A Glance At Progress Payment Terms In Construction Disputes
- Rule & Co Editorial Team
- 3 hours ago
- 2 min read
For contractors who feel they were denied payment for work done, entitlement can depend as much if not more on how progress payment terms are drafted and administered.
As this is a common cause of construction payment disputes in Malaysia, understanding how they work is critical, and below we provide an overview of the topic for creditors.
Alternatively, skip the reading and get in touch for a free recovery assessment.
Otherwise, let’s begin.
Progress payment terms in Malaysia
In most Malaysian construction projects, payment is structured around interim or progress claims submitted periodically (monthly or milestone-based).
If these mechanisms are poorly drafted or loosely administered, disputes arise over whether:
work has been properly valued
certification was validly issued
payment timelines have been triggered, or
claims are deemed rejected due to technical non-compliance
In a payment dispute, the contract wording often becomes the starting point of analysis.
Key terms
Before asserting rights, carefully review the progress payment clause and related provisions.
Area | What to Examine |
Frequency of submission | • Are we entitled to submit claims monthly? • Are there fixed claim dates? • Are milestone claims permitted? • Have we complied strictly with contractual submission dates? |
Certification timelines | • How long does the architect, engineer, or contract administrator have to certify? • Is there a deemed certification mechanism if no response is issued? • Are reasons required for withholding certification? |
Payment timelines after certification | • Is payment due 14, 21, or 30 days after certification? • Is payment expressly triggered upon certification? • Is payment tied to upstream receipt of funds? |
Silence and deemed certification | • Does failure to respond within a stipulated period amount to deemed approval? • Is there an express consequence for delayed certification? • Are withholding grounds required to be stated formally? |
Certification doesn't automatically defeat a claim
Under the Construction Industry Payment and Adjudication Act 2012 (CIPAA), contractors may still pursue disputed progress payments through adjudication, even where:
the certificate is partially issued
the amount certified is lower than claimed
certification is withheld altogether
CIPAA operates on a 'pay now, argue later' principle and allows adjudicators to independently assess entitlement based on documents and contractual terms.
For more on this, check out our full guide to CIPAA adjudication proceedings.
That’s all from us, and we wish you a smooth debt recovery 🙂
Let Rule & Co handle your construction debt recovery
If you’ve sent reminders and been ignored or simply don’t want the hassle of chasing payments, Rule & Co is a debt recovery law firm that focuses on helping creditors recover debts via legal strategies that minimise upfront cost, maximise recovery, and protect your reputation.
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