Apple 99 Development Sdn. Bhd. v Kerjaya Prospek (M) SDN. BHD.

Case Significance

Illustrates the jurisdiction/irregularity distinction in CIPAA challenges: a genuine lack of core jurisdiction cannot be waived and requires the adjudication decision to be set aside, leaving nothing for the winning party to enforce under section 28.

This High Court decision at Shah Alam concerns two originating summonses heard together arising from a construction adjudication under the Construction Industry Payment and Adjudication Act 2012 (CIPAA). The dispute arose from a PAM 2006 construction contract by which Apple 99 Development Sdn Bhd, the employer, appointed Kerjaya Prospek (M) Sdn Bhd as main contractor for a hotel and serviced-suites project with a contract sum of RM213,750,000; the works were suspended and the parties later entered a settlement agreement to enable resumption. When an adjudicator decided in the contractor's favour, the employer applied under sections 15(b) and (d) of CIPAA to set aside the adjudication decision, while the contractor applied under section 28 to enforce it. This record is the employer's setting-aside application. The court examined whether the adjudicator had acted with jurisdiction, distinguishing between a true lack of jurisdiction — which cannot be waived and may be raised at any stage — and mere procedural irregularity or non-compliance with a statutory condition, which can be waived. The court accepted that the employer had shown a lack of core jurisdiction on the part of the adjudicator, and held it was constrained to allow the setting aside of the adjudication decision. Because the decision was set aside, there was no adjudication decision left to enforce, and the contractor's enforcement application under section 28 was dismissed. The court allowed the employer's setting-aside summons with costs of RM15,000, and dismissed the enforcement summons with costs of RM5,000, both payable by the contractor to the employer, subject to allocatur. The court stressed that the distinction matters: a step taken wholly without jurisdiction is a nullity that no conduct of the parties can cure or waive, whereas a mere procedural irregularity or non-compliance with a statutory condition can be waived without conferring a jurisdiction that never previously existed. The judgment illustrates that a CIPAA adjudication decision tainted by lack of core jurisdiction cannot stand or be enforced, and that the setting-aside and enforcement applications rise and fall together.