Takenaka Corp v Tam Chee Chong: Stay of Proceedings Granted in Arbitration Dispute

In Takenaka Corp v Tam Chee Chong, the High Court of Singapore addressed an application by the Judicial Managers of Acesian Star (S) Pte Ltd for a stay of Originating Summons No 936 of 2017, sought by Takenaka Corporation to set aside the rejection of a proof of debt. The Judicial Managers argued for a stay based on an arbitration agreement. The court granted the stay, finding no sufficient reason to deny arbitration and that the Judicial Managers were ready and willing to arbitrate.

1. Case Overview

1.1 Court

High Court

1.2 Outcome

Stay of Originating Summons No 936 of 2017 granted, subject to the condition that payment of the deposit to SIAC be made by the Company by 31 January 2018 and with liberty to apply if arbitration was not being diligently pursued.

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Stay of proceedings granted in favor of arbitration due to an arbitration agreement between Takenaka Corporation and Acesian Star (S) Pte Ltd.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
TAKENAKA CORPORATIONApplicant, RespondentCorporationStay of proceedings grantedLostYeo Boon Tat
TAM CHEE CHONGRespondentIndividualStay of proceedings grantedWonFong Zhiwei, Daryl
LIM LOO KHOONRespondentIndividualStay of proceedings grantedWonFong Zhiwei, Daryl
Acesian Star (S) Pte. Ltd.RespondentCorporationStay of proceedings grantedWon

3. Judges

Judge NameTitleDelivered Judgment
Aedit AbdullahJudgeYes

4. Counsels

Counsel NameOrganization
Yeo Boon TatM Pillay
Fong ZhiweiShook Lin & Bok LLP
DarylShook Lin & Bok LLP

4. Facts

  1. Takenaka Corporation sought to set aside the rejection by the Judicial Managers of Acesian Star (S) Pte Ltd of a proof of debt.
  2. The Judicial Managers sought a stay of OS 936/2017 based on an arbitration agreement between the Company and Takenaka Corporation.
  3. A dispute arose between Takenaka Corporation and the Company in respect of payments due under the subcontract for T4.
  4. An adjudication determination was made under the Building and Construction Industry Security of Payment Act (Cap 30B, 2006 Rev Ed).
  5. Takenaka Corporation terminated the T1E subcontract because of an alleged breach by the Company.
  6. Takenaka Corporation terminated the T4 subcontract on the basis that the Judicial Management application was a default event under the T4 subcontract.
  7. Takenaka Corporation filed a proof of debt for an amount of about $27.8 million under both the T1E and T4 subcontracts against the Company.

5. Formal Citations

  1. Takenaka Corp v Tam Chee Chong and another, Originating Summons No 936 of 2017 (Summons No 4920 of 2017), [2018] SGHC 51

6. Timeline

DateEvent
T1E subcontract was terminated by Takenaka Corporation.
The Company applied for Judicial Management in Originating Summons No 1163 of 2016, and this was ordered in January 2017.
Takenaka Corporation filed a proof of debt for an amount of about $27.8 million under both the T1E and T4 subcontracts against the Company.
This proof of debt was rejected by the Judicial Managers.
Takenaka Corporation sought an order for the setting aside of the rejection of the proof of debt and for the claim set out in its proof of debt to be accepted by the Judicial Managers.
A third Judicial Manager was appointed to investigate the viability of a clawback action.
Hearing date
Payment of the deposit to SIAC be made by the Company
Judgment Date

7. Legal Issues

  1. Stay of Court Proceedings
    • Outcome: The court granted a stay of proceedings in favour of arbitration.
    • Category: Procedural
    • Related Cases:
      • [2016] 2 SLR 871
      • [2016] 3 SLR 431
      • [1999] 1 SLR (R) 1138
      • [2016] 1 SLR 373

8. Remedies Sought

  1. Setting aside of the rejection of the proof of debt
  2. Order for the claim set out in its proof of debt to be accepted by the Judicial Managers

9. Cause of Actions

  • Breach of Contract

10. Practice Areas

  • Arbitration
  • Commercial Litigation
  • Construction Law

11. Industries

  • Construction

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Sim Chay Koon v NTUC Income Insurance Co-operative LtdHigh CourtYes[2016] 2 SLR 871SingaporeCited to establish that cost savings or the subjective preference of one party for litigation would not be sufficient grounds for the Court to refuse to grant a stay in favour of arbitration.
Maybank Kim Eng Securities Pte Ltd v Lim Keng YongHigh CourtYes[2016] 3 SLR 431SingaporeCited for the principle that the court will only deny a stay in exceptional circumstances where the applicant seeking a stay remains ready and willing to arbitrate.
Fasi Paul Frank v Specialty Laboratories Asia Pte LtdUnknownYes[1999] 1 SLR (R) 1138SingaporeCited for the principle that a broad range of factors is captured by the term “sufficient reason”.
Tomolugen Holdings Ltd v Silica Investors LtdUnknownYes[2016] 1 SLR 373SingaporeCited for the proposition that the Court needs to find a balance that serves the ends of justice between a plaintiff’s right to choose where he wants to sue, the Court’s desire to prevent circumvention of the operation of an arbitration agreement, and the Court’s inherent case management power.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute NameJurisdiction
Arbitration Act (Cap 10, 2002 Rev Ed)Singapore
Building and Construction Industry Security of Payment Act (Cap 30B, 2006 Rev Ed)Singapore

15. Key Terms and Keywords

15.1 Key Terms

  • Arbitration Agreement
  • Stay of Proceedings
  • Judicial Management
  • Proof of Debt
  • Arbitration Act
  • Singapore International Arbitration Centre

15.2 Keywords

  • arbitration
  • stay of proceedings
  • construction
  • judicial management
  • proof of debt

16. Subjects

  • Arbitration
  • Construction Dispute
  • Contract Law
  • Civil Procedure

17. Areas of Law

  • Arbitration Law
  • Construction Law
  • Civil Procedure