The Kuala Lumpur Regional Centre for Arbitration (KLRCA) launched its suite of Standard Form of Building Contracts (SFC) at an event held on 15 August 2017 in Kuala Lumpur.
The SFC aims to fill the gaps of existing standard form building contracts, with more mechanisms for parties to resolve disputes and deadlocks and ensure continuity of works and working relationships in building projects. It is also compliant with the Construction Industry Payment and Adjudication Act (CIPAA).
KLRCA is the first arbitral institution worldwide to launch a suite of this kind, which is customisable for all building construction projects in Malaysia.
At the launch, KLRCA director Datuk Sundra Rajoo touched on KLRCA’s existing relationship with the local construction industry. “The industry players have already benefited from the efficient dispute resolution processes and have acknowledged our continuous efforts to further tailor the legal framework to their needs. There is no better illustration than our recent statistics; as of today, we have more than 1,100 registered cases (as compared to 22 cases in 2010),” he said.
He, however, admitted that the issues surrounding the construction industry in Malaysia run deeper. “Although the numbers are impressive, the problem runs deeper and rather than just hacking at the leaves it would be better to dig at the roots instead. We have come to realise that the problem goes beyond simple payment issues and stems from the contracts used by the parties.”
The SFC, he added, is a solution to this. It was engineered as a hybrid that bridges and fills the gaps of local and foreign standard form contracts, with consideration of current laws and judicial precedents. The Malaysia-centric contract will be tweaked in the coming months to meet international standards for projects outside Malaysia.
More than 600 guests from the construction and legal industries attended the launch, which included presentations on the introduction to the contracts, advantages, and key features of the contracts website, where the forms are available for free. — Construction+ Online