CASE UPDATE: Winning party may set aside the Adjudication Decision under Section 15 of CIPAA

Wong Huat Construction Co v Ireka Engineering & Construction Sdn Bhd [2018] 7 MLJ 659

Ordinarily, the party who seeks to set aside an Adjudication Decision pursuant to Section 15 of Construction Industry Payment and Adjudication Act (CIPAA) is the Losing Party who had been ordered to pay the Adjudicated Sum to the Winning Party.

In the case whereby the Adjudicator only awarded the Winning Party / Claimant / Unpaid Party a paltry sum of its claim and the substantial of the Winning Party’s / Claimant’s / Unpaid Party’s claim was rejected, can the Winning Party / Claimant seeks to set aside the CIPAA Adjudication Decision pursuant to Section 15 of CIPAA?   

The High Court recently addressed this issue and held that the Winning Party may fall within the meaning of an ‘aggrieved person’ under Section 15 of CIPAA.  As a result, the Winning Party may set aside a CIPAA Adjudication Decision under Section 15 as well.

Background Facts

The Contractor had appointed the Subcontractor for the supply and application of painting works.

Subsequently, a dispute arises between the parties and the Subcontractor mounted a CIPAA Claim against the Contractor for the sum of RM231,277.17.

In the Adjudication Decision, the Adjudicator only awarded the sum of RM29,791.73 to the Claimant Subcontractor instead of the claimed amount of RM231,277.17.

Dissatisfied with the decision, the Claimant Subcontractor sought to set aside the Adjudication Decision on the ground of breach of natural justice and the Adjudicator had acted in excess of jurisdiction pursuant to Section 15 of CIPAA.

High Court Decision

The High Court held that the phrase ‘an aggrieved person’ in Section 15 of CIPAA is not confined to person against whom an Adjudication Decision is made.

The High Court held that it also extends to a person who has received an Adjudication Decision in his favour but who is aggrieved as in he should have received more if for instance there has not been a denial of natural justice or other vitiating grounds under Section 15 of CIPAA.

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