BA-24C-39-05/2023 Kand.

25
23/11/2023 09:00:17

IN THE HIGH COURT OF MALAYA AT SHAH ALAM,

SELANGOR DARUL EHSAN
ORIGINATING SUMMONS NO: BA-24C-38-05/2023

BETWEEN

BMG GLOBAL SDN BHD

(Company No. 200501020540 (702664-W)

AND

JUANG-ANTARA BINA SDN BHD DEFENDANT

(Company No. 199501016618 (345821-P)

(HEARD TOGETHER WITH)

IN THE HIGH COURT OF MALAYA AT SHAH ALAM,

SELANGOR DARUL EHSAN
ORIGINATING SUMMONS NO: BA-24C-39-05/2023

BETWEEN

BMG GLOBAL SDN BHD

(Company No. 200501020540 (702664-W)

AND

JUANG-ANTARA BINA SDN BHD

(Company No. 199501016618 (345821-P)

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 (HEARD TOGETHER WITH)

IN THE HIGH COURT OF MALAYA AT SHAH ALAM,

SELANGOR DARUL EHSAN
ORIGINATING SUMMONS NO: BA-24C-43-05/2023

BETWEEN

JUANG -ANTARA BINA SDN BHD PLAINTIFF

(Company No. 199501016618 (345821-P)

AND

BMG GLOBAL SDN BHD DEFENDANT

(Company No. 200501020540 (702664-W)

JUDGMENT
(3 Originating Summonses (OSs))

A. INTRODUCTION

[1] On November 2022, Juang-Antara Bina Sdn. Bhd. (Juang) had

commenced an Adjudication Proceedings pursuant to the Construction
Industry Payment and Adjudication Act 2012 (CIPAA 2012) against BMG
Global Sdn. Bhd. (BMG) to claim a sum of RM2,822,066.26 as unpaid
sum. The Adjudicator decided in favour of Juang in his Adjudication
Decision (AD).

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 [2] As a result of the AD, the followings were filed by the parties:

(i) OS No. BA-24C-38-05/2023 (Suit 38) was filed by BMG to

set aside the AD pursuant to s.15 of CIPAA 2012;

(ii) OS No. BA-24C-39-05/2023 (Suit 39) was filed by BMG to

stay of execution of the AD pursuant to s.16 of CIPAA
2012; and

(iii) OS No. BA-24C-43-05/2023 (Suit 43) was filed by Juang

against BMG to enforce the AD pursuant to s.28 of CIPAA
2012.

[3] Since there are 3 OSs filed in relation to this AD, the parties
agreed to having all the 3 OSs heard together and for the decision to be
delivered together. Since this is a cross suit between the parties, for
ease of reference the parties will be referred to henceforth with the
acronym of Juang and BMG wherever applicable.

B. BRIEF BACKGROUND

[4] By way of a Letter of Award dated 19.9.2017, BMG had appointed

Juang as a sub-contractor to carry out a construction of a bridge and all
related works in respect of a
Jambatan Merentasi Sungai Pahang Dari Kg. Guai ke Kg. Seberang
(the Project).

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 [5] Due to a non-payment of claims made by Juang from BMG, Juang
issued a payment claim to BMG requesting for a sum of
RM2,822,066.26, comprising as follows:

(i) RM1,575,196.38 being the total amount for the Payment

Certificates Nos. 40 & 41 and the Progress Claim No. 48
amounting to RM168,650.65, RM376,734.44 and
RM1,129,811.29 respectively; and

(ii) RM1,146,869.88 being the First Moiety of the Retention

Sum.

[6] BMG on the other hand had not responded to the payment claim
by any Payment Response to Juang.

C. ADJUDICATION PROCEEDINGS

[7] Juang initiated Adjudication Proceedings against BMG by issuing a

Notice of Adjudication dated 4.11.2022 and an Adjudication Claim was
served on 21.12.2022 to BMG.

[8] An Adjudication Response was replied by Juang on 9.1.2023

cross claims:

i. RM3,609,000.00 being the liquidated ascertained

damages (LAD) that BMG is entitled to impose against
Juang;

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 ii. RM398,745.03 being the differential sum as a result of
remeasurement; and

iii. Costs.

[9] Upon conclusion of the Adjudication Proceedings, the Adjudicator,

Lim Hock Siang had delivered his decision in favour of Juang via his AD
dated 20.3.2023 as follows:

13.1 an adjudicated sum of RM2,772,096.26;

13.2 pre-action interest at the rate of 5% per annum;
13.3 costs in the sum of RM89,533.22 which includes t
fees, AIAC administrative costs, taxes as well as party to party
costs

[10] The parties agreed for this court to hear and decide the 3 OS
together.

[11] Being dissatisfied with my decision, a Notice of Appeal has been

filed by BMG.

D. OBJECT CIPAA 2012

[12] CIPAA 2012 is a creature of the legislation intended to facilitate

speedy and regular payments in the construction industry. As cash flow
is the utmost important factor in the construction industry, CIPAA
provides interim measures to disputing parties to solve payment issues
expeditiously so as not to jeopardise the continuance of the construction
contract entered into by them. (see Martego Sdn Bhd v. Arkitek Meor

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 & Chew Sdn Bhd and another appeal [2019] 8 CLJ 433; [2019] 5
AMR 516 FC; Bertam Development Sdn Bhd v. R&C Cergas Teguh
Sdn Bhd [2017] 1 LNS 2228)

E. ISSUES

[13] BMG
2012 is premised on :

i. The Adjudicator had breached the rules of natural justice in

and/or

ii. The Adjudicator had not acted impartially and had breached
natural justice in failing to consider all documents presented
to him which led to him acting in excess of his jurisdiction in
arriving at a disproportionate outcome to the detriment of
BMG.

[14] application for a stay of execution of the AD pursuant to

s16 of CIPAA 2012 is premised as follows:

i. Pending the full and final determination in arbitration

pursuant to s. 16(1) (b) of the CIPAA;

ii. That there is a clear and unequivocal error in the AD; and

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 iii. That
be able to repay the Adjudication Sum should BMG is
successful at the Arbitration.

[15] Juang
2012 is premised as follows;

i. that the Adjudicated Amount is not paid by BMG; and

ii. that the AD is neither set aside nor stayed.

F. FINDINGS OF THE COURT

I. Setting Aside OS -Suit 38 (s.15 of CIPAA 2012)

[16] The issues which BMG had raised against the AD are particularly
pursuant to s.15(b), (c) and (d) of CIPAA 2012. As such, I will consider
whether BMG had discharged its burden on a balance of probabilities to
prove to this court that there has been a denial of Natural Justice by the
Adjudicator, that the Adjudicator had failed to act impartially and that the
Adjudicator had acted in excess of his jurisdiction respectively in arriving
to his conclusion of the Adjudication Proceedings. It is also the
contention of BMG that there are clear and unequivocal errors in the AD.

a. s.15(b) of CIPAA 2012

[17] It is Adjudicator had failed to properly or

at all consider all the defences raised by BMG as such the Adjudicator

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 had acted in breach of Natural Justice and in excess of his jurisdiction.
In particular, the Adjudicator had on LAD as
stated in paragraph 28 of the AD on the ground that :-

i. Due to the absence of an extension of time clause, the

ii.
extension of time, Juang merely needs to complete the
works within a reasonable time.

[18] It
defence raised by BMG with regards to the LAD issue as stated in its
Adjudication Response. According to BMG, the Adjudicator in his
decision at paragraph 28 had failed to consider that there is a total delay
of 743 days (from the Completion Date of 18.11.2019 until the date of
practical completion on 30.11.2021) which exceeds the total number of
days of extension of time that Juang is entitled to.

[19] I refer to the case of MRCB Builders Sdn Bhd v. Wazam

Ventures Sdn Bhd and another case [2020] 1 LNS 891; [2020] MLJU
208, where Wong Kian Kheong J (as he then was) held that it is
sufficient to dislodge a complaint of breach of natural justice if the
Adjudicator had given just one reason to have arrived to his decision.

[20] The principle of Natural Justice that is said to have been denied
here is the right to being heard, audi alteram partem. In an Adjudication
Proceedings, the Adjudicator has the duty to accord procedural fairness

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 to the parties during the course of the proceedings whereby the issues
raised by both parties are to be considered and a decision is to be
derived therefrom. In the case of ACFM Engineering & Construction
Sdn. Bhd. v. Esstar Vision Sdn Bhd & another appeal [2016] 1 LNS
1522; [2016] MLJU 1776, the Court of Appeal held:

[19] When one speaks of natural justice, it is nothing more than what we call
the concept of "procedural fairness" which needs to be accorded to the parties

[21] In perusing through the AD, unlike what is claimed by BMG, the
Adjudicator had deliberated on the issue of LAD at paragraph 17
onwards till he reached a conclusion on this issue at paragraph 28 of the
AD.

[22] Even BMG had conceded to the fact that the Adjudicator had
considered the LAD issue before concluding at paragraph 28 i.e that
time is at large and that Juang only has to complete the works within a
reasonable time.

[23] With regards to the issue of set off of RM398,745.03 being the
differential sum as a result of remeasurement, the Adjudicator
deliberated at length on this issue at paragraph 36(b) to 38 of his AD
before coming to his decision whereby he had decided against
claim for a set off.

[24] Therefore, BMG

address the issue of set off raised by it at the Adjudication Proceedings
is totally unsubstantiated and unfounded.

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 [25] On whether the Adjudicator had considered issues which were
raised by Juang in the Adjudication Reply, it cannot be denied that the

Adjudication Reply and a final Sur-Rejoinder by Juang. The issue which

was said to have been raised in the Adjudication Reply was that time is
set at large, which BMG had addressed in its Rejoinder opposing the
same. Juang had also addressed the same issue in its Sur-Rejoinder.
As such, BMG has failed to prove to the court that the Adjudicator had
not accorded procedural fairness in the Adjudication Proceedings.

[26]
but had also made his findings in accordance to all the documents in
relation to these issues which had been submitted for the purpose of this
proceedings.

[27] I refer to the case of Bina Puri Construction Sdn Bhd v Hing
Nyit Enterprise Sdn. Bhd. [2015] 8 CLJ 728 where it was stated as
follows:

Adjudicator may be set aside. Since an application under s.15 is not an

b. s.15 (c) of CIPAA 2012

[28] An AD can be set aside if it can be established pursuant to s.

15(c) of CIPAA 2012 if BMG discharges its legal burden that the

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 Adjudicator lacked independence or impartiality in conducting the
Adjudication Proceedings and in delivering the AD.

[29] On the issue of lack of independence or impartiality of the

Adjudicator, Lee Swee Seng J (as he then was) in the High Court case
of Teguh Wiramas Sdn Bhd v. Thien Seng Chan Sdn Bhd [2017] 1
LNS 619; [2017] 4 AMR 501 had stated the following:

There is also no basis for the Respondent to allege that the Adjudicator
had failed to act independently and impartially. The fact that the Adjudicator
did not agree with the Respondent's position on the law is no proof that he
had failed to act independently and impartially. Such an allegation should not
be launched without some evidence pointing inexorably to a lack of
independence or impartiality in the hearing and the delivery of the
Adjudi

[30] In this case, it is BMG

consider issues which had been raised by BMG at the Adjudication
Proceedings, such as, omissions and recalculations. It is also said that
the Adjudicator had failed to invite for further submissions on these
issues and the issue on LAD which BMG had raised as its cross-claim
at this proceedings. Hence, the Adjudicator had failed to display
impartiality and independence in his role when arriving to his decision.

[31] Apart from the allegations made against the Adjudicator, BMG had
not adduced any evidence to show that the Adjudicator lacked
independence or impartiality in making his decision in favour of Juang.
As shown in the above paragraphs when dealing with s.15(b) of CIPAA,
the Adjudicator had reasoned out every conclusion that he had reached

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 when deliberating the issues brought before him. As such, I am not
convinced that BMG has discharged the burden of proving the allegation
made against the Adjudicator under this limb.

c. s.15(d) of CIPAA 2012

[32] s.27 of CIPAA 2012 provides the jurisdiction in which the

Adjudicator can conduct the Adjudication Proceedings. s.27(3) of CIPAA
particularly gives the Adjudicator the discretion to proceed and complete
the adjudication proceedings not withstanding any jurisdiction challenge,
without prejudice to the rights under s.15 and s.28 accordingly.

[33] An AD is commonly applied to be set aside in reliance of s.15(d),

as such the case of Terminal Perintis Sdn. Bhd. v Tan Ngee Hong
Construction Sdn. Bhd. and another [2017] 1 LNS 177; [2017] MLJU

J (as his he then was) classified jurisdiction 3 categories ie. core

jurisdiction, competence jurisdiction and contingent jurisdiction.

[34] In this case, the jurisdiction challenge is on the contingent

jurisdiction as stated in the Terminal Perintis Sdn. Bhd. v Tan Ngee
Hong Construction Sdn. Bhd. and another (supra):

there must be further compliance with the requirements of the Act as in that
the dispute must be one falling within the matters raised in the Payment Claim
and the Payment Response as provided for under section 27(1) CIPAA. In
that example the word "jurisdiction" is used in the sense of the scope of the
dispute that is before the Adjudicator for decision. So, for example an
Adjudicator may not be able to decide on the defence of set-off arising out of

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 costs of rectifying defective works if this has not been raised in the Payment
Response. If he so decides, then this Court may set it aside as been made in

[35] In this case, BMG

a frolic of his own in coming to his decision and as such he had acted in
excess of his jurisdiction. However, on t
all the issues which the Adjudicator had dealt with had been brought to
him, including the issue pertaining to LAD.

[36] In fact, BMG had in its Affidavit in Support stated that the
Adjudicator had failed to consider Clause 17 of the Letter of Award date
19.9.2017 and PILING WORKS AND
STRUCTURES 8.1 PILING WORKS (ALL PROVISIONAL) Note: All

when deliberating issues involving omissions and recalculation.

[37] However, BMG failed to show that this issue was in fact raised
during the Adjudication Proceedings. As submitted by Juang, BMG had
never raised the issue pertaining to clause 17 of the LOA and the terms
in Tender Bill No. 8 in the adjudication proceeding.

[38] Therefore, BMG cannot now allege that the Adjudicator has
exceeded his jurisdiction because he failed to consider clause 17 of the
LOA and terms in Tender Bill No. 8 because these points were never
raised by BMG in the Adjudication Proceedings in the first place.

[39] Therefore, having failed to establish s.15(b), (c) and (d) of CIPAA
2012 against the Adjudicator, BMG has failed to discharge its burden on

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 balance of probabilities to set aside the AD. As such, this application to
set aside the AD is hereby dismissed with costs of RM5,000.00 to be
paid to Juang by BMG subject to allocatur fees.

II. Stay of Execution Suit 39 (s.16 of CIPAA 2012)

[40] BMG via its affidavit in support deposed by its director had stated
this application is in reliance to s.16(1)(b) CIPAA and that the execution
of the AD should be stayed on the basis that there is a pending civil suit.

[41] The Federal Court case of View Esteem Sdn Bhd v. Bina Puri
Holdings Bhd [2019] 5 CLJ 479 His Lordship Zulkefli Ahmad
Makinuddin PCA had in delivering the judgement stated the following:

s. 16 of CIPAA would allow some degree of flexibility to the courts to

stay the award where there are clear errors, or to meet the justice of the
individual case. It is accepted that a stay of the award ought not be given

[42] Since I have deli

aside the AD, I am of the view that there are no clear and unequivocal
errors in the AD which warrant a stay of execution to be granted.

[43] On the grounds that stay should be granted pending the final
determination of a pending civil suit, to prevent an abuse of s16 CIPAA, I
fall back on what was said by Justice Lee Swee Seng (as his Lordship
then was) in the case of Pasukhas Sdn Bhd v. Empire Multiple Sdn
Bhd and Another Case [2019] 1 LNS 757; [2019] MLJU 1393. His
Lordship in his judgment had succinctly reasoned that in spite of s.

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 16(1)(b), allowing a stay merely on the fact that the arbitration had
commenced with the service of a notice to arbitrate would render the
entire purpose of the CIPAA futile and statutory adjudication wholly
ineffective to ensure cashflow in the construction industry.

[44] The final reason given for this stay application is that the financial
standing of Juang is weak and as such, should BMG is successful in the
civil suit, Juang will not be able to pay back the Adjudication Sum to
BMG.

[45]
reveals that Juang has suffered a loss after tax of RM88,524.99. As
such, Juang may not be able to repay BMG should it be successful at
the civil suit.

[46] Be that as sit may, in the same report, it also shows that Juang
has a revenue of RM56,874,555.56. A revenue of such an amount
certainly does not reflect Juang as a weak concern. BMG has failed to

suit decision nugatory should it be made in favour of BMG.

[47] In the upshot, I d

application with costs of RM5,000.00 subject to allocator fees.

III. Enforcement OS Suit 43 (s.28 of CIPAA 2012)

[48] As guided by Her Ladyship Mary Lim Thiam Suan JCA (as she
then was) in the Court of Appeal case of Inai Kiara Sdn Bhd v. Puteri

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 Nusantara Sdn Bhd [2019] 2 CLJ 229, the court may exercise its
discretion to grant leave under s. 28(1) and (2) CIPAA to enforce an
adjudication decision if the following three conditions (3 Conditions) are
met:

applying for leave under s. 28 CIPAA;

(2) the party against whom an adjudication decision is made, has failed to
pay the adjudicated amount on the date specified in the adjudication
decision; and

(3)

[49] In this case, in the absence of any evidences to say otherwise, all
3 conditions have been satisfied and since the setting aside and the
application for stay of execution of the AD have been dismissed, Juang
application to enforce the AD is allowed with no order as to costs.

G. CONCLUSION

[50] Premised on the above evidences and reasons:

(i) both the Setting Aside and Stay of Execution OSs are
dismissed;

(ii) the Enforcement OS is allowed; and

(iii) a total costs of RM10,000.00 subject to allocatur fees shall

be paid to Juang by BMG accordingly.

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