Winning a CIPAA adjudication is a major step, but it is not always the end of the story. Sometimes the losing party still refuses to pay, hoping that the contractor will give up or run out of patience. Fortunately, CIPAA gives a successful party real tools to turn a decision into actual payment. This guide explains how to enforce an adjudication decision in Malaysia.

A binding decision, not just a recommendation

The first thing to understand is that an adjudication decision is binding on the parties. It is not a suggestion or a recommendation. Once the adjudicator has decided that a sum is payable, the losing party is obliged to pay it, even if they intend to challenge the decision later through arbitration or the courts.

This binding quality is what makes adjudication so effective. It shifts the position immediately in favour of the successful party and provides a solid foundation for enforcement if payment is not made voluntarily.

Enforcement through the courts

If the losing party does not pay, the successful party can apply to the High Court to enforce the adjudication decision. On enforcement, the decision can be treated in much the same way as a court judgment, opening up the usual mechanisms for recovering a judgment debt.

This is a powerful remedy. It means a contractor does not have to start a fresh, lengthy court case to prove the debt all over again. The adjudication decision itself becomes the basis for enforcement, which is far faster and more direct.

Suspending or reducing work

CIPAA also provides another important tool. Where an adjudication decision in the contractor’s favour remains unpaid, the contractor may, in appropriate circumstances and after following the correct procedure, suspend the works or reduce the rate of progress until payment is made.

On an ongoing project, this can be a significant lever. The prospect of work grinding to a halt often concentrates the mind of a non-paying party far more effectively than correspondence. It should, however, be used carefully and in accordance with the Act, so taking advice before suspending work is wise.

Direct payment from the principal

In certain situations, an unpaid party who has won an adjudication may be able to seek payment directly from a party further up the chain, such as the principal or employer, rather than only from the immediate paying party. This can be valuable where the immediate paying party is unwilling or unable to pay but funds exist higher up.

The availability and mechanics of this option depend on the circumstances, so it is another area where specific advice is helpful.

What if the losing party challenges the decision?

A losing party may apply to set aside the decision or may pursue arbitration or litigation for a final determination. However, the existence of such a challenge does not automatically suspend the obligation to comply. In many cases the successful party can still enforce the decision while any challenge proceeds, although the court has a role in managing these situations.

This means that, even where a challenge is on foot, a contractor is often not left waiting. The decision generally stands and can be enforced unless and until it is set aside.

Act decisively

Enforcement is most effective when pursued promptly and correctly. Delay can allow a non-paying party to dissipate assets or simply entrench their refusal. Moving quickly to enforce, using the right tool for the situation, gives you the best chance of converting your decision into payment.