Construction Law

Alliances and Dispute Review Boards: Best Friends or Worst Enemies?

by paula gerber

Gerber, Paula ‘Alliances and Dispute Review Boards: Best Friends or Worst Enemies?’ (2012) 10(1) Australian Journal of Civil Engineering 57-66.

Dispute Review Boards (DRBs) are a very popular dispute avoidance process (DAP) used widely around the world as an... more Dispute Review Boards (DRBs) are a very popular dispute avoidance process (DAP) used widely around the world as an effective tool for ensuring that the conflicts, which invariably arise during the course of construction projects, do not escalate into disputes. DRBs have enjoyed phenomenal success, with 98% of projects that used a DRB being completed with no outstanding disputes. However, Australia has not been part of the global DRB trend. Instead, Australia has embraced an alternative form of DAP, namely, project alliances. While alliances continue to grow in popularity within Australia, this DAP model remains virtually unknown internationally. This article examines why Australia has not embraced DRBs, and whether this country’s enthusiasm for alliances has been at the expense of DRBs, before considering whether there is room for both models of dispute management.

Should DAPs be included in standard form contracts?

by paula gerber

Paula Gerber & Brennan Ong 'Should DAPs be included in standard form contracts?' (2012) 143 Australian Construction Law Newsletter 6-20.

Dispute Avoidance Processes (DAPs), such as Dispute Review Boards (DRBs), Dispute Adjudication Boards (DABs) and... more Dispute Avoidance Processes (DAPs), such as Dispute Review Boards (DRBs), Dispute Adjudication Boards (DABs) and Dispute Resolution Advisors (DRAs) are now a common feature of construction projects around the world. However, Australia has been slow to embrace DAPs. There is no history of DABs or DRAs being used in this country and only modest use of DRBs. The failure of the Australian construction industry to embrace DAPs is surprising given the proven international track record of DAPs in ensuring that construction projects reach completion with no outstanding disputes. One possible explanation for the lack of uptake of DAPs in Australia may be the complete absence of any provisions relating to DAPs in any Australian standard form contract. This article considers how provisions relating to DAPs have been incorporated into standard form contracts in other jurisdictions, whether Australia should follow suit, and if so, how this could be achieved.

ANTICIPATION OF THE ISSUES CONCERNING “DISPUTE” IN STATUTORY ADJUDICATION UNDER CONSTRUCTION INDUSTRY PAYMENT AND ADJUDICATION ACT 2009 (CIPAA) IN MALAYSIA

by Joanna Tay

Presented in the RICS-ISM 3rd International Conference for Undergraduates 2011

Statutory adjudication had been adopted in the United Kingdom under the Housing Grants, Construction Regeneration Act... more Statutory adjudication had been adopted in the United Kingdom under the Housing Grants, Construction Regeneration Act 1996 (HGCRA) with the purpose to resolve the poor payment attitude in construction industry. Malaysia also had embarked on the similar afford in reducing the dispute related to payment in construction industry by proposing the Construction Industry Payment and Adjudication Act (CIPPA). The proposal of CIPAA has been initiated by the construction industry roundtable in June 2004. CIPPA has been drafted by referring to the HGCRA in UK. However, there are issues related to the interpretation of “dispute” arose throughout the years started from the enactment of HGCRA in UK. Therefore, the purpose of this study is to identified the issues related to the interpretation of “dispute” arose under the HGCRA in UK and anticipated those issues in Malaysia’s context under the CIPPA. The cases related to interpretation of “dispute” which heard in the court started after the year which CIPPA is being proposed that is from the year 2005 until 2010 have been analysed. This research is conducted by literature review and case law journals analysis. The outcome of this research is particularly important to acknowledge the construction parties who intend to resolve their dispute through adjudication. The findings of this research shown that there are three out of five issues related to the interpretation of “dispute” under HGCRA which are anticipated may occur in Malaysia under CIPAA. Those issues are on the interpretation of the meaning of dispute, issue on crystallisation of dispute and issue on the scope and extent of the dispute. Meanwhile, two other issues, namely the issue on the singular words of “dispute” under HGCRA and the issue on decided dispute which is prevented to be referred afresh in adjudication is anticipated not to occur under CIPAA in Malaysia. In conclusion, care must take in the implementation of CIPAA 2009 to minimize the argument and to improve the dispute resolution to achieve effective and efficient alternative in solving the construction dispute through statutory adjudication in Malaysia.

Dispute Avoidance Procedures (" DAPs")-The Changing Face of Construction Dispute Management

by paula gerber

How to Stop Engineers from Becoming "Bush Lawyers": The Art of Teaching Law to Engineering and Construction Students

by paula gerber

(2009) 1(4) Journal of Legal Affairs and Dispute Resolution in Engineering and Construction 179

Law forms a core part of most engineering and construction programs. The way that these subjects are taught varies... more Law forms a core part of most engineering and construction programs. The way that these subjects are taught varies dramatically, and too often focuses on trying to teach students complex aspects of the law, such as contract, tort and trade practices. This paper suggests that the aim of including law subjects in construction and engineering degrees needs to be clearly understood as this determines the content of the law subject. It is argued that the reason for including a law subject should be not to teach students the law, but rather to train them to recognise when legal issues arise in their work, and how to respond to such issues. With this aim in mind, a model curriculum is proposed, and insight given into how to most effectively implement such a course.

The legal conditionality of performance bond in Malaysian construction contract

by Azizan Supardi

Azizan Supardi, Hamimah Adnan and Jamaluddin Yaakob
Built Environmental Journal, Volume 4, No. 2, 2007, pp. 11-22

In construction contracts, a 'performance bond' is a bond taken out by the contractor, usually with a bank or... more In construction contracts, a 'performance bond' is a bond taken out by the contractor, usually with a bank or insurance company (in return for payment of a premium), for the benefit of and at the request of the employer, in a stipulated maximum sum of liability and enforceable by the employer in the event of the contractor's default, repudiation or insolvency. There are two types of performance bonds: Conditional bond or default bond; and Unconditional bond or on-demand bond. However, in Malaysia, the question of whether the performance bond in a construction contract is a conditional or an unconditional guarantees is still one of the issues relating to performance bond that has been discussed. Therefore, the objective of this research is to determine the phrase(s) in the Performance Bond in a construction contract that determine whether the performance bond is a conditional or unconditional on demand guarantee. In order to achieve this objective, the research was conducted by analyzing relevant court cases. From the findings, it can be concluded that unless an undisputed meaning of the words in the performance bond to make the performance bond to be purely conditional or unconditional 'on-demand' bond, most court interpreted performance bond to be an on-demand performance bond which is only conditional upon the beneficiary asserting the basis of the claim upon the issuer of the bond contending that there has been breach of contract.

Security of payment in Malaysian construction industry: issues on sub-contract's direct payment

by Azizan Supardi

Azizan Supardi and Hamimah Adnan
3rd International Conference on Mechanical and Electrical Technology, Dailan, China, 26-27 August 2011, pp. 407-412

In Malaysia, sub-contractors have to bear with the current structure of payment mechanisms in the standard forms of... more In Malaysia, sub-contractors have to bear with the current structure of payment mechanisms in the standard forms of contract, which are payment upon certification, direct payment from the employer, and contingent or conditional payment. However, „direct payment‟ provision is applied for in most of the nominated sub-contracts and not to the domestic sub-contractors; thus the Construction Industry Payment and Adjudication (CIPA) Act is proposed. This paper, though, is to disclose the findings on legal cases and sub-contractors‟ perspective on direct payment, by preliminary analyzing the quantitative questionnaire survey to the first 81 from the identified 1,500 sub-contractors throughout the country. Before that, from 186 cases, only 5 selected cases are analysed that thoroughly addressed the judgment of direct payment. It is found out that the particularly small sized subcontractors are definitely need to enhance their knowledge of the so-called the „Security of Payment‟ Regime to benefits from the proposed Act

The adequacy of Malaysian security of payment legislation for sub-contractors in construction industry

by Azizan Supardi

Azizan Supardi, Hamimah Adnan and Mohammad Fadhil Mohammad
Sixth International Conference on Construction in the 21st Century, Kuala Lumpur, Malaysia, 5-7 July 2011, pp. 677-684

In Malaysia, the particularly small sized subcontractors are definitely benefited from payment provisions in the... more In Malaysia, the particularly small sized subcontractors are definitely benefited from payment provisions in the proposed Construction Industry Payment and Adjudication Act (CIPA Act). However, they need to enhance their knowledge of the so-called the ‘Security of Payment’ Regime to benefits from the Act. Due to this, this on-going research attempts to introduce payment framework to the sub-contractors, in giving the knowledge, to claim for payment. This paper, though, is to disclose the finding of the level of knowledge that the sub-contractors have to the proposed Act, by preliminary analyzing the quantitative questionnaire survey. It was found that the adequacy of security of payment framework to the particularly small sized sub-contractors needs to be produced, and the analysis on effectiveness of the various avenues incorporated in the construction contract or statutes in the other developed countries as well as the proposed Act needs to be done. However, as long as the regime remains in proposal, the sub-contractors have to bear with the current structure of payment mechanisms in the standard forms of contract, which are payment upon certification, direct payment from the employer, and contingent or conditional payment.

Security of Payment in Malaysian Construction Industry: Eradication of Sub-contract's Contingent Payment

by Azizan Supardi

Azizan Supardi and Hamimah Adnan
International Conference on Energy, Environment, Entrepreneurship, Innovation, Lanzarote, Canary Islands, Spain, 27-29 May 2011, pp. 116-121

In Malaysia, the sub-contractors have to bear with the current structure of payment mechanisms in the standard forms... more In Malaysia, the sub-contractors have to bear with the current structure of payment mechanisms in the standard forms of contract, which are payment upon certification, direct payment from the employer, and contingent or conditional payment. However, with.the proposed Construction Industry Payment and Adjudication Act (CIPA Act), contingent payment will be no longer valid. This paper, though, is to disclose the findings on legal cases and sub-contractors’ perspective on contingent payment, by preliminary analyzing the quantitative questionnaire survey to the first 79 from the identified 1,500 sub-contractors throughout the country. Before that, from 186 cases, only 3 selected cases are analysed that thoroughly addressed the main issue of contingent payment. It is found out that the particularly small sized subcontractors are definitely benefited from payment provisions in the proposed Act. However, they need to enhance their knowledge of the so-called the ‘Security of Payment’ Regime to benefits from the proposed Act.

Legal Comparison Between Conditional And Unconditional On Performance Bond In Malaysian Construction Contract

by Azizan Supardi

Azizan Supardi, Hamimah Adnan and Jamaluddin Yaakob
International Surveying Research Journal, Volume 1, No. 1, 2011, pp. 45-55

In Malaysia, during the research period of 20 years since the famous case of Teknik Cekap Sdn Bhd v Public Bank Berhad... more In Malaysia, during the research period of 20 years since the famous case of Teknik Cekap Sdn Bhd v Public Bank Berhad [1995] 3 MLJ 449 to Suharta Development Sdn Bhd v United Overseas Bank (M) Bhd & Anor [2005] 2 MLJ 762, the question of whether the performance bond in a construction contract is a conditional or an unconditional guarantees is still one of the issues relating to performance bond that has been discussed much of the time. Therefore, the objective of this paper is to determine the phrase(s) in the Performance Bond in a construction contract that determine whether the performance bond is a conditional or unconditional on demand guarantee. In order to achieve this objective, this pure legal research was conducted by content analyzing relevant court cases. From the findings, it can be concluded that unless an undisputed meaning of the words in the performance bond to make the performance bond to be purely conditional or unconditional ‘on demand’ bond, most court interpreted performance bond to be an on-demand performance bond which is only conditional upon the beneficiary asserting the basis of the claim upon the issuer of the bond contending that there has been breach of contract.

Security of Payment in Malaysian Construction Industry: Sub-contract 'Payment Upon Certification'Cases

by Azizan Supardi

Azizan Supardi and Hamimah Adnan
2nd International Conference on Construction and Project Management, Singapore, 16-18 September 2011, pp. 220-224

In Malaysia, the sub-contractors have to bear with the current structure of payment mechanisms in the standard forms... more In Malaysia, the sub-contractors have to bear with the current structure of payment mechanisms in the standard forms of contract, which are payment upon certification, direct payment from the employer, and contingent or conditional payment. However, ‘payment upon certification’ provision mostly applied for nomiinated sub-contracts and not to the domestic sub-contractors; thus the Construction Industry Payment and Adjudication (CIPA) is proposed. This paper, though, is to disclose the findings on legal cases and subcontractors’ perspective on payment upon certification, by preliminary analyzing the quantitative questionnaire survey to the first 81 from the identified 1,500 sub-contractors throughout the country. Before that, from 186 cases, only 12 selected cases are analysed that thoroughly addressed the main issue of payment upon certification. It is found out that the particularly small sized subcontractors are definitely need to enhance their knowledge of the so-called the ‘Security of Payment’ Regime to benefits from the proposed Act.

Performance bond: conditional or unconditional

by Azizan Supardi

Azizan Supardi, Jamaluddin Yaakob and Hamimah Adnan
2nd Construction Industry Research Achievement International Conference, Kuala Lumpur, Malaysia, 3-5 November 2009

In construction contracts, a 'performance bond' is a bond taken out by the contractor, usually with a bank or... more In construction contracts, a 'performance bond' is a bond taken out by the contractor, usually with a bank or insurance company (in return for payment of a premium), for the benefit of and at the request of the employer, in a stipulated maximum sum of liability and enforceable by the employer in the event of the contractor's default, repudiation or insolvency, as stated by Nigel M Robinson et. al. in his book, Construction Law in Singapore and Malaysia. He further added that there are two types of performance bonds: Conditional bond or default bond; and Unconditional bond or on-demand bond. However, in Malaysia, for the past 20 years and since the famous case of Teknik Cekap Sdn Bhd v Public Bank Berhad [1995] 3 MLJ 449 to the recent Suharta Development Sdn Bhd v United Overseas Bank (M) Bhd & Anor [2005] 2 MLJ 762, the question of whether the performance bond in a construction contract is a conditional or an unconditional guarantees is still one of the issues relating to performance bond that has been discussed. Therefore, the objective of this research is to determine the phrase(s) in the Performance Bond in a construction contract that determine whether the performance bond is a conditional or unconditional on demand guarantee. In order to achieve this objective, the research was conducted by analyzing relevant court cases. From the findings, it can be concluded that unless an undisputed meaning of the words in the performance bond to make the performance bond to be purely conditional or unconditional 'on-demand' bond, most court interpreted performance bond to be an on-demand performance bond which is only conditional upon the beneficiary asserting the basis of the claim upon the issuer of the bond contending that there has been breach of contract.

Legal Analysis on Malaysian Construction Contract: Conditional versus Unconditional Performance Bond

by Azizan Supardi

Azizan Supardi, Hamimah Adnan and Jamaluddin Yaakob
Journal of Politics and Law, Volume 2, No. 3, 2009, pp. 25-34

In Malaysia, the question of whether the performance bond in a construction contract is a conditional or an... more In Malaysia, the question of whether the performance bond in a construction contract is a conditional or an unconditional guarantees is still one of the issues relating to performance bond. Therefore, the objective of this research is to determine the phrase(s) in the Performance Bond in a construction contract that determine whether the performance bond is a conditional or unconditional on demand guarantee. In order to achieve this objective, the research was conducted by analyzing relevant court cases. From the findings, it can be concluded that unless an undisputed meaning of the words in the performance bond to make the performance bond to be purely conditional or unconditional 'on-demand' bond, most court interpreted performance bond to be an on-demand performance bond which is only conditional upon the beneficiary asserting the basis of the claim upon the issuer of the bond contending that there has been breach of contract.

Sub-Contractors' readiness on the Malaysian security of payment legislation in construction industry

by Azizan Supardi

Azizan Supardi. Hamimah Adnan and Mohammad Fadhil Mohammad
International Conference on Construction and Project Management, Chengdu, China, 16-18 November 2010, pp. 248-252

In Malaysia, subcontractors are definitely benefited from payment provisions in the proposed Construction Industry... more In Malaysia, subcontractors are definitely benefited from payment provisions in the proposed Construction Industry Payment and Adjudication Act (CIPA Act). However, the particularly small sized sub-contractors need to enhance knowledge of the so-called the ‘Security of Payment’ Regime to improve their awareness of the benefits of the Act. Due to this, this on-going research attempts to introduce balance and proper guidelines to the sub-contractors, in giving the knowledge, to claim for payment and the main contractors able to make prompt payments. Before that, the research may first identify the payment provisions in the standard forms of contracts as well as in domestic sub-contracts especially on Contingent Payment, and exploring the problems and legal issues relating to payment default. Then, by determining the level of knowledge that the sub-contractors have to the proposed CIPA Act, and analysing the various avenues which improve the payment problem in the construction industry those have been incorporated in the construction contract or statutes in the other developed countries as well as the proposed CIPA Act, the aim may be achieved. The purpose of this paper, though, is to disclose the finding of the first objective of the on-going research. In the standard forms of construction contracts, currently, the payment structure to the sub-contractors are divided into three: payment upon certification, direct payment from the employer, and contingent payment or conditional payment. As long as the Malaysian ‘Security of Payment’ Regime remains in proposal, the sub-contractors have to bear with the current structure of payment mechanisms.

Security of Payment Regime in Construction Industry: Are Malaysian Sub-Contractors Ready?

by Azizan Supardi

Azizan Supardi, Hamimah Adnan and Mohammad Fadhil Mohammad
The Built & Human Environment Review, Volume 4, Special Issue 1, 2011, pp. 122-137

In Malaysia, the particularly small sized sub-contractors are definitely benefited from payment provisions in the... more In Malaysia, the particularly small sized sub-contractors are definitely benefited from payment provisions in the proposed Construction Industry Payment and Adjudication Act (CIPA Act), but need to enhance their knowledge in order to improve their awareness of the benefits of the Act. Accordingly, this on-going research attempts to introduce proper guidelines to the sub-contractors, in giving the knowledge, to claim for payment. Firstly, the research explored the problems and legal issues relating to payment default in law cases and standard forms of contract. By downloading from the Malayan Law Journal, cases that indicated the issues of payment to the subcontractors, were analyzed. It is found that on its relevancy, the adjudicator shall be equipped enough with the knowledge on the issues to become a good and reliable adjudicator, as well as sub-contractors will need to enhance their knowledge on the issues of payment in order to be successful in benefitting the proposed CIPA Act. However, as long as the CIPA Act remains in proposal, the sub-contractors have to bear with the knowledge of the current structure of payment mechanisms in the standard forms of contract, which are payment upon certification, direct payment from the employer, and contingent or conditional payment.

Dispute Avoidance Processes (DAPs) In Australia — Bringing The Future Into The Present

by paula gerber

Ong, Brennan and Gerber, Paula ‘Dispute Avoidance Processes (DAPs) In Australia—Bringing The Future Into The Present’ (2011) 141 Australian Construction Law Newsletter 51-59.

Dispute Avoidance Processes (DAPs) such as Dispute Review Boards (DRBs), Dispute Adjudication Boards (DABs) and... more Dispute Avoidance Processes (DAPs) such as Dispute Review Boards (DRBs), Dispute Adjudication Boards (DABs) and Dispute Resolution Advisors (DRAs) are becoming commonplace on major construction and infrastructure projects around the world. This is not surprising given that DAPs have a proven track record of assisting parties to complete their major projects within time, within budget and without outstanding disputes.  However, it is becoming increasingly obvious that Australia has not yet fully embraced DAPs, and is not part of the global DAPs movement. This is surprising, given that a recent study revealed that $7 billion is being expended annually in connection with construction disputes in Australia.  Given this degree of wastage, one would have thought that the Australian construction industry would be at the forefront of efforts to reduce disputes. 

Die Reform des ukrainischen öffentlichen Baurechts

by Leonid Shmatenko

To be published

Das neue ukrainische Gesetz „Über städtische  Bebauungsaktivitäten“, welches im Februar 2011 unterzeichnet,... more Das neue ukrainische Gesetz „Über städtische  Bebauungsaktivitäten“, welches im Februar 2011 unterzeichnet, jedoch erst am 12. März 2011 in Kraft getreten ist, versucht das alte bürokratische und zentralistische Gesetz durch ein moderneres und unbürokratischeres zu ersetzen. Der nachfolgende Artikel widmet sich dem neuen Gesetz und stellt die Änderungen von ebendiesem dar.

Construction Dispute Review Boards

by paula gerber

DAPs: A flash in the pan or here to stay?

by paula gerber

Paula Gerber & Brennan Ong 'DAPs: A flash in the pan or here to stay?' (2011) 23 (8 & 9) Australian Construction Law Bulletin 122

Feeling Combative? Let's Dance: Dispute Avoidance Processes

by paula gerber

Paula Gerber & Brennan Ong 'Feeling Combative? Let's Dance: Dispute Avoidance Processes' (2011) 85(12) Law Institute Journal 32