Adjudication Decision Need Not Be Enforced As A Judgment Under S. 28 Of Cipaa To Commence Winding Up
Adjudication under Construction Industry Payment and Adjudication Act 2012 (“CIPAA”) is a temporary means of resolving payment disputes in the construction industry. Nevertheless, an adjudication decision is binding on parties until it is set aside or the dispute is finally resolved. Thus, it is possible and indeed an option for the successful party to an adjudication to commence winding up proceedings based on an adjudication decision under CIPAA.
The successful party in an adjudication may enforce an adjudication decision by applying to the High Court for an order to enforce the same pursuant to s. 28 of CIPAA. Once an order to enforce is obtained, s. 28(3) provides that the order may be executed in accordance with the same rules on execution of the orders or judgment of the High Court. This however is not compulsory for the purpose of commencing winding-up proceedings.
The Court of Appeal in the case of Likas Bay Precinct v. Bina Puri [2019] 3 MLJ 244, held that there is no requirement for the successful party in an adjudication to register the adjudication decision with the High Court under s. 28 of CIPAA before issuing a statutory notice to wind up. According to the Court of Appeal, winding up proceedings may be premised on an adjudication decision since it “evinces the fact that the amount stated therein is due and owing”. Thus, the successful party may commence winding up proceedings based on an adjudication decision without first obtaining an order to enforce the same under s. 28 of CIPAA.
In Likas Bay Precinct v. Bina Puri, the Court of Appeal held that the winding-up petition was not premature despite the adjudication decision not having first been registered under s. 28 of CIPAA. Having that said, the Court of Appeal noted that there was no application made for the adjudication decision to be set aside. In cases where there is an ongoing setting aside application, the Courts may take the view that the adjudicated amount in the adjudication decision is disputed (see: Visi Nusajaya v. Elite Alliance Engineering [2019] 1 LNS 945).
If you have any enquiries regarding the above or CIPAA, please do not hesitate to get in touch with our team.
| Lam Ko Luen Partner [email protected] |
Jeremy Ooi Associate [email protected] |