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CIPAA 2012 Case Law Updates
No positive award against Unpaid Party in CIPAA 2012! Non-Paying Party can only ‘zerorize’ claim
The introduction of Construction Industry Payment and Adjudication Act 2012 (CIPAA 2012) allows an aggrieved contractor or consultant (known as Unpaid Party) to recover outstanding payment speedily against the Employer / Contractor (known as Non-Paying Party). In response to a CIPAA claim, the Respondent / Non-Paying Party may raise counterclaims / deduction / set-off to defend against the Claimant’s / Unpaid Party’s claim. What happen if the Respondent/ Non-Paying Party /Employer has a greater counterclaims / deductions / set-off against the Claimant / Unpaid Party? Can the Respondent / Non-Paying Party be allowed a positive claim against the Claimant /
Contracting out of CIPAA 2012?
Following the enforcement of Construction Industry Payment and Industry Act 2012 (CIPAA) on 15 April 2014, the Asian International Arbitration Centre (AIAC) had recorded that there 89.28% of success rate where the CIPAA Adjudication Decision is awarded in the Claimant’s favour. Understandably, given the high success rate of CIPAA proceeding against the Employer, the Employer would be wary of CIPAA claim against them and the following questions arise: Can the Employer expressly exclude the operation of CIPAA 2012 in a construction contract? Would a contractual provision which expressly rules out the applicability of CIPAA 2012 is enforceable? In this case,
No Certificate? No Problem! High Court ruled CIPAA can be based on uncertified claim
Bina Puri Construction Sdn Bhd v Hing Nyit Enterprise Sdn Bhd [2015] 8 CLJ 728 It is a common scene in the construction industry that the contract provides that the contractor’s rights to payment is subjected to the issuance of interim payment certificate and/or valuation of progress claim / interim payment claim. Such provision can also be found in the standard building contract such as PAM Contract, PWD Contract and CIDB Contract. As such, when Construction Industry Payment and Adjudication Act 2012 (CIPAA 2012) first came into effect in 2014, one of the defence frequently raised by the Non-Payment Party