Category: CIPAA 101

Construction Industry Payment and Adjudication Act 2012

Category: CIPAA 101

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Received a CIPAA Payment Claim? What should you do?

What should you really do if you receive a CIPAA Payment Claim, alleging that there is outstanding payment being due and payable? What should you do under the circumstance if you wish to challenge the claim?

This article explores the steps ought to be taken by a Non-Paying Party upon the receipt of a CIPAA Payment Claim (Form 5).

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CIPAA 101 | Construction Industry Payment and Adjudication Act 2012

Defending Against a CIPAA Claim

Given the high success rate of a CIPAA claim against the non-paying parties / Respondent, it naturally places enormous pressure and stress on the Respondent upon the receipt of a CIPAA claim.

In this article, we set out to explain the defences a Respondent may put up to defeat a CIPAA claim.

There are 3 types of defences a Respondent may raise: 1. Substantive Challenge 2. Technical Objection 3. Counterclaim / Set-Off

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Advantages of CIPAA Adjudication

Ever since the implementation of Construction Industry Payment and Adjudication Act 2012 (CIPAA), CIPAA has become a popular alternative dispute resolution to resolve payment dispute. The contractors and consultants will often time resort to CIPAA Adjudication to recover the outstanding payment / fees. 

But one may ask what are the benefits / advantages of resorting to CIPAA Adjudication Proceeding compared to arbitration and litigation then? 

The CIPAA Adjudication mechanism has the following practical advantages / benefits:

1. Expeditious Process
2. High Success Rate
3. All Conditional Payment Clause is void 
4. Direct Payment from Principal 
Suspension of Work is not a breach of contract 
5. Pay Now, Argue Later!
6. No positive counterclaim from Respondent

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Costs of CIPAA and Recovery of Costs in CIPAA

Before resorting to mount a CIPAA claim under Construction Industry Payment and Adjudication Act 2012 (CIPAA), one would understandably also want to fully appreciate the costs typically involved in the CIPAA Proceedings. 

This article sets out the costs typically involved in CIPAA and explains whether the costs of CIPAA can be recovered by the winning party.

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Procedure for CIPAA Adjudication Proceeding

CIPAA Adjudication Proceeding offers a quick and efficient procedure to this problem as the Adjudication Decision can be rendered within 80 – 95 working days and the Winning Party may then enforce the Adjudication Decision and recover the outstanding payment or professional fees.

In this article, we will set out the procedure and the complete guide of the CIPAA Adjudication Proceeding from A – Z: 1. Payment Claim 2. Payment Response, 3. Notice of Adjudication 4. Adjudication Claim, 5. Adjudication Response, 6. Adjudication Reply, 7. Adjudication Decision.

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Enforcement of CIPAA Adjudication Decision

Under the Part IV of Construction Industry Payment and Adjudication Act 2012, there are 3 methods of enforcement which can be exercised concurrently:-

Section 28: Enforcement of Adjudication Decision as Judgment

Section 29: Suspension or reduction of rate of progress of Performance

Section 30: Direct Payment from Principal

Winding up Proceeding: The winning party may also seek to enforce the Adjudication Decision by issuing a Statutory Demand under Section 466 of Company Act 2016. If the losing party fails to meet the demanded Adjudicated Sum within 21 days, the winning party may proceed to wind up the losing party and liquidate its assets to meet the debt.

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