Clause 34.5 (PAM 2006) vs Clause 37.

0 (PAM 2018) – Arbitration

In contrast to the PAM contract 2006, the latest PAM contract 2018 has made some
changes in some of its clauses such as under Clause 37.0 Arbitration (previously
known as under the clause 34.0 Adjudication and Arbitration); it revised the
arrangement and numbering of clause due to resolution of dispute regarding
payment methods; reinforcement of arbitrator and arbitration rules; and omission
of mediation in arbitration.
As per the following:
Clause 37.134.5, Disputes referred to arbitration:
In the event that any dispute or difference arises between the Employer and Contractor,
either during the progress or after completion or abandonment of the Works regarding:
34.537.1(a) any matter of whatsoever nature arising under or in connection with
the Contract;
34.537.1(b) any matter left by the Contract to the discretion of the Architect;
34.537.1(c) the withholding by the Architect of any certificate to which the
Contractor may claim to be entitled to;
34.537.1(d) the rights and liabilities of the parties under Clause 25.0, 26.0, 31.0
or 32.0; or
34.537.1(e) the unreasonable withholding of consent or agreement by the
Employer or Contractor,
then such disputes or differences shall be referred to arbitration.
Clause 37.234.6, Procedures for appointment of arbitrator:
Upon the disputes or differences having arisen then:
34.637.2(a) any party may serve written notice on the other party that such
disputes or differences shall be referred to an arbitrator to be agreed between
the parties; and
34.637.2(b) if after the expiration of twenty one (21) Days from the date of the
written notice to concur on the appointment of the arbitrator, there is a failure to
agree on the appointment, the party initiating the arbitration shall apply to the
President of Pertubuhan Akitek Malaysia to appoint an arbitrator, and such
arbitrator so appointed shall be deemed to be appointed with the agreement
and consent of the parties to the Contract.
Major Changes:
 Re- arrangement and re- numbering of existing alternative dispute resolution
procedures (ADR) provision.
Benefits:
 The purpose of this revision was to resolve the disputes regarding payment
which may be employed and it is up to the discretion of the disputing parties to
choose the method (either through CIPAA or within the Form of Contract).

Clause 37.334.7, Arbitration Act and Rules:

Upon appointment, the arbitrator shall initiate the arbitration proceedings in
accordance with the provisions of the Arbitration Act 2005 or any statutory modification
or re-enactment to the Act and the current edition of the PAM Arbitration Rules or
any modification or revision to such rules.

Changes:
 The revision added the term “the current edition” to the PAM Arbitration Rules
to stress on the major changes of PAM Arbitration Rules.
Benefits:
 The revision requires appointed arbitrator to strictly follow the current edition of
the PAM Arbitration Rules during the initiation of arbitration proceedings due to
the revision made by adding the term “the current edition” to the PAM
Arbitration Rules for the enforcement of arbitration.

Clause 37.434.8, Powers of arbitrator:

The arbitrator shall without prejudice to the generality of his powers, have power:
34.837.4(a) to rectify the Contract so that it accurately reflects the true
agreement made by the Employer and Contractor;
34.837.4(b) to direct such measurements and/or valuations as may in his
opinion be desirable in order to determine the rights of the parties;
34.837.4(c) to ascertain and award any sum which ought to have been the
subject of or included in any certificate;
34.837.4(d) to open up, review and revise any certificate, opinion, decision,
requirement, or notice;
34.837.4(e) to determine all matters in dispute submitted to him in the same
manner as if no such certificate, opinion, decision, requirement or notice had
been given;
 34.837.4(f) to award interest from such dates at such rates and with such rests
as he thinks fit:
34.837.4(f)(i) on the whole or part of any amount awarded by him in
respect of any period up to the date of the award;
34.837.4(f)(ii) on the whole or part of any amount claimed in the
arbitration and outstanding at the commencement of the arbitral
proceedings but paid before the award was made, in respect of any
period up to the date of payment; and
34.837.4(g) to award interest from the date of the award (or any later date) until
payment, at such rates and with such rests as he thinks fit on the outstanding
amount of any award.
Clause 37.534.9, Consolidation of arbitration proceedings:
Where any dispute arises between the Employer and Contractor and the dispute
relates to the works of a Nominated Sub-Contractor and arises out of or is connected
with the same dispute between the Contractor and such Nominated Sub-Contractor,
the Employer and Contractor shall use their best endeavour to appoint the same
arbitrator to hear the dispute under Clause 2931.3 of the PAM Sub-Contract 20182006.
Clause 37.634.10, Commencement of arbitration proceeding:
Unless with the written agreement of the Employer and Contractor, such arbitration
proceedings shall not commence until after Practical Completion or alleged Practical
Completion of the Works or determination or alleged determination of the Contractor's
employment under the Contract or abandonment of the Works except on:
34.1037.6(a) the question of whether or not the issuance of an instruction is
empowered by these Conditions;
34.1037.6(b) any dispute or difference under Clauses 31.0 and 32.0;
34.1037.6(c) whether or not a certificate has been improperly withheld or not in
accordance with these Conditions; or
34.1037.6(d) whether or not a payment to which the Contractor may claim to
be entitled has been properly withheld in accordance with these Conditions.
Clause 37.734.11, Arbitrator's award to be final and binding on parties:
The award of such arbitrator shall be final and binding on the parties.
35.0 Mediation
Clause 35.1, Mediation under PAM rules:
Notwithstanding Clause 34.0 of these Conditions, upon the written agreement of both
the Employer and Contractor, the parties may refer any dispute for mediation. If the
parties fail to agree on a mediator after twenty one (21) Days from the date of the
written agreement to refer the dispute to mediation, any party can apply to the
President of Pertubuhan Akitek Malaysia to appoint a mediator. Upon appointment,
the mediator shall initiate the mediation in accordance with the PAM Mediation Rules
or any modification or revision to such rules.
Clause 35.2, Mediation does not prejudice the parties’ rights to arbitration:
Prior reference of the dispute to mediation under Clause 35.1 shall not be a condition
precedent for its reference to adjudication or arbitration by either the Contractor or the
Employer, nor shall any of their rights to refer the dispute to adjudication or arbitration
under Clause 34.0 of these Conditions be in any way prejudiced or affected by this
clause.

Changes:
 The clause 35.0 Mediation was omitted.
Benefits:
 Prior reference of the dispute to arbitration shall only be reference specifically
to arbitrator as an independent person or body and shall not be reference to
mediator for its reference to arbitration.

Clause 3.3 (Copies of documents) ( PAM 2006 ) vs ( PAM 2018 )

Immediately after the execution Within fourteen (14) Days after the award of the
Contract or on any date after the award as agreed between the Architect and the
Contractor, the Architect or Quantity Surveyor shall without charge to the Contractor
provide him with:
3.3(a) one of the two signed original copies of the Contract Documents;
3.3(ab) two (2) further copies of the Contract Drawings; and
3.3(bc) two (2) copies of the unpriced Contract Bills.
Within fourteen (14) Days after the execution of the Contract, the Architect or
Quantity Surveyor shall also without charge to the Contractor provide him with
one (1) signed copy of the Contract Documents.

Changes :
 The changes specified the exact timeframe for the term ‘Immediately after’,
specified the parties involved in the Contract and number of copies of Contract
Drawings and signed copy of the Contract document.
Clause 36.0 (PAM 2006) vs Clause 38.0 (PAM 2018) - Notice

In contrast to the PAM contract 2006, the latest PAM contract 2018 has made some
changes in some of its clauses such asunder Clause 38 Notice(previously known as
clause 36.0); it added and allow a new notice/ document delivery option which is
“Electronic Transmission”.
As per the following:
Clauses 38.1, Notice:

Any written notice or other document to be given under the Contract shall be given or
sent by:
“38.1(d) by electronic transmission”

Clauses 38.2; Notice Deem Served:

Any written notice or other document shall be deemed to have duly served upon and
received by the addresses:
“38.2(d) if transmitted by way of electronic transmission, at time of transmission.”

Clauses 38.3; Proof of Notice:

In proving the giving of a written notice or any other document under or in respect of
the Contract, it shall be sufficient to show:
“38.3(d) in the case of electronic transmission, that the electronic transmission
was duly transmitted from the dispatch terminal, as evidenced by a transmission report
generated by the transmitting equipment.”

Major Changes:

 Allows the usage of Electronic Transmission.

Benefits:

 As currently, most documents and notice are send via email and WhatsApp
phone. Thus, it greatly beneficial for the current method.
Clause 37.0 (PAM 2006) vs Clause 39.0 (PAM 2018) - Performance Bond

In contrast to the PAM contract 2006, the latest PAM contract 2018 has made some
changes in some of its clauses such as under Clause 39Performance Bond
(previously known as clause 37.0); it revised that the Architect now need to certify
the contractor’s breach before the employer may call on the performance bond and
utilize its fund for purposes.
As per the following:
Clauses 39.5, Payments from the Performance Bond:

In the event, the Employer determines the employment of the Contractor in

accordance with Clauses 25.0, or if there is any breach of the Contract, and subject
to the Architect certifying such breach by the Contractor;
the Employer may call on the:

 Performance Bond and utilize and make payments out of the Performance Bond.
 deduction from the Performance Bond for the completion or rectification of the
Works and reimbursement of loss or expenses suffered by the Employer.
On completion of works, any remaining balances of Performance Bond shall be
refunded to the Contractor without interest.

Clauses 39.6, Return of Performance Bond:

In the event, the Contractor determines his own employment in accordance to Clause
26.0, the Employer shall within 14 days return (28 to 14 days) the Performance
Bond to the Contractor for cancellation.

Major Changes:

 Architect is required to certify the breach by Contractor before the Employer can
utilize the Performance Bond fund for actions.
 Days for Employer to return Performance Bond back to Contractor is reduced from
28 days to 14 days.
Benefits:

 Architect is involved to show that there is fair treatment to both parties without
mistreating anyone and Contractor can get their funding back twice the speed.