The enactment of the Construction Industry Payment and Adjudication Act 2012 (Act 746) (“CIPAA”) which came into force on 15th April 2014 was greeted with much fanfare in Malaysia, particularly amongst those in the construction industry. As provided for in the long title to CIPAA, the introduction of this statute was and is to “facilitate regular and timely payment, to provide a mechanism for speedy dispute resolution through adjudication, to provide remedies for the recovery of payment in the construction industry and to provide for connected and incidental matters.”

Whilst the introduction of CIPAA has been generally been viewed favourably by the construction industry as well as by the legal fraternity, several issues have arisen as a consequence of the manner in which some of the specific statutory provisions within CIPAA have been drafted. To this end, one of the burning issues which has plagued CIPAA since its inception is whether the Act is to be applied retrospectively or prospectively. Given the absence of an express statutory provision within CIPAA addressing this issue, it has been left to the courts in Malaysia to ascertain whether CIPAA is to be applied retrospectively or prospectively particularly given that a number of constructions contracts would have been entered into in writing prior to 15th April 2014.

The courts in Malaysia for a significant period of time arising from the decisions in UDA Holdings Bhd v Bisraya Constructions Sdn Bhd & Anor and another case [2015] 11 MLJ 499, View Esteem Sdn Bhd v Bina Puri Holdings Bhd [2018] 2 MLJ 22 and Bauer (M) Sdn Bhd v Jack-In Pile (M) Sdn Bhd and another appeal [2018] 4 MLJ 640 took conflicting positions. On 16th October 2019, the Federal Court first delivered its decision in Ireka Engineering & Construction Sdn Bhd1 v PWC Corporation Sdn Bhd2 and thereafter delivered its decision in the related appeals in Jack-in Pile (M) Sdn Bhd v Bauer (Malaysia) Sdn Bhd3 by way of Federal Court Civil Appeal No. 02(f)-58-07/2018(B) and Federal Court Civil Appeal No. 02(f)-59-07/2018(B). The decisions of the Federal Court in Ireka Engineering and Jack-in Pile have put the issue of whether CIPAA is to have retrospective effect or is to only apply prospectively to rest.