Legal Immunity of the AIAC under CIPAA Malaysia: A Landmark Ruling in Construction Adjudication

BY CIPAA ADVISORS

Legal Immunity of the AIAC under CIPAA Malaysia: A Landmark Ruling in Construction Adjudication

Introduction

The Construction Industry Payment and Adjudication Act 2012 (CIPAA 2012 Malaysia) has transformed construction dispute resolution in Malaysia, offering a fast-track legal remedy for unpaid construction claims. A recent case involving One Amerin Residence Sdn Bhd and Ragawang Corporation Sdn Bhd tested the extent of legal immunity enjoyed by the Asian International Arbitration Centre (AIAC) in administering CIPAA adjudication Malaysia. This article explores the case, legal findings, and implications for those navigating construction contract disputes Malaysia.

Background of the CIPAA Case Study

One Amerin appointed Ragawang as the main contractor for the Amerin Mall and Residence. Following completion, construction payment disputes Malaysia emerged. Ragawang initiated the CIPAA claim process, seeking RM8.77 million. They submitted a request to the AIAC for the appointment of a CIPAA adjudicator Malaysia.

Despite objections from One Amerin, the AIAC appointed an adjudicator and requested both parties to contribute to the security deposit. Ragawang paid its share, but One Amerin refused. The adjudicator proceeded, and while awaiting a decision, One Amerin filed a judicial review claiming the AIAC acted illegally. This brought into question whether the AIAC enjoys immunity under the CIPAA legal framework.

Key Legal Issues In This Construction Case

The case raised pivotal legal questions:

1. Whether AIAC’s immunity under the Construction Industry Payment and Adjudication Act and the International Organizations (Privileges and Immunities) Act 1992 (IOPIA) includes protection from judicial review.

   
   

2. Whether a distinction must be drawn between AIAC acting as an international arbitral body and as a statutory adjudication authority.

   
   

3. Whether the CIPAA Section 30 and Section 34(1) support such immunity.

Federal Court’s Decision on Adjudication Under CIPAA

The Federal Court reversed the Court of Appeal’s decision and ruled in favour of the AIAC. The court held:

• The AIAC enjoys immunity under both IOPIA and CIPAA Malaysia when acting in its statutory adjudication role.

  
  

• Judicial review does not override the AIAC’s legal protection, aligning with international legal standards.

  
  

• CIPAA legal services must be administered without fear of litigation, ensuring AIAC's independence in CIPAA adjudication processes.

  
  

This case sets a precedent for the limits of judicial intervention in the CIPAA claim process and affirms the legal integrity of the adjudication system.

Implications on Construction Law

For contractors, developers, and CIPAA lawyer Malaysia practitioners, this ruling is a milestone. It affirms that the CIPAA enforcement Malaysia system is robust and protected, encouraging swift CIPAA claim submissions and upholding the neutrality of adjudicators.

Clients facing construction contract disputes Malaysia are advised to seek guidance from a professional CIPAA consultant Malaysia or engage CIPAA consultant services for tailored advice on how to file a CIPAA claim.

Conclusion

This case reinforces the autonomy and immunity of the AIAC in managing CIPAA adjudication Malaysia, safeguarding the purpose of the Construction Industry Payment and Adjudication Act. For industry stakeholders, it highlights the importance of professional CIPAA legal advice, particularly when managing CIPAA payment disputes or navigating the CIPAA 2012 Malaysia legal framework.

To resolve unpaid construction claims Malaysia, consider engaging a certified CIPAA lawyer Malaysia or a qualified CIPAA consultant Malaysia for strategic legal action.

Need Help?

Let us help you recover your construction debt under CIPAA. Contact us today for affordable CIPAA claim services and speak to the best CIPAA claim consultants in Malaysia.

WhatsApp Us: +6011 1630 0091 (WhatsApp)