LION PACIFIC SDN BHD PESTECH TECHNOLOGY SDN BHD

LION PACIFIC SDN BHD PESTECH TECHNOLOGY SDN BHD

The Court allowed the appeals, holding that the subcontract (concluded after CIPAA commenced) was a separate contract to which CIPAA applied but that Clause 4.1 (pay-when-certified) was not a conditional payment falling within the ambit of s35 CIPAA and should be given effect; the adjudicator exceeded jurisdiction by misconstruing pay-when-certified as pay-when-paid and by incorporating new contractual terms and denied the appellant natural justice by failing to consider crucial certification and substantive defences, thus the High Court and adjudicator decisions were set aside.

Citation
B-02(C)(A)-1558-10/2020 (Mahkamah Rayuan)
Parties
Appellant: Lion Pacific Sdn Bhd; Respondent: Pestech Technology Sdn Bhd
Court
C
Jurisdiction
Malaysia
Judgment Date
27 October 2021
Case Number
B-02(C)(A)-1558-10/2020 (Mahkamah Rayuan)
Procedural Posture
Civil Appeal Enforcement of Adjudication Decision Under CIPAA / Court of Appeal Judgment (appeal Heard and Allowed)
Outcome
Appeal allowed; decision of the High Court and the Adjudicator's Decision dated 30.10.2019 set aside; costs awarded.
Legal Topics
Enforcement of Adjudicator's Decision, Jurisdiction of Adjudicator, Conditional Payment (pay When Certified Vs Pay When Paid), Interpretation of Back to Back Contracts, Denial of Natural Justice
Source Language
Malay/English
Construction Law Adjudication/dispute Resolution Contract Law Administrative Law Natural Justice Enforcement of Adjudicator's Decision Jurisdiction of Adjudicator Conditional Payment (pay When Certified Vs Pay When Paid) Interpretation of Back to Back Contracts +1 more

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Parties

Lion Pacific Sdn Bhd

Appellant

Pestech Technology Sdn Bhd

Respondent

Procedural Posture

Civil Appeal Enforcement of Adjudication Decision Under CIPAA / Court of Appeal Judgment (appeal Heard and Allowed)

Legal Issues

  1. 1 Whether CIPAA applied to the subcontract given the main contract pre-dated CIPAA
  2. 2 Whether Clause 4.1 (pay-when-certified) is a prohibited conditional payment under s35 CIPAA
  3. 3 Whether the adjudicator exceeded jurisdiction by effectively importing a pay-when-paid term and incorporating new contractual terms

Ratio Decidendi

The Court allowed the appeals, holding that the subcontract (concluded after CIPAA commenced) was a separate contract to which CIPAA applied but that Clause 4.1 (pay-when-certified) was not a conditional payment falling within the ambit of s35 CIPAA and should be given effect; the adjudicator exceeded jurisdiction by misconstruing pay-when-certified as pay-when-paid and by incorporating new contractual terms and denied the appellant natural justice by failing to consider crucial certification and substantive defences, thus the High Court and adjudicator decisions were set aside.

Court Disposition

Appeal allowed; decision of the High Court and the Adjudicator's Decision dated 30.10.2019 set aside; costs awarded.

Orders

  • Both appeals allowed
  • Set aside the decision of the Learned High Court Judge and the Adjudicator's Decision dated 30.10.2019