KLIAW : Welcoming Remarks by Richard Wee at the Sports Arbitration Conference by KLRCA (May 2015)

Back in May 2015, we had the opportunity to Chair the Organising Committee of the KLRCA's International Arbitration Week. This is Richard's Welcoming Speech as Chairman. 

Sports Arbitration Conference @KLRCA || 8 May 2015

KLRCA is the region's premier arbitration centre. Recently. the International Council of Arbitration for Sports (ICAS) entered into an MOU with KLRCA, effectively appointing  KLRCA as the official host of an alternative hearing centre for the Court of Arbitration for Sports (CAS). 

KLRCA will be organising and hosting the International Arbitration Week from 7th to 10th May 2015. Held in conjunction with Centenary Year of the Chartered Institute of Arbitration (CIArb) UK, the Arbitration Week will see the convergence of top legal minds from around the world who will be speaking on various intriguing arbitral topics. 

Within this Arbitration Week is the Sports Arbitration Conference.

This Sports Arbitration Conference, themed “Beyond Sports” will have participation from international delegates comprising of prominent interested individuals and parties with keen interest in Sports Law and the sports industry. The International Arbitration Week will provide an international platform for interested parties and relevant stakeholders of international arbitration to share their views and discuss on the current fundamental issues and critical challenges faced by the international arbitration community, and to chart out a roadmap for a truly effective, independent and sustainable international arbitration regime.

Save you Diary. 

Making a Claim under the CIPA Act 2012

We had in an earlier posting commented about the CIPA Bill, and made observations on the claim process of that Law. 

Some comparative studies with other Jurisdictions would be a good guide on how to make claims. 

We draw a link to the website of Messrs Evershed, an International Law firm based in UK. Their website has provided an insight of how the UK version of CIPA works vis' a vis the claim process. 

See these links :-

https://www.eversheds.com/documents/services/construction/adjudication-construction-disputes-malaysia.pdf

http://www.eversheds.com/documents/services/construction/Construction-Adjudicationcap.pdf

New adjudication regime

Taken from The Star @Putik Lada series

http://thestar.com.my/columnists/story.asp?file=/2012/3/30/columnists/putiklada/11005153&sec=putiklada

Putik Lada

The proposed Construction Industry Payment and Adjudication Bill 2011 (CIPA) has the primary objective of addressing critical cash flow issues and reducing payment defaults by establishing a cheaper, speedier system of dispute resolution in the form of adjudication.

RECENTLY, there has been much interest in the construction industry in relation to the proposed Construction Industry Payment and Adjudication Bill 2011 (CIPA).

Many professional bodies are offering courses and seminars to key construction industry officials to explain CIPA, and how it will affect them once it is passed in Parliament, which is expected to be in April.

The imminent passing of CIPA means that construction companies need to be prepared for the new regime of statutory adjudication.

Construction industry players have themselves been pushing the Government to enact a CIPA-type legislation since 2003 to address the industry’s cash flow problems.

CIPA’s primary objective is to address these critical cash flow issues – removing the practice of conditional payments (“pay when paid” and “pay if paid”) and reducing payment defaults by establishing a cheaper, speedier system of dispute resolution in the form of adjudication.

Under CIPA, every construction contract made in writing that relates to construction work carried out in Malaysia would be affected by the regime of adjudication.

This means that if you have entered into a construction contract and there is a problem with payment, an adjudication process can be commenced either by or against you.

From a quick reading of the Bill, the Kuala Lumpur Regional Centre of Arbitration (KLRCA) will be the mainstay of the entire process.

KLRCA is already conducting a nationwide roadshow to educate people on CIPA.

However, the Bill also suggests that parties who wish to adjudicate matters would have to take an active role in pursuing their claims.

Parties will be subjected to compulsory adjudication or statutory adjudication –meaning both parties will be dragged into the adjudication process which is dictated by CIPA.

This does not mean that adjudication will block your right to arbitration or to go to court to litigate matters.

The purpose of adjudication is to hurry along cash flow and facilitate payment in the construction industry.

Parties are free to opt for arbitration or court litigation to deal with the legal matters.

CIPA simply provides a statutory right for the parties to demand payment for work done and to create a simple process to ensure that a decision and payment is made – via the process of adjudication.

Parties can commence adjudication and concurrently arbitrate or litigate the matter. Of course, the adjudication process will be terminated if the dispute is decided by arbitration or the court before the adjudication decision can be made. If however, the adjudication decision comes first then it is a binding decision and payment must be made. 

In short, statutory adjudication has the following characteristics: 

> It is a mandatory and statutory process that does not require the agreement of the parties to commence the process;

> It offers a faster process compared to arbitration and court litigation because the time frame is as prescribed by CIPA. It is the only form of dispute resolution that has a statutory time period in which the dispute must be resolved in 45 working days; and

> It provides a binding decision on a payment dispute.

The parties can choose their own adjudicator or request for KLRCA to choose an adjudicator on their behalf.

There are many procedures to be complied with by the parties and the time frame is dictated by the provisions of CIPA.

The entire adjudication process, including the time required to decide the case, would be approximately 100 working days. The adjudication process can be summarised by the following steps:

> Payment Claim: The unpaid party serves a Payment Claim on the non-paying party. The non-paying party would then serve the Payment Response on the unpaid party in reply to the claim within 10 working days. (Either party has a right to refer the dispute to adjudication)

> Initiation of Adjudication: The adjudication proceeding is initiated by the serving of a Notice of Adjudication by the claimant on the respondent.

> Nomination of Adjudicator: An adjudicator is nominated by the agreement of both parties in the dispute within 10 working days from the service of the notice or to request for the adjudicator to be nominated by the director of the KLRCA. The KLRCA has five working days to nominate the same.

> Adjudication Claim: Once the adjudicator is nominated and has accepted the terms and conditions and relevant fees, the claimant is to serve the Adjudication Claim on the respondent within 10 working days upon receipt of the acceptance by the adjudicator whereupon the respondent is to then serve the Adjudication Response on the claimant within 10 working days; the claimant may then serve a further Adjudication Reply within five working days.

> Commencement of Adjudication: The adjudication would then begin. KLRCA shall be informed of the commencement. The adjudicator shall direct that reasonable proportion of the adjudicator’s fees in equal shares be deposited in advance to the Director of KLRCA as security. Parties can represent themselves or choose to be represented by a lawyer.

> Decision: The Adjudicator has to reach a decision not later than 45 working days from the service of the Adjudication Response or Adjudication Reply, whichever is later. An adjudication decision which is not made within the specified period is void.

The adjudicator may also direct full payment of the fees and expenses to be deposited with the Director of KLRCA prior to the release of the adjudication decision to the parties.

A copy of the decision shall be provided not only to the parties but a copy must be served on the Director of KLRCA as well.

It is not clear whether CIPA would effectively address the cash flow problems in the construction industry but Malaysia is one of five countries who have opted to adopt this form of legislation.

The other countries are Britain, some States and Territories in Australia, New Zealand and Singapore. We can only wait and see.

■ The writer is the chairman of the National Young Lawyers Committee. Putik Lada, or pepper buds in Malay, captures the spirit and intention of this column – a platform for young lawyers to articulate their views and aspirations about the law, justice and a civil society. For more information about the young lawyers, visit www.malaysianbar.org.my.

CIPA Bill 2011

The Kuala Lumpur Regional Centre of Arbitration [KLRCA] will be holding a series of Forums and Talks to educate the people about the CIPA Bill. 

The Forums/Talks will be held all over Malaysia from Penang to Miri; between the dates of 18th February to 28th March 2012. Do attend. 

A link to a PDF brochure on the same is appended below:-

http://klrca.org.my/userfiles/File/KLRCA_CIPA_Nationwide_eFlyer_FINAL.pdf

The Construction Industry Payment and Adjudication Bill 2011 (CIPA): What is the fuss?

There is much interest generated in the construction industry of late what with the proposed Construction Industry Payment and Adjudication Bill 2011 (CIPA). Many professional bodies have jumped on the bandwagon in offering courses and seminars to key construction industry officials to try to explain the Bill of Parliament and how the Bill when passed in Parliament will affect them. It has been hinted that the Bill will be passed this March 2012. This would mean that companies in the construction industry should arm itself and be ready for the new regime of statutory adjudication. This is the era of adjudication in the construction industry.

Why CIPA? The construction industry themselves have been pushing the government to enact this piece of legislation since 2003 to address the cash flow problems plagued by the industry. The primary objective of the proposed Act is to address critical cash flow issues in the construction industry. It aims to remove the practice of conditional payments (‘pay when paid’ and ‘pay if paid’) and reduce payment default by establishing a cheaper, speedier system of dispute resolution in the form of adjudication. According to the provisions of CIPA every construction contract made in writing that relates to construction work carried out in Malaysia would be affected by the regime of adjudication. This would essentially mean that if you have entered into a construction contract and there is a problem with regards to payment, an adjudication process can be commenced either by you or against you. A construction contract can be a construction work contract and or a construction consultancy contract.

To this extent, the parties will be subjected to compulsory adjudication or statutory adjudication. This would mean that both parties will be dragged into the adjudication process which is dictated by the provisions of CIPA. The provisions of CIPA does not however affect natural persons entering into a construction contract in respect of a building wholly intended for his own occupation and is four storeys and below.

Be that as it may, would adjudication stop your right to arbitration or to go to court to litigate matters? The answer is No. The purpose of adjudication is to hurry along cash flow and facilitate payment in the construction industry. Parties are free to opt for arbitration or court litigation to deal with the legal matters concerning the same. CIPA simply provides a statutory right for the parties to demand payment for work done and to create a simple process to ensure that a decision and payment is made. This of course is in the form of adjudication as a process.  In fact, the parties can commence adjudication and concurrently arbitrate or litigate the matter as well. Of course, common sense would dictate that the adjudication process will be terminated if the dispute is decided by arbitration or the court before the adjudication decision can be made. If however, the adjudication decision comes first then it is a binding decision and payment must be made. 

In summary, the statutory adjudication has the following characteristics - 

1.     It is a mandatory and statutory process that does not require the agreement of the parties’ to commence the process.

2.     It offers a much faster process compared to arbitration and court litigation because the time frame is as prescribed by the proposed CIPA itself. It is the only form of dispute resolution that has a statutory time period in which the dispute must be resolved in forty five (45) working days.

3.     It provides a binding decision on a payment dispute.

4.  The parties can choose their own adjudicator or request for Kuala Lumpur Regional Centre of Arbitration [KLRCA] to choose an adjudicator on their behalf.

There are many procedures to be complied with by the parties and the time frame is dictated by the provisions of CIPA. The entire adjudication process including the time required to decide the case would take approximately one hundred (100) working days.  So how do you go about starting the adjudication process? The adjudication process can be summarised by the following steps -

1.     Payment Claim - The unpaid party serves a Payment Claim on the non-paying party. The non-paying party would then serve the Payment Response on the unpaid party in reply to the claim within 10 working days. (Either party has a right to refer the dispute to adjudication)

2.     Initiation of Adjudication - The adjudication proceeding is thereby initiated by the serving of a Notice of Adjudication served by the claimant on the respondent.

3.     Nomination of Adjudicator - An adjudicator is thereby nominated by the agreement of both parties in the dispute within 10 working days from the service of the notice or to request for the adjudicator to be nominated by the Director of the KLRCA. The KLRCA has 5 working days to nominate the same.

4.     Adjudication Claim - Once the adjudicator is nominated and has accepted the terms and conditions and relevant fees, the claimant is to serve the Adjudication Claim on the respondent within 10 working days upon receipt of the acceptance by the adjudicator whereupon the respondent is to then serve the Adjudication Response on the claimant within 10 working days; the claimant may then serve a further Adjudication Reply within 5 working days.

5.     Commencement of Adjudication - The adjudication would then begin. KLRCA shall be informed of the commencement. The adjudicator shall direct that reasonable proportion of the adjudicator’s fees in equal shares be deposited in advance to the Director of KLRCA as security. Parties can represent themselves or choose to be represented namely by a lawyer.

6.     Decision - The Adjudicator has to reach a decision not later than 45 working days from the service of the Adjudication Response or Adjudication Reply, whichever is later. An adjudication decision which is not made within the specified period is void. The adjudicator may also direct full payment of the fees and expenses to be deposited with the Director of KLRCA prior to the release of the adjudication decision to the parties. A copy of the decision shall be provided not only to the parties but a copy must be served on the Director of KLRCA as well.

Hence it is important to nominate the correct adjudicator and if in doubt, reliance should be placed on the KLRCA to appoint one on your behalf. The KLRCA has been appointed the adjudication authority in Malaysia by virtue of Part V of CIPA, thus setting the standard terms of appointment, fees for adjudicators and setting the competency standards and criteria for adjudicators.

It is not clear whether CIPA would effectively address the cash flow problems in the construction industry but Malaysia is one of five countries who have opted to adopt this form of legislation. The other countries are the United Kingdom, some States and Territories in Australia, New Zealand and Singapore. We can only wait and see.