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ARTICLE · 07 MARCH 2024

CIPAA Adjudication – To What End?

When the Construction Industry Payment and Adjudication Act 2012 ("CIPAA") came into force on 15 April 2014, the construction industry was stoked and at the same time sceptical.

MalaysiaLitigation, Mediation & Arbitration

When the Construction Industry Payment and Adjudication Act 2012 (“CIPAA”) came into force on 15 April 2014, the construction industry was stoked and at the same time sceptical. Since then, the Courts in the cases that were brought before it in regards to CIPAA have upheld the aim that CIPAA adjudication is meant to achieve rough justice – ‘pay now, argue later'. The industry was somewhat elevated in their scepticism but they continue to watch closely.

9 years on, what of the thoughts of CIPAA adjudication today? Is it really the effective tool that would assist, or has assisted, with the cash flow issues in the construction industry as the policy makers had envisaged?

From when it came into effect, adjudication decisions have gone through numerous litigations in Court typically for setting aside under Section 15 or for stay of the adjudication decision (“AD”) under Section 16 of CIPAA. The threshold to achieve a stay of the AD under CIPAA was a high one, so a

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