SAMSUNG C&T CORPORATION UEM CONSTRUCTION JV SDN BHD v EVERSENDAI CONSTRUCTION (M) SDN BHD

Case Significance

Illustrates the narrow grounds under section 15 of CIPAA for setting aside an adjudication decision for excess of jurisdiction or breach of natural justice, and the courts' reluctance to disturb an adjudicator's determination absent a clear defect.

This High Court (Construction Court) decision concerns an application to set aside an adjudication decision under the Construction Industry Payment and Adjudication Act 2012 (CIPAA), heard together with related applications to stay and to enforce the same decision. In this Originating Summons the party against whom the adjudication decision had been made — a construction joint-venture company — applied under sections 15(a), (b) and (d) of CIPAA to set aside the adjudication decision given in favour of the claimant contractor. Its grounds were that the adjudicator had acted in excess of jurisdiction and/or in breach of natural justice: it complained that the adjudicator had failed to afford it an oral hearing to address the issue of res judicata concerning the claimant's claims, had taken into account new issues raised in the adjudication reply without giving it an opportunity to respond, had failed to address the res judicata issue coherently, and had addressed the wrong question. The court examined whether these matters amounted to a jurisdictional excess or a denial of natural justice of the kind that vitiates an adjudication decision under section 15, bearing in mind the CIPAA scheme's temporary-finality, pay-first-argue-later policy, under which an adjudication decision binds the parties unless and until set aside, stayed, or finally resolved in arbitration or litigation. The court was not persuaded that the adjudicator had exceeded his jurisdiction or denied natural justice, and it dismissed the setting-aside application, together with the connected stay application, with costs, while granting the claimant's enforcement application. The judgment illustrates the narrow grounds on which a CIPAA adjudication decision may be set aside for excess of jurisdiction or breach of natural justice, and the courts' reluctance to reopen an adjudicator's determination absent a clear jurisdictional or procedural defect. The court's approach reflected that setting aside under section 15 is not an appeal on the merits of the adjudication, so that a disagreement with the adjudicator's reasoning, short of a true jurisdictional error or a real denial of the opportunity to be heard, will not suffice to overturn the decision.