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Breaking News: CIPAA only operates prospectively

On 16 October 2019, the Federal Court in the case of Jack-in-Pile (M) Sdn Bhd v Bauer (Malaysia) Sdn Bhd ruled the Construction Industry Payment and Adjudication Act 2012 (“CIPAA”) only operates prospectively.

This means that any construction contract entered into before 15 April 2014 will not be subject to CIPAA.

All pending adjudication cases for such contracts would have to be immediately terminated. All adjudication decisions that have yet to be enforced but relate to contracts entered into before 15 April 2014 can be set aside.

The question that remains is: what happens to the adjudication decisions that have already been enforced? This will be an interesting area to watch as I am certain lawyers are currently preparing to re-open closed cases for such decisions.

If you have any questions on CIPAA, email us at [email protected].