Case Details: | Likas Bay Precinct Sdn Bhd v Bina Puri Sdn Bhd [2019] 3 MLJ 244 |
Court Tier (if applicable) | Court of Appeal Malaysia |
Summary:
- Adjudication decisions under the CIPAA 2012 need not be registered and enforced as a Court judgment before a winding-up notice and proceedings starts.
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However, if the winning party of the adjudication decision intends to pursue other forms of execution proceedings (e.g. writ of seizure and sale, garnishee proceedings), then enforcement of the adjudication decision as a Court’s judgment would still be necessary.
Factual Background:
Bina Puri Sdn Bhd (“Bina Puri”) obtained an adjudication decision in their favour for RM16,439,628.24 from Likas Bay Precinct Sdn Bhd (“Likas Bay”). Bina Puri then issued a statutory winding-up notice and winding-up proceedings against Likas Bay when no payment was forthcoming.
The High Court allowed Bina Puri’s winding-up petition and Likas Bay appealed to the Court of Appeal. Likas Bay advanced 2 arguments, namely, (i) the adjudication decision was not registered and enforced at the High Court before the winding-up notice and proceedings started and (ii) the adjudication decision actually directed for payments to be made to the Asian International Arbitration Centre (“AIAC”) rather than to Bina Puri, hence Bina Puri was not entitled to pursue the winding-up proceedings against them.
The Court of Appeal dismissed Likas Bay’s appeal and upheld the winding-up order granted by the High Court.
Court’s Reasoning:
Section 28 of the Construction Industry Payment And Adjudication Act, 2012 did not expressly require for an adjudication decision to be registered first before any winding-up proceedings could be initiated. Likewise, section 465 (1) (e) and (h) of the Companies Act, 2016 does not require a judgment before remedies thereunder be pursued.
The Court of Appeal recognised that the debt between the parties here was subjected to the statutory adjudication mechanism under CIPAA resulting in a decision that favoured Bina Puri. This, led to Bina Puri to have a good and proper basis for the issuance of the winding-up notice.
As for the argument that the Bina Puri was not the party the payments were directed at under the adjudication decision, the Court of Appeal agreed with the High Court’s reasoning that, ultimately the monies under the adjudication decision were for Bina Puri and just because the payments were directed to be paid to the AIAC does not take away the entitlement of those monies from Bina Puri.
