When a contractor takes over its subcontractor's works, can the contractor make a claim in adjudication against the subcontractor? Scenarios such as this are not uncommon; however, contractors which find themselves in such circumstances and wish to make a claim against the subcontractor by way of adjudication under the Construction Industry Payment and Adjudication Act 2012 should be wary of a recent high court case.
The Federal Court recently delivered a landmark decision concerning the delay of delivery of vacant possession for Schedule G and H-type contracts under the Housing Development (Control and Licensing) Regulations. This article focuses on the decision's impact on housing developers with respect to their completed and ongoing housing projects. While the dust on the calculation of liquidated and ascertained damages for housing projects is now settled, the storm may be brewing for housing developers.
As cashflow is crucial for main contractors in any ongoing construction project, prompt and expeditious payments by the employer are often expected. However, if the main contractor is dissatisfied with the payment certificate, can the main contractor sue the consultant for negligence? The Court of Appeal recently addressed this question and unanimously upheld a high court decision in dismissing a main contractor's claim against a consultant.
The Federal Court recently refused leave to appeal a Court of Appeal decision which had found that the courts' powers in an oppression action are broad and unfettered. This includes the power to order restitution to a company, a remedy traditionally seen as belonging to companies. The broad language used in the oppression provision is crucial in providing the courts with the necessary discretion to formulate remedies which are appropriate and just in the circumstances of a particular case.
The Kuala Lumpur High Court recently struck out two originating summonses against the former director of the Asian International Arbitration Centre (AIAC). The court's ruling included that the appointment of the director of the AIAC was not justiciable. It is hoped that this decision will provide valuable case law and put similar challenges to rest, as such challenges are not only vexatious but also a waste of judicial time and resources.
The Federal Court recently confirmed that the court is entitled to issue a further order subsequent to its final and perfected judgments or orders only in limited circumstances. However, a change or substitution of one form of remedy with another form of remedy ordered in a subsequent application does not amount to variation subject to the facts of each case. This decision reinforces the inherent jurisdiction of the court to grant consequential orders to ensure that justice is achieved.
Section 30 of the Construction Industry Payment and Adjudication Act 2012 creates a statutory obligation for a principal to make the payment awarded by an adjudication decision to a subcontractor in the event of the main contractor's failure to do so. In a recent case, an issue arose on whether direct payment could be ordered against a principal when winding-up proceedings against the main contractor were already afoot.
When a company is wound up by a court order, a liquidator steps in and manages the company. It is enunciated in the Malaysian company law regime that the legal standing of such company to bring or proceed with an action or proceedings is vested in the liquidator. If an action or proceeding is taken by a wound-up company, the liquidator's prior sanction must be obtained. The apex court recently handed down a landmark judgment on the validity of retrospective sanction granted by liquidators.
In a recent case, the plaintiff obtained a judgment in default of defence against multiple defendants during the enforcement of the Movement Control Order in Malaysia. Subsequently, the judge held that various applications of the plaintiff and the defendants be heard by way of a Skype videoconference due to the ongoing COVID-19 pandemic. Dissatisfied with the videoconference, the plaintiff challenged its validity.
The existence of arbitration clauses in construction contracts is not uncommon. This article examines the impact of a recent Federal Court decision on whether an arbitration clause or a judgment in default which had already been obtained despite the existence of the arbitration clause took precedence. The decision shows that the courts will not review whether a dispute exists between parties, regardless of whether a judgment in default has been obtained.
A high court recently issued the first decision regarding a constitutional challenge of the legitimacy of statutory adjudication under the Construction Industry Payment and Adjudication Act 2012. In this case, the court was also confronted with a challenge of the appointment of the late Vinayak Pradhan as the then director of the Asian International Arbitration Centre (AIAC) and the immunity asserted by the AIAC, Pradhan and the adjudicator.
In the course of the hearing of a direct payment application filed under the Construction Industry Payment and Adjudication Act, the issue arose as to whether direct payment could be ordered against an employer when winding-up proceedings were underway against its contractor. To avoid protracted arguments, the subcontractor withdrew the winding-up proceedings during the hearing of the direct payment application. However, another creditor served a winding-up petition on the main contractor shortly thereafter.
The High Court recently considered whether the Construction Industry Payment and Adjudication Act applies retroactively to contracts entered into and disputes arising before the act came into force. In a lengthy judgment, the High Court found that Parliament's intention was to apply the act to all construction contracts – including payment disputes under construction contracts – regardless of when they were made.
In a recent Federal Court case, the court held that an arbitration award may be enforced within 12 years of the date on which the award is registered as a judgment of court. The court's judgment has given equal treatment, insofar as the statute of limitations is concerned, to a judgment arising from registration of an arbitral award and a judgment pronounced at the conclusion of a court-conducted litigation.