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COVID-19 AND ITS IMPACT ON CIPAA PROCEEDINGS

The Construction Industry Payment and Adjudication Act 2012 (“CIPAA”) was designed, inter alia, to “provide a mechanism for speedy dispute resolution through adjudication”. The speed at which CIPAA operates includes the requirement for adjudicators to deliver their decision within 45 working days (s.12(2) CIPAA), failing which the decision becomes void (s.12(3) CIPAA).

In fact, one could observe that throughout CIPAA, deadlines are counted by reference to “working days”.

So, what constitutes a “working day” under CIPAA?

A “working day” is defined in s.4 CIPAA to mean “a calendar day but (excluding) weekends and public holidays applicable to the State or Federal Territory where the site is located”. Only weekends and public holidays are excluded from such definition.

On 16/3/2020, the Federal Government declared the entire Federation of Malaysia to be an infected area pursuant to s.11 Prevention and Control of Infectious Diseases Act 1988 (“PCIDA”). Subsequently on 18/3/2020, the Honourable Minister issued the Prevention and Control of Infectious Diseases (Measures within the Infected Local Areas) Regulations 2020, (“PCIDA Regulations” or “RMO”) which essentially restricted any movement within the infected area from 18/3/2020 to 31/3/2020 save and except for certain limited purposes.

These regulations effectively required all business premises to be closed as it restricted the right to move within the infected area, i.e. the whole of Malaysia. Obviously the closure of business premises would impede the ability of parties, their representatives and even adjudicators to advance their claims or perform their duties under CIPAA.

However, the RMO did not stipulate that the period of 18/3/2020 to 31/3/2020 would be a public holiday. On the contrary, it would seem quite clear that this period is not deemed to be a public holiday as essential services, including limited banking services, continue to operate.

This would mean that the time-lines under CIPAA would continue to run notwithstanding the RMO. If a party needed an extension of time, the party can always apply to the adjudicator who is at liberty to grant extensions of time pursuant to s.25(p) CIPAA. One would imagine that any reasonable adjudicator would readily grant an extension under the present circumstances.

Otherwise, a party who fails to meet a deadline due to RMO may well try to set aside the eventual adjudication decision on the ground of breach of natural justice, in the sense that s/he has not been afforded a genuine opportunity to be heard. That may well make for some interesting argument.

However, what if it is the adjudicator who needs an extension of time?

S.12(2)(c) CIPAA allows parties to mutually agree to an extension of time for the adjudicator. One would imagine that the Claimant would readily agree, seeing that the Claimant would ordinarily much prefer a decision to be delivered than to be voided and having to start the process all over again. However, the Respondent may not as readily agree, which means that the adjudicator would do well not to count on being granted any extension of time pursuant to s.12(2)(c) CIPAA.

Pandemic or not, the wheels of justice in so far as CIPAA is concerned continue to turn.