Backho (S) Pte Ltd v KSE Marine Works Pte Ltd: SOPA Dispute over Oral Contract and Adjudication Determination

In Backho (S) Pte Ltd v KSE Marine Works Pte Ltd, the Singapore High Court addressed KSE Marine Works Pte Ltd's application to set aside an adjudication determination (AD) and a related court order, arguing that the AD was based on an oral contract outside the scope of the Building and Construction Industry Security of Payment Act (SOPA) and that the adjudicator exceeded his jurisdiction. The court dismissed KSE's application, finding that the AD was based on a written contract and that the adjudicator did not exceed his jurisdiction. The court granted KSE an extension of time for filing the application but ultimately ruled in favor of Backho (S) Pte Ltd.

1. Case Overview

1.1 Court

General Division of the High Court of the Republic of Singapore

1.2 Outcome

KSE Marine Works Pte Ltd's application to set aside the Adjudication Determination and the Order is dismissed.

1.3 Case Type

Building and Construction Law

1.4 Judgment Type

Judgment

1.5 Jurisdiction

Singapore

1.6 Description

Singapore High Court case involving Backho (S) Pte Ltd and KSE Marine Works Pte Ltd, addressing a SOPA dispute over an alleged oral contract and setting aside an adjudication determination.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Backho (S) Pte LtdRespondentCorporationApplication to set aside the Adjudication Determination and the Order is dismissedWon
KSE Marine Works Pte LtdApplicantCorporationApplication to set aside the Adjudication Determination and the Order is dismissedLost

3. Judges

Judge NameTitleDelivered Judgment
Tan Siong ThyeJudgeYes

4. Counsels

Counsel NameOrganization
S MagintharanEssex LLC
Liew Boon Kwee JamesEssex LLC
Lee Peng Khoon EdwinEldan Law LLP
Amanda Koh Jia YiEldan Law LLP
Yap Wei Xuan MendelEldan Law LLP

4. Facts

  1. KSE was engaged by Hyundai as a subcontractor for reclamation and marine works at Tuas Western Coast.
  2. Backho sent KSE a quotation on 30 August 2019 for the rental of a Super Long Arm Excavator.
  3. Backho sent KSE another quotation on 4 February 2020 for the rental of excavator equipment, dump trucks, and other items.
  4. KSE claimed that it had an oral agreement with Backho for a volume-based rate of S$1.50/m3 of sand transported.
  5. Backho denied the existence of the alleged oral agreement.
  6. Backho served a payment claim on KSE for work done from 30 August 2019 to 31 May 2020.
  7. KSE argued that there was no contract in writing under s 4(3) of the SOPA.

5. Formal Citations

  1. Backho (S) Pte Ltd v KSE Marine Works Pte Ltd, Originating Summons No 790 of 2021(Summons No 4141 of 2021), [2022] SGHC 11

6. Timeline

DateEvent
Backho sent KSE a quotation for rental of heavy equipment.
Backho began rental of Super Long Arm Excavator with a sieving bucket and an operator.
Backho submitted two quotations to KSE: one for rental of heavy equipment and another for transportation of dredging sand material.
Backho started sand transportation works.
Backho discontinued sand transportation works due to Circuit Breaker and COVID-19 measures.
Backho resumed sand transportation works after the lifting of the Circuit Breaker.
Backho issued Progress Claim No 1 using a volume-based rate for work done in November and December 2020.
KSE claims Backho abandoned the contract.
Backho issued six invoices using a time-based rate for work done in November 2020, December 2020, and January 2021.
Backho served Payment Claim Reference No. 2 on KSE.
KSE served its Payment Certificate in response to Payment Claim 2.
Backho lodged Adjudication Application No 165 based on KSE’s non-payment in respect of Payment Claim 2.
The Adjudicator rendered the Adjudication Determination.
Backho applied to seek leave to enforce the Adjudication Determination.
The assistant registrar granted Backho’s application to enforce the Adjudication Determination.
Service of the Order was effected.
KSE commenced application to set aside the Adjudication Determination and the Order.
Hearing on the issues pertaining to whether KSE’s setting aside application was filed out of time.
Judgment reserved.

7. Legal Issues

  1. Jurisdiction of Adjudicator
    • Outcome: The court held that the Adjudicator did not exceed his jurisdiction.
    • Category: Jurisdictional
    • Sub-Issues:
      • Whether the payment claim was based on a single contract
      • Whether the contract was made in writing
    • Related Cases:
      • [2015] 1 SLR 797
      • [2021] 4 SLR 862
      • [2017] 4 SLR 359
      • [2018] 1 SLR 584
      • [2017] 4 SLR 277
  2. Extension of Time
    • Outcome: The court granted KSE an extension of time to file the application.
    • Category: Procedural
    • Sub-Issues:
      • Length of delay
      • Reasons for delay
      • Merits of intended application
      • Prejudice to the defendant
    • Related Cases:
      • [2021] 4 SLR 862
  3. Existence of Oral Agreement
    • Outcome: The court found that KSE failed to prove the existence of the Alleged Oral Agreement.
    • Category: Substantive
    • Related Cases:
      • [2017] 4 SLR 277

8. Remedies Sought

  1. Setting aside the Adjudication Determination
  2. Setting aside the court order granting leave to enforce the Adjudication Determination

9. Cause of Actions

  • Breach of Contract

10. Practice Areas

  • Construction Law
  • Commercial Litigation
  • Arbitration

11. Industries

  • Construction

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Citiwall Safety Glass Pte Ltd v Mansource Interior Pte LtdCourt of AppealYes[2015] 1 SLR 797SingaporeCited for the principle that the 14-day period under Order 95 Rule 2(4) of the Rules of Court is a time limit in keeping with the scheme of expeditious resolution under the SOPA.
Frontbuild Engineering & Construction Pte Ltd v. JHJ Construction Pte LtdHigh CourtYes[2021] 4 SLR 862SingaporeCited for the relevant considerations in determining if an extension of time ought to be granted, including the length of delay, the reasons for the delay, the merits of the intended application, and whether there was undue prejudice to the defendant if the extension of time was granted.
Rong Shun Engineering & Construction Pte Ltd v CP Ong Construction Pte LtdHigh CourtYes[2017] 4 SLR 359SingaporeCited for the principle that the SOPA mandates that one adjudication application be founded on one payment claim which arises from one contract.
Civil Tech Pte Ltd v Hua Rong Engineering Pte LtdCourt of AppealYes[2018] 1 SLR 584SingaporeCited for the principle that for the purposes of a progress payment and a payment claim, only one contract is material: the Payment Claim Contract.
Metropole Pte Ltd v Designshop Pte LtdHigh CourtYes[2017] 4 SLR 277SingaporeCited for the principle that it is a jurisdictional requirement that the adjudicator’s determination be based on a written contract and the court is entitled to look into the merits of the adjudicator’s decision in this respect.

13. Applicable Rules

Rule Name
Rules of Court (Cap 322, R 5)
Order 95 Rule 2(4) of the Rules of Court (Cap 322, R 5, 2014 Rev Ed)

14. Applicable Statutes

Statute NameJurisdiction
Building and Construction Industry Security of Payment Act (Cap 30B, 2006 Rev Ed)Singapore
Building and Construction Industry Security of Payment (Amendment) Act 2018 (Act 47 of 2018)Singapore
Rules of Court (Cap 322, R 5, 2014 Rev Ed)Singapore

15. Key Terms and Keywords

15.1 Key Terms

  • Adjudication Determination
  • Building and Construction Industry Security of Payment Act
  • SOPA
  • Payment Claim
  • Oral Agreement
  • Contract in Writing
  • Extension of Time
  • Jurisdiction
  • Variation
  • Goodwill Payments

15.2 Keywords

  • SOPA
  • Adjudication
  • Construction
  • Contract
  • Oral Agreement
  • Singapore

17. Areas of Law

Area NameRelevance Score
Building and Construction Industry Security of Payment Act 200495
Construction Law90
Contract Law70
Arbitration60
Civil Procedure50
Breach of Contract40
Extension of Time30

16. Subjects

  • Construction Dispute
  • Adjudication
  • Contract Law