Case Commentary : Bertam Development Sdn Bhd v R&C Cergas Teguh Sdn Bhd

Nov 11, 2017

Bertam Development Sdn Bhd v R&C Cergas Teguh Sdn Bhd

Originating Summons No.: WA-24C-55-03-2017

Judge: YA Lee Swee Seng

Adjudication – CIPAA 2012 – Section 15 (d) CIPAA – Section 25 CIPAA- Adjudicator’s Power to Determine Uncertified Sums – Adjudicator’s Discretion to take into account defences/set-off raised – Section 26 CIPAA


Brief Facts:

R&C Cergas commenced adjudication against Bertam for amongst others, payment based on interim certificates and additional variation works. The Adjudicator found in favour of R&C Cergas and determined that Bertaim is liable to pay R&C Cergas a sum of RM 4.6mil (including variation claims. The Learned High Court Judge upheld the Adjudicator’s Decision.


Summary of the principles held by the High Court:-

1. Reference of uncertified amount to Adjudication

The Plaintiff (Respondent in the adjudication) argued that the Defendant could not, refer the uncertified amount of variation works claim to adjudication when the Defendant had agreed to the payment mechanism to be determined as provided under PAM Contract.

Court held that this was a case where the Architect failed to certify the amount outstanding under the variation works. Architect and the Employer cannot rely on their own breach to refuse to make payments. Otherwise Employers and Architect could always refuse to certify claims for Works done and then contend that until the Architect do certify, there is no claim due and no payment need to be made.

Adjudicator has the jurisdiction (if referred to in the payment claim) to decide on uncertified amounts pursuant to his vast powers in Section 25 CIPAA. The presence or issuance of a certificate of payment is not a pre-requisite of a Payment Claim.

2. Decision on EOT

Plaintiff argued that the matter for determining the application for EOT was also agreed under PAM Contract and that the issue of EOT was not even raised in the Payment Claim.b. There was no payment response filed in this case but the Plaintiff themselves being the Respondent in the adjudication made an application pursuant to S. 26(1) and (2)(b) or(c) for it to raise its cross claims. The Adjudicator allowed the application.c. The Court held that the exercise of such a discretion by the Adjudicator is cushioned from any interference from the Court in a section 15 CIPAA application. The Court was of the view that once the issue of an LAD claim is raised as a defence of set-off, then the adjudicator would have to consider the related issue of the application for EOT. This was not acting in excess of jurisdiction.


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