HIGH COURT (JOHOR BAHRU) – ORIGINATING SUMMONS NO JA-24NCVC-587-09 OF 2021
AHMAD MURAD ABDUL AZIZ JC
21 June 2022
Facts:
The Plaintiff filed an application to the High Court seeking for an injunction to restrain the Defendant from issuing and serving any petition for winding up against the Plaintiff based on the statutory notice.
The Plaintiff who was the main contractor for a project in Johor appointed the Defendant as the sub-contractor to carry out the piling works of the project. The Defendant contends that after the completion of the piling works on 04.09.2020, the Piling Records was signed and stamped by the Plaintiff without any objections with regard to the work. Subsequently, the Plaintiff did not pay the Defendant monies due and owing. The Plaintiff took the position that the Defendant failed to comply with the instructions given by the Architect and Engineer, which subsequently resulted in the issuance of a stop work order and consequent to the stop work order, the interim certificates were not certified by the Architect and Engineer.
The Defendant disagreed with the Plaintiff’s contention and commenced a statutory adjudication proceeding against the Plaintiff and later obtained an adjudication decision in its favour. After obtaining the adjudication decision, the Defendant then served a Winding Up Notice, dated 10.09.2021, to the Plaintiff pursuant to Section 465(1)(e) and 466(1)(a) of the Companies Act 2016, demanding settlement within 21 days. Upon receiving the Notice, the Plaintiff then commenced this proceeding.
The Plaintiff had also filed a setting aside application pursuant to Section 15 of CIPAA 2012.
One of the main issues that the High Court had to decide was whether Defendant has the right to issue any statutory notice or file a winding up petition when the adjudication decision has not been registered under section 28 of CIPAA 2012.
Decision
Held: The Plaintiff’s application was dismissed with cost.
- The Learned High Court judge was of the view that a petition to wind up a company is not an execution or “enforcement” of the adjudication award. It is based on the inability of a company to pay its debt. There was no requirement for the Defendant to first register the decision as a court judgment pursuant to Section 28 of CIPAA 2012. The court referred to the recent Court of Appeal case of Sime Darby Energy Solution v RZH Setia Jaya Sdn Bhd [2021] CLJ 880 which held that a party who is armed with an adjudication award under CIPAA is entitled to issue a statutory notice to the debtor company and to file a winding up petition if the debtor company fails to settle the sum stated in the notice.
- The Court disagreed with the Plaintiff’s submission that the debt is disputed as a result of the ongoing application to set aside the adjudication award as it runs contrary to the principles laid out in the case of Martego Sdn Bhd v Arkitek Meor & Chew Sdn Bhd (Civil Appeal No. W-02(C)(A)-1496-08/2016. For until and unless the adjudication award is set aside, the Defendant is entitled to file a winding up petition against the Plaintiff.
