Security of Payment in Malaysian Construction Industry: Subcontract 'Payment Upon Certification' Cases

In Malaysia, the sub-contractors have to bear with the current structure of payment mechanisms in the standard forms of contract, which are payment upon certification, direct payment from the employer, and contingent or conditional payment. However, 'payment upon certification' provision mostly applied for nomiinated sub-contracts and not to the domestic sub-contractors; thus the Construction Industry Payment and Adjudication (CIPA) is proposed. This paper, though, is to disclose the findings on legal cases and subcontractors' perspective on payment upon certification, by preliminary analyzing the quantitative questionnaire survey to the first 81 from the identified 1,500 sub-contractors throughout the country. Before that, from 186 cases, only 12 selected cases are analysed that thoroughly addressed the main issue of payment upon certification. It is found out that the particularly small sized subcontractors are definitely need to enhance their knowledge of the so-called the 'Security of Payment' Regime to benefits from the proposed Act.