The Construction Industry Payment and Adjudication Act (CIPAA) 2012 was introduced to provide professionals within the construction industry an alternative and faster method of dispute resolution as well as preventing further problems regarding late payment within the industry.
Today, this article will go through the basic terms related to construction adjudication and explain them.
What is adjudication?
Adjudication refers to a statutory dispute resolution method under CIPAA which was enacted to deal with payment claims related to construction work or consultancy services and provide options for payment recovery.
It is different from arbitration and litigation in which the two are commonly the last resort where all parties are ready to terminate the contract. In comparison, adjudication provides a swift neutral decision on dispute where neither party will be unfairly favored.
Here are commonly-used terms in the adjudication process.
Payment Claim: Served by the unpaid party (Claimant) to the non-paying party
Payment Response: Served by the non-paying party (Respondent) to the unpaid party within 10 working days
NOTE: When one party admits to the claim, they are required to state the whole amount as listed. The party disputing the claim will need to state the amount disputed and their reason for doing so.
Notice of Adjudication: Served together with the supporting documents by the claimant
Appointment of Adjudicator: Appointed by agreement between all parties within 10 working days from the Notice of Adjudication or within 5 working days from a receipt requesting for an adjudicator appointment by the director of the Asian International Arbitration Centre (AIAC).
Terms of Appointment: Negotiated and agreed with the adjudicator by all parties within 10 working days
Adjudication Claim: Served together with the supporting documents by the claimant to the respondent and the adjudicator within 10 working days
Adjudication Response: Served together with the supporting documents by the respondent to the claimant and the adjudicator within 10 working days
Adjudication Reply: Served together with the supporting documents by the claimant to the respondent and the adjudicator within 5 working days
Representation: All involved parties may be self-represented or be represented by an outside party, such as solicitors, appointed by them
Adjudication Proceedings: Conducted according to the adjudicator’s directions. Oral evidence may or may not be involved depending on the adjudicator.
Decision: Must be issued according to one of the following:
- Delivered within 45 working days from the service of adjudication response or reply
- 45 working days from the expiration date of the prescribed period for the adjudication response if no adjudication response was received
- A further time as agreed by all involved parties
The adjudication proceeding is binding unless one of the following takes place:
- The proceeding is set aside by the High Court
- The matter has been settled by all involved parties in writing
- The dispute was decided by arbitration or the court
- There is a stay of adjudication decision
The case can be reopened if either or both parties do not agree with the adjudication decision. In such an event, the case is solved through either arbitration or litigation or the termination of the construction contract.
In conclusion, contractors and companies can gain a deeper knowledge regarding CIPAA 2012 by understanding the various terms and processes within the construction adjudication process, ensuring that they receive a speedy dispute resolution solution that is both time saving and cost effective.
