The Construction Industry Payment and Adjudication Act 2012 (CIPAA) was introduced to facilitate the speedy recovery of payments by contractors from employers in the construction industry. However, in certain exceptional circumstances, an adjudication decision may be set aside under Section 15 of CIPAA 2012.

Section 15 Grounds for Setting Aside an Adjudication Decision

Under Section 15 of CIPAA, a party aggrieved by an adjudication decision may apply to the High Court to have the decision set aside based on the following grounds:

• (a) The decision was obtained through fraud or bribery;
• (b) There was a denial of natural justice;
• (c) The adjudicator failed to act independently or impartially;
• (d) The adjudicator acted beyond his jurisdiction.

Can a Fresh CIPAA Claim Be Initiated After a Decision is Set Aside?

This issue was addressed in the landmark case of Wong Huat Construction Co v Ireka Engineering & Construction Sdn Bhd [2018] 7 MLJ 659. The High Court clarified that when an adjudication decision is set aside under Section 15, both parties are returned to their pre-adjudication status—as if the adjudication had never occurred. Consequently, the claimant is not barred from filing a new CIPAA adjudication for the same claim. This is not regarded as a “repeated claim”.

Case Summary: Wong Huat v Ireka Engineering

In this case, Wong Huat Construction Co was appointed as a subcontractor by Ireka Engineering to carry out painting works valued at RM1,019,570.40. Disputes arose over additional variation works and outstanding payments. The subcontractor submitted a CIPAA payment claim of RM231,277.17, but the adjudicator only awarded RM29,791.73 based on revised payment certificates introduced by the respondent.

Unhappy with the reduced award, the claimant applied to set aside the adjudication decision under Section 15. The Court found that a claimant who receives significantly less than the amount claimed can still be considered an “aggrieved party” under CIPAA, and therefore has the legal standing to apply for a setting aside.

High Court’s Position on Re-Filing CIPAA Claims

Justice Lee Swee Seng (as he then was) ruled that once an adjudication decision is set aside, the original claim can be refiled under CIPAA. The Court emphasized that Section 15 was intended to address procedural irregularities and ensure that justice is upheld, not to limit the unpaid party’s remedies to only arbitration or litigation.

“Where an adjudication decision has been successfully set aside, the parties return to their original positions. The unpaid party may initiate a new CIPAA adjudication, and such a claim will not be barred as a duplicate,” – Wong Huat Construction v Ireka Engineering.

This position aligns with international legal practice, as seen in cases like Westwood Structural Services Ltd v Blyth Wood Park Management Company Ltd [2008] EWHC 3138 (TCC), where multiple adjudications were permitted on the same dispute.