DIRECT CLASH BETWEEN MALAYSIAN GOVT & AFRICAN-ASIAN LEGAL CONSULTATIVE ORGANISATION (AALCO) OVER ARBITRATION CENTRE REVEALED

KUALA LUMPUR, 26/03/2019. Asian International Centre for Arbitration's (AIAC) former director Datuk Sundra Rajoo Nadarajah (centre) leaving the Sessions Court courtroom with his lawyers after being charged with three counts of criminal breach of trust over more than RM1 million of AIAC funds. Pix by Malay Mail / Hari Anggara.

AALCO conflicts Tommy Thomas and Vinayak Pradhan

In an ongoing case before the Kuala Lumpur High Court between a contractor in construction adjudication proceedings and Asian International Arbitration Centre (AIAC), the contractor has challenged the appointment of Vinayak Pradhan as the Director of AIAC.

On 7th Oct 2019, the Secretary-General of African-Asian Legal Consultative Organisation (AALCO) – His Excellency Prof. Dr. Kennedy – has affirmed an affidavit denying the status of Vinayak Pradhan as the Director of AIAC. The AALCO is the principal organisation under which comes AIAC. The AIAC is a jointly operated by the Malaysian Government and AALCO.

The Secretary General has rebutted allegations made by the AG as to the validity of appointment of Vinayak Prahdan as the Director in the affidavit of the AG filed in this case. The Secretary General has also completely denied the allegation of Vinayak Pradhan in his affidavit filed in this case that clarification has been made to AALCO over the appointment issues.

The controversies going on over the appointment of the Director

Other than the challenge to the appointment of Director, the contractor has also challenged the constitutionality of the entire Construction Industry Payment and Adjudication Act 2012, under which the AIAC administers adjudication scheme. The challenge is premised on the ground that the Malaysian constitution does not allow privatising the functions of court under Art. 121 of the Federal Constitution.

Apart from that, the contractor has challenged the fee scale prescribed by the Minister as being unconstitutional for imputing inequality in terms of fee payable to adjudicators compared to court fee, which adjudication is a no-option mode for respondents. Added to this, the contractor also claims that the administrative fee charged by the AIAC is illegal and not authorised by any law.

Justice Lim Chong Fong hears the case. Counsel Arun Kasi represents the contractor. Various NGOs are participating in this case, including the Bar Council.

A challenge to the appointment of Director is a serious international question as the outcome will have an impact on the validity of appointments made by the AIAC during the impunged period, both in arbitrations and adjudications.

Similarly the constitutional challenge to the Act will have a very far reaching consequence, as its outcome will have a great impact on the Malaysian construction industry vis-a-vis the validity of all the adjudication decisions made since implementation of the Act in 2014 into question. The total amount of such decisions is in hundreds of millions ringgit.

The next court date is on the 10th Oct at 9 am in KL High Court before Justice Lim Chong Fong.

ARUN KASI

AALCO Affidavit 07-10-2019