Mae Engineering v Dragages Singapore: Stay of Proceedings & Arbitration Agreement
In Mae Engineering Ltd v Dragages Singapore Pte Ltd, the High Court of Singapore addressed an appeal by Dragages against the dismissal of their application for a stay of proceedings under Section 7 of the Arbitration Act and the granting of summary judgment to Mae Engineering. The dispute arose from unpaid amounts under Interim Certificates No. 27 and 28 for M&E works. Mae Engineering sought recovery of $1,461,515.60. Rajendran J dismissed the appeal, finding Dragages' claims for set-off to be without merit and upholding the summary judgment in favor of Mae Engineering.
1. Case Overview
1.1 Court
High Court1.2 Outcome
Appeal dismissed with costs.
1.3 Case Type
Civil
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
High Court case regarding stay of court proceedings due to an arbitration agreement. The court dismissed the appeal, upholding summary judgment for Mae Engineering.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Mae Engineering Ltd | Plaintiff, Respondent | Corporation | Summary judgment granted | Won | Tan Kok Quan SC, Karam Singh Parmar |
| Dragages Singapore Pte Ltd (fka Dragages et Travaux Publics (S) Pte Ltd) | Defendant, Appellant | Corporation | Appeal dismissed | Lost | Wong Meng Meng SC, Paul Sandosham, Gandhi |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| S Rajendran | Judge | Yes |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Wong Meng Meng SC | Wong Partnership |
| Paul Sandosham | Wong Partnership |
| Gandhi | Wong Partnership |
| Tan Kok Quan SC | Tan Kok Quan Partnership |
| Karam Singh Parmar | Tan Kok Quan Partnership |
4. Facts
- Mae Engineering and Dragages Singapore entered into a sub-contract for M&E works worth $22.77 million.
- Clause 17 of the sub-contract outlined the procedure for progress payments.
- Dragages issued Interim Certificates No. 27 and 28 to Mae for works done in November and December 2000.
- Mae submitted invoices for the amounts stated in the Interim Certificates.
- Dragages did not pay the sums due under the Interim Certificates.
- Dragages issued revised Interim Certificates deducting amounts for backcharges, rectification costs, and possible adjustments.
- Mae commenced arbitration proceedings and later instituted a suit in the High Court to recover the unpaid amount.
5. Formal Citations
- Mae Engineering Ltd v Dragages Singapore Pte Ltd (fka Dragages et Travaux Publics (S) Pte Ltd), Suit 1291/2001, RA 253/2001, [2002] SGHC 86
6. Timeline
| Date | Event |
|---|---|
| Dragages issued Interim Payment Certificate No. 27 to Mae. | |
| Mae forwarded invoice No. 8150 to Dragages for payment. | |
| Dragages issued Interim Payment Certificate No. 28 to Mae. | |
| Mae forwarded invoice No. 8470 to Dragages for payment. | |
| Dragages issued revised Interim Payment Certificate No. 27A. | |
| Dragages issued revised Interim Payment Certificate No. 28 (Revised). | |
| Mae gave notice of arbitration. | |
| Mae learned that Dragages had received full payment from the Employer. | |
| Mae instituted Suit No. 1291/01 in the High Court. | |
| Mae commenced Order 14 proceedings against Dragages. | |
| Dragages sought a stay of proceedings under s 7 of the Arbitration Act. | |
| Senior Assistant Registrar dismissed Dragages’ application for a stay and granted Mae’s application for summary judgment. | |
| High Court dismissed Dragages' appeal. |
7. Legal Issues
- Stay of Court Proceedings
- Outcome: The court held that there was no sufficient reason to grant a stay of proceedings.
- Category: Procedural
- Sub-Issues:
- Application of Section 7 of the Arbitration Act
- Sufficient reason not to refer to arbitration
- Enforceability of Arbitration Agreement
- Outcome: The court held that the arbitration agreement should not prevail due to the lack of a genuine dispute.
- Category: Substantive
- Sub-Issues:
- Departure from arbitration agreement
- Burden of proof
- Summary Judgment
- Outcome: The court upheld the granting of summary judgment to Mae Engineering.
- Category: Procedural
- Sub-Issues:
- Order 14 principles
- Prima facie case of disputes
- Set-off Rights
- Outcome: The court held that Dragages' claims for set-off were without merit.
- Category: Substantive
- Sub-Issues:
- Validity of deductions from interim certificates
- Exercise of set-off rights before interim certificate issuance
8. Remedies Sought
- Monetary Damages
9. Cause of Actions
- Breach of Contract
10. Practice Areas
- Commercial Litigation
- Arbitration
- Construction Law
11. Industries
- Construction
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Channel Tunnel Group Ltd & Anor v Balfour Beatty Construction Ltd & Ors | Unknown | Yes | [1993] 1 All ER 664 | England and Wales | Cited for the principle that a court can refuse a stay and grant judgment for the plaintiff if there is no defense to the claim. |
| Ellis Mechanical Services Ltd v Wates Construction Ltd | Unknown | Yes | [1978] 1 LLR 33 | England and Wales | Followed for the principle that interim payments are the lifeblood of subcontractors, and courts should restore that lifeblood as quickly as possible. |
| Home and Overseas Insurance Co Ltd v Mentor Insurance Co (UK) Ltd | Unknown | No | [1990] 1 WLR 153 | United Kingdom | Referred to regarding the purpose of Order 14 proceedings and the need to respect parties' choice of arbitration. |
| Kwan Im Tong Chinese Temple v Fong Choon Hung Construction Pte Ltd | Court of Appeal | Yes | [1998] 2 SLR 143 | Singapore | Followed for the principle that the burden is on the party opposing a stay to show why the arbitration agreement should not prevail. |
| Uni-Navigation Pte Ltd v Wei Loong Shipping Pte Ltd | Unknown | Yes | [1993] 1 SLR 876 | Singapore | Followed for the principle that courts should adopt a holistic and commonsense approach to see if there is a dispute in arbitration cases. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Arbitration Act (Cap 10) | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Arbitration
- Stay of proceedings
- Interim Certificate
- Sub-contract
- Set-off
- Summary judgment
- Backcharges
- Rectification costs
15.2 Keywords
- Arbitration
- Stay of proceedings
- Interim Certificate
- Construction
- Contract
16. Subjects
- Arbitration
- Contract Law
- Construction Law
- Civil Procedure
17. Areas of Law
- Arbitration Law
- Contract Law
- Construction Law
- Civil Procedure