KERJAYA PROSPEK (M) SDN BHD v APPLE 99 DEVELOPMENT SDN BHD

Case Significance

Shows that a CIPAA enforcement application under section 28 cannot succeed once the underlying adjudication decision has been set aside for lack of core jurisdiction, however the Inai Kiara enforcement conditions might otherwise be satisfied.

This High Court decision at Shah Alam is the enforcement application in a pair of originating summonses heard together under the Construction Industry Payment and Adjudication Act 2012 (CIPAA). The underlying contract was a PAM 2006 construction contract under which Apple 99 Development Sdn Bhd, the employer, engaged 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 later governed by a settlement agreement. An adjudicator decided in the contractor's favour. The contractor then applied under section 28 of CIPAA to enforce that adjudication decision as if it were a judgment of the High Court, while the employer applied under sections 15(b) and (d) to set it aside. This record is the contractor's enforcement summons. The court set out the requirements for enforcement recognised in Inai Kiara Sdn Bhd v Puteri Nusantara Sdn Bhd: that the adjudication decision was made in favour of the applying party, that the party against whom it was made had failed to pay the adjudicated amount by the specified date, and that there was no prohibition on the court's discretion to grant leave to enforce. However, the court had already concluded, in the companion setting-aside summons, that the adjudicator lacked core jurisdiction and that the adjudication decision had to be set aside. Since the adjudication decision had been set aside, there was no decision left capable of enforcement, and the enforcement summons was accordingly dismissed. The court set out that enforcement under section 28 is ordinarily a summary route by which an unpaid party turns an adjudication decision into an enforceable High Court judgment, but stressed that it presupposes a valid, subsisting adjudication decision. Because the companion setting-aside summons had extinguished the decision for want of core jurisdiction, that precondition was absent and the enforcement route fell away with it. The court accordingly dismissed the enforcement application with costs of RM5,000 payable by the contractor to the employer, subject to allocatur.