The Malaysian Construction Industry Payment and Adjudication Act 2012 (“CIPAA“) came into force on 15 April 2014. One of the objectives of CIPAA is to facilitate cash flow in the construction industry, as the new compulsory statutory adjudication regime allows parties to obtain a quick interim decision on payment disputes.
The adjudication process offers a relatively faster process compared to court proceedings since there are fixed timelines provided under CIPAA. Disputes which may be referred to adjudication are those relating to non-payment for work done and services rendered under a construction contract. Adjudication doesn’t apply to a construction contract entered into by a person for any construction work in respect of a building which is less than 4 storeys high and which is wholly intended for his occupation (ie: it generally does not apply to an individual owner of a residence).
Our infographic below summarises the stages in an adjudication process. Please note that not all cases may be suitable or eligible for statutory adjudication and you are always advised to contact a lawyer to get advice on your legal rights before taking any action.