Shanghai Construction v Tan: Stay of Proceedings Pending Arbitration in Construction Subcontract Dispute
In Shanghai Construction (Group) General Co. Singapore Branch v Tan Poo Seng, the High Court of Singapore, presided over by AR Eunice Chua on 27 July 2012, granted a stay of proceedings in Suit No 146 of 2012 pending the resolution of an intended arbitration between the plaintiff, Shanghai Construction, and Top Zone Construction & Engineering Pte Ltd. The plaintiff's claim against the defendant, Tan Poo Seng, was based on a dishonoured cheque issued as security for direct payments made to Top Zone's subcontractors. The court found that the issues in the suit were closely intertwined with the disputes in the intended arbitration, including breaches of a subcontract agreement and settlement claims, making a stay appropriate.
1. Case Overview
1.1 Court
High Court1.2 Outcome
Stay of proceedings granted pending the resolution of the intended arbitration between the plaintiff and Top Zone.
1.3 Case Type
Civil
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
Stay of proceedings granted pending arbitration between Shanghai Construction and Top Zone in a construction subcontract dispute. The court found the issues intertwined.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Shanghai Construction (Group) General Co. Singapore Branch | Plaintiff | Corporation | Proceedings Stayed | Stayed | Patrick Ong |
| Tan Poo Seng | Defendant | Individual | Stay Granted | Won | Tan Tian Luh |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Eunice Chua | Assistant Registrar | Yes |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Patrick Ong | David Ong & Co |
| Tan Tian Luh | Chancery Law Corporation |
4. Facts
- Plaintiff and Top Zone entered into a sub-contract agreement.
- Plaintiff made direct payments to Top Zone’s subcontractors.
- Defendant issued a cheque as security for the direct payments.
- Top Zone stopped building works and withdrew from the site.
- Plaintiff presented the cheque for payment, but it was dishonoured.
- Plaintiff commenced suit against the defendant based on the dishonoured cheque.
- There are disputes between the plaintiff and Top Zone arising from the subcontract agreement.
5. Formal Citations
- Shanghai Construction (Group) General Co. Singapore Branch v Tan Poo Seng, Suit No 146 of 2012 (Summons No 3323 of 2012), [2012] SGHCR 10
6. Timeline
| Date | Event |
|---|---|
| Plaintiff entered into a sub-contract agreement with Top Zone. | |
| Top Zone requested the plaintiff to make direct payment to Top Zone’s subcontractors. | |
| Plaintiff paid a total of $454,451.60 to Top Zone’s subcontractors. | |
| Defendant issued a United Overseas Bank cheque for the sum of $450,000. | |
| Top Zone stopped the building works and withdrew from the site. | |
| Plaintiff presented the UOB cheque for payment. | |
| Plaintiff made a demand on a performance bond obtained by Top Zone. | |
| Plaintiff filed a writ of summons and statement of claim against the defendant. | |
| Top Zone filed OS119/2012 seeking an injunction. | |
| Justice Andrew Ang granted the injunction application. | |
| Judgment reserved. |
7. Legal Issues
- Stay of Proceedings
- Outcome: The court exercised its inherent jurisdiction to grant a stay of proceedings pending the resolution of the intended arbitration between the plaintiff and Top Zone.
- Category: Procedural
- Related Cases:
- [1999] CLC 486
- (2000) 1 WLR 173
- [2012] EWHC 1331
- [2006] 1 Lloyd’s Rep 251
- [2006] ABQB 933
- [1991] 1 SLR(R) 382
- [2011] 1 SLR 543
- [1987] 1 WLR 1110
8. Remedies Sought
- Monetary damages
9. Cause of Actions
- Claim based on dishonoured cheque
10. Practice Areas
- Commercial Litigation
- Arbitration
- Construction Law
11. Industries
- Construction
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Reichhold Norway ASA & Anor v Goldman Sachs International | English High Court | Yes | [1999] CLC 486 | England | Cited as precedent for granting a stay of proceedings pending arbitration based on the court's inherent jurisdiction. |
| Reichhold Norway ASA and another v Goldman Sachs International | English Court of Appeal | Yes | (2000) 1 WLR 173 | England | Cited as precedent for granting a stay of proceedings pending arbitration based on the court's inherent jurisdiction. |
| Citigroup Markets Ltd v Amatra Leveraged Feeder Holdings Ltd | N/A | Yes | [2012] EWHC 1331 | England | Cited as a case where Reichhold (CA) was followed and applied. |
| ET Plus SA and others v Jean-Paul Welter and others | N/A | Yes | [2006] 1 Lloyd’s Rep 251 | England | Cited as a case where Reichhold (CA) was followed and applied. |
| Jardine Lloyd Thompson Canada Inc v Western Oil Sands Inc | N/A | Yes | [2006] ABQB 933 | Canada | Cited as a case where Reichhold (CA) was followed and applied. |
| Four Pillars Enterprises Co Ltd v Beiersdorf Aktiengesellschaft | Court of Appeal | Yes | [1991] 1 SLR(R) 382 | Singapore | Cited for the proposition that the court's inherent jurisdiction to stay proceedings should only be exercised rarely and exceptionally. |
| Lanna Resources Public Co Ltd v Tan Beng Phiau Dick | High Court | Yes | [2011] 1 SLR 543 | Singapore | Cited for the proposition that the court's inherent jurisdiction to stay proceedings should only be exercised rarely and exceptionally. |
| Etri Fans Ltd v NMB (UK) Ltd | English Court of Appeal | Yes | [1987] 1 WLR 1110 | England | Cited as a case that had been relied on in Four Pillars and Lanna Resources but was argued to have been overtaken by Reichhold (HC) and Reichhold (CA). |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Bills of Exchange Act (Cap 23, 2004 Rev Ed) | Singapore |
| Rules of Court (Cap 332, R 5, 2006 Rev Ed) | Singapore |
| Arbitration Act (Cap 10, 2002 Rev Ed) | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Stay of proceedings
- Inherent jurisdiction
- Arbitration
- Sub-contract agreement
- Dishonoured cheque
- Security
- Settlement agreement
15.2 Keywords
- stay of proceedings
- arbitration
- construction
- subcontract
- Singapore
- High Court
16. Subjects
- Civil Procedure
- Arbitration
- Construction Dispute
17. Areas of Law
- Civil Procedure
- Arbitration Law
- Construction Law