The surge in the number of disputes involving the statutory adjudication mechanism in the Construction Industry Payment and Adjudication Act (CIPAA) 2012 has led to a significant number of consequential challenges to adjudication decisions in the courts. This article highlights the notable decisions handed down by the Malaysian courts in 2019 and their effect on the future application of the CIPAA.
With airline companies rapidly depleting cash reserves and any form of subsidies to ensure survival in the current climate, the unsurprising reality is that efforts to go green have taken a step back. However, the pandemic has in a way allowed relevant industry players to pause and ponder on long-term strategies, including but not limited to the sustainability of both airline companies and, importantly, environmental protection.
A contractor and claimant, Econpile, has had verdicts delivered by both the Court of Appeal and the High Court on, among other things, the issue of whether an adjudicator has the jurisdiction to decide on a payment claim when the contract has been terminated and whether the contractor is entitled to commence an adjudication proceeding under the Construction Industry Payment and Adjudication Act 2012 after the contract has been terminated.
The domino effect of airlines' massive lay-offs of pilots is a decrease in pilot training applications in Malaysia. One of the many flight training organisations in Malaysia has seen a 30% fall in enrolment at its eastern Malaysia centre and a 15% decrease in its western Malaysia centre. The reason for this is because the investment does not necessarily guarantee its returns.
In the midst of the COVID-19 pandemic and in a move to boost economic activity through medical tourism in Malaysia, the government has announced that it will partially reopen Malaysia's borders to medical tourists from designated green zone countries (eg, Brunei, Singapore, South Korea, Japan, Australia and New Zealand), allowing them to fly in via commercial or chartered flights.
The Kuala Lumpur High Court recently dismissed an application by AirAsia Berhad and its long-haul sister airline, AirAsia X Berhad, for leave to commence judicial review proceedings against a financial penalty imposed by the Malaysian Aviation Commission (MAVCOM). This was the first time that an airline had sought to challenge a penalty imposed by MAVCOM.
On 7 June 2020 the government announced that Malaysia's Movement Control Order would enter a 'recovery phase' beginning on 10 June 2020 and ending on 31 August 2020. As a result, the Malaysian Aviation Commission and the Civil Aviation Authority of Malaysia recently introduced measures to ease the administrative and regulatory challenges faced by the aviation industry during the Recovery Movement Control Order period.
Drone technology is developing fast and drone popularity is growing even faster. It is crucial that drone regulations keep up to speed by undergoing periodic updates and amendments. The time is right for a comprehensive update to the rather limited drone rules in the Civil Aviation Regulations. It is also hoped that both the Civil Aviation Authority of Malaysia and the Ministry of Transport will keep a close eye on the development of other aeronautical projects such as the flying car.
In July 2019 the Kuala Lumpur High Court awarded a summary judgment for a combined sum exceeding RM40 million for unpaid passenger service charges in three civil suits brought by Malaysia Airports Sdn Bhd against AirAsia Berhad and AirAsia X Berhad. The recently released written grounds of judgment for this matter have provided welcome clarification on several important issues for providers of aviation services.
The Ministry of Works has issued a standard operating procedure for the construction industry (Construction SOP), effective for the duration of the Recovery Movement Control Order (RMCO). The ministry has also published FAQs addressing the common queries arising from the Construction SOP. The Construction SOP previously issued by the Ministry of Works for the Conditional Movement Control Order continues to apply for the duration of the RMCO subject to the amendments highlighted in this article.
Following the prime minister's announcement on 1 May 2020 regarding the reopening of the economy, the construction industry is permitted to operate with effect from 4 May 2020. Such operations will be subject to compliance with the standard operating procedure for construction issued by the Ministry of Works.
According to the Malaysian Aviation Commission (MAVCOM), the COVID-19 pandemic constitutes 'extraordinary circumstances' under the Malaysian Aviation Consumer Protection Code. As a result, MAVCOM is temporarily providing some leeway in terms of how airlines can respond to passenger refund requests. However, in doing so, it may have inadvertently exposed passengers to the risk of losing their entire ticket cost.
As Malaysia transitions into the third phase of the Movement Control Order (MCO Phase 3), the government has moved to allow additional economic sectors to operate during this period. This includes construction projects and services related to construction works. However, construction industry players that intend to resume operations during MCO Phase 3 should take note that they must comply with the third set of frequently asked questions issued by the Ministry of International Trade and Industry.
The Malaysian Aviation Commission (MAVCOM) recently reported a bleak outlook in 2020 for the Malaysian aviation services market due to the COVID-19 pandemic. MAVCOM foresees that the significant decline in tourist arrivals and receipts, passenger traffic and revenue due to lower air travel demand could be made worse if the pandemic proves hard to contain, leading to prolonged travel restrictions. This article outlines government initiatives to support the aviation industry.
In relation to the Movement Control Order (MCO) regarding COVID-19, the Ministry of Works, among others, issued a series of frequently asked questions to clarify some of the issues affecting the construction industry. The Ministry of Works has since confirmed that all works at construction sites are not permitted under the MCO and must therefore be stopped during the relevant period, except for 'critical works'.
The COVID-19 pandemic's impact on the Malaysian economy during this period of uncertainty and crisis depends on national-level efforts to contain the virus. Until then, the global restrictions imposed on travel will continue to severely undermine the aviation industry, possibly to the extent of necessitating government intervention in the market. It would be prudent for the government to consider the Malaysian Aviation Commission's position when conducting any cost-benefit analysis of measures or aid.
In its effort to contain the COVID-19 outbreak, the government has implemented the Movement Control Order (MCO) throughout Malaysia. The MCO has affected the performance of non-essential works, including works at project and construction sites where workers are required to stop work. Questions remain, including does the COVID-19 outbreak or the MCO constitute a force majeure event? And how does the outbreak or the MCO affect parties' rights and obligations in terms of timing and costs?
Retention sums are usually provided in construction contracts to be withheld by the employer from the sum otherwise certifiable to the contractor. This serves to safeguard employers against possible defects or non-completion of works on the part of contractors. The Federal Court recently decided whether retention sums under a construction contract are held on trust by the employer for the benefit of the contractor.
Prior to recent Federal Court decisions, there was a cloud of uncertainty arising from conflicting decisions as to whether the Construction Industry Payment and Adjudication Act 2012 (CIPAA) applies prospectively or retrospectively. Based on two recent decisions, it is clear that the CIPAA does not apply to construction contracts made before the CIPAA came into operation on 15 April 2014 and that parties to such contracts cannot resort to statutory adjudication proceedings to resolve payment disputes.
The Malaysian Aviation Commission (MAVCOM) recently announced that it had imposed RM2 million fines on AirAsia Berhad and its long-haul sister airline AirAsia X Berhad. MAVCOM further announced that it had imposed an RM856,875 penalty on Malaysia Airports (Sepang) Sdn Bhd, which is the operator of Kuala Lumpur International Airport. The fines come at a time of considerable uncertainty for MAVCOM and the Malaysian aviation industry.