Defendan kerana fakta material yang Construction Contract itu diplidkan sudah mencukupi . Lagipun hanya klausa 36.5 dan 36.6 yang relevan dalam prosiding ini untuk pertimbangan Adjudikator tidak dengan klausa-klausa yang lain .
22 . Jadi Mahkamah ini dapati yang pihak Adjudikator tidak bertindak di luar bidangkuasanya .”
Dissatisfied with the High Court ’ s decision , JKP appealed both decisions of the High Court to the Court of Appeal .
Court of Appeal Findings
The Court of Appeal had to decide on two issues , i . e . ( i ) whether the adjudicator had acted in excess of his jurisdiction , and ( ii ) whether there had been a denial of justice . The Court of Appeal allowed both appeals of JKP . In coming to its decision , the Court of Appeal made the following findings :
Issue # 1 : Whether the adjudicator had acted in excess of his jurisdiction 1 . ACSB ’ s claim against JKP before the adjudicator was premised on clauses 28 , 55 and 56 of the Contract . There was no mention of clauses 36.5 or 36.6 of the Contract ;
2 . It was expressly or implicitly agreed that clauses 28 , 55 and 56 of the Contract did not apply to the ACSB ’ s claim . The adjudicator was of the opinion that clause 36.6 of the Contract was most applicable to ACSB ’ s claim ;
3 . Without ACSB ’ s pleading its claim under the said provision and without inviting the parties to comment or submit on this issue , the adjudicator allowed ACSB ’ s claim against the JKP ;
4 . Since Clause 36.6 of the Contract was not stated in the PC , it is clear that the requirements under section 5 ( 2 ) of CIPAA were not complied with . The failure to state that ACSB was relying on clause 36.6 of the Contract in the PC was a clear manifestation of statutory noncompliance ;
5 . ACSB ’ s failure resulted in the adjudicator not having jurisdiction to adjudicate on the said clause ;
6 . Clause 36.6 of the Contract was not pleaded in the AC , which is fatal to ACSB ’ s case . It is clear from the Federal Court ’ s decision in View Esteem Sdn Bhd v Bina Puri Holdings
Bhd [ 2018 ] 2 MLJ 22 that the adjudication pleadings in Sections 9 to 11 of CIPAA are pivotal and not mere formal manifestations of the dispute ;
7 . As such , the adjudicator had acted in excess of his jurisdiction when he decided on matters which were never raised and pleaded in the PC and all the adjudication pleadings .
Issue # 2 : Whether there had been a denial of justice 1 . It was not disputed that the adjudicator did not invite the parties to submit whether he was at liberty to rely on Clause 36.6 of the Contract , to which the parties never pleaded ;
2 . The adjudicator went on a frolic of his own and failed to apply the rules of natural justice . It was found that the adjudicator had committed a material breach of the rules of natural justice by failing to notify or bring to the attention of the parties that he was relying on the unpleaded Clause 36.6 of the Contract , which was the basis of his decision to allow ACSB ’ s claim , without allowing the parties the opportunity to comment or to take their respective stands ;
3 . Even though the law bestows the inquisitorial power to the adjudicator to take the initiative to ascertain the facts and the law required for his decision , such power does not extend to enable the adjudicator to unilaterally cherrypick a specific clause of the underlying contract to make out a cause of action for a claimant where the claimant has been put on notice that the clauses relied upon are not applicable .
Commentary
The Court of Appeal ’ s decision in this case had certainly provided a clear illustration on the importance of citing the accurate clause of the contract and / or cause of action in adjudication pleadings , as failure to do so will be fatal to a party ’ s case . As such , parties in adjudication proceedings must be meticulous in drafting its payment claim by ensuring that the correct clause in a contract and / or cause of action is referred in the payment claim and in any other pleadings in an adjudication proceeding .
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