Delay and Non-Payment and Adjudication Act in Remedying the Payment Issues and Providing Dispute Resolution in Construction Industry in Malaysia

Yim, Jian Heng (2021) Delay and Non-Payment and Adjudication Act in Remedying the Payment Issues and Providing Dispute Resolution in Construction Industry in Malaysia. Final Year Project (Bachelor), Tunku Abdul Rahman University College.

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Abstract

The aim of this research is to investigate the phenomena of payment default in Malaysia, by discussing the factors and effects of the said defaults, and reviewing the current effectiveness and limitations of CIPAA 2012, which serves as an act enacted to mitigate the future occurrences of payment defaults and the respective disputes that will deteriorate the status of a typical construction firm. Generally, in Malaysia, most of the construction firms had set multiple objectives in ensuring succeed and sustainability in their businesses, in which a successful and sustainable construction project is often delivered within time, cost and quality. Therefore, it cannot be denied that cash flow management serves as one of the crucial factors in ensuring the prospect above is met. Moreover, Dave Clarke (2014) pinpoints that cash flow is one of the utmost important element towards the lifeblood of a business, in which the occurrence of bankruptcy and liquidation is one of the possible impact when there is negative cash flow being reported. Nevertheless, until nowadays, cash flow management problems in construction industries are still an issue of major concern, as delay and non- payment still occur even though sufficient contractual and administrative provisions had been laid out in Standard Form of Contract Malaysia. Initially, literature review was carried out to understand the causes and effects that channel to the said problems in cash flow management, and to review current effectiveness and limitations of the CIPAA 2012 in remedying the payment issues and along with the adjacent dispute. Similarly, some court cases regarding to the payment problems are incorporated. Subsequently, the ways to collect the required datas are being explained in Research Methodology chapter. Before the datas are being brought into interpretation and analysis, primary datas are obtained by means of issuing open-ended questionnaires to the parties in construction firm in Malaysia and students involved in the relevant field of studies, in order to assess their perceptions on the causes and effects that lead to the said cash flow management problems along with the effectiveness and limitations of CIPAA 2012. The datas obtained are then interpreted by using Stastistical Package for Social Science (SPSS) software, in which the subsequent result will serve as an indicator on how improvements are made to the delay and non-payment problem, along with whether CIPAA 2012 is still effective to be brought into uses in the current construction industry.