JE Synergy Engineering v Sinohydro: SOPA Adjudication Dispute Involving Alleged Fraud and Corruption

In JE Synergy Engineering Pte Ltd v Sinohydro Corp Ltd (Singapore Branch) [2023] SGHC 362, the High Court of Singapore dismissed JE Synergy Engineering's application to set aside adjudication determinations made in favor of Sinohydro under the Building and Construction Industry Security of Payment Act (SOPA). JE Synergy Engineering alleged that the determinations were induced by fraud or corruption, claiming Sinohydro paid bribes to JE Synergy Engineering's employees to over-certify payment claims. The court found that JE Synergy Engineering did not provide compelling evidence of fraud or corruption and dismissed the application to set aside the determinations and stay their enforcement.

1. Case Overview

1.1 Court

General Division of the High Court of the Republic of Singapore

1.2 Outcome

Application dismissed.

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Singapore High Court judgment on setting aside adjudication determinations under SOPA due to alleged fraud/corruption in payment claims. Application dismissed.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
JE Synergy Engineering Pte LtdClaimantCorporationApplication dismissedLost
Sinohydro Corp Ltd (Singapore Branch)DefendantCorporationJudgment for DefendantWon

3. Judges

Judge NameTitleDelivered Judgment
S MohanJudgeYes

4. Counsels

Counsel NameOrganization
Matthew Tan Jun YeAquinas Law Alliance LLP
Cephas Yee XiangAquinas Law Alliance LLP
Raymond WongRWong Law Corporation
Fan Wai Leong, BensonDentons Rodyk & Davidson LLP
See Kwang GuanDentons Rodyk & Davidson LLP
Koh Kia JengDentons Rodyk & Davidson LLP
Ng Guo XiDentons Rodyk & Davidson LLP

4. Facts

  1. JE Synergy was the main contractor for building works.
  2. JE Synergy awarded a subcontract to Sinohydro.
  3. Sinohydro submitted 16 payment claims to JE Synergy.
  4. JE Synergy alleged Niu and Chen received bribes from Sinohydro.
  5. JE Synergy claimed over-certification of approximately $3m.
  6. JE Synergy commenced arbitration against Sinohydro.
  7. JE Synergy applied to set aside the adjudication determinations.

5. Formal Citations

  1. JE Synergy Engineering Pte Ltd v Sinohydro Corp Ltd (Singapore Branch), Originating Application No 437 of 2022, [2023] SGHC 362

6. Timeline

DateEvent
JEE-Sinohydro Subcontract agreement signed
Sinohydro engaged Vico Construction Pte Ltd
Sinohydro submitted PC 14 to JE Synergy
JE Synergy issued PR 14 certifying PC 14 in full
Sinohydro submitted PC 16 to JE Synergy
Sinohydro commenced AA 132 against JE Synergy
Sinohydro commenced AA 150 against JE Synergy
Adjudicator awarded Sinohydro $1,115,788.51 in AA 132
Adjudicator awarded Sinohydro $7,678,070.06 in AA 150
Order of Court granted leave to enforce AD 132 and AD 150
JE Synergy commenced S 950 against Niu Ji Wei and Chen Zhe
JE Synergy commenced arbitration proceedings against Sinohydro
Sinohydro commenced OA 321 applying for leave to enforce the ADs
Vico entered an appearance in S 950 as a fourth party
Sinohydro entered an appearance in S 950 as a third party
Sinohydro applied to stay proceedings in S 950
OA 437 dismissed
Grounds of decision issued

7. Legal Issues

  1. Setting aside adjudication determinations
    • Outcome: The court held that the claimant had not established a compelling case that the making of the adjudication determinations was induced or affected by fraud or corruption.
    • Category: Substantive
    • Sub-Issues:
      • Fraud
      • Corruption
    • Related Cases:
      • [2019] 2 SLR 131
      • [2020] 2 SLR 1125
  2. Enforcement of adjudication determinations
    • Outcome: The court dismissed the claimant's alternative relief for a stay of enforcement of the adjudication determinations.
    • Category: Procedural
    • Sub-Issues:
      • Stay of enforcement
    • Related Cases:
      • [2013] 3 SLR 380

8. Remedies Sought

  1. Setting aside adjudication determinations
  2. Stay of enforcement of adjudication determinations

9. Cause of Actions

  • Breach of contract
  • Breach of fiduciary duties

10. Practice Areas

  • Construction Law
  • Commercial Litigation
  • Arbitration

11. Industries

  • Construction

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Rakna Arakshaka Lanka Ltd v Avant Garde Maritime Services (Pte) LtdCourt of AppealYes[2019] 2 SLR 131SingaporeCited for the principle that s 24(a) of the International Arbitration Act (IAA) contemplates a situation where the award itself, rather than the underlying contract between the parties, is tainted or induced by fraud or corruption. This is in pari materia with s 27(6)(h) of the SOPA.
Ironsands Investments Ltd v Toward Industries LtdHigh CourtYes[2012] NZHC 1277New ZealandCited for the definition of 'corruption' as the perversion of a person’s integrity in the performance of duty or work by bribery etc.
Lao Holdings NV and another v Government of the Lao People’s Democratic RepublicCourt of AppealYes[2023] 1 SLR 55SingaporeCited for the observation that corruption includes illegal conduct, bribery and fraud.
Facade Solution Pte Ltd v Mero Asia Pacific Pte LtdCourt of AppealYes[2020] 2 SLR 1125SingaporeCited for the principle that the court does not review the merits of the adjudicator’s determination in an application to set aside an adjudication determination and that there must be compelling evidence of fraud before the court.
Diamond Glass Enterprise Pte Ltd v Zhong Kai Construction Co Pte LtdCourt of AppealYes[2021] 2 SLR 510SingaporeCited for the philosophy underpinning the SOPA lies in the pithy adage “pay now, argue later”.
W Y Steel Construction Pte Ltd v Osko Pte LtdCourt of AppealYes[2013] 3 SLR 380SingaporeCited for the principle that a stay of enforcement of an adjudication determination may ordinarily be justified where there is clear and objective evidence of the successful claimant’s actual present insolvency.
JE Synergy Engineering Pte Ltd v Niu Ji Wei and another (Sinohydro Corp Ltd (Singapore Branch), third party; Vico Construction Pte Ltd, fourth party)High CourtYes[2023] SGHC 281SingaporeUpholding the AR’s decision following an appeal by the claimant to grant a stay of the proceedings in S 950.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute NameJurisdiction
Building and Construction Industry Security of Payment Act 2004Singapore

15. Key Terms and Keywords

15.1 Key Terms

  • Adjudication determination
  • Payment claim
  • Payment response
  • Over-certification
  • Fraud
  • Corruption
  • Security of Payment Act
  • Subcontract
  • Bribery
  • Kickbacks

15.2 Keywords

  • SOPA
  • adjudication
  • fraud
  • corruption
  • construction
  • payment claim
  • Singapore

17. Areas of Law

Area NameRelevance Score
Building and Construction Industry Security of Payment Act95
Building and Construction Contracts90
Construction Law90
Construction80
Adjudication Determination70
Arbitration60
Contract Law50
Commercial Disputes30
Civil Procedure20
Evidence20

16. Subjects

  • Construction Dispute
  • Arbitration
  • Contract Law
  • Civil Procedure