Challenges to Effective Implementation of Statutory Adjudication in Malaysia

Consistent, accurate and timely payments are important to the construction industry. Cash flow, taken as the ‘lifeblood’ of a construction project distinguishes the project’s development and achievements. In recent years, there has been a growing number of disputes arose in a project, many which are issues related to securing payment when it is due. Alternative dispute resolutions have gained their importance as counter measures to these disputes, which includes adjudication. Malaysia is the latest addition in legislating adjudication in the construction industry within Commonwealth countries with the enactment of Construction Industry Payment and Adjudication Act (CIPAA) in 2014. Upholding the same principles to allow for better cash flow in a construction project, CIPAA is seen to be the answer to this long lost battle by deprived claimants. This paper is a review of the background of statutory adjudication in Malaysia, the challenges that is currently faced and its effect to the implementation of statutory adjudication in Malaysia in achieving its core objectives.