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Construction Litigation Lawyers in Malaysia — High Court Construction Disputes

While CIPAA adjudication and arbitration resolve the majority of construction disputes in Malaysia, the High Court remains essential for several important categories of construction matter — including the enforcement of adjudication decisions, challenges to adjudication decisions under section 15 of CIPAA, urgent injunctive relief, and construction disputes where the contract does not contain an arbitration clause or where litigation is the most appropriate forum.

At NZSK, our construction litigation team in Kuala Lumpur and Selangor appears regularly in the dedicated Construction Courts at the KL High Court and the Shah Alam High Court — which handle all applications related to CIPAA, construction arbitration, and substantive construction litigation. We act for contractors, employers, subcontractors, and developers in the full range of construction court proceedings.

Why Choose Us?

The Dedicated Construction Courts in Malaysia

Malaysia established dedicated Construction Courts within the High Court of Kuala Lumpur and the High Court of Shah Alam in 2013 — one year before CIPAA came into force — in anticipation of the volume of construction-related court applications that CIPAA would generate. The Construction Courts handle:

Enforcement of adjudication decisions under section 16 of CIPAA — where the losing party fails to comply with the adjudication decision voluntarily
Set-aside applications under section 15 of CIPAA — where the losing party challenges the adjudication decision on one of the limited grounds available
Stay of adjudication decision pending set-aside — applications to suspend the obligation to pay while a section 15 challenge is heard
Direct payment applications under section 30 of CIPAA — where a subcontractor seeks to recover directly from the employer
Suspension rights under section 29 of CIPAA — disputes over the right to suspend works
Applications related to construction arbitration — including anti-suit injunctions, interim relief in support of arbitration, and enforcement of arbitration awards
Substantive construction litigation — where the construction contract does not contain a binding arbitration clause

Enforcement of CIPAA Adjudication Decisions

Once an adjudication decision is obtained, if the losing party fails to comply within the period specified in the decision, the winning party may apply to the High Court (Construction Court) to enforce the decision as a judgment of the court. The enforcement application is straightforward — the court does not re-examine the merits of the adjudication — and once entered as a court judgment, the full range of execution mechanisms becomes available: writs of seizure and sale over movable and immovable property, garnishee orders against bank accounts, and judgment debtor summonses.

The Federal Court in Likas Bay Precinct v Bina Puri [2019] confirmed that an unenforced adjudication decision may also be used as the basis for a winding-up petition against the non-complying party — a powerful enforcement tool that puts significant commercial pressure on a respondent who is able to pay but choosing not to.

Section 15 CIPAA Set-Aside Applications

A party dissatisfied with an adjudication decision may apply to the High Court to set aside the decision under section 15 of CIPAA 2012. The available grounds are limited — fraud or corruption in the making of the decision, breach of natural justice, the adjudicator acting outside CIPAA, and the decision being made on matters not referred to adjudication. Section 15 is not a merits appeal: the court will not substitute its own view of the correct outcome for that of the adjudicator.

We advise on the prospects of section 15 challenges — both on behalf of applicants seeking to set aside an adverse decision and on behalf of respondents defending against a section 15 challenge. The threshold for success is high, and an unsuccessful section 15 applicant risks adverse costs orders.

Urgent Injunctions in Construction Disputes

Certain construction situations call for urgent court intervention rather than the relatively slower adjudication or arbitration process. We act in urgent injunction applications in the Construction Court, including:

Injunctions to restrain the unconscionable or fraudulent call on a performance bond
Injunctions to restrain wrongful suspension of works
Injunctions to restrain the employer from entering the site and completing works after a purported termination, pending determination of whether the termination was valid
Injunctions to preserve the status quo on the project while a dispute is being resolved

Construction Litigation — How We Have Helped

Anonymised examples. Details modified to protect client confidentiality.

Contractor | Section 15 CIPAA Set-Aside Defence | Adjudication Decision Upheld

The Situation

A contractor obtained an adjudication decision for approximately RM950,000 in unpaid progress certificates and variations. The employer applied to the High Court (Construction Court) to set aside the decision under section 15 of CIPAA, alleging a breach of natural justice — specifically that the adjudicator had relied on evidence and legal arguments that had not been put to the employer in the course of the adjudication proceedings.

What We Did

We represented the contractor in defending the section 15 application. We filed a detailed Response to the set-aside application, addressing each of the employer’s breach of natural justice allegations — demonstrating that the adjudicator had relied only on the documents and submissions properly before the adjudication, that the employer had been given a full and fair opportunity to respond to all matters raised, and that the employer’s real grievance was with the adjudicator’s decision on the merits rather than with the process by which it was reached.

✔ Outcome

The High Court dismissed the employer’s section 15 application — finding no breach of natural justice and no other valid ground for set-aside. The adjudication decision was enforced in full. The employer was ordered to pay the contractor’s costs of the set-aside proceedings.

Employer | Bond Call Injunction | Restrained as Unconscionable

The Situation

An employer made a call on a contractor’s on-demand performance bond — for the full bond amount of RM750,000 — following a dispute over delays and alleged defects on a commercial project in the Klang Valley. The contractor maintained that the call was made in bad faith and was unconscionable: the project was substantially complete, the alleged defects were minor and disputed, and the LAD claim that the employer was using to justify the bond call was based on a disputed and contested EOT refusal.

What We Did

The contractor approached NZSK urgently on the same day the bond call was made. We prepared and filed an urgent ex parte injunction application in the Construction Court within hours — seeking to restrain the bank from paying out on the bond and the employer from receiving the bond proceeds pending a full hearing. We supported the application with evidence of the contractor’s arguable defence to the delay and defects claims and the disproportionate nature of the bond call.

✔ Outcome

The Construction Court granted an ex parte injunction restraining the bond call on the same day. At the inter partes hearing one week later, the injunction was continued pending the final resolution of the delay and defects disputes in arbitration. The bond proceeds were preserved for the contractor throughout the arbitration, which ultimately resolved the dispute — with the contractor’s EOT entitlement accepted, reducing the employer’s LAD claim significantly.

Frequently Asked Questions

What is the difference between enforcing an adjudication decision and challenging it in the Construction Court?

Enforcement (under section 16 of CIPAA) is the process by which the winning party registers the adjudication decision as a court judgment and executes it against the losing party's assets — where the losing party has failed to comply voluntarily. A set-aside challenge (under section 15 of CIPAA) is the losing party's application to the court to invalidate the adjudication decision on one of the limited grounds available. The two processes are distinct and may run simultaneously — it is common for a respondent to apply to set aside a decision while the claimant simultaneously applies to enforce it.

Can I get an injunction to stop my employer from calling on my performance bond?

Yes, in appropriate circumstances. Malaysian courts will grant an injunction to restrain a performance bond call where the call is made fraudulently or unconscionably. The threshold for unconscionability is that the call is clearly unfair in all the circumstances — not merely that the contractor disputes the underlying claim. The court applies a low threshold at the ex parte stage, but the bar is higher at the inter partes hearing. We advise on the prospects of a bond call injunction and act urgently in these applications.

What are the grounds for setting aside a CIPAA adjudication decision in Malaysia?

The grounds for setting aside a CIPAA adjudication decision under section 15 are: (a) fraud or corruption in the making of the decision; (b) breach of natural justice; (c) the adjudicator not acting in accordance with CIPAA; and (d) the decision being made in respect of a matter not referred to adjudication. These grounds are narrow and do not include a general right of appeal on the merits. The courts have consistently emphasised that section 15 is not a mechanism for re-examining the correctness of the adjudicator's substantive decision.

Speak to a Construction Lawyer Now!

Whether you need to enforce an adjudication decision, defend a set-aside challenge, obtain an urgent injunction, or pursue construction litigation in the Malaysian High Court, contact NZSK for practical and commercially focused trade mark legal advice. Contact us to arrange a consultation.