KUALA LUMPUR: The construction industry in the country will be receiving a boost Tuesday when the Construction Industry Payment and Adjudication Act (Cipaa) 2012 comes into action, which will providing a new legal avenue to resolve cash flow-related problems.
Works Minister Datuk Fadillah Yusof said the implementation of Cipaa 2012 has been approved by the Cabinet and comes into force on Tuesday, in conjunction with the official opening of the Specialised Construction Courts.
"I am confident the implementation of Cipaa will provide significant remedy associated with protracted resolution of construction disputes, delayed payment and non-payment," said Fadillah.
He said the Specialised Construction Courts was essential in expediting construction cases which tended to be technical and complex in nature.
The new courts were officiated in the Duta Court Complex by Chief Justice Tun Arifin Zakaria on Monday, though the specialised courts had been in action since April last year.
He said as of March, 132 cases have been filed to the KL Court and 30 in Shah Alam.
The two courtrooms cost about RM1mil to renovate, with two High Court judges chosen to hear cases there - Datuk Mary Lim Thiam Suan in Kuala Lumpur and See Mee Chun in Shah Alam.
"We believe two courts are sufficient for now, but more will be built as the case load increases. Those in other states can also file in these courts," said Arifin.
Cipaa was passed on June 18, 2012 and gazetted on June 22.
The Act introduces statutory adjudication as a dispute resolution, which provides for the recovery of payment upon the conclusion of the adjudication process, in addition to a host of other remedies.
It includes the right to reduce the rate of work progress or to suspend work or even to secure direct payment from the principal.
The Act further provides default payment terms in the absence of provisions to that effect in the construction contract.