Star Engineering v Pollisum Engineering: Stay of Proceedings & Arbitration Agreement
In Star Engineering Pte Ltd v Pollisum Engineering Pte Ltd and Great Eastern General Insurance Limited, the High Court of Singapore heard an appeal by Pollisum Engineering against the decision to dismiss its application for a stay of court proceedings in favor of arbitration. The dispute arose from a construction contract where Star Engineering sought an injunction to prevent Pollisum Engineering from receiving funds under a performance bond. The court, presided over by Judicial Commissioner Alex Wong Li Kok, allowed the appeal, granting a stay of proceedings in favor of arbitration, emphasizing the importance of upholding the parties' agreement to arbitrate.
1. Case Overview
1.1 Court
High Court of the Republic of Singapore1.2 Outcome
Appeal allowed. Stay granted in relation to the first respondent pursuant to section 6 of the Arbitration Act and a case management stay granted in relation to the second respondent pursuant to the court’s inherent power of case management.
1.3 Case Type
Civil
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
Singapore court grants stay of proceedings in favor of arbitration, upholding parties' agreement to arbitrate disputes arising from a construction contract.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Star Engineering Pte Ltd | Applicant | Corporation | Application Dismissed | Lost | Hsu Bi-Wei, Timothy Homer, Tay Eu-Yen, Wong Hin Pkin Wendell |
| Pollisum Engineering Pte Ltd | Respondent, Appellant | Corporation | Appeal Allowed | Won | Chong Yi Mei (Zhang Yimei), Isaac Tito Shane, Yeo Cai Yun Kimberly |
| Great Eastern General Insurance Limited | Respondent | Corporation | Case Management Stay Granted | Neutral | Jawharilal Balachandran, Julia Emma Cruz, Li Shunhui Daniel |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Wong Li Kok, Alex | Judicial Commissioner | Yes |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Hsu Bi-Wei, Timothy Homer, Tay Eu-Yen, Wong Hin Pkin Wendell | Drew & Napier LLC |
| Chong Yi Mei (Zhang Yimei), Isaac Tito Shane, Yeo Cai Yun Kimberly | Tito Isaac & Co LLP |
| Jawharilal Balachandran, Julia Emma Cruz, Li Shunhui Daniel | GH LLC |
4. Facts
- Star Engineering and Pollisum Engineering entered into a contract on 25 September 2019 for a construction project.
- The contract was based on the REDAS Design and Built Conditions of Contract.
- Star Engineering provided an unconditional on-demand performance bond (PB) of S$856,000.
- The contract contained an arbitration clause, while the PB had a non-exclusive jurisdiction clause.
- Pollisum Engineering made a call on the PB on 30 October 2023, alleging breach of contract by Star Engineering.
- Star Engineering sought an injunction to prevent Pollisum Engineering from receiving funds under the PB.
- Pollisum Engineering applied for a stay of court proceedings in favor of arbitration.
5. Formal Citations
- Star Engineering Pte Ltd v Pollisum Engineering Pte Ltd and another, Originating Application No 1135 of 2023 (Registrar’s Appeal No 4 of 2024), [2024] SGHC 137
6. Timeline
| Date | Event |
|---|---|
| Contract signed between Star Engineering and Pollisum Engineering for construction project. | |
| Performance Bond No 2019-A0688351-GPB issued by Great Eastern General Insurance Limited. | |
| Pollisum Engineering made a call on the Performance Bond. | |
| Star Engineering filed Originating Application No 1135 of 2023. | |
| Star Engineering commenced HC/SUM 3408/2023. | |
| Pollisum Engineering commenced SUM 3431, seeking a stay of OA 1135 in favour of arbitration. | |
| Chan Seng Onn SJ allowed the applicant’s application to temporarily injunct the respondents. | |
| Pollisum Engineering brought the application to appeal against the learned AR’s decision. | |
| Hearing date. | |
| Judgment date. |
7. Legal Issues
- Stay of Court Proceedings
- Outcome: The court granted a stay of proceedings in favor of arbitration, emphasizing the importance of upholding the parties' agreement to arbitrate.
- Category: Procedural
- Sub-Issues:
- Court's discretion under Arbitration Act
- Case management stay
- Related Cases:
- [2022] 2 SLR 622
- [2016] 3 SLR 431
- [2016] 1 SLR 373
- [2019] 2 SLR 682
- [2024] SGHC 72
- [2023] SGHC 281
- [2023] SGHC 48
- [2009] 1 SLR(R) 1000
- Fraudulent Payment Demand
- Outcome: The court determined that the issue of whether the Payment Demand on the Performance Bond was made fraudulently should be decided in arbitration.
- Category: Substantive
8. Remedies Sought
- Injunction against receiving payment under the performance bond
- Injunction against making further demands for payment under the performance bond
9. Cause of Actions
- Breach of Contract
- Injunction
10. Practice Areas
- Arbitration
- Commercial Litigation
- Construction Law
- Performance Bonds
11. Industries
- Construction
- Insurance
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| CSY v CSZ | Court of Appeal | Yes | [2022] 2 SLR 622 | Singapore | Cited for the principle that section 6(2) of the Arbitration Act gives the court discretion to refuse a stay of court proceedings, but this discretion is to be exercised in a guarded manner. |
| Maybank Kim Eng Securities Pte Ltd v Lim Keng Yong and another | High Court | Yes | [2016] 3 SLR 431 | Singapore | Cited to illustrate a situation where different forums govern disputes arising under different contracts, but distinguished because the present case involves a specific modification to refer disputes relating to the performance bond to arbitration. |
| Tomolugen Holdings Ltd and another v Silica Investors Ltd and other appeals | Court of Appeal | Yes | [2016] 1 SLR 373 | Singapore | Cited for the three higher-order concerns applicable to both case management stays and stays under section 6 of the Arbitration Act: claimant's right to choose whom to sue and where, preventing circumvention of arbitration clauses, and the court's inherent power to manage its processes. |
| Rex International Holding Ltd and another v Gulf Hibiscus Ltd | Court of Appeal | Yes | [2019] 2 SLR 682 | Singapore | Cited for the principle that a case management stay arises where there are overlapping issues that will have to be ventilated before different fora among different parties, some of whom are bound by an arbitration agreement, while others are not. |
| Crystal-Moveon Technologies Pte Ltd v Moveon Technologies Pte Ltd | High Court | Yes | [2024] SGHC 72 | Singapore | Cited for the threshold requirement for a stay under s 6 of the AA is that the dispute in the court proceedings (or any part thereof) falls within the scope of the arbitration agreement. |
| 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 Court | Yes | [2023] SGHC 281 | Singapore | Cited for the principle that a complete overlap of parties is unnecessary for a case management stay, as all that is required is 'some overlap'. |
| Parastate Labs Inc v Wang Li and others | High Court | Yes | [2023] SGHC 48 | Singapore | Cited to illustrate that where claims against remaining defendants in court are 'premised on' the claimant establishing the same allegations in arbitration, it is logical to have all those issues determined first in arbitration. |
| Multi-Code Electronics Industries (M) Bhd and another v Toh Chun Toh Gordon and others | High Court | Yes | [2009] 1 SLR(R) 1000 | Singapore | Cited for the principle that a stay of a proceeding did not amount to “an automatic lifting of all interim injunctions” and that the court retained a jurisdiction to grant or continue the interim injunctions following a stay. |
13. Applicable Rules
| Rule Name |
|---|
| Rules of Court 2021 O 6 r 7(5) |
| Arbitration Rules of the Singapore International Arbitration Centre (6th Ed, 1 August 2016) Rule 30.2 |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Arbitration Act 2001 | Singapore |
| International Arbitration Act 1994 | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Arbitration Agreement
- Stay of Proceedings
- Performance Bond
- REDAS Conditions
- Payment Demand
- Injunction
- Case Management Stay
- Fraudulent Payment Demand
15.2 Keywords
- arbitration
- stay of proceedings
- performance bond
- construction contract
- injunction
- Singapore High Court
16. Subjects
- Arbitration
- Construction Dispute
- Contract Law
- Civil Procedure
17. Areas of Law
- Arbitration Law
- Construction Law
- Civil Procedure
- Contract Law