By:
Bryan Lui (Co-Managing Partner) [bryanlui@luibhullar.com]
Harneshpal Karamjit Singh (Co-Managing Partner) [harnesh@luibhullar.com] Yap Chean Hong (Partner) [cheanhong@luibhullar.com]
Have you successfully won your adjudication under CIPAA 2012?
Here’s a step-by-step guide to ensure you recover the amount owed quickly and effectively under the Construction Industry.
Payment and Adjudication Act
Enforcing CIPAA Decisions via High Court: Understanding the CIPAA Adjudication Process
Under CIPAA Malaysia guidelines, Section 28 allows you to enforce an adjudication decision as if it were a court judgment.
Steps to follow:
Step 1: Filing an Originating Summons to Register the CIPAA Decision in the High Court
Step 2:Enforcement Options Under CIPAA Enforcement Malaysia: Garnishee and Writ of Seizure
Garnishee Proceedings: Freeze and recover funds directly from the debtor’s bank account.
Writ of Seizure and Sale: Auction the debtor’s assets to recover unpaid sums.
This formalizes the CIPAA adjudication process and ensures you can take legal steps to claim payment for construction contract disputes.
2. Skipping Court Enforcement: Filing a Winding-Up Petition Based on CIPAA Payment Claims
A unique advantage of CIPAA 2012 is that you can initiate a winding-up petition without registering the decision in court.
Steps to file a winding-up petition:
Step 1: Issuing a Statutory Demand Under CIPAA Malaysia Guidelines and under Section 466(1)(a) of the Companies Act 2016, giving the debtor 21 days to pay.
Step 2: Leveraging Winding-Up Petitions for Quick Debt Recovery
Step 3: Once successful, the debtor’s assets can be liquidated to settle the adjudicated sum.
Key Benefits of Winding-Up:
Speed and leverage: Winding-up petitions under CIPAA enforcement Malaysia pressure debtors to pay promptly to avoid insolvency.
Proof of Debt: The CIPAA payment claims decision itself is sufficient to justify the petition.
3. Exercising Your Right to Suspend Work or Services Under CIPAA 2012
Under Section 29 of the Construction Industry Payment and Adjudication Act, you have the right to suspend work if payment remains outstanding.
How to Suspend Services for Non-Payment: A Guide to Section 29 of CIPAA:
Issue a 14-day written notice before suspending on-site work, supply of goods, or services.
This step can apply pressure on the debtor to honor the adjudicated amount.
4. Drawing on Performance Bonds to Recover Unpaid Sums in Construction Contract Disputes
Using Performance Bonds as a Remedy in CIPAA Enforced Claims
If your construction contract includes a performance bond or guarantee, you can recover unpaid amounts through it. Be sure to review the bond’s terms carefully before proceeding.
5. Why Winding-Up Petitions Are a Powerful Tool for Enforcing CIPAA Decisions
How Winding-Up Petitions Fast-Track Debt Recovery in Construction Payment Disputes:
Speed: Winding-up petitions accelerate the recovery process in construction contract disputes.
Leverage: The threat of insolvency motivates prompt payment.
No Delays: You can bypass enforcement registration under the CIPAA adjudication process.
6. Tips for Successful CIPAA Enforcement: Navigating the Adjudication Timeline and Legal Steps
Always issue a statutory demand before filing for winding-up.
Be prepared for debtor disputes, such as cross-claims or attempts to set aside the decision.
Engage experienced legal counsel to ensure compliance with the adjudication timeline under CIPAA.
By leveraging enforcement mechanisms, winding-up petitions, and suspension rights under CIPAA 2012, you can recover unpaid sums swiftly. The CIPAA Malaysia guidelines provide a clear path to resolving payment disputes in construction, making the adjudication process an effective tool for contractors and claimants.
Please contact us for a free consultation via WhatsApp (+60143000960) or E-mail (admin2@luibhullar.com) for any queries regarding CIPAA or construction matters.
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