BuildLaw Issue 33 November 2018 | Page 22

adjudication decision on the basis that the adjudicator had failed to consider these two issues raised in the Adjudication Response and this failure constituted a breach of natural justice5 . This breach of natural justice was material and caused Samsung prejudice and a proper consideration of the two issues could have changed the adjudicator’s mind as to the final outcome of the adjudication because the disputed amount of these two items exceeded Bintai’s claim of retention monies.
In the court of appeal6 , the court dismissed the appeal and affirmed that 1) there was a breach of natural justice; and 2) the breach was sufficiently material as to cause prejudice to Samsung. The court held:
“49 First, these issues were clearly essential to the resolution of the Adjudication Application. They had been raised in the Adjudication Response, which featured a response amount of… … if the Adjudicator had gone on to consider and had then concluded that Samsung was entitled to be paid by Bintai in respect of the backcharges and variation works…, then Bintai’s Adjudication Application would have been defeated by Samsung’s Adjudication Response. Hence, there is simply no escaping the fact that these were essential issues that had to be dealt with by the Adjudicator.”
“50 However, it was evident from the Adjudication Determination as a clear and virtually inescapable inference that the Adjudicator did not apply his mind at all to the issues of the backcharges and variation works. As we had observed at [20] above, not a single paragraph in the Adjudication Determination related to the issues of the backcharges and variation works.”
The Adjudicator had breached the rule of natural justice by failing to consider a matter clearly raised in the Adjudication Response.
Malaysia
Emerald Capital (Ipoh) Sdn Bhd v Pasukhas Sdn Bhd (WA-24C-133-07/2017)
In March 2018, the High Court of Malaya at Kuala Lumpur handed down a judgment and allowed the enforcement of an adjudication decision on a dispute between an employer and main contractor.
There were two originating summonses being heard together. The first was the employer (plaintiff) that sought to set aside the decision under s.15(b) and (d) of the Construction Industry Payment and Adjudication Act 2012. The other was the main contractor (respondent) that sought to enforce the decision against the employer.
One of the matters considered by the court was whether there was a breach of natural justice for the alleged failure of the adjudicator to consider the employer’s set-off claim.
The court held:
“I am satisfied that in this case the Adjudicator had rightly declined jurisdiction to consider matters that took place after the dispute had been referred to Adjudication in the Notice of Adjudication and that the reference here to the quotations given after the Payment Response was designed to shore up and support the defence of a contractual set-off which had not arisen yet...
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Reading the Adjudication Decision as a whole, the Adjudicator had dismissed the set-off on merits as well as on jurisdiction. With respect to merits this Court would not interfere as it involves a mixed finding of fact and law. With respect to jurisdiction, I am satisfied that the Adjudicator had come to the right conclusion as the facts supporting the set-off were matters that arose post the service of the Payment Response and the Adjudicator had rightly declined to consider for the reasons above stated.”
The court made reference to Penang High Court OS No.: PA-24C-06-10/2017 in Mecomb Malaysia Sdn Bhd v VST M & E Sdn Bhd:
“36. The notice of adjudication in the Adjudication was filed on 17 April 2017.