Sin Herh Construction v Hyundai Engineering: Interim Injunction & Performance Bond Call Dispute

Sin Herh Construction Pte Ltd sought an interim injunction against Hyundai Engineering & Construction Co Ltd to prevent them from calling on a performance bond issued by China Taiping Insurance (Singapore) Pte Ltd. The High Court of Singapore, presided over by Senior Judge Kan Ting Chiu, dismissed the application, finding that Sin Herh Construction had not established a strong prima facie case of unconscionability. The court also dismissed the application for an Erinford Order.

1. Case Overview

1.1 Court

High Court

1.2 Outcome

Plaintiff's application was dismissed.

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

The High Court refused Sin Herh Construction's application for an interim injunction to restrain Hyundai Engineering from calling on a performance bond.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Hyundai Engineering & Construction Co LtdDefendantCorporationJudgment for DefendantWon
China Taiping Insurance (Singapore) Pte LtdDefendantCorporationNeutralNeutral
Sin Herh Construction Pte LtdPlaintiffCorporationApplication DismissedLost

3. Judges

Judge NameTitleDelivered Judgment
Kan Ting ChiuSenior JudgeYes

4. Counsels

Counsel NameOrganization
Chan Kah Keen MelvinTSMP Law Corporation
Tan Pei Qian RachelTSMP Law Corporation
Wong Tze RoyLee Mun Hooi & Co
Goh Teck WeeLee Mun Hooi & Co
Lee Mun HooiLee Mun Hooi & Co

4. Facts

  1. Plaintiff and 1st Defendant entered into an agreement for reinforced concrete works.
  2. Plaintiff provided a performance bond as security for due performance.
  3. 1st Defendant made a demand on the Bond on 5 January 2016.
  4. Plaintiff applied for an interim injunction to restrain the 1st Defendant from receiving payment.
  5. Plaintiff contended the 1st Defendant's call on the Bond was unconscionable.
  6. The contracted works were not carried out by the Plaintiff in compliance with the Agreement.
  7. The Plaintiff did not meet the set deadlines for the contracted works.
  8. The Plaintiff withdrew a substantial number of its workers from the worksite.
  9. The 1st Defendant imposed back-charges on the Plaintiff.
  10. The Plaintiff attempted in vain to meet the 1st Defendant to talk over the back-charges.

5. Formal Citations

  1. Sin Herh Construction Pte Ltd v Hyundai Engineering & Construction Co Ltd and another, Originating Summons No 14 of 2016, [2017] SGHC 03

6. Timeline

DateEvent
Agreement signed between Plaintiff and 1st Defendant.
1st Defendant's letter regarding extension of Performance Bond.
Meeting between senior officials from Plaintiff and 1st Defendant.
Meeting between senior officials from Plaintiff and 1st Defendant.
Supplementary Sub-Contract Agreement signed.
Initial expiration date of the Bond.
1st Defendant to issue a Payment certificate.
Subsequent payment to be made within this period.
Subsequent payment to be made within this period.
Extended expiration date of the Bond.
1st Defendant's Final Claim Assessment.
Plaintiff received Final Claim Assessment.
1st Defendant made a demand on the Bond.
90 days after the expiration of the Bond.
Plaintiff applied for an interim injunction.
Hearing date.
Plaintiff sent an e-mail to have a meeting for “quantity reconciliation”.
Hearing date.
Costs of $12,000 awarded to the 1st Defendant.
Plaintiff's solicitors informed that they are prepared to furnish their firm’s undertaking to release the sum of $416,035.01 to the 1st Defendant in the event the Plaintiff’s appeal is unsuccessful.
Plaintiff’s counsel wrote to court for an Erinford Order.
Hearing date.

7. Legal Issues

  1. Unconscionability
    • Outcome: The court found that the Plaintiff had not established a strong prima facie case of unconscionability to restrain the calling on the performance bond.
    • Category: Substantive
    • Related Cases:
      • [2012] 3 SLR 352
      • [2000] 1 SLR 117
  2. Interim Injunction
    • Outcome: The court refused to grant the interim injunction.
    • Category: Procedural
  3. Erinford Order
    • Outcome: The court refused to grant the Erinford Order.
    • Category: Procedural
    • Related Cases:
      • [1974] 1 Ch 261
      • [1993] 2 SLR(R) 741

8. Remedies Sought

  1. Interim Injunction
  2. Erinford Order

9. Cause of Actions

  • Breach of Contract
  • Unconscionable Conduct

10. Practice Areas

  • Commercial Litigation
  • Construction Law
  • Injunctions
  • Performance Bonds

11. Industries

  • Construction
  • Insurance

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
BS Mount Sophia Pte Ltd v Join-Aim Pte LtdCourt of AppealYes[2012] 3 SLR 352SingaporeCited for the settled law on unconscionability as a basis for restraining the calling on a performance bond and the high threshold for establishing unconscionability.
Dauphin Offshore Engineering & Trading Pte Ltd v The Private Office of HRH Sheikh Sultan bin Khalifa bin Zayed Al NahyanN/AYes[2000] 1 SLR 117SingaporeCited for the principle that unconscionability cannot be precisely defined and depends on the facts of each case.
Erinford Properties Ltd and Another v Cheshire County CouncilN/AYes[1974] 1 Ch 261N/ACited as the origin of the Erinford Order and the principles governing its application.
Tan Soo Leng David v Wee, Satku & Kumar Pte Ltd and anotherN/AYes[1993] 2 SLR(R) 741SingaporeCited as an example of the acceptance of Erinford Properties Ltd v Cheshire County Council as good law in Singapore.
Wilson v. Church (No. 2)Court of AppealYesWilson v. Church (No. 2), 12 Ch.D. 454N/ACited for the principle that an appeal should not be rendered nugatory.

13. Applicable Rules

Rule Name
Order 29 of the Rules of Court

14. Applicable Statutes

Statute NameJurisdiction
No applicable statutes

15. Key Terms and Keywords

15.1 Key Terms

  • Performance Bond
  • Interim Injunction
  • Unconscionability
  • Erinford Order
  • Back-charges
  • Supplementary Agreement
  • Final Claim Assessment
  • Quantity Reconciliation

15.2 Keywords

  • Performance Bond
  • Injunction
  • Construction
  • Singapore
  • Unconscionability
  • Contract
  • Hyundai
  • Sin Herh

17. Areas of Law

Area NameRelevance Score
Civil Procedure90
Performance Bond80
Injunctions75
Erinford Injunction70
Banking and Finance30

16. Subjects

  • Construction Dispute
  • Contract Law
  • Civil Procedure
  • Injunctions
  • Performance Bonds