Summary or Take-Away Points:
- Construction adjudication provides for a quicker and simpler way for contractors to claim for their unpaid construction claims.
- The law governing construction adjudication in Malaysia is the Construction Industry Payment And Adjudication Act, 2012.
- The “appointing authority” and “administrator” for construction adjudication in Malaysia is the Asian International Arbitration Centre (formerly known as the Kuala Lumpur Regional Centre for Arbitration) (“AIAC”).
Background:For a long time, the only ways contractors could claim for their unpaid payments was to pursue court litigation or arbitration. For several reasons, these were not feasible and, in many cases, contractors were financially prevented from going the distance in both litigation or arbitration in regards to their claims for unpaid monies. To overcome the essential issue of cashflow, the Construction Industry Payment And Adjudication Act, 2012 (“CIPAA”) was enacted and became law on 15th April 2014. CIPAA is aimed at providing a quicker mechanism to determine the validity and entitlement of such claims. The whole process and time involved could be summarised as follows:-
|Document / Event||Time Period Allocated (Working Days)|
|Payment Response||10 (from receipt of the Payment Claim)|
|Notice of Adjudication (and proposal on the appointment of the Adjudicator)||10|
|Appointment of Adjudicator (if by the AIAC)||5 (if there is no agreement by the parties on the Adjudicator’s appointment in the Notice of Adjudication)|
|Acceptance of the Adjudicator’s terms of appointment||10 (from the date of the parties’ agreement to appoint or the date of the AIAC’s appointment of the Adjudicator)|
|Submission of the Adjudication Claim||10|
|Submission of the Adjudication Response||10|
|Submission of the Adjudication Reply (if any)||5|
|Delivery of the Adjudicator’s decision||45 (from the receipt of the Adjudication Reply or expiry of the time for the submission of the Adjudication Response)|