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HOW CIPAA Adjudication in Malaysia can HELP CONTRACTORS
CIPAA IS FAST
The entire adjudication proceedings in Malaysia can be concluded in about 95 working days despite the intense exchange of documents and claims in the proceedings. No party is allowed to delay the adjudication proceedings as the statutory timeline is strict and fixed except with both parties' agreement.
CIPAA IS CHEAP
As the Adjudication proceedings are fast and involve purely document exchange, the cost involved is relatively lower when compared to Court and Arbitration. The best part about CIPAA is that the losing party is bound to pay all costs incurred by the winning party which includes the claim consultants or lawyers fee.
CIPAA IS EFFECTIVE:
Most often than not, party who obtains an Adjudication Decision in its favour will get pay as soon as the Adjudication Decision being served upon them. This is because the losing party knows the effect of such Adjudication Decision and the extent to which the winning party can enforce and execute the Adjudication Decision against them. For example, the winning party could initiate winding up proceeding against the losing party based on the Adjudication Decision alone and it will heavily impact the credit status of the losing party.
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CIPAA IS IMPACTFUL:
CIPAA provides powerful remedy to winning party to either suspend or slow down work performance of the project when an Adjudication Decision obtained has still not been paid. Not only that, the winning party can apply to the High Court to convert the Adjudication Decision as if it is an order or judgment of the High Court so to facilitate the execution proceedings like garnishee, judgment debtor summons and writ of seizure and sale etc.
CIPAA ALLOWS DIRECT PAYMENT AGAINST PRINCIPAL:
What most contractors do not know is that a winning party in an adjudication proceeding can seek direct payment from the principal of the losing party, even without an express written contract with the principal. Traditionally, a party can only sue if there exist a contract and parties are privy to it. Now, with introduction of Section 30 of CIPAA, the employer of the losing party is bound to make payment for the Adjudication Decision if there is money owing from the principal to the losing party at that point of time where the Adjudication Decision is issued.
