjudication Act 2012 And In the matter of the Adjudication Decision dated 23.9.2022 and 4 S/N tWGWFVqEtEa8DkfIDis/Q **Note : Serial number will be used to verify the originality of this document via eFILING portal Correction of Adjudication Decision dated 11.10.2022 by Ang Boon Pin, Adjudicator And In the matter of the Letter of Appointment between CTY Façade Builder Sdn Bhd and GD Builders Sdn Bhd dated 24.7.2020 And In the matter of the Agreement And Conditions of PAM Sub-Contract 2006 (For Use Where the Sub-Contractor is Nominated Under the PAM Contract 2006) between CTY Façade Builder Sdn Bhd and GD Builders Sdn Bhd And In the matter of Section 16(1)(b) Section 16(2) of the Construction Industry Payment and Adjudication Act 2012 And In the matter of Order 7, 28, 69A and Order 92 Rule 4 of the Rules of Court 2012. 5 S/N tWGWFVqEtEa8DkfIDis/Q **Note : Serial number will be used to verify the originality of this document via eFILING portal BETWEEN GD BUILDERS SDN BHD (No. Company: 935185-K) … PLAINTIFF AND CTY FAÇADE BUILDER SDN BHD (No. Company: 74519-U) … DEFENDANT GROUNDS OF JUDGMENT (Enclosure 1) 1. Originating Summons WA-24C-216-11/2022 (OS 216) is GD Builders Sdn Bhd’s (“GDB”) application to set aside the Adjudication Decision dated 23.9.2022 (“AD”) granted to CTY Facade Builder Sdn Bhd (“CTY”) for the sum of RM420,423,76 which was subsequently corrected via. Correction of AD dated 23.9.2022 and Originating Summons WA-24C-215-11/2022 (“OS 215”) is GDB’s application for a stay of the AD pending the matter between GDB and CTY being finally disposed of in the Arbitration Proceedings whilst Originating Summons WA-24C-202-10/2022 (“OS 202”) is CTY Facade Builder Sdn Bhd’s (“CTY”) application under section 28 CIPAA to enforce the AD. Background Facts 2. GD Builders is the main contractor appointed for a project known as “Cadangan Pembangunan Perdagangan Yang Mengandungi: 1 6 S/N tWGWFVqEtEa8DkfIDis/Q **Note : Serial number will be used to verify the originality of this document via eFILING portal Blok Pangsapuri Servis (138 Unit) Dan Pejabat 22 Tingkat Yang Terdiri Daripada 1 Tingkat Kemudahan (Di Aras 9), 7 Tingkat 138 Unit Pangsapuri Servis (Di Aras 10-16), 1 Tingkat Kemudahan Pejabat (Di Aras 17), 10 Tingkat Pejabat (Di Aras 18-27), 1 Tingkat Kemudahan Pejabat (Di Aras 28), 1 Tingkat Pejabat ‘Penthouse’ (Di Aras 29) & 1 Tingkat Mekanikal (Di Aras 30); Ii 1 Blok Pangsapuri Servis 36 Tingkat ( 522 Unit ) Yang Terdiri Daripada 1 Tingkat Kemudahan Pangsapuri Servis (Di Aras 9), 2 Tingkat 29 Unit Pangsapuri Servis Dan Mekanikal (Di Aras 10-11), 15 Tingkat 240 Unit Pangsapuri Servis (Di Aras 12 - 26), 2 Tingkat 29 Unit Pangsapuri Servis Dan Mekanikal (Di Aras 27 - 28), 14 Tingkat 224 Unit Pangsapuri Servis (Di Aras 29 - 42), 1 Tingkat Kemudahan Pangsapuri Servis (Di Aras 43) & 1 Tingkat Mekanikal (Di Aras 44) Dengan 10 Tingkat Podium ‘Annexe Ruang’ Niaga Dan Tempat Letak Kereta Yang Terdiri Daripada 1 Tingkat Lobi Utama, Ruang Niaga Dan Mekanikal (Di Aras Bawah) & 9 Tingkat Tempat Letak Kereta (Di Aras Ga – 8) Berserta 1 Tingkat Basemen Tempat Letak Kereta Di Atas Lot 44983 Dan 44984, Mukim Petaling, Bandar Baru Sri Petaling, Kuala Lumpur Untuk Tetuan Stellar 8 Sdn Bhd" ("Project"). 3. CTY is the nominated subcontractor for the design, supply, delivery, installation and testing of the complete facade treatment works for the Project (“Subcontract Works”). 4. Through the Letter of Appointment dated 24.7.2020 (hereinafter referred to as "LOA") issued by GD Builders to CTY, CTY was appointed as the subcontractor for the Subcontract Works. CTY accepted the appointment. 7 S/N tWGWFVqEtEa8DkfIDis/Q **Note : Serial number will be used to verify the originality of this document via eFILING portal 5. On or around September 2020, a dispute arose between CTY and Juru Kos (the QS) in respect of CTY’s scope of work under the Project ie. whether CTY’s scope of work include the works for “Office Tower – Roof Crown Steel Frame”. The dispute escalated in or around March 2021 between CTY and Juru Kos leading CTY to issue a letter dated 28.4.2021 to the Employer requesting the Employer’s involvement to settle the dispute. 6. Whilst parties were disputing CTY’s scope of works as stated above, CTY had issued Progress Claims for the alleged work done for the Project. Additionally, CTY then issued Site Progress Reports starting from Site Progress Report No. 1 dated 5.5.2022 until Site Progress Report No. 10 dated 5.10.2021 (i.e. 10 site progress reports in 5 months despite CTY’s allegation that GD Builders has allegedly failed to handover site possession to CTY). 7. GD Builders had included all of CTY’s Progress Claims in GD Builder’s respective Interim Progress Claim and submitted the same to the Architect for valuation and certification, and CTY’s claim has been valued and/or certified as follows:- No. Progress Claim Amount Claimed Amount Certified (RM) (RM) 1. Progress Claim No. 2 dated RM300,800.00 uncertified 25.9.2020 2. Progress Claim No. 3 dated RM323,200.00 Uncertified 22.4.2021 8 S/N tWGWFVqEtEa8DkfIDis/Q **Note : Serial number will be used to verify the originality of this document via eFILING portal 3. Progress Claim No. 4 dated RM377,200.00 Payment of 25.9.2022 RM88,560.00 certified 4. Progress Claim No. 5 dated RM542,800.00 Uncertified 25.6.2021 5. Progress Claim No. 6 dated RM786,461.38 Payment of 25.9.2022 RM50,000.00 certified 8. In any event, it was alleged that due to CTY’s failure to comply with the Condition Precedent under the agreement between the parties (failure to submit the Performance Bond), had caused GD Builders to withhold any payment due to CTY in the sum of RM1,189,850.00. 9. CTY further alleged that GD Builders had allegedly wrongfully withheld payments that are due and owing to CTY, and terminated the agreement by a letter dated 8.10.2021 with immediate effect. 10. Six months after the termination of the agreement by CTY, CTY commenced the Adjudication Proceedings against GD Builders claiming payment amounting to RM951,334.87 purportedly accrued to CTY as follows:- No. Alleged Basis of Claim Amount claimed (RM) 1. Progress Claim No. 2 dated 25.9.2020 300,800.00 (uncertified) 2. Progress Claim No. 3 dated 22.4.2021 22,400.00 (uncertified) 9 S/N tWGWFVqEtEa8DkfIDis/Q **Note : Serial number will be used to verify the originality of this document via eFILING portal 3. Progress Claim No. 4 dated 24.5.2021 and 88,560.00 Interim Valuation dated 9.6.2021 4. Progress Claim No. 6 dated 25.8.2021 and 50,000.00 Interim Valuation dated 10.9.2021 (certifying the sum of RM50,000.00 payable to CTY) 5. Idling costs claimed under Progress Claim No. 209,000.00 5 dated 25.6.2021 (uncertified) 6. Idling costs claimed under Progress Claim No. 270,734.87 6 dated 25.8.2021 (uncertified) 7. Retention Sum 9,840.00 TOTAL RM951,334.87 11. Through GD Builders’ Payment Response dated 12.5.2022 and Adjudication Response dated 20.7.2022, GD Builders submitted inter alia as follows:- 13.1. GD Builders challenged the Adjudicator’s jurisdiction from determining the issue of delay and extension of time; 13.2. CTY has unlawfully terminated the agreement between the parties; 13.3. CTY has breached the agreement when :- a) CTY failed to submit a programme that complies with the contractual completion date; b) CTY failed to resubmit the work programme based on the latest site condition and GD Builder’s revised master work programme; 10 S/N tWGWFVqEtEa8DkfIDis/Q **Note : Serial number will be used to verify the originality of this document via eFILING portal c) CTY failed to construct and complete the roof crown steel structure support for stick wall glass panel above level 30; d) CTY failed to submit the Performance Bond prior to the commencement of Subcontract Works; 13.4. No amount is due to CTY as a result of CTY’s own breach and CTY’s own admission and acknowledgment for GD Builders to retain the payment due to satisfy the requirement of submission of Performance Bond; 13.5. CTY failed to prove its idling cost claim; 13.6. CTY is not entitled to claim for the release of the Retention Sum arising from its own unlawful termination of the agreement; and 12. GD Builders further claimed for set-off against CTY in the total sum of RM6,753,000.00 for:- 14.1. Difference between the new contract value due to CTY’s wrongful termination in the sum of RM2,203,000.00; 14.2. Liquidated Damages in the sum of RM3,600,000.00; and 14.3. Overhead costs of RM950,000.00. 11 S/N tWGWFVqEtEa8DkfIDis/Q **Note : Serial number will be used to verify the originality of this document via eFILING portal 13. On 23.9.2022, the Adjudicator issued the Adjudication Decision in the Adjudication Reference No: AIAC/D/ADJ-4283-2022 (AD) whereby it was inter alia adjudicated as follows:- (i) The uncertified sum of RM300,800.00 pursuant to Progress Claim No. 2 is allowed with late payment interest at the rate of 6.4% per annum from 16.12.2020 until full realisation; (ii) The uncertified sum of RM22,400.00 pursuant to Progress Claim No. 3 is allowed with late payment interest at the rate of 6.4% per annum from 13.7.2021 until full realisation; (iii) The certified sum of RM88,560.00 pursuant to Progress Claim No. 4 is allowed with late payment interest at the rate of 6.4% per annum from 19.7.2021 until full realisation; (iv) The certified sum of RM50,000.00 pursuant to Progress Claim No. 6 is allowed with late payment interest at the rate of 6.4% per annum from 21.10.2021 until full realisation; (v) The Claimant's claim for idling cost and/or loss and expense of RM479,734.87 is dismissed; (vi) The Respondent to release the retention sum of RM9,840.00 to the Claimant within 14 days from the date of this decision failing which the Claimant in entitled to a late payment interest at the rate of 6. 4% per annum from the expiration of the 14 days hereof until its full realisation; 12 S/N tWGWFVqEtEa8DkfIDis/Q **Note : Serial number will be used to verify the originality of this document via eFILING portal (vii) The Respondent to pay the Claimant party to party costs of RM15,000.00 within 14 days from the date of this decision; and (viii) The Respondent to solely bear the Adjudicator Fee and the AIAC administrative fee in the sum of RM22,223. 76 which to be paid to the Claimant within 14 days from the date of the decision. 14. On 11.10.2022, the Adjudicator further issued a Correction of Adjudication Decision dated 23.9.2022 (Corrected AD) pursuant to S.12(7) CIPAA 2012 whereby the Adjudicated Sum for item (i) in relation to Progress Claim No. 2 was reduced from RM300,800.00 to RM212,400.00 Issues and Findings 15. I will now deal with the issues in OS 216 where it was claimed by GDB that: (i) the Adjudicator did not have the jurisdiction to hear and/or determine the issues pertaining to delay and/or extension of time (ii) the issue of the unilateral and wrongful termination due to CTY’s alleged breach of contract such as, amongst others, the failure to submit the work programme, failure to complete the roof crown steel structure support for stick wall glass above level 30 and the failure to submit the Performance Bond (“PB”) 13 S/N tWGWFVqEtEa8DkfIDis/Q **Note : Serial number will be used to verify the originality of this document via eFILING portal (iii) the Adjudicator had acted in breach of natural justice and /or in excess of jurisdiction in allowing CTY’s claim for Progress Claim no 2 and 3 (iv) the Adjudicator had acted in excess of his jurisdiction in deciding CTY’s claim for idling costs and /or loss of expenses for Progress Claims no 5 and 6 (v) CTY was not allowed to be paid as CTY had not provided the Performance Bond (vi) GDB is not liable to pay CTY the progress claims as clause 10.1 of the LA states that payment shall be made by the Employer (vii) the Adjudicator had acted in breach of natural justice and /or in excess of jurisdiction in allowing CTY’s claim for the retention sum (viii) the Adjudicator had acted in breach of natural justice and /or in excess of jurisdiction in disallowing GDB’s counter claim and set off (ix) the Adjudicator had acted in breach of natural justice and /or in excess of jurisdiction in allowing CTY’s claim for liquidated damages (x) the Adjudicator is incompetent (xi) the dispute ought to be proceeded with by way of arbitration instead of the adjudication proceedings Adjudicators Jurisdiction 16. As to the issue of the Adjudicator not having the jurisdiction to hear and/or determine the issues pertaining to delay and/or extension of time, I have perused the AD and find that the Adjudicator had dealt with the same in the AD, see paragraphs 19 -22 as seen in exhibit 14 S/N tWGWFVqEtEa8DkfIDis/Q **Note : Serial number will be used to verify the originality of this document via eFILING portal GDB 12 of enclosure 2 in OS 216, and held that he was not prohibited from considering the grounds in the Adjudication claim after referring and considering the Federal Court case of View Esteem Sdn Bhd v Bina Puri Holdings Bhd [2018] 2 MLJ 22, and where the Adjudicator then held that “…the delay alleged as stipulated in the Adjudication Claim (AC) is one of the ground to state the ‘nature and description of the dispute and remedy sought.”. As the Setting Aside Application is not an appeal against the AD, this court will not interfere with the Adjudicator’s findings. 17. On this point, I further note that the respective parties had agreed for the Adjudicator to determine the issue of the validity of the termination in the AD as GDB had in paragraph 41 and 42 of its Adjudication Response raised the issue of the purported release of the Retention sum to which GDB claims that CTY was not entitled to due to inter alia CTY’s alleged “wrongful and unlawful termination”. In any event the case of View Esteem(Supra) as well as Section 9 and 27 of CIPAA will cover this where the said section provides: “Section 9 (1) The claimant shall, within ten working days from the receipt of the acceptance of appointment by the adjudicator under subsection 22(2) or 23(2), serve a written adjudication claim containing the nature and description of the dispute and the remedy sought together with any supporting document on the respondent.” “Section 27 15 S/N tWGWFVqEtEa8DkfIDis/Q **Note : Serial number will be used to verify the originality of this document via eFILING portal (1) 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 (Payment Claim) and 6 (Payment Response).” 18. Thus, following from the above, I find that the Adjudicator did have the jurisdiction to determine the aforesaid issues and that GDB’s contention on this is entirely misconceived. Alleged Unilateral And Wrongful Termination 19. As to the ground of the issue of termination in GDB’s challenge to the registration of the AD, I do not find that GDB raised the issue of jurisdiction on this point in their Adjudication Response and I hold that GDB is trying to seek a rehearing of the merits of this. From a reading of the AD at paragraphs 23 to 41 I have noted that the Adjudicator had after considering the parties respective arguments on this issue and the pleadings before him, found inter alia: (i) “The notice of termination dated 8.10.2021 in terminating the Contract was inter alia premise on the ground of the Respondent delayed its works resulted in unable to provide working area for the Claimant in carrying out its works” (ii) that the non compliance of the termination procedures and bad faith as not being proven by GDB and (iii) agreed with CTY’s position in terminating the Contract premised on the delay of GDB in giving site possession and that the said termination was in accordance with cause 24.1 (b) of the PAM CONTRACT 2006 and was lawful. 16 S/N tWGWFVqEtEa8DkfIDis/Q **Note : Serial number will be used to verify the originality of this document via eFILING portal 20. As the Adjudicator had carefully considered the respective parties contention on this point, and come to his decision thereafter, I have no reason to disturb this finding and thus this Court therefore dismisses this ground of alleged unilateral and wrongful termination as being of no substance. Progress Claim No 2 And 3 21. GDB had also submitted that he Adjudicator had acted in breach of natural justice and /or in excess of jurisdiction in allowing CTY’s claim for Progress Claims no 2 and 3 on the grounds that the Adjudicator had failed to properly examine the uncertified Progress Claims no 2 and 3, acted in breach of natural justice when he dismissed the Architect’s and QS Statutory Declarations (SD). 22. Here again I have found that the Adjudicator had in paragraphs 42 to 61 of the AD considered and dealt with the issue of Progress Claim no 2 and 3 in quite some detail. In the said AD, the Adjudicator on this matter had considered (a) the various shop drawings for Progress Claim no 2 and found that CTY had merely claimed 63% of the total lump sum amount of RM160,000 and 100% of the preparation of tender amounting to RM200,000 (b) the various uncertified amounts in Progress Claim no 3 and the documents in support thereto (c) the Architect’s and QS SD’s 17 S/N tWGWFVqEtEa8DkfIDis/Q **Note : Serial number will be used to verify the originality of this document via eFILING portal 23. After taking into account the parties respective positions and submissions on the same, the Adjudicator then held that (i) GDB “did not discharge the onus in its proving its allegation that there is lacking of evidence in showing the Claimants work was done” (ii) the averments in the SD as ‘doubtful and not plausible’ (iii) there is … ‘no provision in the Contract which would justify a non certification of a progress claim due to lacking of a performance bond’ (iv) he would invoke his powers pursuant to section 25(n) of CIPAA and allowed the said Progress Claims no 2 and 3 24. Based on the above, I thus hold that this ground of GDB’s contention that there was a breach of natural justice and/or in excess of jurisdiction in allowing CTY’s claim for Progress Claim no 2 and 3 as being unproven and misconceived as the Adjudicator had examined the uncertified Progress Claim no 2 and 3 as well as whatever evidence in support thereto before making his decision. There is also no necessity for the Adjudicator to call for a hearing as under section 25 CIPAA, he has the power to determine or establish the procedures for the adjudication matter before him. Idling Costs And /Or Loss Of Expenses For Progress Claims No 4 And 6 25. With regards the contention that the Adjudicator had acted in excess of his jurisdiction in deciding CTY’s claim for idling costs and /or loss of expenses for Progress Claims no 4 and 6; I find that the Adjudicator had addressed this at paragraphs 87 – 100 of the AD and held inter 18 S/N tWGWFVqEtEa8DkfIDis/Q **Note : Serial number will be used to verify the originality of this document via eFILING portal alia that the issue of jurisdiction on this point does not fall within the ambit of ‘claim’ under the definition of ‘payment’ under CIPAA and that pursuant to clause 22.1 of the PAM Contract there was express provision for assessing this claim for loss and expense and in accordance with Syarikat Bina Daruk Aman Bhd & Anor v Government of Malaysia [2017] MLJU 2381 the same can thus be adjudicated under CIPAA. 26. The Adjudicator then went through the law on CTY’s claim for idling costs and /or loss of expenses and after going through various case law authorities and the relevant provision in the PAM Contract as well as the respective documentation between the parties and concluded that the said claim was based on the facts, out of time. Hence this issue is academic and not relevant to the proceedings before me. Performance Bond & Statutory Declarations 27. In respect of the contention by GDB that CTY was not allowed to be paid as CTY had not provided the Performance Bond (PB); I find that the Adjudicator had again dealt with this at paragraphs 65 to 76 of the AD. This issue arose as a result of the express provision of clause 9 of the LA which requires CTY to issue a PB equivalent to 5% of the Sub contract sum from the earliest due certification as a Security Deposit and where GDB had produced the SD’s in support of their case to state that the Progress Claim no 2 and 3 had not been certified due to the non issuance of the PB and that there was no evidence submitted by CTY that the works had been done, which was also dealt with by the Adjudicator from paragraphs 55 to 58 of the AD 19 S/N tWGWFVqEtEa8DkfIDis/Q **Note : Serial number will be used to verify the originality of this document via eFILING portal in respect of the former and in paragraphs 48 to 54 of the AD with regards the latter. 28. After going through the facts, the Adjudicator found the SD’s were amongst others affirmed 1 year after the commencement of the adjudication proceedings and held that the said SD’s were ‘doubtful and not plausible’ and that had the work not been done, the Architect and QS would have raised their concern at the material time but nit to aver it in the SD’s after a lapsed of 1 year and there was no ground for non certification of progress claims due to the lack of the PB. The Adjudicator thereafter concluded that from the facts , he found evidence submitted by CTY that the works had been done and it was his “finding that the Claimant has lawfully determined its own employment…” and referred to clause 32.6 of the PAM Contract which stated that the Contractor i.e GDB, was to return the PB within 28 days to CTY for cancellation when CTY terminates their employment and thus allowed the said claim under this heading. 29. Again, with respect, I see no issue with Adjudicator’s decision and the case as claimed by GDB on this heading has no basis and has failed to be proven to justify any claims of either breach of natural justice and/or excess of jurisdiction on the part of the Adjudicator’s decision. Conditional Payment 30. I will now turn to the issue of whether GDB liable to pay CTY the progress claims as clause 10.1 of the LA states that payment shall 20 S/N tWGWFVqEtEa8DkfIDis/Q **Note : Serial number will be used to verify the originality of this document via eFILING portal be made by the Employer. This is clearly a contravention of section 35 of CIPAA which reads: (1) Any conditional payment provision in a construction contract in relation to payment under the construction contract is void. (2) For the purposes of this section, it is a conditional payment provision when:- (a) the obligation of one party to make payment is conditional upon that party having received payment from a third party; or (b) the obligation of one party to make payment is conditional upon the availability of funds or drawdown of financing facilities of that party. 31. Thus, GDB’S contention on this is a non issue and is dismissed. Retention Sum 32. In relation to GDB’s allegation that the Adjudicator had acted in breach of natural justice and /or in excess of jurisdiction in allowing CTY’s claim for the retention sum of RM9,840 when CTY had wrongfully and unlawfully terminated the Contract. 33. In coming to his decision on this point, the Adjudicator had referred to and accepted the principle in ABB Transmissions & Distributions Sdn Bhd v Sri Antan Sdn Bhd [2009] 7 MLJ 644 that the objective of retention sums is mainly for the purpose of set off against costs in rectifying defects in the event the Claimant failed to 21 S/N tWGWFVqEtEa8DkfIDis/Q **Note : Serial number will be used to verify the originality of this document via eFILING portal attend to the defects during the Defect Liability Period, and since he had decided that the termination was lawful, CTY’s contention was inapplicable. 34. Again, I hold that as the Adjudicator had decided on this issue, this Court cannot re hear this issue. Counter Claim and Set Off 35. GDB had also submitted that the Adjudicator had acted in breach of natural justice and /or in excess of jurisdiction in disallowing GDB’s counter claim and set off based on the alleged breach by CTY of the Contract amounting to RM6,753,000. 36. I have found that the Adjudicator had dealt with this at paragraphs 108 to 118 of the AD and after examining the submissions and authorities on this issue, and held that the parties are to be bound by the terms of the Contract in this respect and GDB’s ‘common law and equitable rights of set off are extinguished by clear implication’ after finding that GDB had failed to adduce evidence on the details of the set off within the prescribed period under the PAM Contract and therefore failed to discharge its burden thereto. 37. This Court holds no breach of natural justice and /or in excess of jurisdiction has been committed by the Adjudicator on this issue as this is not a case where this Court is acting as an appellate Court to review the decision of the Adjudicator so long as has carefully considered the contentions of both the parties in deciding to dismiss the same. 22 S/N tWGWFVqEtEa8DkfIDis/Q **Note : Serial number will be used to verify the originality of this document via eFILING portal Liquidated Damages Claim 38. With regards the allegation by GDB that the Adjudicator had acted in breach of natural justice and /or in excess of jurisdiction in allowing GDB’s claim for liquidated damages (LAD) for RM3,600,000 ; the Adjudicator had in the AD held that he was guided by clause 16.1 of the PAM contract with regards this issue and that as there was no Certificate of Non Completion adduced by GDB in accordance with the said clause, and CTY had adduced the Site Progress Report nos 1 -10 justifying GDB’s inaction and delayed its Works which caused CTY to be unable to access the site in carrying out its works, GDB was not entitled to LAD. 39. Once again, I find no breach of natural justice and /or in excess of jurisdiction by the Adjudicator on this issue. Adjudicator’s Alleged Incompetency 40. There is also the contention by GDB that the Adjudicator is incompetent as his appointment in the said adjudication proceedings were not in accordance with the PAM Contract which requires the Adjudicator to be appointed by the Pertubuhan Arkitek Malaysia (“PAM”) and not the AIAC and that the adjudication was supposed to be conducted pursuant to the PAM Adjudication Rules and not CIPAA. 41. To this, I firstly have found nothing in the Adjudication Response or at any point during the course of the adjudication proceedings objecting to the learned Adjudicators appointment or the provisions 23 S/N tWGWFVqEtEa8DkfIDis/Q **Note : Serial number will be used to verify the originality of this document via eFILING portal of CIPAA being used in the said adjudication proceedings ; and secondly I hold that since this is a statutory Adjudication pursuant to CIPAA and where the parties have not gone on to appoint an adjudicator by agreement, to which I must add GDB has already by their conduct submitted to such jurisdiction by participating fully in the said adjudication proceedings, AIAC is in the circumstances the correct and proper party to appoint the Adjudicator in the said adjudication proceedings. 42. I also rely on Bumimetro Constrcution Sdn Bhd v Mayland Universal Sdn Bhd and anor case [2017] MLJU 1993 where the Court following Martego Sdn Bhd v Arkitek Meor & Chew Sdn Bhd [2017] 1 CLJ 101 had stated: “[34] Statutory adjudication referred under CIPAA does not require the agreement of the parties to commence the process and prevails over the parties’ agreement to arbitrate in that arbitration cannot stand in the way of Statutory Adjudication and neither can it stultify or have the effect of automatically staying an Adjudication Decision until the Arbitral Award is delivered. In Martego Sdn Bhd v Arkitek Meor & Chew Sdn Bhd [2017] 1 CLJ 101 it was observed as follows: “[89] Statutory Adjudication does not require the agreement of the parties to commence the process and prevails over any contractual agreements to the contrary between the parties. Statutory Adjudication stand alone and aloof of all other alternative modes of dispute resolution like Arbitration or Litigation. 24 S/N tWGWFVqEtEa8DkfIDis/Q **Note : Serial number will be used to verify the originality of this document via eFILING portal 43. For GDB to rely on the terms of the PAM Contract vis a vis the Adjudicator to be appointed by the Pertubuhan Akitek Malaysia (“PAM”) and that the adjudication was supposed to be conducted pursuant to the PAM Adjudication Rules, GDB must expressly notify CTY of its intention to be bound by the terms of the PAM Contract and not subscribe and/or submit, as in this case to the provisions of CIPAA with regards the appointment of the Adjudicator herein and the use of CIPAA in its adjudication. Once GDB has submitted to the jurisdiction of CIPAA, they will have waived their rights to be bound by the terms of the PAM Contract vis a vis the Adjudicator’s appointment and the use of the PAM Adjudication Rules and are instead bound by the CIPAA provisions and are estopped for raising this issue further, see the Federal Court case of Boustead Trading (1985) Sdn Bhd v Arab Malaysian Merchant Bank Bhd [1995] 3 MLJ 331 on the principles of estoppel. 44. Section 4 of CIPAA provides that:- "adjudicator" means an individual appointed to adjudicate a dispute under this Act; 45. Section 21 of CIPAA on the other hand states: An adjudicator may be appointed in the following manner:- (a) by agreement of the parties in dispute within ten working days from the service of the notice of adjudication by the claimant; or (b) by the Director of the KLRCA:- 25 S/N tWGWFVqEtEa8DkfIDis/Q **Note : Serial number will be used to verify the originality of this document via eFILING portal (i) upon the request of either party in dispute if there is no agreement of the parties under paragraph (a); or (ii) upon the request of the parties in dispute. 46. Accordingly by virtue of sections 4 and 21 of CIPAA, and the conduct of GDB in the adjudication proceedings thereto, I thus hold that the appointment of the Adjudicator herein is valid and proper, and that GDB’s submission on this is rejected by this Court. Proceedings Ought to be brought by Arbitration 47. As to the contention by GDB that the dispute ought to be proceeded with by way of arbitration instead of the adjudication proceedings, I only need state that it is settled law that CIPAA was meant to alleviate cash flow issues by providing an effective and economical mechanism, see Martego Sdn Bhd v Arkitek Meor & Chew Sdn Bhd and Anor appeal [2020] 6 MLJ 224. 48. In Ranhill E&C Sdn Bhd v Tioxide (Malaysia) Sdn Bhd [2015] 1 LNS 1435 the High Court held at paragraph [40] of the judgment that: “... the right to refer to adjudication is a statutory right the (sic) cannot be rendered meaningless by reason of a good contractual promise to arbitrate” 49. Further based on Section 37 of CIPAA: 26 S/N tWGWFVqEtEa8DkfIDis/Q **Note : Serial number will be used to verify the originality of this document via eFILING portal (1) A dispute in respect of payment under a construction contract may be referred concurrently to adjudication, arbitration or the court. (2) Subject to subsection (3), a reference to arbitration or the court in respect of a dispute which is being adjudicated shall not bring the adjudication proceedings to an end nor affect the adjudication proceedings. 50. Thus, by virtue of the above section and case law authorities, the adjudication proceedings can be referred concurrently to arbitration and does not render the adjudication invalid even where there is an arbitration contract in place to litigate the dispute in question. Decision 51. It would appear from the facts before me that GDB was attempting, by the issues raised, to challenge the merits of the AD. All in, I have not found it fit to decide that a breach of natural justice had occurred or that the Adjudicator had acted in excess of his jurisdiction. This court is bound by the trite principles that it cannot rehear the merits of the adjudication. 52. Section 15 of CIPAA provides that:- An aggrieved party may apply to the High Court to set aside an adjudication decision on one or more of the following grounds: (a) the adjudication decision was improperly procured through fraud or bribery; 27 S/N tWGWFVqEtEa8DkfIDis/Q **Note : Serial number will be used to verify the originality of this document via eFILING portal (b) there has been a denial of natural justice; (c) the adjudicator has not acted independently or impartially; or (d) the adjudicator has acted in excess of his jurisdiction. 53. As none of the grounds as per Section 15 of CIPAA in the matter before me exists in the application in OS 216, I hereby dismiss the same with costs. 54. In respect of OS 202, I hold that the requirements pursuant to section 28 CIPAA to enforce the AD has accordingly been proven by CTY to this Court and that the alleged inability of CTY to repay the said adjudicated sum to GDB is rendered academic in light of my decision herein with regards OS 216. 55. Henceforth, I will grant Order In Terms of prayers 1, 2, 3 (i) to (xiii) and 4 of enclosure 1 of OS 202. 56. I hereby dismiss OS 216 with costs as the same is now academic. Dated: 27th day of February 2023 sgd. NADZARIN WOK NORDIN HIGH COURT JUDGE CONSTRUCTION COURT 1 28 S/N tWGWFVqEtEa8DkfIDis/Q **Note : Serial number will be used to verify the originality of this document via eFILING portal COUNSEL FOR GD BUILDERS: Masturina binti Mohamad Rodzi (Messrs Edwin Lim & Suren] COUNSEL FOR CTY FAÇADE: Nampal Singh Sachdev a/l Manjit Singh and Siow Pey Yiaw [Messrs Manjit Singh Sachdev, Mohammad Radzi & Partners] 29 S/N tWGWFVqEtEa8DkfIDis/Q **Note : Serial number will be used to verify the originality of this document via eFILING portal