CASE UPDATE: CIPAA cannot be contracted out

Ranhill E&C Sdn Bhd v Tioxide (Malaysia) Sdn Bhd and Another Case [2015] 1 LNS 1435

In this case, the High Court clarified that CIPAA, as a statutory adjudication proceeding, cannot be contracted out by the parties. 

As a result, the Unpaid Party’s / Claimant’s right to bring a CIPAA claim cannot be extinguished by virtue of the provision of contract. 

Background Facts

The case involves 2 Adjudication Decisions. Both of the Adjudication Decisions were decided in favour of the Contractor and the Owner of the Project sought to set aside both of the Adjudication Decisions.

The Owner of the Project argued that the construction contract contains an arbitration agreement. As such, it was argued that the parties had covenanted arbitrate the matter and not to refer the dispute to any other forum, viz-a-viz the CIPAA Proceedings.

Decision of High Court

The High Court held that the right to refer to adjudication is a statutory right which cannot be contracted out by virtue of the dispute resolution clause in the contract.

The High Court also went a step further to held that the provisions of CIPAA would prohibit any attempt to expressly contracting out of CIPAA.

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