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Knowledge-Sharing: Construction Contracts Management and Arbitration

Tuesday, 27 November 2018, Kuching – Being in the construction industry, we ask ourselves how much do we really know about CIPAA? Are we aware of the current trends in dispute resolution? What do we know about arbitration of construction contracts? As part of efficient project management and delivery, we indeed should and need to know about the subject matter of dispute resolution in construction contracts!

The above questions and more were discussed during a highly interactive in-house Knowledge-Sharing session on the topic “Arbitration: Strategic & Efficient Management of Issues in the Construction Industry”, held by Lebuhraya Borneo Utara (LBU) last Friday, 23 November, in Kuching.

The session was presented by reknown Malaysian law firm Lee Hishammuddin Allen & Gledhill (LHAG). It was attended by some 35 participants from LBU HQ, CMT, as well as key stakeholders from MIDT and JKRS. Also present were LBU MD Haji Mohamad Zaidee Abang Hipni and CEO Ir Safuani Abdul Hamid.

The knowledge-sharing session covered 3 main topics – on management of construction contracts, on arbitration, and lastly on the Construction Industry Payment and Adjudication Act 2012 (CIPAA) which came into effect in 2014.

The evaluation of tenders, understanding risks and liabilities, procedures with regard to variations, and Extension of Time (EOT) issues were covered. Also touched on were dealing with termination, enforcement of liquidated and ascertained damages (LAD), and practical dispute resolution mechanisms.

Peppered with examples, the team from LHAG demonstrated the importance of keeping adequate documentation, and stressing on the need to be time sensitive in responding to requests and claims.

For Ainor Khaliq Anuarudin, LBU’s General Counsel, “The main take-away from the special talk by LHAG is that we must always refer to the Contract Documents in administrating the construction works. We should not wait only if there are issues, as it may be too late. Good documentation management and record-keeping are essential as it may determine whether you win or lose an arbitration or CIPAA adjudication.”

For Haji Mohd Zam Deraman, Head of Contracts (CMT), the session was indeed useful. “It was an eye-opener. It will be more beneficial to us if we can have dedicated session with the same legal team so they can cite previous arbitration cases relevant to our project, and share more on how to properly and tactfully handle cases coming our way”, said Haji Mohd Zam.