Shanghai Tunnel v Econ-NCC: Arbitration Appeal on Sub-Contract Delay and Waiver

Shanghai Tunnel Engineering Co Ltd (STEC) appealed against a decision in arbitration with Econ-NCC Joint Venture (ENJV) regarding a sub-contract for bored tunnelling works in Phase 3 of the Circle Line MRT project. The High Court of Singapore, presided over by Judith Prakash J, heard STEC's appeal on questions of law relating to the arbitrator's findings on substantial completion, extension of time, and ENJV's claim for reimbursement of liability to LTA for delay. The court allowed the appeal, remitting the partial award for reconsideration of ENJV's counterclaim.

1. Case Overview

1.1 Court

High Court

1.2 Outcome

Appeal Allowed

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Appeal regarding arbitration over sub-contract delay in MRT construction. Court remits award for reconsideration of ENJV's counterclaim.

1.7 Decision Date

25 August 2010

2. Parties and Outcomes

Party Name	Role	Type	Outcome	Outcome Type	Counsels
Shanghai Tunnel Engineering Co Ltd	Appellant	Corporation	Appeal Allowed	Won	Tan Chee Meng of WongPartnership LLP Josephine Choo of WongPartnership LLP Lesley Tan of WongPartnership LLP
Econ-NCC Joint Venture	Respondent	Partnership	Counterclaim to be reconsidered	Remanded	P Balachandran of Robert Wang & Woo LLC

3. Judges

Judge Name	Title	Delivered Judgment
Judith Prakash	Judge	Yes

4. Counsels

Counsel Name	Organization
Tan Chee Meng	WongPartnership LLP
Josephine Choo	WongPartnership LLP
Lesley Tan	WongPartnership LLP
P Balachandran	Robert Wang & Woo LLC

4. Facts

STEC was subcontracted by ENJV for bored tunnelling works in Phase 3 of the Circle Line MRT project.
The sub-contract completion date was 31 December 2004.
ENJV handed over the SB and NB launch shafts late.
STEC and ENJV entered into a 2nd SA where ENJV made an advance payment to STEC.
STEC waived its claims for extension of time in the 2nd SA.
ENJV claimed damages from STEC for delay in completion of the sub-contract works.
The arbitrator found STEC liable for 68 days of delay but did not award damages to ENJV.

5. Formal Citations

Shanghai Tunnel Engineering Co Ltd v Econ-NCC Joint Venture, Originating Summons No 226 of 2009, [2010] SGHC 252

6. Timeline

Date	Event
2002-08-01	Main contract between LTA and ENJV was dated
2002-12-05	Letter of Award for sub-contract awarded to STEC by ENJV
2002-12-15	Commencement date for the sub-contract works
2003-04-24	Based on the 22B3 programme, the date for handing over of the SB launch shafts to STEC for commencement of work
2003-05-08	Based on the 22B3 programme, the date for handing over of the NB launch shafts to STEC for commencement of work
2003-06-27	SB launch shaft handed over to STEC
2003-07-26	STEC and ENJV entered into the second supplemental agreement
2003-08-11	NB shaft handed over to STEC
2004-10-27	Scheme of arrangement concerning ECON approved by the court
2004-11-16	STEC was to complete the installation of tunnelling works including First Stage Concrete
2004-12-31	Completion date for the sub-contract works
2005-05-20	STEC gave notice to ENJV of its intention to commence arbitration proceedings
2006-04-03	STEC's application for an interim award to be made summarily in its favour was dismissed by the Arbitrator’s interim award
2007-03-01	Hearing of the arbitration commenced
2007-04-01	Further hearings took place in arbitration
2007-05-01	Further hearings took place in arbitration
2007-05-24	Oral evidence was completed in arbitration
2008-08-14	Fifth and final set of submissions from ENJV was received
2008-12-15	The Arbitrator denied ENJV’s request to put in a sixth set of submissions and declared the close of the hearing of the arbitration
2008-12-29	Arbitrator issued the Partial Award
2009-01-01	Solicitors for both STEC and ENJV wrote to the Arbitrator to seek clarification and correction on various points of the Partial Award
2009-01-28	The Arbitrator issued the Correction Award
2009-01-14	STEC made a clarification request for reduction of number of days in delay
2009-01-08	Gay Choon Ing was decided
2009-01-01	Yamashita was decided on 30 December 2008
2009-01-01	The last of the parties’ closing submissions before the Arbitrator was submitted in October 2008
2009-01-01	Domestic Arbitration Rules of the Singapore International Arbitration Centre (2nd Ed, 1 September 2002) (“SIAC Rules”) (which, as agreed by the parties, applied to the arbitration)
2010-08-26	Judgment reserved

7. Legal Issues

Breach of Contract
- Outcome: The court found that ENJV had not established actual liability for damages, and the arbitrator should have dismissed the counterclaim.
- Category: Substantive
- Sub-Issues:
  - Delay in completion of sub-contract works
  - Failure to establish actual liability for damages
Interpretation of Contract
- Outcome: The court found that the 2nd SA was not a compromise agreement and STEC had waived its claims for extension of time.
- Category: Substantive
- Sub-Issues:
  - Waiver of claims
  - Commercial purpose of agreement
Completeness of Arbitral Award
- Outcome: The court found that the arbitrator did not render a complete decision by not dismissing ENJV's claim and allowing it to pursue further action in another forum.
- Category: Procedural
- Sub-Issues:
  - Failure to determine all issues
  - Delegation of decision-making power

8. Remedies Sought

Monetary Damages
Declaration

9. Cause of Actions

Breach of Contract

10. Practice Areas

Arbitration
Construction Law
Commercial Litigation

11. Industries

Construction
Engineering

12. Cited Cases

Case Name	Court	Affirmed	Citation	Jurisdiction	Significance
Yamashita Tetsuo v See Hup Seng Ltd	Court of Appeal	Yes	[2009] 2 SLR(R) 265	Singapore	Cited for principles on the interpretation of contracts, specifically the contextual approach and consideration of commercial purpose.
Gay Choong Ing v Loh Sze Ti Terence Peter and Another Appeal	Court of Appeal	Yes	[2009] 2 SLR(R) 332	Singapore	Cited for principles on the law of compromise, including the requirements for a valid compromise agreement.
Zurich Insurance (Singapore) Pte Ltd v B-Gold Interior Design & Construction Pte Ltd	Court of Appeal	Yes	[2008] 3 SLR(R) 1029	Singapore	Cited for the principle that surrounding circumstances may create ambiguity about the language used in a contract.
Citicorp Investment Bank (Singapore) Ltd v Wee Ah Kee	Court of Appeal	Yes	[1997] 2 SLR(R) 1	Singapore	Cited regarding the meaning imputed by the court be one which 'the words are reasonably adequate to convey'
Ronly Holdings Ltd v JSC Zestafoni G Nikoladze Ferroalloy Plant	Not Available	Yes	[2004] 1 CLC 1168	Not Available	Cited for the principle that an award must be final and a tribunal cannot delegate its decision-making power to another forum.
MAE Engineering Ltd v. Fire-Stop Marketing Services Pte Ltd	Court of Appeal	Yes	[2005] 1 SLR(R) 379	Singapore	Cited for the principle that the perceived “commercial sense” of the court cannot be allowed to override the words of a contract where they are clear and unambiguous.
Charter Reinsurance Co Ltd v Fagan	Not Available	Yes	[1997] 3 AC 313	Not Available	Cited for the principle that to force upon the words a meaning which they cannot fairly bear is to substitute for the bargain actually made one which the court believes could better have been made.

13. Applicable Rules

Rule Name
Domestic Arbitration Rules of the Singapore International Arbitration Centre

14. Applicable Statutes

Statute Name	Jurisdiction
Arbitration Act (Cap 10, 2002 Rev Ed)	Singapore
Evidence Act (Cap 97, 1997 Rev Ed)	Singapore

15. Key Terms and Keywords

15.1 Key Terms

Sub-Contract
Extension of Time
Waiver
Liquidated Damages
Second Supplemental Agreement
Partial Award
Completion Date
Launch Shaft
Main Contract
Delay

15.2 Keywords

arbitration
contract
construction
delay
waiver
sub-contract
extension of time

17. Areas of Law

Area Name	Relevance Score
Arbitration	90
Breach of Contract	90
Contract Law	90
Construction Law	70
Commercial Disputes	60
Sub-Contract	50

16. Subjects

Arbitration
Contract Law
Construction Dispute