The Federal Court recently delivered a landmark ruling in which it clarified points of law on the retrospective application of the Construction Industry Payment and Adjudication Act 2012 (CIPAA) and the application of Section 35 of the CIPAA, which governs the validity of pay-when-paid clauses in construction contracts. The court's decision that the CIPAA has no retrospective effect is far reaching.
In 2018 Malaysia saw considerable developments in case law on statutory adjudication. Stakeholders' use of this form of dispute resolution mechanism continues to grow exponentially with no sign of abating. This article examines some of the significant decisions that the Malaysian courts handed down in 2018 and their impact on statutory adjudication under the Construction Industry Payment and Adjudication Act.
Malaysia witnessed considerable developments in statutory adjudication case law in 2017, probably due to the increasing use of this form of dispute resolution mechanism by stakeholders in the construction industry. This update examines some of the significant decisions that were handed down by the Malaysian courts in 2017 and their impact on statutory adjudication under the Construction Industry Payment and Adjudication Act.
The Court of Appeal recently considered whether a pay-when-paid clause in a construction contract is void under the Construction Industry Payment and Adjudication Act. It found that pay-when-paid clauses under a construction contract drawn up before the enactment of the Construction Industry Payment and Adjudication Act will remain valid and not be affected by the introduction of Section 35, which prohibits any conditional payment clauses in construction contracts.
The Federal Court recently dealt with three broad issues under the Construction Industry Payment and Adjudication Act – namely, jurisdictional challenge, the exclusion of defences and the setting aside and staying of decisions. The decision has broad repercussions for the way that adjudications are conducted in Malaysia.
The Construction Industry Payment and Adjudication Act 2012 came into effect on April 15 2014. Since then, the Malaysian courts have had the opportunity to consider various aspects of the act on numerous occasions. Some significant decisions have been handed down by the courts in the past two-and-a-half years and although statutory adjudication in Malaysia is still in its infancy, it is evident that a body of local decisions is steadily being built up to assist in the interpretation of the act.
Recovering pure economic loss in negligence is a difficult and complex area of law, and developing this area in Malaysia has been a prolonged and sometimes difficult process. In recent years the courts have delivered a series of judgments in construction cases indicating the approach to be taken.
The recent decision in Tan Tien Seng v Grobina Sdn Bhd is significant for both property purchasers and developers, as it limits the circumstances in which a developer may make changes to or deviations from building plans without the purchaser's consent.
Standard form contracts are often used to in order to save time and money instead of drafting a fresh construction contract for each new project. Familiarity with the available standard forms and types of construction contract enables prudent employers to ensure that they achieve the appropriate contractual framework for the physical execution of their needs.
In Pernas Construction Sdn Bhd v Syarikat Rasabina Sdn Bhd a majority of the Malaysian Court of Appeal upheld the decision of the Kuala Lumpur High Court. The majority found that the plaintiff was forced or coerced into signing the mutual termination agreement despite the absence of any contention to that effect in the pleadings or evidence before the High Court.
In Ekovest-KMZ-Dragages Sdn Bhd v HSBC Bank Malaysia the Kuala Lumpur High Court considered an application for an interim injunction to restrain payment under a performance bond where the beneficiary had yet to make any demand under the bond.