CIPAA IMPLEMENTATION IN THE MALAYSIAN CONSTRUCTION INDUSTRY: FROM CONTRACTOR’S PERSPECTIVES

• Published in: Malaysian Construction Research Journal
• Main Author: Zulkhairi F.H.; Hussin S.N.; Saidin M.T.; Zain F.M.Y.; Hussein E.; Khalil N.
• Format: Article
• Language: English
• Published: Construction Research Institute of Malaysia 2022
• Online Access: https://www.scopus.com/inward/record.uri?eid=2-s2.0-85129731747&partnerID=40&md5=23f7cf282f5d4ea3143e9532da1714c7

Payment disputes is prevalent among construction players and openly recognized as the main problem in construction project. Hence, Construction Industry Payment and Adjudication Act (CIPAA) is introduced in 2014 to create a rapid, efficient and impartial mechanism for resolving construction disputes in Malaysia by implementing the adjudicators' decisions. However, the Asian International Arbitration Centre (AIAC) reported that more than 50% adjudication cases are eventually re-arbitrated and re-litigated, causing further payment delays. This scenario has an unfavorable impact on the contracting parties involved in a construction project including delay in project completion. Therefore, the objectives of this paper is to identify the current implementation of CIPAA, identify the factors contributed to the payment problems, and to determine the limitations of CIPAA in settling disputes of construction projects. A quantitative approach is used in this study; using questionnaire as the survey instrument. The survey was disseminated to 268 nos. of G7 contractors in Kuala Lumpur and Selangor. The results shows that disagreement on the valuation of work done is the main factor that contributes to payment problems. Thus, the implementation of CIPAA allows the disputes parties to remain confidential and helps to improve the cashflow in the construction industry. However, CIPAA's limitations in resolving payment disputes include the non-finality of an adjudication jurisdiction and the competency of the adjudicator.The findings will help in the improvement of dispute resolution in Malaysia through statutory adjudication. © 2022, Construction Research Institute of Malaysia. All rights reserved.