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    Cipaa 2012: An Overview: Ingenieur

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    Calvin Kew
    The Construction Industry Payment & Adjudication Act 2012 (CIPAA 2012) provides a fast, effective, and cheaper option for resolving payment disputes arising from construction contracts in Malaysia. Under CIPAA 2012, an adjudicator will review payment claims and make a decision within a short period of around 3-5 months. To initiate a CIPAA proceeding, there must be a written construction contract, unpaid certified or uncertified payments that are due, and supporting documents. The adjudicator cannot award a defending party a counterclaim amount higher than the claimant's original claim. CIPAA 2012 aims to help alleviate problems of non-payment and delayed payments in the Malaysian construction industry.

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    Cipaa 2012: An Overview: Ingenieur

    Uploaded by

    Calvin Kew
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    The Construction Industry Payment & Adjudication Act 2012 (CIPAA 2012) provides a fast, effective, and cheaper option for resolving payment disputes arising from construction contracts in Malaysia. Under CIPAA 2012, an adjudicator will review payment claims and make a decision within a short period of around 3-5 months. To initiate a CIPAA proceeding, there must be a written construction contract, unpaid certified or uncertified payments that are due, and supporting documents. The adjudicator cannot award a defending party a counterclaim amount higher than the claimant's original claim. CIPAA 2012 aims to help alleviate problems of non-payment and delayed payments in the Malaysian construction industry.

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    CIPAA Overview

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    CIPAA Overview

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    The Construction Industry Payment & Adjudication Act 2012 (CIPAA 2012) provides a fast, effective, and cheaper option for resolving payment disputes arising from construction contracts in Malaysia. Under CIPAA 2012, an adjudicator will review payment claims and make a decision within a short period of around 3-5 months. To initiate a CIPAA proceeding, there must be a written construction contract, unpaid certified or uncertified payments that are due, and supporting documents. The adjudicator cannot award a defending party a counterclaim amount higher than the claimant's original claim. CIPAA 2012 aims to help alleviate problems of non-payment and delayed payments in the Malaysian construction industry.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    40 views2 pages

    Cipaa 2012: An Overview: Ingenieur

    Uploaded by

    Calvin Kew
    The Construction Industry Payment & Adjudication Act 2012 (CIPAA 2012) provides a fast, effective, and cheaper option for resolving payment disputes arising from construction contracts in Malaysia. Under CIPAA 2012, an adjudicator will review payment claims and make a decision within a short period of around 3-5 months. To initiate a CIPAA proceeding, there must be a written construction contract, unpaid certified or uncertified payments that are due, and supporting documents. The adjudicator cannot award a defending party a counterclaim amount higher than the claimant's original claim. CIPAA 2012 aims to help alleviate problems of non-payment and delayed payments in the Malaysian construction industry.

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    of 2

    INGENIEUR

    CIPAA 2012: AN OVERVIEW


    By Lam Wai Loon and Serene Hiew
    Harold & Lam Partnership
    COVER FEATURE

    T
    he Construction Industry Payment &
    Adjudication Act 2012 (“CIPAA 2012”),
    for a fast, effective and cheaper option
    to resolve payment disputes arising from a
    contract for construction related works done
    and services rendered, was introduced by way of
    an Act of Parliament in 2012. This mechanism
    is available to work and service providers in the
    construction industry (including contractors, sub-
    contractors, suppliers, architects, engineers,
    quantity surveyors and the like) provided always
    that there is a written construction contract and
    the construction project is within the territory of
    Malaysia. The main idea behind the introduction
    of CIPAA 2012 is to help alleviate the prevailing
    problems of non-payment or delayed payments
    and under- certification in the Malaysian
    construction industry. Although most disputes in
    the construction industry revolve around payment
    issues, there are some basic requirements that a
    party seeking to resort to the mechanism would
    have to consider before commencing a CIPAA
    process namely:-
    ● Is there a written construction contract?
    ● Are there payments for work done —
    certified or uncertified — left unpaid?
    ● Are these payments already due (to refer to
    period for honouring certificate)?
    ● Are there supporting documents to verify
    the claim?

    16 VOL 78 APRIL-JUNE 2019


    The entire CIPAA process takes about 3.5 For example, Contractor X claims for
    to 5 months. A claim under CIPAA 2012 can be RM500,000.00 pursuant to an Architect’s
    made during the course of the project or after the Payment Certificate. Employer Y disputes the claim
    completion of the project works. This duration and states that it is entitled to   liquidated and
    is short when compared with court litigation or ascertained damages (LAD) of RM800,000.00
    arbitration. However, it is generally a documents- and counterclaims for RM300,000.00 against
    only proceeding and as such, a party who wishes Contractor X. Even if the adjudicator finds that
    to commence CIPAA proceedings should keep Employer Y’s defence is valid and it is entitled
    good documentary records to support its payment to the deduction of LAD, the adjudicator cannot
    claim. One of the appealing features of the CIPAA award the RM300,000.00 against Contractor
    process is that the Courts have ruled that the X. The most the adjudicator can decide is that
    defending party, also known as the non-paying Contractor X is not entitled to any money from
    party, shall not be entitled to launch a counter- Employer Y.
    claim against the claimant that is more than the The chart below briefly shows you the process
    amount claimed by the claimant in the CIPAA of a CIPAA proceeding from the filing of a Payment
    proceeding. At the very best, the defending party Claim until the delivery of the adjudication decision
    can only zerorise the claimant’s claim through by the Adjudicator.
    offsets or cross claims.

    PAYMENT Payment Notice of


    CLAIM Response Adjudication

    Adjudication Adjudication Appointment


    Response Claim of Adjudicator

    Adjudication
    DELIVERY
    Reply
    OF
    DECISION

    17

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