Our Partners, T. Kuhendran,Susan Tan Shu Shuen and Koh Shien Lin, together with our Senior Associate, Siew Kai Hwei from our Construction Dispute Resolution practice group, successfully represented a leading Malaysian construction company in six related arbitration proceedings arising from multiple contracts for a large international education campus project.
The disputes involved claims relating to outstanding payments, final accounts, retention sums, alleged defects, delays, extensions of time (“EOT”), liquidated damages (“LAD”) and other related contractual issues. Following extensive hearings involving numerous factual and expert witnesses, six Final Awards were recently issued, resulting in a highly favourable overall outcome for our client.
In the principal arbitration concerning the main construction contract, the employer alleged approximately 4,000 defects and pursued rectification claims of approximately RM50 million. The employer further sought to challenge EOTs previously granted by the project architect and claimed LAD exceeding RM39 million. The Tribunal rejected the overwhelming majority of the employer’s defects claims, upheld the validity of the EOTs granted under the contract, rejected the employer’s LAD claim, and awarded our client approximately RM33 million, together with costs and interest.
In a separate arbitration concerning specialist works, the Tribunal upheld the validity of the completion certification, dismissed the vast majority of the employer’s defect allegations and awarded our client approximately RM4.5 million, together with interest and costs.
A notable feature of both arbitrations was the Tribunal’s acceptance of key legal and evidential arguments advanced on behalf of our client. The Tribunal found that the employer had failed to discharge its burden of proving that most of the alleged defects were attributable to our client. The Tribunal also accepted challenges to the reliability of the employer’s expert evidence and noted the absence of evidence from material project participants. Importantly, the Tribunal declined to award most of the rectification costs claimed by the employer due to its failure to substantiate quantum.
The remaining four arbitrations primarily concerned inter-contract payment allocation and distribution issues and were likewise resolved in our client’s favour.
This matter is notable for the successful defence of extensive defects, delay and LAD claims across six related arbitrations arising from a major international education campus development. Notwithstanding allegations of approximately 4,000 defects, rectification claims of approximately RM50 million and LAD claims exceeding RM39 million, our client secured awards totalling approximately RM54 million.
The awards reflect the Tribunal’s acceptance of key legal and evidential arguments concerning burden of proof, expert independence, causation and quantum, ultimately reinforcing the importance of a disciplined, evidence-based approach in complex construction disputes and highlight the critical role of rigorous legal strategy in testing large-scale defects and delay claims.
