Yau Lee Construction v. Far East Square: Stay of Proceedings & Arbitration of Construction Dispute

In Yau Lee Construction (Singapore) Pte Ltd v Far East Square Pte Ltd, the High Court of Singapore addressed applications by both parties for a stay of court proceedings in favor of arbitration, concerning a construction dispute under the Singapore Institute of Architects (SIA) Conditions. Yau Lee Construction sought a stay of Far East Square's claim for liquidated damages, while Far East Square sought a stay of Yau Lee Construction's counterclaim. The dispute centered on the validity of architect's certificates and the entitlement to extensions of time. The court granted both stay applications, referring the entire dispute to arbitration.

1. Case Overview

1.1 Court

High Court

1.2 Outcome

Defendant's Stay Application granted; Plaintiff's Stay Application granted.

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Stay granted, referring dispute over architect's certificates and liquidated damages in a construction project to arbitration.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Far East Square Pte LtdRespondent, ApplicantCorporationStay Application GrantedStayed
Yau Lee Construction (Singapore) Pte LtdApplicant, RespondentCorporationStay Application GrantedStayed

3. Judges

Judge NameTitleDelivered Judgment
Elton Tan Xue YangAssistant RegistrarYes

4. Counsels

Counsel NameOrganization
Christopher ChuahWongPartnership LLP
Lee Hwai BinWongPartnership LLP
Valerie KohWongPartnership LLP
Deborah HoeWongPartnership LLP
Raymond ChanChan Neo LLP
Karen OungChan Neo LLP

4. Facts

  1. Far East Square Pte Ltd appointed Yau Lee Construction as the main contractor for a construction project.
  2. The Letter of Award incorporated the SIA Conditions (7th Ed, April 2005).
  3. The Main Contract comprised the Letter of Award and the SIA Conditions.
  4. Mr. Lim Meng Hwa of ADDP Architects LLP was the architect administering the Main Contract.
  5. A Delay Certificate was issued on 17 February 2014.
  6. A Termination of Delay Certificate was issued on 19 December 2016, backdated to 19 February 2014.
  7. A Further Delay Certificate was issued on 7 February 2017.
  8. A Final Certificate was issued on 5 September 2017, certifying liquidated damages of $1.169m.
  9. An adjudication determination was rendered on 14 February 2018, with $2,276,284.68 due to Yau Lee Construction.

5. Formal Citations

  1. Yau Lee Construction (Singapore) Pte Ltd v Far East Square Pte Ltd, Suit No 276 of 2018 (Summons Nos 1613 and 1802 of 2018), [2018] SGHCR 11

6. Timeline

DateEvent
Letter of Award issued to Yau Lee Construction.
Main Contract executed.
Delay Certificate issued.
Yau Lee Construction complained about delays not accounted for in Delay Certificate.
ADDP indicated no objection to grant further extension of time.
Termination of Delay Certificate issued.
Further Delay Certificate issued.
Final Certificate issued.
Adjudication determination rendered.
Suit commenced.
Judgment reserved.

7. Legal Issues

  1. Stay of Court Proceedings
    • Outcome: The court granted the stay applications, referring the disputes to arbitration.
    • Category: Procedural
  2. Validity of Architect's Certificates
    • Outcome: The court found that there was a prima facie case of disputes as to whether the Architect's Certificates were validly issued.
    • Category: Substantive
  3. Interpretation of SIA Conditions
    • Outcome: The court interpreted clauses 24(1), 24(3), and 23(2) of the SIA Conditions.
    • Category: Substantive

8. Remedies Sought

  1. Stay of Proceedings
  2. Monetary Damages
  3. Declaration

9. Cause of Actions

  • Breach of Contract

10. Practice Areas

  • Arbitration
  • Construction Disputes
  • Commercial Litigation

11. Industries

  • Construction
  • Real Estate

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Chin Ivan v H P Construction & Engineering Pte LtdCourt of AppealYes[2015] 3 SLR 124SingaporeCited as the leading judgment on the validity of architect’s certificates.
Ser Kim Koi v GTMS Construction Pte LtdCourt of AppealYes[2016] 3 SLR 51SingaporeCited by the Plaintiff to support its position on the standard for determining whether a stay should be granted.
Kwan Im Tong Chinese Temple and another v Fong Choon Hung Construction Pte LtdCourt of AppealYes[1998] 1 SLR(R) 401SingaporeCited by the Defendant to support its position that the relevant test for a stay application is the test of prima facie dispute.
Tjong Very Sumito and others v Antig Investments Pte LtdCourt of AppealYes[2009] 4 SLR(R) 732SingaporeCited for the approach to determine the existence of a dispute to be referred to arbitration under the International Arbitration Act.
Dalian Hualiang Enterprise Group Co Ltd v Louis Dreyfus Asia Pte LtdHigh CourtYes[2005] 4 SLR(R) 646SingaporeCited for the reading of Halki Shipping Corporation v Sopex Oils Ltd.
Halki Shipping Corporation v Sopex Oils LtdEnglish Court of AppealYes[1998] 1 WLR 726England and WalesEndorsed in Tjong Very Sumito for the approach to determine the existence of a dispute to be referred to arbitration under the International Arbitration Act.
Uni-Navigation Pte Ltd v Wei Loong Shipping Pte LtdHigh CourtYes[1992] 3 SLR(R) 595SingaporeCited for the principle that s 7 of the Arbitration Act (Cap 10, 1985 Rev Ed) required consideration of whether the claim is undisputed or indisputable.
Kwang In Tong Chinese Temple v Fong Choon Hung Construction Pte LtdHigh CourtYes[1997] 1 SLR(R) 907SingaporeThe High Court decision in Kwan Im Tong, which was doubted by the Court of Appeal.
Home and Overseas Insurance Company Ltd v Mentor Insurance Co (UK) Ltd (in liquidation)English Court of AppealYes[1990] 1 WLR 153England and WalesCited with approval in Kwan Im Tong for the principle that parties have agreed on their chosen tribunal and a defendant is entitled prima facie to have the dispute decided by that tribunal in the first instance.
Tradax Internacional SA v Cerrahogullari TAS The M EregliQueen's Bench DivisionYes[1981] 2 Lloyd’s Rep 169England and WalesCited with approval in Kwan Im Tong for the principle that if a claim is indisputably due, the claimant can either obtain a final or interim award in the arbitration or summary judgment in an action.
Channel Tunnel Group Ltd and France Manche SA v Balfour Beatty Construction LtdHouse of LordsYes[1993] 1 All ER 664England and WalesCited with approval in Kwan Im Tong for the principle that the exception to the mandatory stay has been regarded as the opposite side of the coin to the jurisdiction of the court under RSC Ord 14 to give summary judgment in favour of the plaintiff where the defendant has no arguable defence.
Fasi Paul Frank v Specialty Laboratories Asia Pte LtdHigh CourtYes[1999] 1 SLR(R) 1138SingaporeTurned his mind to the principles laid out in Kwan Im Tong.
Multiplex Construction Pty Ltd v Sintal Enterprise Pte LtdCourt of AppealYes[2005] 2 SLR(R) 530SingaporeThe Court of Appeal’s approach in Multiplex is instructive.
JDC Corp and another v Lightweight Concrete Pte LtdCourt of AppealYes[1999] 1 SLR(R) 96SingaporeCited for the message that if there appears to be a conflict between two provisions of a contract and such conflict cannot be settled without delving deeply into the contract, then the resolution of the question of construction that is raised by the conflict is a dispute which should go to arbitration.
Anwar Siraj and another v Teo Hee Lai Building Construction Pte LtdHigh CourtYes[2007] 2 SLR(R) 500SingaporeConcerned a stay application under the AA.
Samsung Corp v Chinese Chamber Realty Pte LtdHigh CourtYes[2004] 1 SLR(R) 382SingaporeCited for the principle that where irregularities in the architect’s certificates are alleged by the defendant, the defendant cannot succeed in establishing a prima facie case of disputes merely by raising mere allegations; he must back this up by credible evidence.
H P Construction & Engineering Pte Ltd v Chin IvanHigh CourtYes[2014] 3 SLR 1318SingaporeCited for the principle that where irregularities in the architect’s certificates are alleged by the defendant, the defendant cannot succeed in establishing a prima facie case of disputes merely by raising mere allegations; he must back this up by credible evidence.
MAE Engineering Ltd v Dragages Singapore Pte Ltd (formerly known as Dragages et Travaux Publics (S) Pte Ltd)High CourtYes[2002] 1 SLR(R) 853SingaporeCited for the principle that once the defendant sets up a prima facie case of a dispute, the burden shifts to the plaintiff to satisfy the court that there is sufficient reason why the matter should not be referred in accordance with the arbitration agreement under s 6(2)(a) of the AA and the court should instead assume jurisdiction.
Maybank Kim Eng Securities Pte Ltd v Lim Keng Yong and anotherCourt of AppealYes[2016] 3 SLR 431SingaporeCited for the principle that once the defendant sets up a prima facie case of a dispute, the burden shifts to the plaintiff to satisfy the court that there is sufficient reason why the matter should not be referred in accordance with the arbitration agreement under s 6(2)(a) of the AA and the court should instead assume jurisdiction.
Tropicon Contractors Pte Ltd v Lojan Properties Pte LtdHigh CourtYes[1989] 1 SLR(R) 591SingaporeCited for the principle that if the architect has already informed the contractor of its willingness to grant an extension of time, then such notice will not be a condition precedent to the grant of an extension of time.
Aoki Corp v Lippoland (Singapore) Pte LtdHigh CourtYes[1995] 1 SLR(R) 314SingaporeThe language used by Khoo J in Aoki Corp v Lippoland (Singapore) Pte Ltd [1995] 1 SLR(R) 314 (“Aoki”) at [26] strongly suggests that these are different requirements under cl 24.(1).
Sembcorp Marine Ltd v PPL Holdings Pte Ltd and another and another appealCourt of AppealYes[2013] 4 SLR 193SingaporeIn order to determine whether such a term should be implied, one would have to apply the framework set out in Sembcorp Marine Ltd v PPL Holdings Pte Ltd and another and another appeal [2013] 4 SLR 193 at [93]-–[101], which necessitates an investigation of matters such as whether the parties contemplated the gap and the exact nature of the term to be implied having regard to the officious bystander test.
Lian Teck Construction Pte Ltd v Woh Hup (Pte) Ltd and othersHigh CourtYes[2006] 4 SLR(R) 1SingaporeHowever, as Chao JA pointed out in Samsung, the tests that were applied in stay and summary judgment applications were never the same, even prior to the amendments. The former concerned an issue of jurisdiction and the latter the substantive dispute between the parties. Following the amendments, “the application for summary judgment can only be made after the Defence has been filed” and “while a stay application is pending, no O 14 application should be made”: Samsung at [23]–[24]. Given the decoupling of the applications today, there is even less reason to assimilate the applicable tests.
Australian Timber Products Pte Ltd v Koh Brothers Building & Civil Engineering Contractor (Pte) LtdHigh CourtYes[2005] 1 SLR(R) 168SingaporeAccording to the Defendant, it filed its Defence and Counterclaim because the Plaintiff had refused to agree to the deferment of the filing of a Defence pending the outcome of any stay application filed by the Defendant. In any event, given the Defendant’s reservation of rights, the Plaintiff has not contended that the Defendant has taken a step in the proceedings by filing its Defence and Counterclaim and is thereby barred from seeking a stay of the proceedings (see also Australian Timber Products Pte Ltd v Koh Brothers Building & Civil Engineering Contractor (Pte) Ltd [2005] 1 SLR(R) 168 at [22] and Chong Long Hak Kee Construction Trading Co v IEC Global Pte Ltd [2003] 4 SLR(R) 499 at [13]).
Chong Long Hak Kee Construction Trading Co v IEC Global Pte LtdHigh CourtYes[2003] 4 SLR(R) 499SingaporeAccording to the Defendant, it filed its Defence and Counterclaim because the Plaintiff had refused to agree to the deferment of the filing of a Defence pending the outcome of any stay application filed by the Defendant. In any event, given the Defendant’s reservation of rights, the Plaintiff has not contended that the Defendant has taken a step in the proceedings by filing its Defence and Counterclaim and is thereby barred from seeking a stay of the proceedings (see also Australian Timber Products Pte Ltd v Koh Brothers Building & Civil Engineering Contractor (Pte) Ltd [2005] 1 SLR(R) 168 at [22] and Chong Long Hak Kee Construction Trading Co v IEC Global Pte Ltd [2003] 4 SLR(R) 499 at [13]).

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 Payments Act (Cap 30B, 2006 Rev Ed)Singapore

15. Key Terms and Keywords

15.1 Key Terms

  • Arbitration
  • Stay of Proceedings
  • Architect's Certificate
  • Delay Certificate
  • Termination of Delay Certificate
  • Further Delay Certificate
  • Final Certificate
  • SIA Conditions
  • Extension of Time
  • Liquidated Damages

15.2 Keywords

  • arbitration
  • stay of proceedings
  • construction law
  • architect certificates
  • SIA Conditions
  • Singapore

17. Areas of Law

Area NameRelevance Score
Construction Law85
Arbitration75
Building and Construction Contracts70
Contract Law60
Breach of Contract50

16. Subjects

  • Construction Dispute
  • Arbitration
  • Contract Law
  • Civil Procedure