Chin Leong Construction Systems Pte Ltd (formerly known as Chin Leong Construction Pte Ltd) v Kin Lin Builders Pte Ltd

• Jurisdiction: Singapore
• Judge: Valerie Thean Pik Yuen
• Judgment Date: 11 June 2004
• Neutral Citation: [2004] SGDC 143
• Plaintiff Counsel: Mr Christopher Yap (Christopher Yap and Co)
• Published date: 28 June 2004
• Court: District Court (Singapore)
• Defendant Counsel: Mr Troy Yeo (K K Yap and Partners)
• Subject Matter: Contract,Incorporation of arbitration clause in sub-contract by reference to main contract.,Civil Procedure,Application for stay of present proceedings pursuant to the Arbitration Act, Cap 10,Appeal by Plaintiffs against application.

11 June 2004

District Judge Valerie Thean:

1. On 15 April 2004, a deputy registrar granted a stay of the present proceedings pursuant to the Arbitration Act, Cap 10. I dismissed the plaintiffs’ appeal from the deputy registrar’s decision, and they have appealed therefrom.

Facts

2. The defendants are general building and engineering contractors. They were appointed as main contractors by the Singapore Government (referred to hereinafter as 'MOHA') for the development of the Gurkha Cantonment Phase 3A at Mount Vernon 61 by an agreement dated 14 December 2001 ('the main contract'). The plaintiffs were employed by the defendants as sub-contractors for the supply and application of waterproofing works by a letter of award dated 11 May 2002 ('the sub-contract').

3. The plaintiffs commenced legal proceedings on 16 February 2004 for damages to be assessed for unpaid progress payments and for variations. The defendants deny the claim, and also contend that they would counterclaim for $149,295.26.

Application for stay

4. At the hearing for the defendants' application for a stay of proceedings pursuant to the Arbitration Act, the plaintiffs resisted the application on two grounds: first, that the clause for arbitration had not been incorporated in the subcontract between the plaintiffs and defendants; and secondly, even if it had, that there was no real dispute to be referred for arbitration.

Whether the clause for arbitration was incorporated in the contract

5. Clause 28 of the sub-contract between the plaintiffs and defendants provided as follows:

The Main Contract Conditions and Specifications shall be read and construed as part of the Sub-Contract Document and shall be binding between the parties. Any specified contractual requirements shall be binding you back to back.

6. Clause 22 of the main contract between the defendants and MOHA provided as follows:

Settlement of Dispute

22.1 Conciliation

Subject to sub-clause 22.4(a) and (b) herein, any dispute or difference between the Main Contractor and the Sub-Contractor in connection with or arising out of the Sub-Contract, including any question regarding its existence, validity or termination, shall first be resolved by conciliation in Singapore by a sole conciliator to be agreed by the parties, or failing agreement within twenty-eight (28) days of eitehr party giving written notice requiring conciliation to the other, a person to be appointed on the written request of either party by or on behalf of the Chairman for the time being of the Singapore International Arbitration Centre ("SIAC").

22.2 Arbitration

(a) In the event that the conciliation is terminated without the parties reaching a full settlement on the dispute in question, the remaining dispute or claim shall be referred to and finally resolved by arbitration in Singapore by a sole conciliator to be agreed by the parties, or failing agreement within fourteen (14) days of either party giving written notice requiring conciliation to the other, a person to be appointed on the written request of either party by or on behalf of the Chairman for the time being of the SIAC.

(b) The Chairman of the SIAC may in his sole discretion appoint the conciliator as the arbitrator and the parties are precluded from objecting to the said appointment on the ground that he had previously acted as a conciliator between them.

22.3 Time for Reference to Conciliation or Arbitration

No reference to conciliation or arbitration shall be initiated by either party until after the issuance of the Maintenance Certificated under the Main Contract unless the prior written consent of all the parties has been obtained or save for the situation set out in sub-clause (5) below. In addition, if a dispute or difference concerns the termination or the repudiation of the Sub-Contract by either party such dispute or difference may be referred to conciliation followed by arbitration, if necessary, at any after such termination or repudiation.

22.4 Same Dispute in Main Contractor Reference

(a) Where a reference to arbitration has been made under the Main Contract and the dispute in the Main Contract arises out of or is connected with the same facts as the dispute in the Sub-Contract, the parties to this sub-Contract may make a reference to arbitration without first going through conciliation and are required in such a case to use their best endeavours to obtain the consent of the Employer to allow the dispute in the Sub-Contract to be adjudicated at the same time as or immediately after the dispute in the Main Contract by the same arbitration appointed pursuant to the terms of the Main Contract and in the former case to allow the Sub-Contractor to act as a party in the said arbitration.

(b) Where a dispute in the Main Contract arises out of or is connected with the same facts as the dispute in the Sub-Contract and has become seised by the Courts of the Republic of Singapore, then this clause shall lapse in the absence of contrary agreement between the parties and to the extent only that it applies to such a dispute, and the authority of the conciliator or arbitrator already appointed under it shall be deemed to be revoked or that extent in relation to any such dispute or part of a dispute.

7. The defendants contended that clause 28 incorporated clause 22 of the main contract, thus an agreement to arbitrate was applicable. Mustill & Boyd, The Law and Practice of Commercial Arbitration in England p. 106...