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CIPAA’s direct payment from employer: 4 conditions to be satisfied

There are 4 conditions to be satisfied in an application for direct payment from an employer per Section 30 of the Construction Industry Payment And Adjudication Act 2012. In TRI PACIFIC ENGINEERING SDN BHD v. KL ECO CITY SDN BHD [2026] MLRAU 110, the Court of Appeal held that:

 

“[22] It has been widely accepted that the case of Cabnet Systems (M) Sdn Bhd v. Dekad Kaliber Sdn Bhd & Anor [2020] 3 MLRH 83; [2020] 3 AMR 257 has laid down the conditions which must be fulfilled for an application under sec 30 CIPAA to be satisfied. In that case Wong Kian Kheong J (now JCA) had held, "[29] I am of the following view regarding the application of s 30 CIPAA: (1) a party (X) who has obtained an adjudication decision against another party (Y), may claim for the adjudicated amount from Y's principal (Z) if the following four conditions are satisfied (4 Conditions)- (a) Y has failed to pay the adjudicated amount to X [please see s 30(1) and (3)CIPAA] (1st Condition); (b) X has made a written request for Z to pay the adjudicated amount directly to X (X's Written Request) [please refer to s 30(1) CIPAA] (2nd Condition); (c) there is a sum of money due from Z to Y at the time of Z's receipt of X's Written Request [please see s 30(5) CIPAA] (3rd Condition); and (d) Z did not comply with X's Written Request and did not pay the adjudicated amount directly to X (4th Condition); and (2) if Z pays the adjudicated amount directly to X, by reason of s 30(4) CIPAA, Z may recover the adjudicated amount from Y as a debt or set-off."

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