Ee Hup Construction v China Jingye: Performance Bond Call & Unconscionability
Ee Hup Construction Pte Ltd appealed against the High Court's decision in HC/OA 426/2024, which partially allowed their application for an injunction against China Jingye Engineering Corporation Limited's call on a performance bond issued by India International Insurance Pte Ltd. The Appellate Division of the High Court, comprising Tay Yong Kwang JCA, See Kee Oon JAD, and Mavis Chionh Sze Chyi J, dismissed the appeal, finding no unconscionability in China Jingye's call on the bond. The court ordered Ee Hup Construction to pay costs to China Jingye.
1. Case Overview
1.1 Court
Appellate Division of the High Court1.2 Outcome
Appeal Dismissed
1.3 Case Type
Civil
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
Appeal regarding an injunction against a performance bond call. The court found no unconscionability in the call, dismissing the appeal.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Ee Hup Construction Pte Ltd | Appellant | Corporation | Appeal Dismissed | Lost | |
| China Jingye Engineering Corporation Limited (Singapore Branch) | Respondent | Corporation | Appeal Upheld | Won | |
| India International Insurance Pte Ltd | Respondent | Corporation | Civil proceedings discontinued | Neutral |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Tay Yong Kwang | Justice of the Court of Appeal | No |
| See Kee Oon | Judge of the Appellate Division | No |
| Mavis Chionh Sze Chyi | Judge of the High Court | Yes |
4. Counsels
4. Facts
- CJY was the main contractor for the Bedok South Mass Rapid Transit train station and tunnels project.
- CJY engaged EH as a sub-contractor for excavation and earthworks for a fixed lump sum of $5,483,334.
- EH was obligated to procure an on-demand performance bond of $501,163.80.
- III issued Performance Bond No. AGPB-013715 in favor of CJY for $501,163.80.
- III gave notice on 6 October 2022 of its intention not to extend the Bond.
- Disputes arose between EH and CJY regarding back-charges allegedly incurred by CJY on behalf of EH.
- CJY called on the Bond on 16 April 2024, citing costs and expenses totaling $598,015.19 due to EH's default.
5. Formal Citations
- Ee Hup Construction Pte Ltd v China Jingye Engineering Corp Ltd (Singapore Branch) and another, Civil Appeal No 61 of 2024, [2025] SGHC(A) 3
6. Timeline
| Date | Event |
|---|---|
| CJY engaged EH as a sub-contractor | |
| Performance Bond No. AGPB-013715 was issued | |
| III gave notice of its intention not to extend the Bond | |
| EH issued payment claim number 69 | |
| CJY issued payment response number 65 | |
| Adjudicator determined that a sum of $642,307.63 was payable from CJY to EH in respect of PC 69 | |
| EH applied for an adjudication review of the adjudicator’s decision in AA 69/2023 | |
| CJY called on the Bond | |
| EH filed OA 426 for an injunction | |
| EH brought its claim in PC 76 to adjudication | |
| Judge's oral grounds of decision | |
| Judge revised the order | |
| Judgment date | |
| Grounds of decision delivered |
7. Legal Issues
- Unconscionability
- Outcome: The court found no unconscionability in the call on the performance bond.
- Category: Substantive
- Related Cases:
- [2012] 3 SLR 352
- [2021] 3 SLR 571
- Duty to Speak
- Outcome: The court held that CJY did not breach its duty to speak under s 15(3) of SOPA.
- Category: Substantive
- Related Cases:
- [2013] 3 SLR 380
- [2018] 1 SLR 317
- Erinford Injunction
- Outcome: The court found no basis to grant an Erinford injunction.
- Category: Procedural
- Related Cases:
- [1974] 2 WLR 749
8. Remedies Sought
- Injunction to restrain call on performance bond
9. Cause of Actions
- Breach of Contract
- Injunction
10. Practice Areas
- Construction Law
- Commercial Litigation
- Injunctions
11. Industries
- Construction
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| BS Mount Sophia Pte Ltd v Join-Aim Pte Ltd | Court of Appeal | Yes | [2012] 3 SLR 352 | Singapore | Cited for the high threshold required to prove unconscionability in calling on a performance bond and the need to balance the interests of the obligor and beneficiary. |
| CEX v CEY and another | Unknown | Yes | [2021] 3 SLR 571 | Singapore | Cited for policy considerations regarding performance bonds, including respecting parties' intentions, upholding the autonomy principle, and preventing abusive calls on bonds. |
| W Y Steel Construction Pte Ltd v Osko Pte Ltd | Court of Appeal | Yes | [2013] 3 SLR 380 | Singapore | Cited to define the scope of the 'duty to speak' under s 15(3) of the SOPA, clarifying that it curtails the adjudicator's power to consider new grounds for withholding payment not included in the payment response. |
| Audi Construction Pte Ltd v Kian Hiap Construction Pte Ltd | Unknown | Yes | [2018] 1 SLR 317 | Singapore | Cited to explain that the 'duty to speak' requires a respondent to raise in its payment response any objection it intends to rely on before the adjudicator. |
| Samsung C&T Corp v Soon Li Heng Civil Engineering Pte Ltd | Court of Appeal | No | [2020] 2 SLR 955 | Singapore | Cited regarding the unconscionability of deliberately avoiding making a claim before an adjudicator to preserve the right to claim under a performance bond, but distinguished on the facts. |
| Shanghai Chong Kee Furniture & Construction Pte Ltd v Church of St Teresa | High Court | Yes | [2024] SGHC 5 | Singapore | Cited for the principle that courts do not engage in a detailed merits review when considering an application to injunct a call on a performance bond. |
| Anwar Siraj and another v Teo Hee Lai Building Construction Pte Ltd | Court of Appeal | Yes | [2003] 1 SLR(R) 394 | Singapore | Cited for the principle that courts do not engage in a detailed merits review when considering an application to injunct a call on a performance bond. |
| Royal Design Studio Pte Ltd v Chang Development Pte Ltd | High Court | No | [1990] 2 SLR(R) 520 | Singapore | Cited for the argument that the court should preserve the status quo, but distinguished as the bond in that case was a conditional performance bond. |
| Master Marine AS v Labroy Offshore Ltd and others | Court of Appeal | Yes | [2012] 3 SLR 125 | Singapore | Cited to emphasize the advantage of an on-demand performance bond, which assures immediate payment subject only to a compliant demand. |
| Erinford Properties Ltd and another v Cheshire County Council | Unknown | Yes | [1974] 2 WLR 749 | England and Wales | Cited for the principle that an Erinford injunction should be granted to ensure that a successful appeal is not rendered nugatory. |
13. Applicable Rules
| Rule Name |
|---|
| Supreme Court Practice Directions 2021 |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Building and Construction Industry Security of Payment Act 2004 | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Performance Bond
- Unconscionability
- Back-charges
- Duty to Speak
- Adjudication
- Erinford Injunction
- Payment Claim
- Payment Response
- Temporary Land Occupation fees
15.2 Keywords
- performance bond
- construction
- injunction
- unconscionability
- Singapore
17. Areas of Law
| Area Name | Relevance Score |
|---|---|
| Construction Law | 90 |
| Performance Bond | 85 |
| Injunctions | 75 |
| Erinford Injunction | 65 |
| Litigation | 60 |
| Unconscionability | 55 |
| Insurance | 50 |
| Commercial Law | 30 |
16. Subjects
- Construction Dispute
- Contract Law
- Arbitration Law
- Injunctions