Faculty of Engineering, Technology and Built Environment

School of Architecture and Built Environment

Bachelor Of Quantity Surveying (Hons)

Course Name:
BEQ2083 Construction Law and Dispute Resolution 2

Assignment Title:
Assignment 1

Student Name & Matric Number:

Adrian Bong Yew Chung (1002162657)

Lecturer:
Sir Muhammad Ariffuddin Arifin

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Table of Content

Contents
Table of Content ........................................................................................................................ 2

1.0 Introduction .......................................................................................................................... 3

2.0 Causes of conflict in construction industry .......................................................................... 3

3.0 Legal issues in construction contracts.................................................................................. 3

4.0 Alternative Dispute Resolution (ADR) ................................................................................ 4

4.1 Arbitration................................................................................................................................... 5

4.1.1 Process and mechanism in PAM Contract 2018 ....................................................... 5

4.1.2 Process and mechanism in PWD 203A ..................................................................... 6

4.1.3 Process and mechanism in AIAC Standard Form of Contract .................................. 7

4.1.4 Process and mechanism in FIDIC Construction Contract 2nd Edition 2017.............. 8

4.2 Mediation .................................................................................................................................... 8

4.2.1 Process and mechanism in Mediation ....................................................................... 8

4.2.2 Process and mechanism in PWD 203A ..................................................................... 8

4.2.3 Process and mechanism in AIAC Standard Form of Contract .................................. 9

4.3 Adjudication ............................................................................................................................... 9

4.3.1 Process and mechanism in PAM Contract 2018 (With Quantities) ........................ 10

4.3.2 Process and mechanism in AIAC Standard Form of Contract ................................ 10

4.3.3 Process and mechanism in FIDIC Construction Contract 2nd Edition 2017............ 10

5.0 Comparison of Standard Form of Contract between PAM Contract 2018 (with quantities),
PWD 203A, AIAC Standard Form of Contract, and FIDIC Construction Contract 2nd Edition
2017.......................................................................................................................................... 11

6.0 Conclusion ......................................................................................................................... 13

References ................................................................................................................................ 14

Turnitin Report......................................................................................................................... 17

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1.0 Introduction
Construction Industry brings huge impact to the country economy. Hence, it cannot be denied
that the construction industry plays an important role to enhance the economy of Malaysia.
Before the construction has begun, there must be five requirements to form a valid contract
including Consideration, Mutual Assent, Offer and Acceptance, capable parties, and legal
purpose. The Malaysia law were referring to the Contract Act 1872 from India and in line with
the common law in United Kingdom which was the Contract Act 1950 (Jalil & Pointon, 2004).
The provisions of this law have become more like the applicable contract law in the United
Kingdom as it was amended in 1974. According to Ho (2010), the standard form of contract
that are used today in Malaysia are PAM 2018 (with quantities), PWD 203A, and FIDIC
construction contract. PAM 2018 (with quantities) stands for “Pertubuhan Arkitek Malaysia”,
PWD refers to “Public Work Department”, while the FIDIC contract stands for “The
International Federation of International Engineers”. All of the standard form of contracts as
mentioned before consists of clauses of termination/determination, delay and disruption
protocol, as well as other dispute resolution. In order to overcome the dispute in the
construction industry, the quantity surveyors are compulsory to master the knowledge on both
the contractual and legal aspects of any dispute. Hence, quantity surveyor should be able to
identify legal issues in construction contracts and able to explain potential dispute resolution
mechanism that is applicable to resolve disputes between the construction participants.

2.0 Causes of conflict in construction industry

According to the findings (Jaffar et al., 2011), the origin of problems should be first discovered
and investigated in order to avoid the conflict and dispute in construction industry. (Jaffar et
al.,(2011); Hohns, H. M. (1979)) mentioned that the five main categories of construction
disputes include consumer reaction and people involved, defects or omission in the contract
documentation, changed condition, professionals who are failed to calculate the cost at the
beginning of the project, and existence of errors. Specifically, these disputes lie onto the three
main issues which are technical problems, contractual problems, and behavioral problems.

3.0 Legal issues in construction contracts

The construction Industry is well-known to be a high-risk industry compared as other sectors
such as manufacturing sector, agriculture sector and many more around the globe. The main
reason that the construction industry is very risky and consists of lots of disputes as the timeline
of a construction project is very short which is only around two to five years. Not only that, the
construction contract is very short and therefore the dispute escalated very fast. When the

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construction company has some disputes, they can refer to the court as the main dispute
resolution while arbitration, adjudication, and mediation will be the alternative dispute
resolution. The two common legal issues in Malaysia are delays and payment issue.

According to Boon et al. (2021), the delays will mostly likely to happen in most countries, even
developed countries and Malaysia is no exception. Although there has been a lot of research
on building delays, this enduring issue still affects the construction sector globally. The first
factor that cause the delay in Malaysia is the competency management. The Malaysia
construction company should be able to ensure the sub-contractors and the suppliers are able
to work together to increase the performance of the project. However, the Malaysia
construction industry has low competency management which makes the project has low-
productivity and the contractor-related issue will increase which makes the quality of the work
is very low. Not only that, the design changes during building production is also causing the
project to delay as the teams are inexperienced which can extend the duration. The second main
factor is the miscommunication and poor coordination management. (Boon et al. (2021);
Zidance and Andersen (2018)) mentioned that the construction industry is suffering from the
task that divided into many parts which will increase the percentage of miscommunication.
This will cause the conflict and claim during the production of the building.

According to Azhari Azman et al., (2014), the payment issue can be mentioned as one of the
main issues in the construction industry in Malaysia for a long time. The most common reason
for the payment in the construction industry is mostly between the contractor and client as the
employer would likely to postpone the payment to contractor. If this issue is keep happening
and the payment is not made, the serious knock down cash flow will happened. The factors that
caused the non-payment and late-payment in the construction industry are poor financial
management from the client, the action of client which refuse to do payment even after due
date, both parties have conflict, the use of pay when paid clause in sub-contractor, the attitude
of local construction worker, short of current year project, delay of certification, disagree on
the valuation of the work done, contractual provisions, and technical problem.

4.0 Alternative Dispute Resolution (ADR)

According to Arun et al., (2022), the alternative dispute resolution in Malaysia are arbitration,
adjudication, and mediation.

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4.1 Arbitration
The arbitration can be defined as one of the dispute resolutions in which both parties agree to
appoint an arbitrator to undergo the dispute privately instead of going to the court. Specifically,
it is less formal than litigation and arbitrator can make decision for the dispute that has been
stated by both parties which also acts as a private judge (Lim, 2016). The arbitration can make
the decision just like a judge but is faster, cheaper and does not need to go to court which is
shown publicly. The arbitration process is carried out in a judicial manner which is the court
‘trial’ but if the dispute still cannot be solved, then the parties need to appoint a 3rd arbitrator
which is known as umpire which is neutral to make the decision.

4.1.1 Process and mechanism in PAM Contract 2018

In PAM Contract 2018 (with quantities), the clauses of arbitration is under clause 37.0. When
the dispute between the client and the contractor has arisen during the progress or after
completion, the parties is legal to refer to the arbitration when any dispute is in connection with
the contract, any topic the contract leaves up to the architect's judgement, any certificate that
the contractor may claim they are entitled to but that the architect refuses to issue, Similar to
mediation, when one of all parties is unable to appoint the arbitrator after 21 days, the President
of PAM will help to appoint an arbitrator and the appointed arbitrator must obey the Arbitration
Act 2005 and the PAM Arbitration Rules. Based on clause 37.4, the power that the arbitration
has in the PAM contract 2018 (with quantities) are they can amend the contract which satisfy
both employer and the contractor. Secondly, the arbitrator that based on the PAM contract 2018
has the full power to make decision to determine the right of the parties to direct such
measurements and/or valuation in his opinion. They also have the power to determine the
amount that should have been the subject of or contained in any certificate, and determine the
disputes from the parties that submitted to them if there is no progress. The arbitrator that obeys
the PAM contract 2018 (with quantities) is being allowed to grant interest from certain dates
at certain rates and with certain rests as he thinks fit in regards to any time frame up until the
award date on the part or all the amount awarded. Not only that, they are able to claim part or
all the amount in the arbitration in any time before the payment but they must be paid before
receive the award.

However, the process of the arbitration is that the commencement shall not be held until after
the completion of work, alleged practical completion of work or determination or alleged
determination of contractor employment unless there are disputes that related to clause 31.0
which is outbreak of hostilities and clause 32.0 which is war damage, the certificate is

5
improperly refused to give based on contract and the payment of contractor has been refused
to give by the client and did not follow the timeline. The process of arbitration can be started
once one of the parties has submitted the form that requested by PAM to appoint an arbitrator;
however; before that, the requirement that parties need to appoint an arbitrator is the name and
location of the arbitration, copies of arbitration clause, the brief description about the current
dispute by both parties, the lists of arbitrator by claimant and the arbitrator is appointed by the
claimant. The arbitration in PAM Contract 2018 (with Quantities) shall held the process
neutrally and impartially as between the parties and parties should given the chance to explain
his explicit and dealing with that of his opponent and arbitrator should settle the dispute as soon
as possible to save time and cost. All the documents and information from both parties should
supplied to the arbitrator simultaneously. The Arbitrator award shall be final and binding to the
parties.

4.1.2 Process and mechanism in PWD 203A

In PWD 203A, the clauses for the arbitration are under clause 66.0. When the dispute between
the client which is the Government and the Contractor related or not related to the construction
contract, the parties is legal to refer the dispute to the officer named in Appendix for making
decision and the officer must obey to clause 66.4 which mentioned that any disputes under
clause 51 default of obligations such as, events of defaults, termination, and consequences of
termination. However, the arbitration process can only be held after the completion of the
construction project. Not only that, From the date of the written notice to concur on the
appointment of the arbitrator, the parties that based on the PWD 203A is given 45 days.
However, if the parties failed to appoint an arbitrator in 45 days, the Director of the Regional
Centre for arbitration in Kuala Lumpur will appoint an arbitrator for them and the arbitrator
that appointed must obey the rules for arbitration of the Kuala Lumpur Regional Centre for
Arbitration while conducting both parties. In clause 66.7, it mentioned that the arbitrator should
have the wisdom to determine the amount of any incidental costs or amount to be taxed between
solicitor and client or as between party and party. One significant clause in PWD 203A
mentioned that if the arbitrator is unable due to the death or unwilling to act, the Government
and the Contractor is needed to appoint a new arbitrator again. If they failed, the Regional
Centre for Arbitration in Kuala Lumpur will hire a new arbitrator for them. The arbitrator that
appointed should obey the Arbitration Act 2005 and the laws of Malaysia. The Arbitrator award
shall be final and binding to the parties.

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4.1.3 Process and mechanism in AIAC Standard Form of Contract
In AIAC Standard Form of Contract, the clauses for arbitration in clause 34.0. When the dispute
between the Client and the Contractor has arisen, the parties can undergoes the arbitration
process using the AIAC Arbitration Rules and the legal place of arbitration process shall only
be Malaysia. All the powers of the arbitrator that based on the AIAC Standard Form of Contract
are referred to the AIAC Arbitration Rules and Arbitration Act 2005. In the AIAC Standard
form of contract, the arbitration process can be held after the so-called Practical Completion of
works or Practical Completion, determination or alleged determination of Contractor’s
employment and termination of contract, and lastly the abundant of construction works.
However, the exception are the proposal made by the Contract Administrator (CA) must
identify the dispute and make sure to fulfil the condition based on clause 31.0 or 32.0. Next,
Contract Administrator is also compulsory to make a certificate that improperly refuse to give
or otherwise did not fulfil the condition or the payment that the contractor wish to claim has
been refused or rejected. Any arbitration that takes place while the Works are being completed
shall not modify the Parties' or the CA's duties. Moreover, the clause of AIAC Standard Form
of Contract for arbitration is also included clause 34.4 which is CA as Witness. Before the
arbitrator(s) is related to any dispute refers to the arbitration, The clause explains that the
Contract Administrator should not be disqualified as the witness and giving evidence. Lastly,
the award that is made by arbitration is finalized and binding on the parties.

Whenever the parties would like to undergo the arbitration under AIAC Arbitration Rules, they
shall submit the “Commencement Request” to the director of AIAC and the request shall be
included the arbitration clauses that has copied, a copied version of contractual documentation
which arbitration clause is included, a copied version of the notice of arbitration, and the non-
refundable payment statement which is 795 usd equivalent to RM3503.96 for international
arbitration, domestic arbitration will be priced at RM 1590.00. If the parties has not appointed
an arbitrator within 30 days from the day they receive the notice, they can apply to the Director
of AIAC to appoint an arbitrator for them. The parties has the full freedom to decide the number
of arbitrators and if they failed to do so, three arbitrators shall be fixed for international
arbitration and one arbitration for domestic arbitration. If the parties have agreed to appoint
three arbitrators, then one party should appoint one arbitrator and the two appointed arbitrators
should need to search for the third arbitrator which is known as umpire. During the process of
arbitration, the arbitrator has the freedom to set the time or extend the time for party to describe
the dispute and the arbitrator’s decision shall be final and binding to the parties.

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4.1.4 Process and mechanism in FIDIC Construction Contract 2nd Edition 2017
In the FIDIC Construction Contract 2nd Edition 2017, when the parties did not satisfy the
decision made by the Dispute Avoidance Adjudication Board (DAAB), they can move forward
to arbitration which is in clause 21.6. The arbitration in the FIDIC contract shall be finalized
and binding. In term of power of the arbitrator, they can revise any dispute or decision of the
Dispute Avoidance Adjudication Board (DAAB) that is relevant to the dispute. Unlike the
AIAC Standard Form of Contract which is the Contract Administrator as a witness, the FIDIC
Construction Contract 2nd Edition 2017 would request the Engineer as the witness and give the
evidence for matters that related to the Dispute. None of the party is being stopped to evidence
or arguments put before the Dispute Avoidance Adjudication Board (DAAB) to obtain the
decision made. Not only that, the arbitration process in the FIDIC Construction Contract 2nd
Edition 2017 mentioned that it can be held before or after completion of the project works.
When the arbitrator has awarded a party to pay the amount to the other party, the payment can
be made without any certification or notice. In clause 21.7, The other party that is not satisfied
with the decision made by the Dispute Avoidance Adjudication Board (DAAB) can directly
moving forward to arbitration.

4.2 Mediation
Arun et al., (2022) reported that the mediation refers to a process where a neutral party assists
in negotiation. Some parties think that the mediation is a more suitable than litigation is
because litifation is taking a lots of time, expensive and exposed to public. Therefore, both
parties will volunteer to appoint a mediatior to facilitate both parties. The entire dispute
resolution process is led by mediator and both parties must volunteer to enter the mediation.
However, mediation will not make decision and the decision is made by parties as they need to
follow Mediation Act 2012 (MA).

4.2.1 Process and mechanism in Mediation

The mediation under PAM rules is stated on the clause 34.0 which defines that the parties can
choose the mediation as the alternative dispute resolution and both parties must be volunteer
to do the mediation; However; if they could not find the mediator within 21 days of making
the agreement, one of all parties can apply to the President of Pertubuhan Arkitek Malaysia to
appoint one mediator to them. Therefore, the mediator is obligatory to obey the mediation
under PAM rules in clause 34.0.

4.2.2 Process and mechanism in PWD 203A

In PWD 203A, there is no clause specifically described about the mediation and their
characteristics. Hence, The Malaysian Government has introduced the Mediation Act 2012
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which is separated from PWD 203A to make it the Act in law of Malaysia. The main purpose
of this action is to enhance the knowledge of mediation and promote it as the method of
Alternative Dispute Resolution (ADR) by ensure the mediator in Malaysia can facilitate the
parties to solve the disputes (Shamsuddin et al., 2019). However, (Shamsuddin et al., 2019)
mentioned that there is no clause mentioned about the mediation because the government think
that the resolution is impossible for the financial issue as they think that although the mediation
will facilitate the parties, but the decision that is made by one party is impossible.

4.2.3 Process and mechanism in AIAC Standard Form of Contract

In AIAC Standard Form of Contract, the condition of the disputes that the employer and the
parties can request for mediation is similar to the condition to request for the arbitration in
clause 34.1. However, the process or the commencement of the mediation must be following
the clauses in AIAC Standard Form of Contract which is clause 35.0. Although both parties
has signed the mediation agreement, it cannot stop the parties from searching for another
alternative dispute resolution such as adjudication until arbitration if the problem between
parties is not solved. In clause 35.3, it mentioned that the mediation process can be done at any
time whether it is before or during any arbitration proceeding under clause 34.0.

The parties shall request for mediation to the KLCRA if they wish to have mediation and the
details should include the name, location, a copied version of mediation clause or other
mediation agreement, a copy of contractual agreement with dispute parties, a brief description
of the dispute, and the registration fee. If the parties failed to appoint a mediator within 30 days,
then they should request the Director of KLRCA to appoint the mediator. The mediator shall
be neutral to both parties and must communicate with both parties to facilitate the parties and
should not make decision for them.

4.3 Adjudication
According to Mah (2021), the adjudication can be defined as a process for the construction
dispute resolution mainly related to late payment. Malaysia has finally approved and introduced
the adjudication process by introducing the Construction Industry Payment and Adjudication
Act 2012 (CIPAA) to ensure the payments are promptly made. The adjudicator is completely
independent to both parties and this dispute resolution acts as “pay now, argue later”
mechanism. Specifically, the entire process of adjudication is in private and confidential as
well as it provides binding and enforceable decisions on payment disputes which means that
the parties still can refer the dispute to arbitration or litigation.

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4.3.1 Process and mechanism in PAM Contract 2018 (With Quantities)
In PAM Contract 2018 (with quantities), the clause for adjudication is clause 36.0. This type
of alternative dispute resolution is a process that must be carried out before arbitration under
clause 30.4 which is set-off by Employer and after the date of Practical Completion of any
dispute under the clause 30.4 will be following the clause 37.0 which is arbitration. In the notice
to refer to adjudication which is clause 36.2, both parties must be agreed to appoint an
adjudicator within 21 days from the first date of the written notice. If both parties are failed to
do so, they can request the President of Pertubuhan Arkitek Malaysia (PAM) to appoint an
adjudicator. The appointed adjudicator must carry out the entire process of adjudication based
on the current edition of the PAM Adjudication Rules. For the decision of the adjudicator, the
party will be bound until practical completion and they must give the written notice to other
party to refer to the dispute within 6 weeks from the adjudication moving forward to arbitration.
The decision that made by the adjudicator is finalized and binding to the parties if only the
adjudicator did not refer to the arbitration within specific time.

4.3.2 Process and mechanism in AIAC Standard Form of Contract

The parties can referred their dispute to the adjudicator using the Construction Industry
Payment and Adjudication Act (CIPAA Act 2012) which mainly related to the payment issue
in the AIAC Standard Form of Contract. In Construction Industry Payment and Adjudication
Act (CIPAA Act 2012), there is a part mentioning about the adjudication in part IV which
mentioned that the party would submit a notice of adjudication matter at the AIAC to the
Director of AIAC and must fulfil the requirement. Both parties must agree and have the
willingness to appoint an adjudicator within 10 working days from the date they submit the
notice. If they failed to appoint one adjudicator, they can apply to the Director of the KLCRA
to appoint an adjudicator. The adjudicator must be able to make decision within 45 working
days from the date they reply to the adjudication response unless the parties are agreed to extend
the time for making decision. The decision made shall be in writing and the adjudicator is
responsible to write solid reasons.

4.3.3 Process and mechanism in FIDIC Construction Contract 2nd Edition 2017
In FIDIC Construction Contract 2nd Edition 2017, the clause that mentioned the details for
adjudication is at clause 21 which is the constitution of Dispute Avoidance/ Adjudication Board
(DAAB). When the disputes between the client and the contractor has arisen during the
construction, they can appoint the member of Dispute Avoidance/ Adjudication Board (DAAB)
within 28 days if the contract did not stated the time frame after receiving the Letter of
Acceptance. In FIDIC Contract, the number of DAAB members can be up to three if it is not

10
stated and parties not agree, as well as the actual number of DAAB members would be depends
on the construction contract that is agreed by both parties. The selection of the DAAB members
shall be only based on the name stated in the contract data. If both parties have decided to
choose three members of Dispute Avoidance/ Adjudication Board (DAAB), then either party
must choose one member for the agreement of other party. After the members of DAAB has
been consulted by both parties, they shall move forward to agree the third member who is
appointed as chairperson. The Dispute Avoidance/ Adjudication Board (DAAB) has to ensure
that the three members of DAAB have all signed the DAAB agreement. The parties are
compulsory to agree the term of the remuneration to the members of the DAAB in which one-
half of the remuneration should be paid by each party. If one of the members of DAAB has
passed away or another reason which make the adjudication process is unable to move on, both
parties can appoint the most suitable person to replace the current one and the replaced person
should also obeying the rules that described in the clause 21.1 in FIDIC Construction Contract.

5.0 Comparison of Standard Form of Contract between PAM Contract 2018 (with
quantities), PWD 203A, AIAC Standard Form of Contract, and FIDIC Construction
Contract 2nd Edition 2017
The PAM contract 2018 (with quantities) has the clauses for mediation, adjudication, and
arbitration including the process. The PWD 203A only consists of the clause for arbitration
while the AIAC Standard Form of Contract consists of adjudication, and arbitration. The FIDIC
Construction Contract 2nd Edition 2017 consists of clauses for adjudication which is Dispute
Avoidance/ Adjudication Board (DAAB) and arbitration.

In PAM Contract 2018 (with quantities), the mediation is at clause 34.0 and the dispute can be
arisen between the Employer and contractor. The President of Pertubuhan Arkitek Malaysia
(PAM) can appoint the mediator after 21 days if the parties cannot appoint a mediator because
of dispute between them. The PAM Contract 2018 (with Quantities) also mentioned that the
mediation is the first dispute resolution before adjudication, and arbitration. In PWD 203A,
there is no clause mentioned about the mediation because the government think that the
resolution is impossible for the financial issue as they think that although the mediation will
facilitate the parties, but the decision that is made by one party is impossible (Shamsuddin et
al., 2019). In AIAC Standard Form of Contract, the clause did not mention about the maximum
days of appointing the mediator and the next step if the parties cannot appoint the mediator. In
FIDIC Construction Contract 2nd Edition 2017, there is no clause mentioning about the
appointment of mediator, the commencement and the award. For the requirement of appointing

11
the mediator, the PAM Contract 2018 (with Quantities) mentioned that all of the parties can
apply for the mediator and appointed mediator must following the mediation under PAM rules
in clause 34.0 while the remaining three standard form of contract did not mention about the
mediation.

For the adjudication, the PAM Contract 2018 (with Quantities) mentioned that if the contractor
is set off by the Employer, the adjudication can be the chosen dispute resolution before applying
arbitration in clause 36.0. If the parties are unable to appoint an adjudicator after 21 days from
the first day written notice, they can apply to President of Pertubuhan Arkitek Malaysia (PAM)
to appoint an adjudicator for them and the appointed adjudicator must follow the PAM
Adjudication Rules. The decision that is made by adjudicator in PAM Contract 2018 (with
Quantities) must be six weeks and the decision made must be final and binding. In PWD 203A,
there is no clause mentioning the details of adjudication while AIAC Standard Form of
Contract mentioned that the parties can refer to the Construction Industry Payment and
Adjudication Act (CIPAA 2012) for the details of adjudication act which is in clause 36.2. The
parties shall appoint an adjudicator within 10 working days from the date they submit the
notice and if they failed to do so, they can apply to the Director of KLCRA to appoint the
adjudicator. For the FIDIC Construction Contract 2nd Edition 2017, the clause for adjudication
is in clause 21.1 and the appointment of adjudicator can be up to three members or only one
member. The appointment of adjudicator shall be within 28 days if the contract data is not
stated. When the parties appointed three members of DAAB members, the third person shall
be appointed as chairperson. If the parties failed to appoint an adjudicator, the parties will
appoint an adjudicator by their own and the third adjudicator will be appointed as they need to
follow the FIDIC Construction Contract 2nd Edition 2017.

For the arbitrator, the PAM Contract 2018 (with Quantities) stated that arbitration process can
be started during the progress or after completion or the abandonment of the work while the
PWD 203A can appoint an arbitrator until the completion of the work while the AIAC Standard
Form of Contract mentioned that the arbitration can be carried out after the completion of work,
the FIDIC Construction Contract 2nd Edition 2017 mentioned that the arbitration process can
be carried out before and after the completion of work. The PAM Contract 2018 (with
Quantities) stated that the appointment of arbitrator shall be within 21 days from the day of the
written notice. If they failed to appoint one arbitrator, they can apply to the President of
Pertubuhan Arkitek Malaysia to appoint one arbitrator and the appointed arbitrator should obey
the PAM Arbitration Rules. The PWD 203A stated that the appointment of arbitrator shall be

12
within 45 days from the day of the written notice. If they failed, they can apply to Director of
the Regional Centre of Kuala Lumpur while the AIAC Standard Form of Contract did not
mention the duration of appointment of AIAC but they can refer to the AIAC Arbitration rules.
All the decision made by arbitrator in all the standard form of contract shall be final and binding.

6.0 Conclusion
In conclusion, it cannot be denied that there are lots of disputes in construction industry in
Malaysia. The main dispute resolution in Malaysia will be the litigation. However, the litigation
in Malaysia and around the globe is too pricey and time consuming. Therefore, the alternative
dispute resolution has been formed to ensure the dispute can be solved and it is cheap as well
as less time needed. The alternative dispute resolution are mediation, adjudication and
arbitration. In Malaysia, there are three types of standard form of contracts which are PAM
Contract 2018 (With Quantities), PWD 203A, AIAC Standard form of contract and one
International form of contract which is FIDIC Construction Contract 2nd Edition 2017. The
PAM Contract 2018 (With Quantities) consists of mediation, expert determination,
adjudication, and arbitration while the PWD 203A consists of arbitration only. The AIAC
Standard Form of Contract consists of mediation, adjudication and arbitration while the FIDIC
Construction Contract 2nd Edition 2017 consists of adjudication which named as Dispute
Avoidance/ Adjudication Board (DAAB), and Arbitration. Therefore, it can be determined that
the PAM Contract 2018 (With Quantities) has the most complete of alternative dispute
resolution which are mediation, adjudication, arbitration. The mediation can be overcome by
Mediation Rules in PAM Contract 2018 or Mediation Act 2012 in Malaysia, while the
adjudication can be solved using the Clause in PAM Contract 2018 (With Quantities) and
Construction Industry Payment and Adjudication Act 2012 (CIPAA 2012) and Dispute
Avoidance/ Adjudication Board (DAAB). For the Arbitration, the PAM Contract 2018 (With
Quantities) has it own clause which is clause 37.0 and need to obey the PAM Arbitration Rules,
the PWD 203A is in Clause 66.0, AIAC Standard Form of Contract is in clause 34.0 while the
FIDIC is in clause 21.6. The mediation is the first alternative dispute resolution, while the
adjudication is the second and the arbitration is the third alternative dispute resolution if the
dispute still cannot be solved using the previous alternative dispute resolution. Hence, it is
compulsory for both parties to determine the best alternative dispute resolution to ensure the
dispute can be solved in a less time, and cheaper way.

13
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