CCM Industrial v 70 Shenton: Performance Bond & Unconscionability in Construction Contract Termination

CCM Industrial Pte Ltd, a building contractor, sought an injunction against 70 Shenton Pte Ltd to prevent them from receiving payment under a performance bond issued by The Overseas Assurance Corporation Limited, following the termination of their construction contract. The High Court dismissed CCM's application, finding that CCM failed to establish a strong prima facie case of unconscionability on the part of 70 Shenton in calling on the performance bond. The court noted CCM's lack of response to concerns raised about project delays prior to the termination.

1. Case Overview

1.1 Court

High Court

1.2 Outcome

Summons dismissed with costs.

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

CCM Industrial sought to restrain 70 Shenton from calling on a performance bond. The court dismissed CCM's application, finding no strong prima facie case of unconscionability.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
The Overseas Assurance Corporation LimitedDefendantCorporationNeutralNeutral
CCM Industrial Pte LtdPlaintiffCorporationApplication DismissedLost
70 Shenton Pte LtdDefendantCorporationSuccessful in resisting injunctionWon

3. Judges

Judge NameTitleDelivered Judgment
Woo Bih LiJudgeYes

4. Counsels

Counsel NameOrganization
Paul TanRajah & Tann LLP
Thea Sonya RamanRajah & Tann LLP
Daniel TayRodyk & Davidson LLP
Patrick WongRodyk & Davidson LLP

4. Facts

  1. CCM was engaged by 70 Shenton as the main contractor for a construction project.
  2. The contract included a performance bond issued by OAC.
  3. The architect raised concerns about delays in the micro-piling works.
  4. 70 Shenton terminated CCM's employment due to the alleged delays.
  5. 70 Shenton made a demand on OAC for payment under the performance bond.
  6. CCM sought an injunction to restrain 70 Shenton from receiving payment under the performance bond.

5. Formal Citations

  1. CCM Industrial Pte Ltd v 70 Shenton Pte Ltd and another, Originating Summons No 269 of 2014, [2014] SGHC 75

6. Timeline

DateEvent
CCM engaged by 70 Shenton as main contractor.
Performance Bond Policy No 2012-A0414201-GPB issued by OAC.
Architect informed CCM of delays.
Termination Certificate issued.
70 Shenton terminated CCM's employment.
70 Shenton demanded payment under the PB.
CCM filed Originating Summons and Summons.
Summons heard and dismissed.
Decision Date

7. Legal Issues

  1. Unconscionability
    • Outcome: The court found that CCM had failed to establish a strong prima facie case of unconscionability on the part of 70 Shenton in calling on the performance bond.
    • Category: Substantive
    • Related Cases:
      • [2012] 3 SLR 352

8. Remedies Sought

  1. Declaration that 70 Shenton is not entitled to receive payment under the performance bond
  2. Injunction to restrain 70 Shenton from receiving payment under the performance bond

9. Cause of Actions

  • Injunction to restrain call on performance bond

10. Practice Areas

  • Construction Litigation
  • Commercial Litigation

11. Industries

  • Construction

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
BS Mount Sophia Pte Ltd v Join-Aim Pte LtdCourt of AppealYes[2012] 3 SLR 352SingaporeCited for the principles on granting an injunction to restrain a beneficiary from calling on a performance bond.

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 Bond
  • Unconscionability
  • Termination Certificate
  • Micro-piling
  • Delay
  • Injunction

15.2 Keywords

  • Performance bond
  • construction contract
  • injunction
  • unconscionability
  • Singapore

17. Areas of Law

Area NameRelevance Score
Unconscionability95
Performance Bond90
Injunctions85
Contract Law70
Construction Law60

16. Subjects

  • Construction Dispute
  • Contract Law
  • Performance Bonds