Is a contractor estopped from claiming under-certification after accepting payment on the under-certified payment certificate?
In Meridian Contracts Sdn Bhd v Bauer (Malaysia) Sdn Bhd (2020), Bauer was the piling subcontractor and Meridian the sub-subcontractor for basement carcass works.
Meridian submitted a penultimate progress claim for the period ending 28.12.2017 for a sum in excess of RM5 million. However, Bauer only certified a sum in excess of RM500,000.00 in respect of the said claim. The certified sum was duly paid and accepted by Meridian on 12.6.2018.
Dissatisfied with the certified sum, Meridian commenced adjudication proceedings for the uncertified sum. An Adjudication Decision was issued on 31.10.2019 in Meridian’s favour.
Meridian then applied to enforce the Adjudication Decision pursuant to s. 28 CIPAA. True to form, Bauer applied to set aside and/or stay the Adjudication Decision pursuant to ss. 15 and 16 CIPAA.
One of the arguments mounted by Bauer in its application to set aside and/or stay the Adjudication Decision was that Meridian was estopped from challenging the Interim Payment Certificate No 26 (which certified payment in excess of RM500,000) because Meridian had already accepted payment pursuant to the said certificate.
The learned High Court Judge did not agree. The learned Jude held that the mere fact of accepting payment under an under-certified certificate cannot amount to acceptance of the same because it is in the very nature of progressive payment certificates that they cannot be considered as final determination of the value of works done.
The Adjudication Decision was therefore duly enforced, and the applications to set aside and/or stay the Adjudication Decision were dismissed.
Chan Kheng Hoe, Head of Construction Law ([email protected])
Wong Sheng Wei, Pupil-in-Chamber ([email protected])