ICOP Construction v Tiong Seng: Construction Dispute over Microtunneling Works

ICOP Construction (SG) Pte Ltd, a subcontractor, appealed a decision in the Appellate Division of the High Court of Singapore against Tiong Seng Civil Engineering (Pte) Ltd, the main contractor, regarding a construction dispute over microtunneling works. The initial trial was bifurcated, and this appeal concerned liability. The lower court ordered Tiong Seng to pay ICOP $1,333,298.52, and ICOP to pay Tiong Seng $402,790.46 for delay damages, also finding ICOP had wrongfully terminated the subcontract. The Appellate Division allowed the appeal in part, adjusting damages and substituting liquidated damages with general damages.

1. Case Overview

1.1 Court

Appellate Division of the High Court of the Republic of Singapore

1.2 Outcome

Appeal allowed in part.

1.3 Case Type

Civil

1.4 Judgment Type

Judgment

1.5 Jurisdiction

Singapore

1.6 Description

Construction dispute between ICOP Construction and Tiong Seng Civil Engineering over microtunneling works. Appeal allowed in part.

1.7 Decision Date

1 January 2024

2. Parties and Outcomes

Party Name	Role	Type	Outcome	Outcome Type	Counsels
ICOP Construction (SG) Pte Ltd	Appellant, Plaintiff	Corporation	Appeal allowed in part	Partial	Lee Wei Han Shaun of Bird & Bird ATMD LLP Adly Rizal bin Said of Bird & Bird ATMD LLP Ng Khim Loong Mark of Bird & Bird ATMD LLP Gladys Yeo Li Min of Bird & Bird ATMD LLP
Tiong Seng Civil Engineering (Pte) Ltd	Respondent, Defendant	Corporation	Counterclaim allowed in part	Partial	Ho Chien Mien of Allen & Gledhill LLP Yew Kai Ning Sophia of Allen & Gledhill LLP Ng Wei Ying of Allen & Gledhill LLP

3. Judges

Judge Name	Title	Delivered Judgment
Woo Bih Li	Judge of the Appellate Division	No
Kannan Ramesh	Judge of the Appellate Division	No
Quentin Loh	Senior Judge	Yes

4. Counsels

Counsel Name	Organization
Lee Wei Han Shaun	Bird & Bird ATMD LLP
Adly Rizal bin Said	Bird & Bird ATMD LLP
Ng Khim Loong Mark	Bird & Bird ATMD LLP
Gladys Yeo Li Min	Bird & Bird ATMD LLP
Ho Chien Mien	Allen & Gledhill LLP
Yew Kai Ning Sophia	Allen & Gledhill LLP
Ng Wei Ying	Allen & Gledhill LLP

4. Facts

ICOP was subcontracted by TSCE to perform microtunneling works for a potable water pipeline project.
The subcontract was awarded via a letter of award and supplemental letter, backdated to April 15, 2017.
ICOP was to install 124m of DN1200mm pipe and 2229m of DN1600mm pipe using microtunneling.
The subcontract outlined four sequential drives with tentative commencement and completion dates.
The actual timeline deviated substantially from the original schedule.
ICOP terminated the subcontract on March 13, 2019, citing reasons beyond its control.
TSCE called on the performance bond after ICOP terminated the subcontract.

5. Formal Citations

ICOP Construction (SG) Pte Ltd v Tiong Seng Civil Engineering (Pte) Ltd, Civil Appeal No 100 of 2022, [2024] SGHC(A) 1

6. Timeline

Date	Event
2016-06-01	TSC engaged by the Public Utilities Board to construct a potable water pipeline.
2017-04-15	Execution of letter of award and supplemental letter for subcontract between TSCE and ICOP (backdated).
2017-05-01	TSCE subcontracted the microtunnelling works to ICOP.
2017-06-03	ICOP commenced pipe jacking for Drive 1.
2017-12-29	Notice to Proceed for Drive 2 issued.
2018-02-27	TSCE sent an e-mail to One Smart Engineering Pte Ltd, attaching TSCE’s draft design drawing of the headwall and thrust wall and seeking One Smart’s review and endorsement.
2018-03-12	One Smart returned the drawing to TSCE with Mr Ng’s endorsement.
2018-03-22	Resident Technical Officer conducted an inspection of the in-progress construction of the headwall and noted that it passed the inspection.
2018-03-24	Resident Technical Officer conducted another inspection of the headwall and recorded that it also passed the inspection.
2018-05-17	Mr Ng visited the worksite and observed that the headwall and the thrust wall for Shaft P5-2 had been installed.
2018-05-23	TSCE informed ICOP that SP Power requested TSCE to keep a 5m clearance between the existing underground 400kV joint bay and the proposed pipeline.
2018-06-07	TSCE agreed with ICOP’s suggested amendments to resolve the alignment issue and made the necessary adjustments to the tunnel alignment drawing.
2018-06-14	ICOP accepted the new alignment on condition that ICOP shall not be liable for any kind of damages or delays incurred either directly or indirectly due to the revised alignment.
2018-06-26	ICOP commenced MTBM launching work.
2018-07-03	Second sealing test was conducted, but it also failed.
2018-07-04	TSCE commenced further rectification works, including the casting of further concrete on the outer joints, grouting works, and pumping of foam in the entrance headwall.
2018-07-11	A third sealing test was conducted, but it also failed. ICOP formally wrote to TSCE recommending TSCE to construct a new headwall.
2018-07-12	Further sealing tests were conducted, but they all failed.
2018-07-16	Further sealing tests were conducted, but they all failed.
2018-07-17	Further sealing tests were conducted, but they all failed.
2018-07-18	Further sealing tests were conducted, but they all failed. TSCE called for a meeting with One Smart.
2018-07-27	A meeting took place between representatives from TSCE, ICOP, BTJV and One Smart. ICOP insisted that TSCE rebuild the headwall to resolve the leakage issues. TSCE eventually agreed to build a new headwall.
2018-07-30	ICOP removed its jacking equipment and demobilised from Shaft P5-2.
2018-08-01	Shaft P5-2 was handed back to TSCE for TSCE to rebuild the headwall.
2018-08-14	TSCE completed the reconstruction of the headwall and returned Shaft P5-2 to ICOP.
2018-08-23	A further sealing test of the rebuilt headwall was conducted successfully.
2018-08-25	ICOP commenced pipe jacking works from Shaft P5-2 to Shaft P5-1.
2018-09-04	TSCE informed ICOP that the site’s noise levels exceeded the applicable limits.
2018-12-08	TSCE’s project manager, Mr Jesse Jung Jae Hun, informed ICOP’s Mr Alberini that there might be some problems regarding the exit wall and the recovery of the MTBM in Shaft P5-1.
2019-01-09	TSCE’s Site Engineer, Mr Peter Castillo informed ICOP’s Mr Alberini that after superimposing the receiving cradle and pipe jacking machine in the as-built layout plan for the Shaft P5-1, Mr Castillo found that the cutter head of the MTBM would collide with the end valve after the MTBM fully breaks through Shaft P5-1.
2019-01-11	ICOP stated in a letter that as per Appendix F of the Subcontract, the minimum wall to wall distance required for Shaft P5-1 should be 7.5m.
2019-01-25	The recovery of the MTBM was completed. ICOP demobilised the MTBM and dispatched the MTBM to Malaysia.
2019-03-13	ICOP terminated the Subcontract.
2022-01-02	Judgment reserved.
2023-05-26	Hearing date.
2024-01-02	Judgment date.

7. Legal Issues

Breach of Contract
- Outcome: The court found that ICOP had wrongfully terminated the Subcontract. The court also found that both ICOP and TSCE had breached the contract, leading to delay damages.
- Category: Substantive
- Sub-Issues:
  - Wrongful Termination
  - Delay Damages
  - Failure to comply with noise restrictions
  - Failure to supply sufficient pipes
  - Supply of poor-quality pipes
  - Failure to timeously carry out waste disposal
Delay Damages
- Outcome: The court found both ICOP and TSCE liable for delay damages, adjusting the amounts and substituting liquidated damages with general damages.
- Category: Substantive
- Sub-Issues:
  - Critical Delay
  - Concurrent Delay
  - Liquidated Damages
  - General Damages
Performance Bond
- Outcome: The court found that TSCE's call on the performance bond was justified because ICOP had breached the Subcontract.
- Category: Substantive

8. Remedies Sought

Monetary Damages
Return of Performance Bond Amount

9. Cause of Actions

Breach of Contract
Wrongful Termination

10. Practice Areas

Construction Law
Commercial Litigation

11. Industries

Construction

12. Cited Cases

Case Name	Court	Affirmed	Citation	Jurisdiction	Significance
ICOP Construction (SG) Pte Ltd v Tiong Seng Civil Engineering Pte Ltd	High Court	No	[2022] SGHC 257	Singapore	Cited for the Judge's detailed explanation of the microtunnelling process.
Sembcorp Marine Ltd v PPL Holdings Pte Ltd and another and another appeal	Court of Appeal	Yes	[2013] 4 SLR 193	Singapore	Cited for the requirements for the implication of terms in a contract.
V Nithia (co-administratrix of the estate of Ponnusamy Sivapakiam, deceased) v Buthmanaban s/o Vaithilingam and another	Court of Appeal	Yes	[2015] 5 SLR 1422	Singapore	Cited for the general rule that parties are bound by their pleadings.
Saga Cruises BDF Ltd and another v Fincantieri SPA (formerly Fincantieri Cantieri Navali Italiani SPA)	High Court of Justice	No	[2016] EWHC 1875 (Comm)	England and Wales	Cited for the proposition that where there are concurrent causes of delay, any critical delay is caused by the event which is first in time.
Henry Boot Construction (UK) Ltd v Malmaison Hotel (Manchester) Ltd	Technology and Construction Court	No	(1999) 70 ConLR 32	England and Wales	Cited for the principle that where there are concurrent causes for a delay, the contractor is entitled to an extension of time, but cannot recover damages for the delay.
Walter Lilly & Company Ltd v Mackay	High Court of Justice	No	[2012] EWHC 1773	England and Wales	Cited for the principle that where there are concurrent causes for a delay, the contractor is entitled to an extension of time, but cannot recover damages for the delay.
Hadley v Baxendale	Court of Exchequer	Yes	(1854) 9 Ex 341	England and Wales	Cited for the rules on causation, mitigation and remoteness of damage.
Crescendas Bionics Pte Ltd v Jurong Primewide Pte Ltd	Court of Appeal	Yes	[2023] 1 SLR 536	Singapore	Cited for the principle that delay damages can sound in reliance loss.
Crescendas Bionics Pte Ltd v Jurong Primewide Pte Ltd	High Court	Yes	[2019] SGHC 4	Singapore	Cited for the principle that in the absence of an extension of time clause, an act of prevention by the contractor would set time at large and the subcontractor’s obligation is to complete the project within a reasonable time.
Fongsoon Engineering (S) Pte Ltd v Kensteel Engineering Pte Ltd	High Court	Yes	[2011] SGHC 82	Singapore	Cited for the principle that even though time for completion is at large, the contractor has to complete the works within a reasonable period.
Peak Construction (Liverpool) Ltd v McKinney Foundations Ltd	Court of Appeal	Yes	(1970) 1 BLR 114	England and Wales	Cited for the principle that even though time for completion is at large, the contractor has to complete the works within a reasonable period.
Balfour Beatty Construction Ltd v London Borough of Lambeth	Court of Appeal	Yes	[2002] 1 BLR 288	England and Wales	Cited for the principle that even though time for completion is at large, the contractor has to complete the works within a reasonable period.
V Nithia (co-administratrix of the estate of Ponnusamy Sivapakiam, deceased) v Buthmanaban s/o Vaithilingam and another	Court of Appeal	Yes	[2015] 5 SLR 1422	Singapore	Cited for the general rule that parties are bound by their pleadings.
Wei Ho-Hung v Lyu Jun	Court of Appeal	Yes	[2022] 2 SLR 1066	Singapore	Cited for the principle that a party cannot mount a new case on appeal.
Diamond Glass Enterprise Pte Ltd v Zhong Kai Construction Co Pte Ltd	High Court	Yes	[2022] SGHC(A) 44	Singapore	Cited for the principle that a party can justify its termination on non-payment.
RDC Concrete Pte Ltd v Sato Kogyo (S) Pte Ltd and another appeal	Court of Appeal	Yes	[2007] 4 SLR(R) 413	Singapore	Cited for the principle that a party can terminate the contract if the contract clearly and unambiguously states that, in the event of a certain event of events occurring, the innocent party will be entitled to terminate the contract.
Jia Min Building Construction Pte Ltd v Ann Lee Pte Ltd	High Court	Yes	[2004] 3 SLR(R) 288	Singapore	Cited for the principle that a temporary slowdown in the progress of works will not invariably be viewed as contractual repudiation.
Chattan Developments Ltd v Reigill Civil Engineering Contractors Ltd	Technology and Construction Court	Yes	[2007] EWHC 305 (TCC)	England and Wales	Cited for the principle that a liquidated damages clause excludes unliquidated damages.
Biffa Waste Services Ltd v Maschinenfabrik Ernst Hese GmbH	Technology and Construction Court	Yes	[2008] EWHC 6 (TCC)	England and Wales	Cited for the principle that a liquidated damages clause excludes unliquidated damages.
Alliance Concrete Singapore Pte Ltd v Comfort Resources Pte Ltd	Court of Appeal	Yes	[2009] 4 SLR(R) 602	Singapore	Cited for the principle that a breach by A would only assist B if it was still continuing when A purported to treat B as having repudiated the contract and if the effect of A’s subsisting breach was such as to preclude A from claiming that B had committed a repudiatory breach.
Jet Holding Ltd v Cooper Cameron (Singapore) Pte Ltd	Court of Appeal	Yes	[2006] 3 SLR(R) 769	Singapore	Cited for the principle that a breach by A would only assist B if it was still continuing when A purported to treat B as having repudiated the contract and if the effect of A’s subsisting breach was such as to preclude A from claiming that B had committed a repudiatory breach.
Cheng Poh Building Construction Pte Ltd v First City Builders Pte Ltd	Court of Appeal	Yes	[2003] 2 SLR(R) 170	Singapore	Cited for the principle that a stay on the execution of sums awarded in ICOP’s claims pending the second tranche of the Suit is warranted.
UBQ v UBR and another matter	High Court	Yes	[2023] SGHC(A) 10	Singapore	Cited for the principle that an appellate court would generally be slow to criticise a trial court’s findings on expert evidence, unless it entertains doubts as to whether the evidence has been satisfactorily sifted or assessed by the trial court.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute Name	Jurisdiction
Evidence Act 1893	Singapore
Environmental Protection and Management Act 1999	Singapore

15. Key Terms and Keywords

15.1 Key Terms

Microtunneling
Subcontract
Headwall
MTBM
Performance Bond
Delay Damages
Critical Delay
Liquidated Damages
General Damages
Authorities’ Approvals
Noise Restrictions

15.2 Keywords

construction
microtunneling
breach of contract
delay damages
performance bond
Singapore

17. Areas of Law

Area Name	Relevance Score
Construction Law	85
Performance Bond	75
Contract Law	70
Termination	60
Damages	50
Remedies	30
Evidence	25
Banking and Finance	20
Arbitration	15
Civil Procedure	10

16. Subjects

Construction Dispute
Contract Law
Civil Procedure
Performance Bonds