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  • CIPAA 2012

    • 5 Mins Read On CIPAA 2012!

    The Construction Industry Payment and Adjudication Act 2012 (CIPAA) is a law in Malaysia that provides a statutory adjudication process for parties involved in construction contracts. The purpose of CIPAA is to provide a faster and more efficient way for parties to resolve payment disputes in the construction industry. 

    Here are some key points to note about the CIPAA process in Malaysia:

    1. CIPAA applies to all construction contracts entered into after 15 April 2014, and to all construction contracts entered into before that date if they contain a clause that provides for CIPAA to apply.
    2. The CIPAA process starts with a payment dispute arising between parties in a construction contract. Either party can initiate the adjudication process by serving a payment claim on the other party.
    3. The recipient of the payment claim can choose to respond with a payment response within a specified timeframe. If the recipient disputes the payment claim, they must provide a payment schedule setting out the amount they are willing to pay.
    4. If the parties are unable to reach a resolution through negotiation, either party can apply for adjudication by serving a notice of adjudication on the other party.
    5. The adjudicator appointed by the Director of the Asian International Arbitration Centre (AIAC) will then make a decision within a strict timeframe, usually within 45 days.
    6. The decision of the adjudicator is binding and enforceable, and can be registered as a court judgment.
    7. The CIPAA process is designed to be relatively quick and cost-effective, with the aim of resolving payment disputes in a timely manner and without the need for lengthy court proceedings.

    Overall, the CIPAA process in Malaysia provides an important avenue for parties involved in construction contracts to resolve payment disputes quickly and efficiently. It is important to seek the guidance of an experienced lawyer to assist with the CIPAA process, to ensure that all legal requirements are met and that the dispute is resolved fairly.

    The firm is committed to provide clients with comprehensive legal solutions to navigate the complex landscape of property transactions, Corporate Advisory services, Litigation and Alternative Dispute Resolution services.

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