Emergent Engineering v China Construction Realty: SOPA Adjudication Dispute
In Emergent Engineering Pte Ltd v China Construction Realty Co Pte Ltd, the Singapore High Court dismissed China Construction Realty's application to set aside an adjudication determination and order of court under the Building and Construction Industry Security of Payment Act (SOPA). Emergent Engineering, the applicant and sub-contractor, sought payment from China Construction Realty, the respondent and main contractor, for work done on a residential project. The court, Tan Siong Thye J, found that the adjudicator did not breach natural justice, the payment claim was validly served, and it was a claim for progress payment within the scope of SOPA. The court dismissed the application with costs to be determined.
1. Case Overview
1.1 Court
General Division of the High Court1.2 Outcome
Respondent's application to set aside the Adjudication Determination and the Order of Court is dismissed.
1.3 Case Type
Civil
1.4 Judgment Type
Ex Tempore Judgment
1.5 Jurisdiction
Singapore
1.6 Description
Singapore High Court dismisses application to set aside adjudication determination under SOPA, concerning termination of a construction sub-contract.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Emergent Engineering Pte Ltd | Applicant | Corporation | Application to set aside Adjudication Determination and Order of Court dismissed | Won | Koong Len Sheng, Lee Wan Ling |
| China Construction Realty Co Pte Ltd | Respondent | Corporation | Application to set aside Adjudication Determination and Order of Court dismissed | Lost | Tan Beng Swee |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Tan Siong Thye | Judge of the High Court | Yes |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Koong Len Sheng | David Lim & Partners LLP |
| Lee Wan Ling | David Lim & Partners LLP |
| Tan Beng Swee | CTLC Law Corporation |
4. Facts
- China Construction Realty Co Pte Ltd engaged Emergent Engineering Pte Ltd as a sub-contractor for a residential project in December 2019.
- The terms of engagement were detailed in a Letter of Acceptance dated 14 December 2019.
- The scope of the sub-contract work was varied under Variation Order No 1 dated 14 August 2020 and a Supplemental Agreement dated 31 March 2021.
- On 22 April 2022, China Construction Realty Co Pte Ltd issued a Notice of Termination seeking to terminate the Sub-Contract.
- Emergent Engineering Pte Ltd served Payment Claim No 25 on 6 May 2022.
- China Construction Realty Co Pte Ltd served Payment Response No 25 on 27 May 2022.
- Emergent Engineering Pte Ltd lodged Adjudication Application No. SOP/AA 093 of 2022 on 10 June 2022.
5. Formal Citations
- Emergent Engineering Pte Ltd v China Construction Realty Co Pte Ltd, Originating Application No 667 of 2022(Summons No 2788 of 2022), [2022] SGHC 276
6. Timeline
| Date | Event |
|---|---|
| Letter of Acceptance issued to Emergent Engineering Pte Ltd | |
| Variation Order No 1 issued | |
| Supplemental Agreement signed | |
| China Construction Realty Co Pte Ltd issued a Notice of Termination | |
| Emergent Engineering Pte Ltd responded with notice of wrongful termination | |
| Emergent Engineering Pte Ltd served Payment Claim No 25 | |
| China Construction Realty Co Pte Ltd served Payment Response No 25 | |
| Emergent Engineering Pte Ltd lodged Adjudication Application No. SOP/AA 093 of 2022 | |
| First Adjudication Conference held | |
| Second Adjudication Conference held | |
| Adjudication Determination rendered | |
| Order of Court obtained by Emergent Engineering Pte Ltd | |
| Judgment delivered |
7. Legal Issues
- Breach of Natural Justice
- Outcome: The court found that the Adjudicator had not breached the rules of natural justice.
- Category: Procedural
- Sub-Issues:
- Failure to consider essential issues
- Failure to apply mind to essential issues
- Validity of Payment Claim
- Outcome: The court found that the Applicant had validly served PC 25 on the Respondent.
- Category: Substantive
- Progress Payment Claim
- Outcome: The court found that PC 25 was a claim for progress payment within the scope of the SOPA.
- Category: Substantive
8. Remedies Sought
- Monetary Damages
9. Cause of Actions
- Breach of Contract
10. Practice Areas
- Construction Law
- Commercial Litigation
- Arbitration
11. Industries
- Construction
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Citiwall Safety Glass Pte Ltd v Mansource Interior Pte Ltd | Court of Appeal | Yes | [2015] 1 SLR 797 | Singapore | Cited for the principle that the court does not review the merits of the adjudicator’s decision when hearing an application to set aside an adjudication determination. |
| W Y Steel Construction Pte Ltd v Osko Pte Ltd | Unknown | Yes | [2013] 3 SLR 380 | Singapore | Cited to support the principle that the adjudication regime under SOPA seeks to achieve temporary finality. |
| Glaziers Engineering Pte Ltd v WCS Engineering Construction Pte Ltd | Unknown | Yes | [2018] 2 SLR 1311 | Singapore | Cited for the principle that a party seeking to set aside an adjudication determination on the ground of a breach of natural justice must show a material breach of natural justice which has caused it to suffer prejudice. |
| Bintai Kindenko Pte Ltd v Samsung C&T Corp | Unknown | Yes | [2018] 2 SLR 532 | Singapore | Cited for the principle that each party must be given an adequate opportunity to be heard and to respond to the case raised by the other party. |
| Metropole Pte Ltd v Designshop Pte Ltd | Unknown | Yes | [2017] 4 SLR 277 | Singapore | Cited for the principle that the adjudicator must receive both parties’ submissions and address important issues which are determinative of the outcome of a dispute. |
| AKN v ALC | Unknown | Yes | [2015] 3 SLR 488 | Singapore | Cited for the principle that the court should only infer that the adjudicator has failed to consider an important pleaded issue if such an inference was “clear and virtually inescapable”. |
| Range Construction Pte Ltd v Goldbell Engineering Pte Ltd | Unknown | Yes | [2021] 2 SLR 91 | Singapore | Cited for the principle that natural justice only requires that the parties be heard; it does not require that the parties be given responses on all submissions made. |
| SEF Construction Pte Ltd v Skoy Connected Pte Ltd | Unknown | Yes | [2010] 1 SLR 733 | Singapore | Cited for the principle that natural justice only requires that the parties be heard; it does not require that the parties be given responses on all submissions made. |
| Lee Wee Lick Terence (alias Li Weili Terence) v Chua Say Eng (formerly trading as Weng Fatt Construction Engineering) and another appeal | Court of Appeal | Yes | [2013] 1 SLR 401 | Singapore | Cited for the principle that if there is no valid service of a payment claim, the appointment of an adjudicator will be invalid, and the resulting adjudication determination would be null and void. |
| Comfort Management Pte Ltd v OGSP Engineering Pte Ltd | Court of Appeal | Yes | [2018] 1 SLR 979 | Singapore | Cited for the principle that the role of a court in reviewing an adjudicator’s determination is not to review the merits of the determination. |
| Orion-One Residential Pte Ltd v Dong Cheng Construction Pte Ltd and another appeal | Court of Appeal | Yes | [2021] 1 SLR 791 | Singapore | Cited to argue that PC 25 was a claim for the final settlement of accounts between the Applicant and the Respondent following the termination of the Applicant’s employment under the Sub-Contract. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Building and Construction Industry Security of Payment Act 2004 | Singapore |
| s 16(5)(c) of the SOPA | Singapore |
| s 27(6)(g) of the SOPA | Singapore |
| s 10 of the SOPA | Singapore |
| s 4(2)(c) of the SOPA | Singapore |
| s 2 of the SOPA | Singapore |
| s 5 of the SOPA | Singapore |
| s 6 of the SOPA | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Adjudication Determination
- Building and Construction Industry Security of Payment Act 2004
- Payment Claim
- Payment Response
- Notice of Termination
- Sub-Contract
- Termination Provision
- Payment Suspension Provision
- Progress Payment
15.2 Keywords
- SOPA
- adjudication
- construction
- payment claim
- termination
- natural justice
16. Subjects
- Building and Construction Law
- Adjudication
- Contract Law
- Civil Procedure
17. Areas of Law
- Building and Construction Law
- Contract Law
- Civil Procedure
- Arbitration Law