International Construction Law Review
CONSTRUCTION INDUSTRY PAYMENT AND ADJUDICATION LEGISLATION: THE CHOICE THAT LIES AHEAD FOR MALAYSIA
ADAM CONSTABLE
Barrister, Keating Chambers
On 13 and 14 September 2005, an International Forum shortly entitled “Construction Industry Payment Act and Adjudication—a Small Step Towards Zero Payment-Default but a Giant Leap Towards Greater Efficiency” was held in Kuala Lumpur, Malaysia. The event was organised by the Construction Industry Development Board of Malaysia and the Institution of Surveyors, Malaysia, and supported by the Kuala Lumpur Regional Centre for Arbitration. The conference was attended by speakers from the UK, Singapore, New Zealand, Australia and Hong Kong. All but Hong Kong have in place legislation providing for a payment regime within construction contracts, together with some form of adjudication. Malaysia does not—yet.
The purpose of the Forum was to promote discussion and debate about the varied schemes adopted by the each of the jurisdictions, with a view to assisting interested parties in Malaysia from the industry, government and professional bodies in their consideration of whether a payment Act should be introduced. The Forum was given an unexpected boost in the opening hour when the Malaysian Minister for Works announced in his official opening speech that it was the intention of the Malaysian Government to introduce a construction payment and adjudication Act. The first question —whether such legislation should be introduced—had therefore been answered before the first session. The real focus therefore was upon understanding the differences between how each jurisdiction had approached the legislation and what lessons might be learnt from the way in which the Acts had been embraced, or otherwise, within the respective industries.
The Housing Grants, Construction and Regeneration Act 1996 introduced a statutory payment and adjudication scheme to the UK construction industry, in effect from May 1998. The fundamental purpose of the legislation was to meet the need for prompt payment in the construction industry. New South Wales, Australia, was the first jurisdiction to introduce legislation to meet the same industry problem, but did so in a very different way. Other Australian states, including Victoria and Queensland, have both followed the NSW model, as, much more recently, have legislators in Singapore, whose Building and Construction Industry Security of Payment Act 2004 came into force on 1 April 2005. By contrast, New Zealand
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Construction Industry Payment and Adjudication Legislation
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