Samwoh Asphalt v Sum Cheong: Performance Bond Dispute & Interlocutory Restraint

In Samwoh Asphalt Premix Pte Ltd v Sum Cheong Piling Pte Ltd, the High Court of Singapore, on 2001-07-05, heard an application by Samwoh Asphalt Premix Pte Ltd for an interlocutory restraint order against Sum Cheong Piling Pte Ltd to prevent them from receiving funds under a performance guarantee. The court, presided over by Justice G P Selvam, denied the application, holding that the performance guarantee was in effect a demand guarantee and that the demand was justified. The court emphasized that applications for interlocutory restraint are improper in such cases.

1. Case Overview

1.1 Court

High Court

1.2 Outcome

Application for interlocutory restraint order denied.

1.3 Case Type

Civil

1.4 Judgment Type

Judgment

1.5 Jurisdiction

Singapore

1.6 Description

Samwoh Asphalt sought to restrain Sum Cheong from receiving funds under a performance guarantee. The court denied the order, emphasizing the nature of demand guarantees.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Samwoh Asphalt Premix Pte LtdPlaintiffCorporationApplication for interlocutory restraint order deniedLost
Sum Cheong Piling Pte LtdDefendantCorporationApplication for interlocutory restraint order deniedWon
ECICS-COFACE Guarantee Company (Singapore) LtdDefendantCorporationNeutralNeutral

3. Judges

Judge NameTitleDelivered Judgment
G P SelvamJudgeYes

4. Counsels

Counsel NameOrganization
Choy Chee YeanRajah & Tann
John ThomasColin Ng & Partners
K SureshanColin Ng & Partners
Daniel ChuaWong Partnership

4. Facts

  1. Samwoh Asphalt Premix Pte Ltd sought to restrain Sum Cheong Piling Pte Ltd from receiving moneys under a performance guarantee.
  2. SC Piling had a principal contract with the Ministry of Defence for construction of a runway.
  3. SC Piling subcontracted part of the works to Gim Chuan Contractor Pte Ltd.
  4. Gim Chuan made a sub-subcontract with Samwoh Asphalt Premix Pte Ltd.
  5. The performance guarantee was issued by Ecics-Coface Guarantee Company (Singapore) Ltd.
  6. The performance guarantee was given in substitution of a cash deposit.
  7. The performance guarantee was for S$500,000.00.

5. Formal Citations

  1. Samwoh Asphalt Premix Pte Ltd v Sum Cheong Piling Pte Ltd and Another, Suit 245/2000, SIC 587/2001, [2001] SGHC 170

6. Timeline

DateEvent
Performance guarantee given
Subcontract dated between Samwoh Asphalt Premix Pte Ltd and Gim Chuan Contractor Pte Ltd
Suit filed
Judgment issued

7. Legal Issues

  1. Whether demand under performance guarantee was justified
    • Outcome: The court held that the demand was justified because it was made to achieve the very purpose for which it was procured by Sum Cheong Piling Pte Ltd.
    • Category: Substantive
  2. Whether application for interlocutory restraint order was proper
    • Outcome: The court held that an application for interlocutory restraint is improper.
    • Category: Procedural

8. Remedies Sought

  1. Interlocutory Restraint Order

9. Cause of Actions

  • Breach of Contract

10. Practice Areas

  • Commercial Litigation
  • Construction Law

11. Industries

  • Construction
  • Banking

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
No cited cases

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute NameJurisdiction
No applicable statutes

15. Key Terms and Keywords

15.1 Key Terms

  • Performance Guarantee
  • Demand Guarantee
  • Interlocutory Restraint Order
  • Unconscionable Conduct

15.2 Keywords

  • performance bond
  • demand guarantee
  • interlocutory restraint
  • construction
  • Singapore

17. Areas of Law

Area NameRelevance Score
Performance Bond85
Contract Law70
Injunctions60
Unconscionability50

16. Subjects

  • Construction Dispute
  • Banking
  • Performance Bonds
  • Demand Guarantees