UK Adjudicators May 2020 newsletter

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EDITORS COMMENTS
With the pandemic in the UK imposing a lock
down you might have thought that there
would not be much to share. Well you’d be
wrong the TCC have dismissed an application
to stay an adjudication due to the Coronavirus
and an injunction was granted to prevent an
expert from testifying as the company they
worked for owed a fiduciary duty to the client.
Also the Supreme Court live streamed the
appeal in the case of Bresco Electrical Services
Ltd (in liquidation) (Appellant) v Michael J
Lonsdale (Electrical) Ltd (Respondent).
The CIC LVD MAP launches on the 1 May 2020
and UK Adjudicators are one of the
Adjudicator Nominating Bodies
The 2020 London Adjudication & Arbitration
Conference will hopefully take place on the 20
August at the IET in central London. If you
would like to attend, speak, support, sponsor
or exhibit please get in touch to express your
interest. We have a much larger venue being
lined up for the 2020 venue as we reached
our capacity limits in the last venue.
As always, I would encourage you to forward
articles, commentaries, news and events that
our readers would find of interest and share
details of our panel and nomination service
with friends, colleagues and clients.
During this period of self isolation and social
distancing we are able to maintain our
nomination services and trust that our panel
members will utilise technology to conduct
virtual hearings where necessary.
If you can organise a webinar please do get in
touch as we intend putting on a number
during this period of isolation and distancing.
Accompanying the newsletter are copies of
the CC LVD MAP and the MDA Attorneys
South African Adjudication Survey.
I sincerely hope that you and your families
remain safe during the crisis and encourage
you to follow governmental advice and
updates.
Sean Gibbs LLB(Hons) LLM MICE FCIOB FRICS
FCIARB, is a director with Hanscomb
Intercontinental and is available to serve as an
arbitrator, adjudicator, mediator, quantum
expert and dispute board member.
sean.gibbs@hanscombintercontinental.co.uk

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MILLCHRIS DEVELOPMENTS LTD V
WATERS [2020] 4 WLUK 45 –
APPLICATION FOR INJUNCTION TO
STOP AN ADJUDICATION REFUSED
On the 2 April 2020, The Honourable Mrs
Justice Jefford gave judgement in the case of
MillChris Developments Ltd v Waters [2020] 4
WLUK 45. The decision concerned an
application for injunctive relief to restrain an
adjudication due to the Coronavirus epidemic
in the United Kingdom.
The background to the case was that Waters a
homeowner had employed a building
contractor, MillChris Developments to
undertake building works at its home. The
Contractor ceased trading in 2019 however
Waters alleged MillChris had been overpaid
by £45,000.00 and that aspects of the work
were defective £and that there were defects
in the works.
Waters sought to resolve the crystallized
dispute using statutory Adjudication, and
commenced the adjudication on the 23 March
2020.
The Adjudicator issued a timetable for
submissions from the parties and a site visit
was directed to be held on the 14 April 2020 .
It was at this point the Contractor objected to
participating in the Adjudication, on the
grounds that it was not possible to comply
with the deadlines of the health crisis and
therefore the adjudication should be
postponed until the imposed lock-down
measures were lifted by the Government.
The Adjudicator continued to proceed with
the Adjudication but proposed a two-week
extension to the timetable, MillChris objected
and sought injunctive relief from the court to
prevent the Adjudication proceeding.
Submissions made on behalf of MillChris were
that the Adjudication would be in breach of
natural justice as MillChris had insufficient
time to prepare a response due to the
Coronavirus epidemicdue to the following
matters:
• its solicitor was forced to self isolate
at home;
• it was unable to gather evidence due
to lack of contact with relevant
parties:
• none of its representatives would be
able to attend the site visit;
• there was insufficient time to appoint
an independent surveyor
The Honourable Mrs Justice Jefford refused to
grant the application for an injunction. The
Application was refused on the following
grounds;
• there was no explanation why papers
could not be transported or scanned

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between the Contractor and its
solicitor, or anyone else instructed;
• the reason for not being able to
obtain evidence was not due to
COVID-19, but the Contractor's
inability to contact its former
managing director;
• no attempt had been made to contact
the Contractor's former Project
Manager;
• the Adjudicator offered an extension
for submissions to allow the
Contractor to make contact with the
relevant parties, but the Contractor
objected;
• the parties to an Adjudication had no
right to be present at a site visit, the
Adjudicator could conduct the visit
alone;
• the Contractor could have listed
specific matters for the Adjudicator's
attention in advance of the site visit.
Conclusion
Parties must remember that each case turns
on its own specific facts, however the court
refused injunctive relief. This should signal
clearly to parties and their advisers that the
TCC court has continued it approach to
supporting adjudication and it will be
exceptional for them to grant relief. While the
court has jurisdiction to grant an injunction in
respect of an ongoing adjudication, it would
only do so very rarely. Parties and their
advisers would be advised to consider the
principles from this case and the cases
considered by the court of Michael J Lonsdale
(Electrical) Ltd v Bresco Electrical Services Ltd
(In Liquidation) [2018] EWHC 2043 (TCC), and
American Cyanamid Co v Ethicon Ltd [1975]
A.C. 396, [1975] 2 WLUK 14. Dorchester Hotel
Ltd v Vivid Interiors Ltd [2009] EWHC 70 (TCC),
Twintec Ltd v Volkerfitzpatrick Ltd [2014]
EWHC 10, Bresco Electrical Services Ltd v
Michael J Lonsdale (Electrical) Ltd [2019]
EWCA Civ 27, Billingford Holdings Ltd & BFL
Trade Ltd v SMC Building Solutions Ltd [2019]
EWHC 711, MillChris Developments Ltd v
Waters [2020] 4 WLUK 45 (unreported).
Robert Gibbs is a commercial manager with
Hanscomb Intercontinental and is available to
provide advice and representation in
arbitration and adjudication proceedings.
robertgibbs@hanscombintercontinental.com

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THE TCC THROWS A SPANNER IN
THE WORKS OF EXPERT WITNESS
FIRMS
Summary
In what is likely to be a significant blow to
firms providing expert witness services, the
TCC has recently issued a judgment that may
heavily curtail their activities.
In a decision issued last week in A Company v
X, Y, Z [2020] EWHC 809 (TCC) the claimant
succeeded in continuing an injunction
restraining the three defendant consultancy
firms from acting as expert witnesses for a
third party in ICC proceedings against the
claimant.
It was held that by agreeing to provide expert
services to the claimant in connection with
one contract on a project, the entire
consultancy group to which the first
defendant belonged owed a fiduciary duty of
loyalty to the claimant. That duty of loyalty
would be breached if another company within
the defendant group accepted instructions to
provide expert services in relation to another
arbitration arising out of the same project.
The practical implications of this decision is
that once a consultancy undertakes any
substantial work for a party, it needs to very
carefully consider the fiduciary duty of loyalty
that it owes to that party and not accept
other instructions that would be in conflict
with that duty. That would obviously include,
as here, instructions from another party in
proceedings against the instructing party
concerning the same project and may even
have broader implications.
Being subject to a fiduciary duty is a very
serious matter. Experts will have undertaken
appointments on the basis of owing a duty of
confidentiality to their appointing party and
will not have considered owing a duty of
loyalty which goes well beyond ordinary
criticism that could be levied at an expert for
a lack of independence. This will result in
uncertainty and excessive cautiousness going
forwards and likely a state of panic in ongoing
proceedings that involve experts that could be
said to be in breach of that duty. There is
likely to be scramble by parties looking to
review decisions in which there may be
arguments that experts have breached this
fiduciary duty.

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It has very serious implications for the expert
witness ‘industry’ and given those
implications is likely to be the subject of an
appeal.
The Decision The claimant was the developer
of a petrochemical plant (the “Project”) and
entered into contracts with a main contractor
(the “Contractor”), as well as engineering,
procurement and construction management
consultants (the “EPCM Consultants”). In due
course, disputes arose about delays to the
Project, and the Contractor commenced an
ICC arbitration against the claimant (the
“Works Package Arbitration”). The claimant
engaged the first defendant as delay experts
in the Works Package Arbitration. That expert
appointment included a confidentiality
agreement.
Meanwhile, the EPCM Consultants
commenced an ICC arbitration against the
claimant (the “EPCM Arbitration”) in respect
of unpaid fees. The claimant counterclaimed
in respect of delay and disruption, including
any sums payable to the Contractor caused by
the EPCM Consultants’ late release of
drawings, and failure to properly manage and
supervise the Contractor. The EPCM
Consultants sought the services of delay and
quantum experts for the EPCM Arbitration
and engaged another expert of the first
defendant.
The first defendant informed the claimant of
that appointment and advised that it did not
consider that there was a conflict of interest
because each expert owed a duty assist the
Tribunal and act independently, was the
individual and not the company, were of
different disciplines and based in different
geographic region and information barriers
were operated.
The claimant advised the first defendant that
its engagement by the EPCM Consultants
created a conflict of interest and was contrary
to the terms of its appointment. An interim
injunction was sought restraining the
defendants from providing expert services to
the EPCM Consultants on the EPCM
Arbitration.
The Issues
At the return date, the Court had to grapple
with the following issues:
1. Whether as a matter of principle
independent experts, who are engaged by a
client to provide advice and support in
arbitration or legal proceedings, in addition to
expert evidence, can owe a fiduciary duty of
loyalty to their clients.
2. Whether on the facts of this case, the
Employer was entitled to a fiduciary

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obligation of loyalty from any or all of the
Defendants.
3. Whether there had been, or may be, a
breach of any duty of loyalty or confidence.
4. If so, whether to grant the injunction.
The Arguments
The claimant argued that the defendants’
provision of expert services to the EPCM
Consultants was a breach of the rule that a
party owing a duty of loyalty to a client must
not, absent informed consent, agree to act or
actually act for a second client in a manner
which is inconsistent with the interests of the
first. The defendants argued that independent
experts do not owe a fiduciary duty of loyalty
to their clients because that would be
inconsistent with their overriding duty to the
tribunal, and that there was no conflict of
interest as sophisticated information barriers
were in place that prevented the transmission
of confidential information between the
appointed experts.
Fiduciary duty
The parties were in agreement as to the
principles governing fiduciary relationships.
The court set out the relevant definition of a
fiduciary citing Millett LJ in Bristol & West
Building Society v Mothew [1998] Ch 1 (CA):
“A fiduciary is someone who has undertaken
to act for or on behalf of another in a
particular matter in circumstances which give
rise to a relationship of trust and confidence.
The distinguishing obligation of a fiduciary is
the obligation of loyalty. The principal is
entitled to the single-minded loyalty of his
fiduciary. The core liability has several facets.
A fiduciary must act in good faith; … he must
not place himself in a position where his duty
and his interest may conflict; he may not act
for his own benefit or the benefit of a third
person without the informed consent of his
principal …
A fiduciary who acts for two principals with
potentially conflicting interests without the
informed consent of both is in breach of the
obligation of undivided loyalty; he puts
himself in a position where his duty to one
principal may conflict with his duty to the
other …This is sometimes described as “the
double employment rule”. Breach of the rule
automatically constitutes a breach of fiduciary
duty…”
The recognised classes of fiduciaries were
limited to trustees, guardians, executors,
administrators, agents, doctors and lawyers.
The addition of experts to that list might be
considered somewhat unusual. Hence, the
parties were in dispute as to whether expert

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witnesses were fiduciaries, the defendant
arguing that such a duty would be
inconsistent with the independent role of the
expert support for which was found in
Harmony Shipping v Saudi Europe Line (1979)
that was adopted by the Federal Court of
Australia in Wimmera Industrial Minerals v
Iluka Midwest [2002] FCA 653.
Historically the courts’ concern in relation to
experts was the protection of privileged
material; hence the decision in Prince Jefri
Bolkiah v KPMG [1999] 2 AC 222 (HL) which
was considered to be an exceptional case in
which the defendant accountants were
essentially in the same position as solicitors
and had an ongoing obligation to preserve
confidential and privileged information. This
was explained by Mann J in Meat Corporation
of Namibia Limited v Dawn Meats (UK)
Limited [2011] EWHC 474 (Ch) who concluded
that “on certain facts an expert should not be
permitted to act because it is likely that the
expert will be unable to avoid having resort to
privileged material that he should not resort
to”.
The TCC concluded that in each of the above
cases there was no existing fiduciary duty
giving rise to a duty of loyalty; the issue was
whether, absent a duty of loyalty, an
obligation to preserve confidential and
privileged information should preclude the
expert from acting for another party.
Experts’ immunity was abolished in Jones v
Kaney [2011] 2 AC 398 (SC) with Lord Phillips
explaining that there is no conflict between
the duty that an expert owes to his client and
that owed to the court.
The TCC set out the following general
principles in respect of expert witnesses:
1. In principle, an expert can be compelled to
give expert evidence in arbitration or legal
proceedings by any party, even in
circumstances where that expert has provided
an opinion to another party.
2. When providing expert witness services,
the expert has a paramount duty to the court
or tribunal, which may require the expert to
act in a way which does not advance the
client’s case.
3. Where no fiduciary relationship arises,
having regard to the nature and
circumstances of the expert’s appointment, or
where the expert’s appointment has been
terminated, the test from Prince Jefri Bolkiah
based on an ongoing obligation to preserve
confidential and privileged information does
not necessarily apply to preclude an expert
from acting or giving evidence for another
party.
The above appear to point to a conclusion
that the defendants should not be restrained
from providing expert witness services to the

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EPMC Consultants. However, the Court stated
that:
“None of the authorities supports the
proposition that an independent expert does
not owe a fiduciary obligation of loyalty to his
or her client.”
And further that: “As a matter of principle, the
circumstances in which an expert is retained
to provide litigation or arbitration support
services could give rise to a relationship of
trust and confidence. In common with
counsel and solicitors, an independent expert
owes duties to the court that may not align
with the interests of the client. However, as
with counsel and solicitors, the paramount
duty owed to the court is not inconsistent
with an additional duty of loyalty to the
client”.
The apparent justification for this conclusion
appears to be the Supreme Court decision in
Jones v Kane; albeit that the Supreme Court
did not consider whether or not an expert
owed its client a fiduciary duty.
On the facts of this case, a relationship of
trust and confidence did arise, because X “was
engaged to provide expert services for the
claimant in connection with the Works
Package Arbitration. […] However, it was also
engaged to provide extensive advice and
support for [the Employer] throughout the
arbitration proceedings”.
Whilst the TCC did not decide that all experts
owe their client a fiduciary duty, confining its
decision to one that the circumstances in
which an expert is retained could give rise to
such a duty, nevertheless, the implications are
clear. Particularly as the TCC went on to find
not only that the first defendant owed such a
duty to the claimant but that the defendant
group owed such a duty thereby potentially
precluding employees of other companies
within that group from acting for anyone
against the claimant. That seems very broad-
reaching and as expert services firms have
become much more multi-disciplinary in
nature, likely to present real hurdles in
practice.
The TCC was clear that X’s fiduciary duty of
loyalty extended to the wider group, and thus
precluded Y and Z from being engaged by the
EPCM Consultants. This was on the basis of
the close financial links between the
defendants: the defendants’ shareholders had
a common interest in the performance of the
group, and that each defendant had a
financial interest in the performance of others
within the group.
The TCC rejected the Defendants’ arguments
to rebut those concerns and concluded that
the defendant group owed fiduciary duties to
the claimant:
1. Not unreasonably and particularly in light of
the previous authorities, firms providing these

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services had in place firm-wide conflict
management system intended to preserve
confidentiality and privilege. It was held that
that did not change the position: a fiduciary
must not place himself in a position where his
duty and his interest may conflict. Therefore,
steps to prevent any such conflict arising in
fact did not assist. It might be thought that
such issues were more relevant to whether or
not a breach of duty had occurred; rather
than deemed irrelevant to its existence.
2. Barristers were in a similar position sharing
funding, marketing and an interest in each
other’s success and often appearing on other
sides of litigation without issue. It was held
that the comparison was ‘not apt’ as
barristers do not share profits, are required to
represent unpopular clients or causes (a
reference to the ‘cab rank’ rule) and (deemed
most importantly) that it is common
knowledge that barristers are self-employed
and those in the same set may act on
opposing sides. Whether that is ‘common
knowledge’ or not must be open to some
debate. The Court also raised the fact that
the defendant did not inform the claimant
that they might take instructions to act both
for and against the claimant in respect of the
dispute and the conclusiondrawn that if it had
done, the claimant would not have instructed
the defendant. That conclusion is drawn from
the fact that when the defendant advised the
claimant that it was acting, the claimant
objected.
The Court then concluded that the fiduciary
duty had been breached because the two
arbitrations were concerned with the same
subject matters and there was an overlap of
issues so “plainly” a conflict of interest.
Accordingly, the Court was satisfied that it
was likely that accepting the EPCM
Consultants’ instruction was a breach of
fiduciary duty. The nature of the services
being provided by the defendants was
considered as part of the analysis of breach,
rather than imposition of a duty.
Furthermore, the Court did not consider the
extensive information barriers that had been
erected within the defendant group when
considering the issue of breach.
Practical Implications
This judgment will not be welcomed by
consultancy firms.
First, whilst the ratio of the decision is that
the existence of a fiduciary duty depends on
the nature of the particular retainer, a
fiduciary relationship was nevertheless found
in what were fairly common circumstances.
Appointing parties and experts would expect
their relationship to give rise to a duty of
confidentiality rather than one of loyalty. That
may differ where an expert is involved in all

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stages of case for a lengthy period of time but
would not generally apply. That said, such
relationship would not ordinarily be expected
by the parties to extend to a duty of loyalty
indefinitely and/or without anchoring in the
specific project. This judgment would
preclude firms that provide expert services
from accepting instructions on any dispute
where a conflict of interest may (rather than
will) arise and could prevent an appointed
expert from ever acting against that
appointing party on any other project.
Second, acceptance of instructions by one
office of a global firm is likely to conflict out
the entire firm. It is difficult to see what more
a global consultancy can do to separate
offices from one another than what the
Defendants did in this case: they were
separate legal entities, and had a firm-wide
conflict management system in place. This
was not enough. It therefore appears that any
large consultancy “managed and marketed as
one global firm” [57] may have to decline
instructions to act against a party which has
instructed an office in any region and in any
discipline. Prudence would require them to as
professional indemnity insurance would not
cover them for any breach of fiduciary duty.
The judgment is on BAILII at :
https://www.bailii.org/ew/cases/EWHC/TCC/
2020/809.html
Jessica Stephens QC
jstephens@4pumpcourt.com
Kajetan Wandowicz
kwandowicz@4pumpcourt.com
4 Pump Court Temple London EC4Y 7AN
Tel +44 (0)20 7842 5555
www.4pumpcourt.com
Pump Court International
Tel (+852) 3101 7108
www.pumpcourtinternational.hk

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CONSTRUCTION CONTRACTS
ADJUDICATION SERVICE
RECOMMENCES
The Construction Contracts Adjudication
Service will resume the processing of
applications for the appointment of an
Adjudicator under section 6(4) of the
Construction Contracts Act, 2013 on Tuesday,
14 April 2020.
Due to the ongoing restrictions in place, the
service may not be able to process
applications strictly within the 7-day
timeframe set out in the Handbook. CCAS will
endeavour to operate as efficiently as the
circumstances allow.
https://dbei.gov.ie/en/Construction-
Contracts-Adjudication-Service/
REFORMS TO THE MALAYSIAN
CONSTRUCTION INDUSTRY
PAYMENT AND ADJUDICATION ACT
2012 : SURVEY RESULT AND CIPAA
PUBLIC FORUM ON 26th FEBRUARY
2020
The AIAC is the named adjudication authority
of the Construction Industry Payment and
Adjudication Act 2012 (“CIPAA 2012”). This
role encompasses the power to administer
adjudication proceedings and set the
competency standards for our adjudicators. In
order to streamline the administration of the
adjudication process, the AIAC has developed
the AIAC Adjudication Rules & Procedure and
issues circulars if any need for clarifications
arise.
As at the end of 2019, the AIAC had received
over 3,000 adjudication case registrations and
it had also empanelled at least 600
adjudicators.
The AIAC has also had the privilege of
participating in the development of the CIPAA
2012 since its enactment in 2014. The CIPAA
2012 has since become one of the more
effective and efficient mechanisms for the
resolution of payment disputes in the
construction industry in Malaysia. It has
continued to rapidly grow in use across the
country. However, our observation from

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having administered these 3,000 cases over
the years is that the time is upon us to start
thinking about the improvement of the CIPAA
2012 to better serve the interests of the
public. SURVEY RESULT ON THE REFORMS TO
THE CIPAA 2012 Recognising that any good
law should represent the voice of the people,
the AIAC and the Bar Council Construction
Law Committee joined forces in disseminating
a survey to elicit feedback on the areas of the
CIPAA 2012 which, in the view of the public,
required reform. Specifically, this survey
gauged whether or not reforms to the CIPAA
2012 were necessary, and if so, which parts of
the CIPAA 2012 required amendments.
A total of 110 responses were received to the
survey from participants of diverse
backgrounds. For this purpose of this report,
the people who responded to the survey will
be classified as “Respondents”.
Along with the Bar Council Construction Law
Committee, the AIAC team has had the liberty
to read the comments provided by the
Respondents. Most, if not all, of the feedback
was valuable. The AIAC would like to take this
opportunity to express our gratitude to
everyone who contributed to the survey.
Below are several notable findings from the
survey. Please be informed that the
information produced below should not in any
way be treated as representing the views of
the AIAC and/or the Bar Council Construction
Law Committee – it is simply a product of the
feedback received to the survey. The
responses reflect the views of the
Respondents whose identities have been kept
confidential.
the pool of Respondents comprises not only
of adjudication decision-makers (i.e.
adjudicators), but also other adjudication
participants (i.e, a user of the CIPAA 2012 or
the representative of the user of the CIPAA
2012). The AIAC hopes that this diversity this
will translate into inclusive and collective
findings that will truly reflect the voice of the
construction industry.
The first question that the survey posed was
whether or not the framework of the CIPAA
2012 needed to be amended. Kindly note that
the reference to the “Framework of CIPAA
2012” also includes other procedural
frameworks affecting the CIPAA such as the
CIPAA Regulations 2014, the AIAC
Adjudication Rules & Procedure, the CIPA
Exemption Order, and the AIAC Circulars.
In this regard, approximately 60% of the
Respondents indicated that the framework of
the CIPAA 2012 needed to be reformed. One
could conclude therefore, that the majority
felt reforms of the CIPAA 2012 were
necessary.
Respondents who indicated “yes” then
proceeded to provide their views on which

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section(s) and/or framework of the CIPAA
2012 should be reformed.
The Respondents who indicated “no” to the
first question proceeded to comment on the
“others” section of the survey. Interestingly,
even though these Respondents were of the
view that the CIPAA 2012 did not require any
reform, they still provided comments and
suggestions to amend the CIPAA 2012 in the
“others” section. The inference to be made is
that it is likely that more than 58.2% of the
Respondents were minded to have the CIPAA
2012 and its accompanying Framework
reformed. 1. Part I: Preliminary, Sections 1 – 4
of the CIPAA 2012 The first part of the CIPAA
2012 runs from Sections 1 – 4, primarily
focusing on the scope of the application and
definition of terms used in the CIPAA 2012.
In this regard, 48% of the Respondents believe
that Part I needs to be amended.
Notable comments included:
Firstly, clarification on the phrase “four
storeys high”. 3. Non-application This Act does
not apply to a construction contract entered
into by a natural person for any construction
work in respect of any building which is less
than four storeys high and which is wholly
intended for his occupation.
As of now, the CIPAA 2012 is not applicable to
construction contracts entered into by a
natural person for any construction work in
respect of any building which is less than four
storeys high and which is wholly intended for
his occupation. There seems to be a general
consensus from the result survey to remove
the requirement of the four-storey high or at
least for the CIPAA 2012 to provide
clarification on the method to calculate the
level of the storeys.
Secondly, the Respondents believe that the
term “working day” needs to be further
clarified. As of now, a “working day” follows
the calendar day, and excludes weekends and
public holidays applicable in the State where
the project site is located. This provision
might be a bit problematic in two situations:
First where party autonomy rears its head and
parties prefer otherwise; and second, when
the project site location spans across multiple
States.
“working day” means a calendar day but
exclude weekends and public holidays
applicable at the State or Federal Territory
where the site is located.
Thirdly, the Respondents seem to form a
collective nod on the insertion of a provision
to clarify the position of the CIPAA 2012
regarding its scope of application. Namely,
whether it is prospective or retrospective in
nature. Although the recent judicial
development in the case of Bauer seems to

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shed light on this issue, in the view of the
Respondents, a clear reinforcement in the
CIPAA 2012 will clearly put an end to the saga.
That said, the AIAC understands that further
judicial developments are ongoing in this
area.
2. Part II: Adjudication of Payment Disputes,
Sections 5 – 20 of the CIPAA 2012 The second
part of the CIPAA 2012 is the heart of the
adjudication procedure, covering Sections 5 –
20 which regulate the issuance of the
payment claim up until the issuance of the
adjudication decision.
For that reason alone, it is not surprising that
this Part attracted the highest number of
Respondents desiring reform, specifically,
almost 80% of the Respondents. Notable
comments include but are not limited to:
Firstly, clarification on the right of the
respondent to raise a counterclaim. As of
now, the CIPAA 2012 is silent regarding this
and the respondent can only raise a set-off to
reduce the payment claim advanced by the
claimant. There seems to be a dividing view
from the result survey – some Respondents
suggested that the CIPAA 2012 should allow
counterclaims, whereas others had hoped
that the CIPAA 2012 would make it clear that
counterclaims cannot be introduced by the
respondent in adjudication proceedings.
Secondly, the right to file the notice of
adjudication. As of now, the CIPAA 2012 has
made it possible for the non-paying party to
file the notice of adjudication, although the
payment claim is filed by the unpaid party.
Filing the notice of adjudication will entitle
the non-paying party to enjoy purported
privileges in being the claimant which include,
the right to issue a notice of withdrawal. As
such, clarification was requested on this issue.
Section 7(1): An unpaid party or a non-paying
party may refer a dispute arising from a
payment claim made under section 5 to
adjudication.
Section 8(1): A claimant may initiate
adjudication proceedings by serving a written
notice of adjudication containing the nature
and description of the dispute and the remedy
sought together with any supporting
document on the respondent.
“claimant” means an aggrieved party in a
construction contract who initiates
adjudication proceedings
Thirdly, and quite surprisingly, a vast majority
of the Respondents concurred that the 45
working days to issue the Adjudication
Decision is too long and needs to be
shortened. Now, this suggestion is particularly
interesting, seeing that 66% of the
participating Respondents were adjudicators.
From the perspective of the AIAC, however,

MAY 2020 NEWSLETTER
15 | P a g e
this suggestion is feasible since adjudicators’
delivery of the Adjudication Decision is
reaching 97.83% in terms of timeliness. This
means that the vast majority of adjudicators
empanelled with the AIAC delivered their
adjudication decisions on time. Whether or
not this can be translated to a willingness or
ability to deliver adjudication decisions within
a shortened period will be left to be seen.
3. Part III: Adjudicator, Sections 21 – 27 of the
CIPAA 2012 This section focusses on the
appointments, duties, obligation, and
jurisdiction of the adjudicator. The majority of
the Respondents (61.7%) believed that this
Part should also be reformed.
Notable comments included the need for
clarification regarding the power of the
adjudicator to set-aside the proceedings
based on non-compliance.
The CIPAA 2012 presently empowers the
adjudicator to set aside or make any order
dealing with the adjudication proceeding as
the adjudicator deems fit, if there is any
ground of non-compliance. Pursuant to
Section 26(1) of the CIPAA 2012, non-
compliance of the parties appears broad and
can be derived from time limits, the form or
content of documents submitted or in any
other respect which amounts to an
irregularity. Further, any non-compliance of
the parties neither invalidates the power of
the adjudicator to hear the dispute nor does it
nullify the adjudication proceedings or the
decision itself. 26. Power of Adjudicator Not
Affected by Non-compliance Subject to
subsection (2), the non-compliance by the
parties with the provisions of this Act whether
in respect of time limit, form or content or in
any other respect shall be treated as an
irregularity and shall not invalidate the power
of the adjudicator to adjudicate the dispute
nor nullify the adjudication proceedings or
adjudication decision. The adjudicator may on
the ground that there has been non-
compliance in respect of the adjudication
proceedings or document produced in the
adjudication proceedings— Set aside either
wholly or partly the adjudication proceedings;
Make any order dealing with the adjudication
proceedings as the adjudicator deems fit; or
Allow amendment to be made to the
document produced in the adjudication
proceedings.
Respondents believe that this section needs
to be clarified in several instances: clarity is
required regarding what constitutes “non-
compliance” and also whether it is reasonable
for setting aside to be a penalty for non-
compliance. Respondents of the survey have
conveyed that the text of the CIPAA 2012 is
presently too broad and does not protect the
legitimate interest of the parties. 4. Part IV:
Enforcement of Adjudication Decisions,
Sections 28 – 31 of the CIPAA 2012 Part IV of
the CIPAA 2012 mainly covers the stage post

MAY 2020 NEWSLETTER
16 | P a g e
the delivery of the adjudication decision. In
this regard, there were two school of
thoughts: 50% of the Respondents believed
that these sections need to be amended; the
remaining 50% took the view that the Part
should remain as is. Notable comments
included:
Firstly, the need for clarification on the
enforcement of the Adjudication Decision as a
judgement. Respondents believed that the
CIPAA 2012 should specifically indicate the
timeline for the purposes of the enforcement
of an Adjudication Decision. There was also a
suggestion for review mechanisms to be in
place in respect of erroneous determinations,
such as allowing the court to look into the
merits of the matter.
Secondly, the Respondents further suggested
that clarification needs to be made on the
section relating to the direct payment from
the principal. The CIPAA 2012 allows the
winning party to recover their outstanding
sum from the principal of the losing party, in
the event the losing party fails to voluntarily
comply with the adjudication decision.
Many Respondents queried the enforceability
of this mechanism as the CIPAA 2012 does not
contemplate the consequences of a principal
who fails to comply with this mechanism and
the procedure available to the principal to
recover this sum as a debt from the losing
party. 5. Part V: Adjudication Authority,
Sections 32 – 33 of the CIPAA 2012 Part V of
the CIPAA 2012 focuses on the Adjudication
Authority of the CIPAA 2012, namely the AIAC.
This particular Part generated the lowest
percentage of Respondents requesting
amendments (31%). Notable comments
included:
Firstly, granting more power to the AIAC to
refuse the registration of an adjudication. Of
course, as many of you are already aware –
the CIPAA 2012 empowers the AIAC to
provide administrative support for the
conduct of adjudication proceedings. The
support provided includes conducting a
preliminary review of documentation,
registration, appointment, collection of
deposits, custodian of adjudication decisions
where deposits have not been remitted,
amongst others. But there seems to be a
general consensus that the AIAC should
assume more power to refuse the registration
of an adjudication matter that is not
compatible with the provisions of the CIPAA
2012. The AIAC’s position on this point is that
whenever it is apparent that an adjudication
matter falls outside the scope of the CIPAA
2012 (for instance, when the matter is
exempted pursuant to the CIPA Exemption
Order 2014, or the date of the filing of the
payment claim or notice of adjudication is
premature), the AIAC will not proceed with
registering those cases. In case of doubt,
however, the AIAC will nevertheless proceed

MAY 2020 NEWSLETTER
17 | P a g e
to appoint the adjudicator and have the
adjudicator decide upon the issue. 32.
Functions of AIAC The AIAC shall be the
adjudication authority and shall be
responsible for the following: Setting of
competency standard and criteria of an
adjudicator; Determination of the standard
terms of appointment of an adjudicator and
fees for the services of an adjudicator;
Administrative support for the conduct of
adjudication under this Act; and Any functions
as may be required for the efficient conduct
of adjudication under this Act.
Secondly, the Respondents also conveyed a
desire for the existence of an ad hoc
adjudication process to alleviate the financial
hurdles in initiating an adjudication
proceeding. Presently, the CIPAA 2012
framework does not recognise the concept of
ad hoc adjudication. How this will work in
practice remains unseen. 6. Part VI: General,
Sections 34 – 37 of the CIPAA 2012 Part VI of
the CIPAA 2012 is a general section
encompassing Sections 34 to 37. 41.7% of the
Respondents indicated a need to amend to
this section, with the most notable comment
being on the conditional payment provision.
There seems to be an overwhelming nod in
favour of reforms to the conditional payment
provision. Several Respondents requested
more detailed definitions of conditional
payment in light of recent judicial
developments. Several Respondents also
believed that the CIPAA 2012 should clarify
whether such a provision applies to all types
of construction contracts or only to
construction contracts that fall within the
ambit of the CIPAA 2012.
7. Part VII: Miscellaneous, Sections 38 – 41 of
the CIPAA 2012 With respect to the final Part
of the CIPAA 2012, which contains
Miscellaneous provisions, 58% of the
Respondents believed that amendments were
necessary.
Most of the comments relating to this Part
concerned proposing an additional mode of
service, such as email, fax and private courier.
As of now, the default primary mode of
service under the CIPAA 2012 is by hand
(personal service) or registered post. The push
for amendments might derive from the
emergence of adjudication claims from States
outside the Klang Valley, as well as for
matters from Sabah and Sarawak. In those
situations, having to serve documents by hand
or registered post might not be feasible due
to a lack of geographic proximity. 38. Service
of Notices and Documents Service of a notice
or any other document under this Act shall be
effected on the party to be served— By
delivering the notice or document personally
to the party; By leaving the notice or
document at the usual place of business of
the party during the normal business hours of
that party; By sending the notice or document
to the usual or last-known place of business of

MAY 2020 NEWSLETTER
18 | P a g e
the party by registered post; or By any other
means as agreed in writing by the parties.
8. Reforms to the CIPAA Regulations 2014 By
assent from the Minister of Works, the CIPAA
Regulations 2014 (“Regulations”) became
applicable on the day that the CIPAA 2012
came into force. The Regulations are intended
to supplement the CIPAA 2012 for the better
carrying out of the provisions of the CIPAA
2012.
55.6% of the Respondents believed that the
Regulations needed to be amended, with
most comments dedicated to the criteria of
an adjudicator.
Currently, the Regulations require four (4)
cumulative criteria to become an adjudicator.
The majority of the comments focused on the
first criterion, that is the “experience”
requirement. According to Regulation 4(a),
the competency standard and criteria of an
adjudicator includes the requirement of an
adjudicator to have “working experience of at
least seven years in the building and
construction industry in Malaysia”. 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 AIAC; 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.
There seemed to be a suggestion to expand
the parameter of experience to include
experience acquired outside Malaysia. If this
eventuates, the AIAC foresees an increase in
the number of foreign adjudicators
empanelled as well as an increase in
adjudication cases involving foreign parties. 9.
Reforms to the CIPA Exemption Order 2014
The Construction Industry Payment and
Adjudication (Exemption) Order 2014
(“Exemption Order”) exempts two categories
of Government construction contracts from
the statutory adjudication regime under the
CIPAA 2012.
The first category of exempted contracts is set
out in Schedule 1 of the Exemption Order.
These contracts are exempted entirely from
the operation of the CIPAA 2012.
The second category of exempted contracts is
contained in Schedule 2 of the Exemption
Order. It is only a partial exemption in that it
gives the parties to Government construction
contracts with a contract sum of RM20 million
or less, a longer period for the service of
certain documents, such as the payment

MAY 2020 NEWSLETTER
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response, adjudication response and
adjudication reply, than the time frames
provided under the CIPAA 2012. This
exemption, however, was only to be
applicable until 31st December 2015.
Only 24.4% of the Respondents believed that
Exemption Order needs to be amended, with
notable comments surrounding the relevancy
of the Exemption Order in present times. Few
comments suggested that the Exemption
Order ought to be omitted and/or be
inapplicable. Given that the applicability of
the second category of exempted contracts
has expired, the need to have this included is
a point to be considered. The question which
remains is one relevant to the first category of
exempted contracts. 10. Reforms to the AIAC
Adjudication Rules & Procedure & AIAC
Circulars Shortly after the CIPAA 2012 came
into force, the AIAC issued a set of rules and
procedure called the AIAC Adjudication Rules
& Procedure. These rules and procedures are
to facilitate the efficient administration of
adjudication cases and other matters by the
AIAC under the CIPAA 2012.
In addition, the AIAC has provided a set of
forms to assist and guide intended
participants in the adjudication process under
the CIPAA 2012. These forms are contained in
Schedule 1 of the AIAC Adjudication Rules and
Procedure.
41.9% of the Respondents considered that the
AIAC Adjudication Rules & Procedure require
amendments. Notable comments included
the need to clarify the fee deposit
determination and to clarify withdrawal cost
determination. The Respondents also
indicated that the text of the CIPAA 2012 is
currently unclear on the method to collect the
deposit from the parties and further
clarification on the determination of the
reasonable sum for withdrawal cost is
needed.
48.8% of the Respondents opined that the
AIAC Circulars need to be amended. Most of
the comments suggested that the AIAC be
required to constantly issue an update
regarding judicial developments in
adjudication cases. The AIAC takes note of this
comment and it will endeavor to publish more
adjudication-related developments in our tri-
annual newsletters. 11. Reforms to the Guide
to the CIPAA 2012 The Guide to the CIPAA
2012 differs from the other instruments
outlined above. It is not a legal framework by
nature but it helps to provide a commentary
to the CIPAA 2012 in layman’s terms. In this
regard, only 31% of the Respondents believed
that the Guide to the CIPAA 2012 needed to
be amended, with notable comments being to
ask the AIAC to update the same in light of
recent judicial developments and issuing
guidelines in relation to the SST.

MAY 2020 NEWSLETTER
20 | P a g e
The AIAC takes note of these comments and
the AIAC is quite pleased to have received
them as it goes someway in indicating that
users of the CIPAA 2012 have taken guidance
from or do rely on the Guide to the CIPAA
2012 and expect the same to be updated
regularly.
Between January and March
2020, the AIAC received one
hundred and eighty (180) new
adjudication matters.
BALFOUR BEATTY CIVIL
ENGINEERING LTD & ANOR V
ASTEC PROJECTS LTD [2020] EWHC
796 (TCC)
In Balfour Beatty Civil Engineering Ltd & Anor
v Astec Projects Ltd [2020] EWHC 796 (TCC);
Astec successfully established that it could
provide adequate security and was allowed to
conditionally proceed with an adjudication.
The Defendant established that the
exceptional circumstances envisaged by the
Court of Appeal in Bresco whereunder a Party
in liquidation would not be injuncted from
adjudicating were met. The claim for an
injunction to prohibit the adjudication was
dismissed.
https://www.bailii.org/ew/cases/E
WHC/TCC/2020/796.html

MAY 2020 NEWSLETTER
21 | P a g e
SCL INTERNATIONAL CONFERENCE
2020
The Society of Construction Law 9th
International Conference has been postponed
till November 2021.
The Right Honourable Lord Justice Coulson
will be a keynote speaker at the Conference.
http://www.constructionlaw2021.com/scl21
UK ADJUDICATORS 2020 LONDON
ADJUDICATION & ARBITRATION
CONFERENCE
The 2020 conference takes place on the 20
August 2020 at the IET 2 Savoy Place, London
WC2R 0BL in the 450 capacity Kelvin Lecture
Theatre.

MAY 2020 NEWSLETTER
22 | P a g e
Speakers, chairs and hosts include:
Louise Woods
Marcus Teverner QC
James Doe
Andrew Anglionby
Sean Gibbs
David Sawtell
Matthew Finn
Anthony Albertini
Iain Aitchison
Julie Forsyth
Murray Armes
Virginie Colaiuta
Chris Dyson
Victoria Tyson
Dan Miles
Peter Collie
Dean Sayers
Robert Palles Clark
Don Harvey
Franco Mastrandrea
UKA Panel members can book a reduced-price
ticket through the Eventbrite booking
website. You will be mailed a link for your
own personal use.

UK Adjudicators May 2020 newsletter

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UK Adjudicators May 2020 newsletter