Perbadanan Putrajaya v DAMANSARA REALTY (JOHOR) SDN. BHD.

Case Significance

Illustrates the narrow grounds under section 15 of CIPAA on which an adjudication decision may be set aside, and the courts' support for the statute's swift "pay now, argue later" objective, the set-aside application being dismissed and the decision enforced.

This High Court decision in the Construction Court at Kuala Lumpur concerns an application to set aside an adjudication decision made under the Construction Industry Payment and Adjudication Act 2012 (CIPAA). It was one of three related originating summonses heard together arising from an adjudication between Perbadanan Putrajaya and Damansara Realty (Johor) Sdn Bhd, in which an adjudication decision dated 10 January 2025 had been made in favour of the contractor. By this originating summons, Perbadanan Putrajaya applied under section 15(b) and (d) of CIPAA to set aside the adjudication decision, section 15 permitting a decision to be set aside on limited grounds, namely that it was improperly procured through fraud or bribery, that there was a denial of natural justice, that the adjudicator had not acted independently or impartially, or that the adjudicator had acted in excess of jurisdiction. The court emphasised the policy of CIPAA, which is to provide a swift, interim "pay now, argue later" mechanism for resolving construction payment disputes, so that the grounds for setting aside an adjudication decision are deliberately narrow and the court does not review the merits of the adjudicator's decision. Finding that none of the statutory grounds under section 15 had been made out, the court dismissed the application to set aside the adjudication decision, with costs, and, in the companion proceedings, dismissed the application to stay the decision and granted an order enforcing it. The judgment is a useful illustration of the narrow grounds on which an adjudication decision may be set aside under section 15 of CIPAA and of the courts' support for the statutory scheme's temporary-finality objective. The court's reasoning reflects the deliberate legislative choice to keep judicial intervention in adjudication to a minimum, so that a dissatisfied party cannot convert a set-aside application into a rehearing of the payment dispute. The narrow section 15 grounds protect the integrity and speed of the adjudication process while leaving the parties free to litigate or arbitrate the substantive dispute to final resolution.