Tag: LAD

Construction Industry Payment and Adjudication Act 2012

Tag: LAD

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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CIPAA Consulting News & Update Background

CASE UPDATE: Non-Paying Party can only ‘zerorize’ claim and will not have a positive claim against Unpaid Party

Tenaga Poly Sdn Bhd v Crest Builder Sdn Bhd  Originating Summons No. WA-24C-44-06/2016
Any set-off, deduction or counterclaim introduced by the Non-Paying Party (such as LAD, rectification costs advance payment) can only operate to ‘zerorise’ the Unpaid Party’s claim.

The Unpaid Party would NOT be made to pay the Non-Paying Party in the CIPAA Proceeding even if the set-off, deduction or counterclaim is greater than the CIPAA Payment Claim amount.

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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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