Prior to CIPAACT SOLUTION SDN BHD’s current journey, we have our existing clients excitedly talked to us that there is a legislation that would help the contractors to pursue their construction payment disputes but did not actually know “what is CIPAA?” or “what is Adjudication?”. That was when our story began.
It is one of our motto that we must be able to understand and be able to explain to the clients as well as to the public on “what is CIPAA”? This talk of the town “CIPAA” is actually an abbreviation of the “Construction Industry Payment & Adjudication Act 2012” which is an Act passed by the Parliament in 2012 that comes into operation on 15 April 2014, with the aims to help the contractors who experience Under Payment, Late Payment and/or Non-Payment issues in their project to recover their payment from the non-paying party through simpler, quicker, cheaper, legally binding and enforceable resolution enabled by an adjudication proceeding, that involves an independent third party who considers the claims of both parties (the Unpaid party and Non-paying party) and making a decision on the recovery of payment upon the conclusion of process.
So, what is CIPAA and what is its scope?
1. It covers extensive type of works in the construction industry (inclusive of construction services contract, construction consultancy contract and procurement of construction materials, equipment and workers), based on the construction contracts that are made in writing.
2. It is applicable to the construction works carried out wholly or partly in Malaysia, including a construction contract entered into by the Government. It is also applied to both local and international contracts; however, the subject of the construction work must be carried out wholly or partly in Malaysia.
3. However, it is not applicable to contract entered into by a natural person for construction of building which is less than 4 storey and which is intended for his own occupation.
4. The Act is also not applicable for Government contracts for any construction works that involve emergency, unforeseen circumstances and that relate to national security or security related facilities.
As CIPAA develops, we develop. If you or your contractor friends face construction payment issues, we are here to help.
