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

Case Significance

Illustrates the limited and discretionary nature of a stay under section 16 of CIPAA and the priority the scheme gives to a contractor's interim entitlement to payment, the stay being refused and the adjudication decision enforced.

This High Court decision in the Construction Court at Kuala Lumpur concerns an application to stay an adjudication decision made under the Construction Industry Payment and Adjudication Act 2012 (CIPAA), heard together with a related set-aside application and an enforcement application. Following an adjudication decision dated 10 January 2025 in favour of the contractor, Damansara Realty (Johor) Sdn Bhd, the employer, Perbadanan Putrajaya, applied under section 16 of CIPAA to stay that decision. Section 16 permits the High Court to grant a stay of an adjudication decision in two situations: where an application to set aside the decision under section 15 has been made, or where the subject matter of the decision is pending final determination by arbitration or the court. Even where one of those gateways is engaged, the grant of a stay remains a matter for the court's discretion, exercised sparingly and in a manner consistent with CIPAA's purpose of ensuring cash flow to contractors through a swift interim payment mechanism; a stay is not granted merely because a set-aside application or parallel proceedings exist. The court considered whether the employer had shown special or exceptional circumstances justifying the suspension of the contractor's entitlement to be paid under the adjudication decision. Being unpersuaded that a stay was warranted, and having also dismissed the section 15 set-aside application in the companion proceedings, the court dismissed the application to stay the adjudication decision, with costs, and granted an order enforcing the decision. The judgment is a useful illustration of the limited and discretionary nature of a stay under section 16 of CIPAA and of the priority the scheme gives to a contractor's interim entitlement to payment. The court's approach reflects that the default position under CIPAA is that an adjudicated sum is to be paid, and that a stay is the exception rather than the rule; a paying party must therefore point to something beyond the mere existence of a challenge or parallel proceedings before the contractor's cash-flow entitlement will be suspended pending final resolution of the dispute.