DQS 359

POST CONTRACT ADMINISTRATON PRACTICE

PAYMENT

Present by (GROUP 7) :

1) ALIF IMRAN BIN MUHAMMAD NOOR AFANDI (2017202334)

2) ILLYA AMYRA BINTI NORDIN (2017202148)
3) SYAZA BINTI ZAHRI (2017204556)
SUBTOPIC IN PAYMENT

Payment to Contractor & Interim Certificates

Fluctuation of price

Final Account & Payment Certificate

Financial Statement

Advance Payment

CIPAA
Payment to Contractor
&
Interim Certificates
What is Payment to the Contractor?
 In construction industry, payment is the sum of money paid to the contractors for
the performance and obligations of the contractor after the completion of entire
scope of work including variation.
 The construction works involve huge amounts of money and most of the
contractors find it very difficult to bear the heavy daily construction expenses if
payments are delayed.
 It also one of the employer’s main responsibility to pay the contractor in which
failure to pay is considered a breach of contract.
 Most of the construction contracts contain provisions for payment to be made
against the types of payment usually issued by the Superintending Officer (S.O.) /
Architect.
 The Contractor is paid the value of work done based on rates in the BQ or
proportion of lump sums for contracts without BQ.
Types of Payment
 The payment can be made in three (3) forms main
types of payment that classified as:

1) Advance Payment
2) Interim Payment
3) Final Payment
Types of Payment (Cont’d)
1) Advance payment
 Advance payment defined as a sum of money lent by the client to the
contractor in the early stages of construction as a financial aid for the work and
repayment to the client through an interim payment deduction.
 For example, mobilization costs and down payments to vendors.
 It is given for the government project only and only applicable for conventional
contract and design and build/Turnkey contract only.
 The main purpose of implementing this scheme is to help the contractor to start
up and finance the contract without resorting to unnecessary external
borrowings.
 Provision of advance payment stated in clause 69.1 stated that the contractor
should be entitled to an advance payment, i.e. 25% of the value of the
Contract Sum after less Prime Cost Sum and value Provisional Sums and
Contingencies i.e. “Value of Builder’s Work” and subject to a maximum of RM 10
Million (PWD 203A, 2010)
Types of Payment (Cont’d)
2) Interim Payment
 Interim Payment are defined as a sum payable to the contractor on a regular
basis as specified in the standard form of contract for the value of work, which
has been completed plus material supplied and any other eligible items
accounted by the contract
 The payment is in installments as the works progress in order to assist the
contractor’s cash flow.
 The general procedure is by the contractor shall submit to the CA monthly
statements of the estimated value of the work executed then the CA shall
check and certify monthly statement within 21 days of the receipt of the
contractor’s statement.
 Hence, the employer shall pay the amount certified to the contractor within 14
days
 This payment occur throughout the contract construction period
Types of Payment (Cont’d)
3) Final Payment
 Final Payment are defined as the payment to be made to the contractor or
the client of the works described in the contract after all the contract price
adjustment is done.
 This is the last payment to be made by the employer to the contractor (or by
the contractor to the employer) at the end of the defects liability period
providing that all patent defects have been rectified.
 Upon completion of the Defects Liability Period to the contractor, the
contractor shall request the CA to issue a Final certificate and the CA shall issue
the Final Certificate upon being satisfied that the contractor has rectified the
defects ( PAM Clause 55.1)
 Hence, unless such stage is reached and certified by the contract
administrator, the contractor is not entitled to any payment whatsoever.
 The final certificate would state the final balance payable to the contractor or
to the employer.
Who has the authority to approve the payment?

 The Contract Administration (CA) or any other competent person

appointed by the employer and notified to the contractor. Such
person may be Engineer, Architect or any other technical person.
 It is their responsibility for administrating and supervising the
execution of the work.

Who need to pay?

 The employer who employs the
contractor to carry out the works.
Employer's duty to pay

 The employer's duty to pay the contractor does not arise until the
CA has issued an interim certificate.
 The interim certificate would state the amount that the employer
should pay to the contractor, subject only to his right of set off
(counter-claim) within a fixed period( period of honouring
certificates)
 If the employer fails to pay, the contractor can claim interest on late
payment or suspend the works or terminate the contract provided
that shows he follows the appropriate procedures.
Application for Payment by contractor
• PAM CONTRACT 2018 WITH QUANTITIES
Application for Payment by contractor (cont’d)

• PWD FORM 203A (REV. 1/2010)

Application for Payment by contractor

• PWD FORM 203A (REV. 1/2010) (cont’d)

Application for Payment by contractor (cont’d)

PAM CONTRACT 2018 WITH QUANTITIES PWD FORM 203A (REV. 1/2010)

CLAUSE 30.1 CLAUSE 28.1

• The contractor is to submit a • The contractor is to submit a prior
payment application for interim application for payment showing the
payment showing the amount he amount he thinks as due to together
thinks due including details and with all relevant documents
particulars. necessary to substantiate his
application.
• If he fails to submit, he is deemed to
have waived his right for that interim CLAUSE 28.3 AND 28.6
certificate. However, the architect • If he fails to submit the full particulars,
has the discretion to issue or not issue the S.O will still have to evaluate the
an interim certificate under the works based on the documents
circumstances. available to him.
 General procedure of payment application
 The procedure is as below:
1) The contractor is to submit a payment application together with particulars that
enable the CA or QS to ascertain the amount due in the interim certificate.
2) Therefore, the payment claim should include amounts claimed for work done,
value of materials on site, variations, amount of NSC's, loss and expense and
others under provision of the contract.
3) Then, the CA or QS will visit the site to carry out a valuation of the partially
completed works by contractor
4) The payment are determined based on the valuation carried out during the period
5) within a specified period, the CA is to issue an interim certificate to the employer as
a condition precedent to payment
6) Next, the employer has a specified period in which to pay the contractor from the
date of the certificate (period of honouring certificate)
7) If the employers fails to pay, the contractor is entitled to recover interest for late
payment.
Certificates
 A certificate is the formal expression of the CA's opinion that the work
complies with the contract.
 A certificate is important as a payment certificate is a pre-condition to
contractor's right to receive payment from the employer.
 For example, the certificates issued by the CA:-
1) Interim certificate
2) Practical completion certificate
3) Completion of making good defects certificate
4) Penultimate certificate
5) Final certificate
Certificates (Cont'd)
DEFINITION

 lnterim payment certificate

- This certificate will be issue by CA to show the progress of work properly carried out
and the sums to be pay to the contractor.
 Practical completion certificate
- This certificate will be issue when all the works described in the contract have been
carried out and considered complete.
 Completion of making good defects certificate
- This certificate will be issue when all the defects, imperfections, shrinkage and any
other fault raised during the Rectification Period (previously known as ‘Defects Liability
Period’) have been rectified by the contractor.
 Penultimate certificate
- The certificate is produced by the CA stating that the Contractor has achieved
Practical Completion.
 Final certificate
- This certificate are certified by CA that shows the construction contract has be seen
fully completed and states the balance sums to be pay to the contractor for his
services.
What is Interim Payment Certificates?
 The interim payment certificate is a condition precedent to the
contractor's entitlement to payment

 The interim payments certificate are certified by the CA within the

stipulated time after receiving contractor's payment application or of
each valuation date.

 The value of interim certificates is the value of the work completed, less
any amounts that already paid, less retention. Half of this retention will
be released on certification of practical completion and the other half
upon issue of the certificate of making good defects.

 If the certificate is late or not issued at all, the contractor may refer the
matter to a dispute procedure such as arbitration.

 Therefore,if the payment is late or on sum not paid, the employer need
to pay interest. The interest is imposed on a daily basis from the
payment due date until the date when the late payment is made.
Issuance of Interim Payment Certificate
• PAM CONTRACT 2018 WITH QUANTITIES
Issuance of Interim Payment Certificate (cont’d)
• PWD FORM 203A (REV. 1/2010)
Issuance of Interim Payment Certificate (cont’d)

PAM CONTRACT 2018 WITH QUANTITIES PWD FORM 203A (REV. 1/2010)

CLAUSE 30.1 CLAUSE 28.2

• The Architect must issue an interim • The S.O must issue an interim certificate
certificate within 21 days of receipt within 14 days of receiving the
of the contractor's application and contractor's application, provided total
value in each monthly valuation exceeds
after receiving the QS's payment
the sum referred in the appendix (for the
valuation. There is no provision for a first and subsequent interim value). Within
minimum certificate amount. the same 14 days period, the S.O is to
inspect, verify and make a valuation of
the works. A provision for the issuance of
the certificate is that the contractor has
complied with the terms and conditions
of the contract, such as submission of
certain prescribed documents.
Is the interim payment conclusive of the amount and work included?

• PAM CONTRACT 2018 WITH QUANTITIES

• PWD FORM 203A (REV. 1/2010)

 The amount and work included in the interim certificates are not
conclusive.
 It does not imply acceptance of the quality of work or materials, nor does it
bind in the future. Amounts included in one certificate may be omitted in
subsequent certificates.
 Hence, each successive certificate requires a new evaluation of the work
done, thus providing an opportunity to adjust or change the previous
evaluation of earlier interim certificates.

PAM CONTRACT 2018 WITH QUANTITIES PWD FORM 203A (REV. 1/2010)

CLAUSE 30.3 CLAUSE 32

• Except for clerical or computational • No certificate of the S.O is conclusive
errors, the Architect cannot revise or evidence as to the sufficiency of any
correct any payment certificate issued work, materials or goods, nor does it
by him. However, he may, by a later relieve the contractor from his liability
certificate correct or modify errors in to make good all defects.
previous certificates.
Case Study
1. Non-payment

Kah Seng Construction Sdn. Bhd v Selsin Development Sdn. Bhd

Case:
 In this case, the contractor argues that it has the right that it was entitled to suspend
works because of non-payment of one certificate and partial non-payment of another.
 The employer argued that even if the employer was not entitled to set off sums of
monies for delay and defective works against sums due to the contractor in the interim
certificates, there was no provision in the rudimentary contract between the parties for
non payment of certified sums and that the contractor's admitted suspension was
wrongful

The judge held that:

1. ' There is no intermediate right in a building contract to suspend works. if the contractor
insists on the continued performance of the contract like he affirms the contract, he
must himself continue to perform his primary obligations under the contract like
continue reforming the contract works. That is why suspension of the works by the
contract like not continuing with his primary obligations, becomes itself a repudiatory
breach by the contractor”,
Case study (Cont'd)

 The employer fails to pay the contractor within the period of honouring
certificates without reasonable cause.
 Remedies available to contractor are:
- The suspension of work
- Claiming for interest
- Apply for summary judgement
- Determining the contract with the employer
- Apply for te winding up of employer's company
Case study (cont'd)
2. Errors in interim certificates

Lojann properties v Tropicon Contractors (1991)

Case:
 which was a contract under SIA Form of Contract, the contractor brought court
proceedings against the employer for summary judgement after the employer
had failed to honour twelve interim payment certificates.
 Whilst the application for summary judgement was pending, the architect
issued modification to the twelve certificates, which resulted in the contractor
owing money to the employer.
Court decision:
 The court rejected the new certificates, which were intended to revise the
certificate issued two year earlier and decided that these certificates were
flawed and invalid and further took a suspicious view of the conduct of the
architect in the discharge of his duties as a certifier under the contract.
Case study (cont'd)

 According to clause 30.3 in PAM, Architects have the power to revise or

correct any payment certificates only if there are:
- Clerical error
- Computational error
- Typographical error
- Errors of similar nature
 Besides the above errors, Architect is not entitled to revise or correct any
payment certificate issued by him.
Retention Sum
 Definition
A warranty for hidden defects during construction, including the one year defects liability
period after project completion.
 Purpose
It serves to safeguard the employer against possible defects or non- completion of works
on the part of the contractor.
 When to release?
Release of the retention sum is usually done in two part:
1) Where half the retention sum is usually released with the issuance of the Certificate of
Practical Completion.
2) The another one is usually released after expiry of the defects liability period and the
issuance of Certificate of Making Good Defects by the Architect/Engineer/SO.
 The employer retains a percentage (often 10%) of the value of work properly done by
contractor on each of an interim certificate until the amount has reached the limit of
retention sum which is 5% of the contract sum.
 Moreover, the employer can use the sum to hire other contractors to remedy the defects
or complete the works if the original contractor fail to do so.
Retention Sum (cont'd)

• PAM CONTRACT 2018 WITH QUANTITIES

Retention Sum (cont'd)
• PWD FORM 203A (REV. 1/2010)
Retention Sum (cont'd)

PAM CONTRACT 2018 WITH QUANTITIES PWD FORM 203A (REV. 1/2010)

CLAUSE 30.5 CLAUSE 13.2 and 28.5

• The forms set out the percentage • The retention under PWD form is
deduction from the amount made to the certified amount.
included in the interim certificate • If the contractor provides a
and for the items identified. performance and in the form of
• For building works, it is usually banker's insurance or finance
retains 10% from interim certificate company guarantee, the
and the limit of retention is 5% of government will pay the full
the contract sum. amount in the interim certificate.
• However, if it is in the form of
performance guarantee sum, the
government retains 10% from
interim certificate until has reached
5% of the contract sum.
Interim valuation
 Purpose:
To ensure the employer is paying no more than is required by the contract
and that the contractor is paid the correct amount for the work that he
has carried out.
 The valuation of the work is valued in total(accumulative) which means the
figure arrived at will be the total value of the works done up to the
valuation date.
 For example, the gross valuation of interim valuation no. 2 would be the
total value of work carried out in months one and two, not just the previous
month.
 Furthermore, the liquidated damages are not covered in the interim
certificate or valuation as the employer may recover LAD as a debt or from
any payment due to the contractor under this contract from the
performance bond
Interim valuation (cont’d)
 The following items must be considered when valuing the work executed:

1) Preliminaries
2) Measured work (that contained in the BQ)
3) Value of variations
4) Value of NSC’s and NS”s work
5) Profits and attendance on PC sums
6) Materials on-site (and off site if applicable)
7) Fluctuations in cost
8) Loss and expense
9) Retention sum
10) Previous payments
Interim valuation (cont’d)
PAM CONTRACT 2018 WITH QUANTITIES PWD FORM 203A (REV. 1/2010)

• The valuation and certification • Do not have any provision for who
duties are separated. to deal with valuation of the works
• The QS will responsible for the
preparation of interim valuation
and the amount to be
recommended to the architect to
issue of the interim certificates.
• Meanwhile, the CA is not bound to
follow the QS's valuation but
remains responsible for certifying
sums of payments.
Interim valuation (cont'd)
Schedule of payment (details to be included in monthly valuation)

 PWD CLAUSE 28.2-28.4

Interim valuation (cont'd)
 Schedule of payment (details to be included in monthly valuation)

PWD CLAUSE 28.2-28.4

a) Estimated total value of the works properly executed
b) Amount of any valuation of variation.
c) Amount of provisional sum and PC sum expended
d) 90% of the value of the unfixed material and goods properly delivered to or
adjacent to the site.
e) Value of fluctuation of price

LESS:
f) Any payment (including advance payment) previouly it have under this
contract
Interim valuation (Cont'd)

PAM CLAUSE 30.2

a) The amount in the interim certificate is to include total value of work
properly executed
b) Percentage of the value of materials and goods properly delivered.

LESS:
 retention amount
 The amounts previously certified
Fluctuations of price
Fluctuations of price

 In construction project, large projects are usually undertaken over a long

period of time. It is more likely that the price of material used in the work and
the wage rate will increase and even in some cases fall during the contract period
.

 Rise and fall is the adjustment made to the contract price to offset or
compensate for any rises and falls that occur during the period of contract
 FINAL ACCOUNT
&
PAYMENT CERTIFICATE
DEFINITION
Final Account
oIn a construction contract, final account is an agreed statement concerning the amount of
money to be paid at the end of a building contract by the employer to the contractor
o It shows the overall amount due to the contractor for the works carried out under the
contract
oIt is the original contract sum adjusted as necessary in accordance with the contract
oThis is a stage where a quantity surveyor must determines the final cost of a project.

Payment Certificate
oDocument verified by an architect, engineer, or owner of a construction project that the
noted work has been completed and is approved for payment by the contractor

Final Certificate
o It is a statement of final sum to be paid to the contractor or the employer in settlement of the
contract, and that the contractor has completed the works according to the contract
oFinal Certificate = (Final Account) – (Total Amount Of Previous interim Payment Certificates)
Cont’d
Final account consists of statement of final
account, certificate of practical completion,
certificate of making good defect, certificate of
extension of time and list progress payment

Final account prepared is to ensure the amount

of the final payment added to the contract sums
that have already been paid equally with the
final account for the project.

The QS have to reduce any possible delays in

making the final payment to the contractor.
 INTRODUCTION

For final account 1) The contractor must 2) The final 3) All the claims to 4) All the ‘set-off’/
have fulfilled all his measurement and which the contractor is deductions to which the
to be formalized, obligations under the valuation of the entitled must have been employer is entitled
the following contract executed work must evaluated. must have been
conditions must have been satisfactorily ascertained
be satisfied: completed
 Preparation of final account

Then, (e.g. within 6 months

from receipt of all
documents) the CA or QS
must complete the final
account and send the
The documents necessary for contractor a copy Of the final
The process begins with the the purposes of calculating account. The forms may
contractor, he must send to the final contract sum within provide steps for the parties
the Contract Administration the specified period (e.g. 6 to reach an agreement on the
(CA) all documents months) after practical draft final account. If the
completion. contractor fails to submit the
necessary documents within
the stipulated time, the CA
will make assessment based
on whatever information
available to him
Differences Clauses PAM 2008 with quantity PWD 203A
 Clause 30.10  Clause 31.0
between PAM  Clause 30.11  Clause 31.1
 Clause 30.12  Clause 31.2
CONTRACT 2018  Clause 30.13  Clause 31.3
WITH QUANTITIES  Clause 30.14  Clause 31.4
 Clause 30.15  Clause 31.5
& PWD FORM 203A  Clause 30.16
(REV. 1/2010)
 • List Of Terms Of Contract In ‘Final Account’ Based On PWD 203A &
PAM Contract 2018 With Quantities

Nominated Sub
Contract Sum / Harga Site Valuation / Penilaian Main Contractor / Nominated Supplier /
Contractor / Sub-
Kontrak Tapak Kontraktor Utama Pembekal Dinamakan
Kontraktor Dinamakan

Variation of Price / Turun

Advance Payment /
PC Sum / Wang Kos Provisional Sum / Wang Retention Sum / Wang naik harga bahan-bahan
Bayaran Pendahuluan
Prima Peruntukan Sementara Tahanan (PAM Only) binaan (PWD Only) –
(PWD Only)
Cancelled 2013

Liquidated Ascertain
Performance Guarantee Penultimate Payment /
Damages / Gantirugi Performance Bond / Bon
Sum / Wang Jaminan
tertentu dan ditetapkan Perlaksanaan Bayaran Pra Muktamad
Perlaksanaan (PWD Only)
(LAD)
Timeline of Final Account

• PAM CONTRACT 2018 WITH QUANTITIES

Cont’d

• PWD 203A
Preparation of Final Account
(after PAM Clause 30.10)
Items that must have in Final Account
• PAM CONTRACT 2018 WITH QUANTITIES
CONT’D

• PWD 203A
What is Final Certificate?

• PAM CONTRACT 2018 WITH QUANTITIES

CONT’D

• PWD FORM 203A (REV. 1/2010)

 Contractor erred in submitting document for final account by
failing to show supporting document for the remaining
CASE STUDY claimed sum

Hasrat Sedaya Sdn

Bhd v Bumihiway
(M) Sdn Bhd The judge held that only RM1,052,907.57 was allowed and
the remaining claim of RM257,108.87 (RM1,310,016.44
minus RM1,052,907.57) was dismissed due to lack of proof.
The appellant failed to prove the work done for the
remaining work with any valid evidence thus the judge did
not grant the full amount claimed.
Case Study Tkm Contractor erred by failing to have the final account
verified by consultants.
Property Sdn Bhd v
Syarikat KMZ Sdn
Bhd
The judge dismissed the application as the final
account statement adduced was found lack of
verification. The final amount claimed was not
verified by the quantity surveyor and architect of the
project thus rendered the account inconclusive.
 Contractor erred by failing to provide Final Certificate for the
claim of the outstanding sum

Case Study Procorp

Realty Sdn. Bhd. v
Sumpiles (Malaysia)
Sdn. Bhd
The judge dismissed the application by the appellant for the
summary judgment. The judge held that the final account
statement lacked of verification and certification of the S.O.
thus the final account statement was yet to be final and
conclusive. Therefore, the application for the summary
judgment to grant the outstanding sum stated in the final
account was dismissed.
GENERAL FLOW OF PREPARATION OF FINAL ACCOUNT

Final Balance
EXAMPLE OF FINAL ACCOUNT
FINANCIAL STATEMENT
 Financial statements tell contractors, as well as sureties,
bankers and other stakeholders, how well a construction
company is doing.
DEFINITION &
INTRODUCTION As Quantity Surveyors we keep the client informed at all
stages of the project of the financial position of the contract
at agreed regular intervals, usually monthly

As the works proceed on site we will produce regular

Financial Statements which keep the client up to date with
the estimated total final cost of the project

The report is generally in two parts, the first considers the

current position on how much money the client has already
spent, and the second the probable final cost of the project.
The cost report is crucially important in that it can forewarn
the client of any future possible increases or decreases in the
cost of the project.
Item in Financial Statement
Quotation set against prime cost and provisional
sum

Variation orders issued to the main contractor

Provisional quantities re-measurement

Dayworks sheets

Contractors claims for delays or disruptions

Function of
Financial To ensure project costs are effectively managed

Statement
throughout the projects

To monitor the project’s cost to ensure the

project’s financial success

As a advising on the current cost position, likely

the pattern of future payments over the
contract period ant the probable final total cost
ADVANCE PAYMENT
What Is Advance Payment?

Advance Payment is a sum of money lent by the customer to the

contractor in the early stages of construction as a financial aid for
the work and repayment to the customer through an interim
payment deduction
 Some forms make provisions for the employer to make an advance
payment to the contractor. This is a sum paid early to assist the
contractor with its start-up costs, for example, mobilization costs and

How do
down payments to vendors.

advance The contractor must repay the employer the amount in instalments
spread over an agreed period, and this is usually through percentage

payment
deduction in the payment certificates.

work? The employer will require the contractor to give a bond from an
approved bond provider before making payment.

The purpose of the bond is to protect the employer's interests if the

contractor fail to repay an advance payment. (PWD Clause 69, the
government is obligated to make an advance payment; FIDIC Clause
14.2, 14.3, 14.7(a) - advance payment Clause applies only if the amount
is stated in the appendix).
 CLAUSES
• The clause for advance
payment in PWD FORM 203A
clause of 69.1 stated that the
contractor will get the advance
payment of contract amount
25% of the contract sum less
provisional sum. If the
contractor follow the condition
stated, the advance payment
can be worth maximum 10
million Ringgit Malaysia
CLAUSES
• PWD Clause 69.2 state that
the refund of an advance
payment made to contractor
are minus through interim
payment gradually
CLAUSES
• PWD Clause 69.3 stated that the repayment of the advance
payment that does not complete before the completion date
must be settled by advance guarantee
CONSTRUCTION INDUSTRY
PAYMENT
&
ADJUDICATION ACT 2012
(CIPAA)
 DEFINITION

CIPAA is a shortform for Construction Industry Payment and Adjudication Act (“CIPAA 2012”)
where it operate on 15 April 2014. The Malaysian Parliament enacted CIPAA 2012 with a
declared intention to reduce the problems of payment in the construction industry through the
introduction of a statutory adjudication process.

For example, The Act recognises that the cash flow of small contractors and subcontractors
who are financially weak maybe disrupted by unjustified deductions or dishonest payment
avoidance practices by employers or main contractors who have the upper hand in terms of
bargaining and financial power which may in turn cause construction works to come to a halt
and business failures.

The adjudication proceedings are to ensure that any payment dispute relating to
construction work may be resolved in a speedy but interim manner and thereby
facilitating the cash flow in the construction industry under the Act1. Parties to
construction contracts will be subject to compulsory statutory adjudication under
CIPAA 2012 and thus, parties cannot contract out of the Act and the Act applies
retrospectively2.
 CONT’D

The adjudication process commences with the service of the Notice of Adjudication
by the Claimant. In most cases, the Claimant is the unpaid party who is dissatisfied
with the Payment Response and hence initiates the adjudication proceedings. The
party against whom the Notice of Adjudication is served will become the respondent.

An adjudicator will need to be appointed to conduct the adjudication proceedings.

The adjudicator may be appointed either by agreement of the parties or by the
Director of Kuala Lumpur Regional Centre for Arbitration (“KLRCA”) if the parties
could not reach an agreement on the appointment of the adjudicator.

Generally, the adjudication process will take approximately 90 days to complete from
the issuance of a notice of adjudication to the delivery of adjudication decision by the
adjudicator.
Advantagesof
Speedy dispute resolution for the recovery
CIPAA 2012 of payment in the construction industry.

Provides binding and enforceable decision

on payment dispute. The Adjudicator’s
decision can be enforced as judgment.

High level of enforcement. It allows

suspension of works or reduce rate of
progress.

Enables direct payment from principal.

Disadvantages
of CIPAA 2012
CIPAA 2012 only confines
to payment disputes in
relation to construction
contracts falls under s4 of
CIPAA 2012

The decision made by the

Adjudicator is interim in
nature as it is subjected to
arbitration and litigation13

The Adjudicator will decide

the course and direction of
the proceedings. Parties has
little room to negotiate.
THANK YOU