The Construction Industry Payment and Adjudication Act 2012
("CIPAA") came into operation on
15.4.2014. CIPAA was enacted to ease cash flow problems in the
construction industry by facilitating regular and timely payment,
by providing a mechanism for speedy payment dispute resolution
through adjudication and by providing remedies for the recovery of
payment in the construction industry. Instead of going to Court,
many have opted for adjudication proceedings over court or
arbitration proceedings. However, others held back as the
application of CIPAA to contracts entered into before 15.4.2014 was
not clear. The Federal Court, which is the highest Court in
Malaysia, recently made a pronouncement which clarified the issue
– it unanimously decided that CIPAA applies
prospectively.
