PUNCAK TASNIM SDN BHD v KT ADVANCE CONSTRUCTION SDN BHD

Case Significance

Illustrates the narrow section 15 grounds for setting aside a CIPAA adjudication decision, which do not permit a merits review, and confirms enforcement of the decision under section 28 once the statutory conditions are satisfied.

This High Court decision at Ipoh concerns cross-applications relating to an adjudication decision made under the Construction Industry Payment and Adjudication Act 2012 (CIPAA). A property-development company, as the main contractor, had engaged the defendant subcontractor for a residential project, and following the termination of the letter of award a dispute went to adjudication, in which the adjudicator decided in the subcontractor's favour. The main contractor applied by originating summons to set aside and stay the adjudication decision, while the subcontractor applied to enforce it as if it were a judgment of the High Court.

The setting-aside grounds engaged the limited statutory bases in section 15 of CIPAA. The main contractor alleged that the adjudicator had exceeded his jurisdiction under section 15(d), had acted with bias or failed to act impartially under section 15(c), and had breached natural justice by failing to consider a "without prejudice" admission letter, and it complained that the adjudicator had not considered all the defences raised in the adjudication response, including in relation to uncertified claims. The court measured these complaints against the narrow scope of section 15, which does not permit a merits review of an adjudication decision, and it did not find any of the grounds made out.

On enforcement, the court applied the principle that an adjudication decision may be enforced under section 28 of CIPAA where the decision favours the applicant, the opposing party has failed to pay the adjudicated amount by the specified date, and there is no legal prohibition on enforcement. With the setting-aside application dismissed and the interim stay thereby terminating, those conditions were satisfied. The court accordingly dismissed the main contractor's setting-aside application with costs and allowed the subcontractor's enforcement application with costs. The judgment is a useful illustration of the narrow section 15 grounds for challenging a CIPAA adjudication decision and of enforcement under section 28.