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Construction Industry Payment and Adjudication Regulations 2014

CONSTRUCTION INDUSTRY PAYMENT & ADJUDICATION ACT 2012
CONSTRUCTION INDUSTRY PAYMENT & ADJUDICATION REGULATIONS 2014

IN exercise of the powers conferred by section 39 of the Construction Industry Payment and Adjudication Act 2012 [Act 746], the Minister, upon considering the recommendation of the Kuala Lumpur Regional Centre of Arbitration (KLRCA), makes the following regulations:

1. Citation and commencement

  • These regulations may be cited as the Construction Industry Payment and Adjudication Regulations 2014.
  • These Regulations come into operation on 15 April 2014.

2. Responsibility of KLRCA

The KLRCA is responsible, in accordance with the policy directions from the Minister charged with the responsibility for legal affairs-

  • for maintaining a register of the KLRCA’s Panel of Adjudicators;
  • for determining the code of conduct for an adjudicator;
  • for providing training and conducting examinations for an adjudicator;
  • for determining fees for the services and expenses of an adjudicator;
  • for receiving and holding any fees and expenses deposited by the parties in dispute on behalf of an adjudicator.

3. KLRCA’s Panel of Adjudicators

  • The KLRCA shall maintain a register of the KLRCA’s Panel of Adjudicators.
  • The KLRCA may remove the name and other particulars of an adjudicator from the KLRCA’s Panel of Adjudicators if—
    • the adjudicator requests in writing for his name to be removed from the KLRCA’s Panel of Adjudicators; or
    • the adjudicator ceases to satisfy the competency standard and criteria as an adjudicator as specified in regulation 4.
  • For the purpose of paragraph (2)(b), the KLRCA shall notify the adjudicator before the name and other particulars of the adjudicator is removed from the KLRCA’s Panel of Adjudicators.

4. Competency standard and criteria of adjudicator

The competency standard and criteria of an adjudicator are as follows:

  • the adjudicator has working experience of at least seven years in the building and construction industry in Malaysia or any other fields recognized by the KLRCA;
  • the adjudicator is a holder of a Certificate in Adjudication from an institution recognized by the Minister;
  • the adjudicator is not an undischarged bankrupt; and
  • the adjudicator has not been convicted of any criminal offence within or outside Malaysia.

5. Appointment of adjudicator

  • For the purpose of the appointment of an adjudicator by parties in dispute under section 22 of the Act, the claimant shall notify the adjudicator to be appointed in writing and provide him with a copy of the notice of adjudication.
  • For the purpose of the appointment of an adjudicator by the Director of the KLRCA under section 23 of the Act, the parties in dispute shall make a written request to the Director of the KLRCA.
  • Upon receipt of the written request under subregulation (2), the Director of the KLRCA shall appoint an adjudicator within five working days and shall notify the parties in dispute and the adjudicator in writing.
  • The adjudicator appointed—
    • by parties in dispute under section 22 of the Act; or
    • by the Director of the KLRCA under section 23 of the Act,

shall, at the time of the acceptance of appointment, make a declaration in writing pursuant to section 24 of the Act and submit such declaration to the Director of the KLRCA.

  • The declaration under subregulation (4) shall specify that the adjudicator has no conflict of interest in respect of his appointment.
  • For the purpose of subregulation (5), an adjudicator has a conflict of interest in his appointment to adjudicate a dispute in respect of a construction contract if—
    • the adjudicator is—
      • an employee or partner of either party in dispute; or
      • a director or shareholder of a corporation, where the party in the dispute is a corporation;
    • the adjudicator is an employee, a director, a partner or shareholder of a corporation owned by either party in the dispute;
    • either party in the dispute is a member of the adjudicator’s family; or
    • the adjudicator—
      • has assisted either party in the dispute to prepare any document; or
      • has provided either party in the dispute any advice,

in relation to the construction contract.

  • For the purpose of subregulation (6) —
    • “corporation” has the same meaning assigned to it in subsection 41) of the Companies Act 1965 [Act 125];
    • “member of the adjudicator’s family” includes—
      • his spouse;
      • his parent (including a parent of his spouse);
      • his child (including an adopted child or stepchild);
      • his brother or sister (including a brother or sister of his spouse); and
      • a spouse of his child, brother or sister.

6. KLRCA’s standard fees for services and expenses of adjudicator

The KLRCA’s standard fees for the services and expenses of an adjudicator as specified in the Schedule shall apply if the parties in dispute and the adjudicator fail to agree on the terms of appointment and the fees of the adjudicator.

7. Costs of adjudication proceedings

For the purpose of subsection 181) of the Act, the quantum of costs in the adjudication proceedings to be paid by any party to a dispute shall be determined by an adjudicator in accordance with all relevant circumstances including—

  • the complexity of the claim or matter arises from the claim and the difficulty or novelty of the issues relating to the claim;
  • specialized skill, knowledge and responsibility of, and time and labour expended by, any party to the dispute, its consultant, expert or representatives;
  • the preparation of documents in the adjudication proceedings; and
  • the amount or value of the adjudication claim.

8. Fees and expenses of adjudicator

  • For the purpose of section 19 of the Act—
    • the adjudicator appointed under subsection 19(1) or (2) of the Act shall submit to the Director of the KLRCA a copy of his terms of appointment and fees to be paid by the parties in dispute prior to the commencement of the adjudication proceedings;
    • the adjudicator shall submit to the Director of the KLRCA a copy of his direction to the parties in dispute to contribute and deposit with the Director of the KLRCA proportion of fees in advance as security including the date of payment to be made by the parties in dispute;
    • the adjudicator shall submit to the Director of the KLRCA a copy of his direction to the parties in dispute to require full payment of fees and expenses payable including the date of payment to be made by the parties in dispute;
    • the adjudicator may submit to the Director of the KLRCA a copy of his direction to the parties in dispute to pay the fees and expenses if the parties in dispute fail to make such payment within the period as directed by the adjudicator;
    • the adjudicator shall release the adjudication decision to the parties in dispute upon full payment of the adjudicator’s fees and expenses to be deposited with the Director of the KLRCA by the parties in dispute;
    • the adjudicator shall furnish other documents and information relating to the fees and expenses payable by the parties in dispute as may be required by the Director of the KLRCA.
  • The Director of the KLRCA shall—
    • pay to the adjudicator any fees and expenses deposited by the parties in dispute upon receiving a copy of the adjudication decision within the period specified under subsection 12(2) of the Act; and
    • refund to the parties in dispute any fees and expenses relating to the adjudication if the adjudicator fails to decide the dispute within the period specified under subsection 12(2) of the Act.
  • The KLRCA shall be responsible for all payment of fees and expenses deposited under section 19 of the Act including any interest earned from such payment and such interest earned shall be retained by the KLRCA.