JDC Corporation and Another v Lightweight Concrete Pte Ltd

• Jurisdiction: Singapore
• Judge: Karthigesu JA
• Judgment Date: 12 January 1999
• Neutral Citation: [1999] SGCA 3
• Docket Number: Civil Appeal No 92 of 1998
• Date: 12 January 1999
• Year: 1999
• Published date: 19 September 2003
• Plaintiff Counsel: Christopher Chuah and Michael Chia (Drew & Napier)
• Citation: [1999] SGCA 3
• Defendant Counsel: David Morris and Lean Min Tze (Arthur Loke & Partners)
• Court: Court of Appeal (Singapore)
• Subject Matter: Agreement,Burden on respondent to show sufficient reason for opposing stay of proceedings,Whether appellant has established prima facie case of disputes between parties,Whether appellant entitled to stay the proceedings under s 7 of Arbitration Act,Arbitration,Whether terms of sub-contract require parties to refer their disputes to an arbitral tribunal,Civil Procedure,Contractual terms,Whether disputes between appellant and respondent fall within ambit of the arbitration agreement,s 7 Arbitration Act (Cap 10),Whether respondent's claim undisputed or indisputable,Stay of proceedings,Contract

Judgment:

LP THEAN JA

(delivering the grounds of judgment of the court): This was an appeal against the decision of a judge in chambers discharging an order of the assistant registrar staying the proceedings pursuant to s 7 of the Arbitration Act (Cap 10). We allowed the appeal and now give our reasons.

2. The facts

The appellants were the main contractors for the construction of an administration and operation building for the new container terminal at Pasir Panjang (`the project`) of the Port of Singapore Authority (`PSA`). The respondents were the nominated sub-contractors for the supply and installation of external wall cladding and glazing for the project under a contract (`the sub-contract`) entered into by the parties on or about 17 May 1996.

3.The sub-contract comprised of several documents which were to be read in conjunction with one another. The relevant documents for our purposes were: (i) the PSA`s standard form of conditions of sub-contract (`the conditions`); (ii) the preliminaries and conditions of sub-contract (`the preliminaries`) which contained an extract of some of the conditions in the main contract between PSA and the appellants; and (iii) the particular specifications of the project (`the specifications`).

4.Disputes arose between the parties in relation to the performance of the sub-contract. In a letter to the respondents dated 29 December 1997, the appellants alleged that certain works under the sub-contract were not `substantially completed`, and that the deadline for their completion was the end of May 1997 which they, the respondents, had failed to meet. The appellants made an interim claim for a total sum of $2,426,230 for their loss and damage under cl 19 of the conditions and this amount comprised of the following: (a). a sum of $464,130 representing the acceleration cost; and

(b). a sum of $1,962,100 representing additional preliminaries and staff overheads.

In addition, they also claimed liquidated and ascertained damages in respect of which they had yet to ascertain the exact amount. In their letter they indicated that they proposed to recover the amount from the respondents under cl 12 of the conditions.

5.Clause 12 of the conditions gave to the appellants a right to deduct from and set off against moneys due to the respondents any sums which the respondents were liable to pay to the appellants under the sub-contract. It provides as follows:

12 Contractor`s right to deduction or set-off

The Contractor shall notwithstanding anything in this Sub-contract contained be entitled to deduct from or set off against any money due from him to the Sub-Contractor (including any retention money) any sum or sums which the Sub-Contractor is liable to pay to the Contractor under this Sub-Contract.

6.On the same day of 29 December 1997, the superintending officer of the project issued an interim payment certificate No 19 (`Certificate No 19`) certifying that the sum of $335,000 (excluding GST of $10,050) was due to the respondents from the appellants. Another sum of $84,000 (excluding GST of $2,520) was similarly certified to be due to the respondents on 19 January 1998 under the interim payment certificate No 20 (`Certificate No 20`). Under cl 23 of the conditions, the appellants were required to notify and pay to the respondents the amount certified within seven days of receiving payment from PSA. The appellants, however, did not make any payment of either sum to the respondents under the respective certificates.

7.The respondents in their letter dated 19 January 1998 to the appellants rejected the appellants` allegations set out in the letter of 29 December 1997, saying that the allegations were `fundamentally flawed and would not be sustained in an arbitration`. This was ignored by the appellants and on 26 January 1998 they indicated to the respondents that they would under cll 12 and 19 of the conditions deduct from and set off against the sums of $345,050 and $86,520 the amount claimed by them for the loss and damage sustained.

8.Subsequently, the respondents commenced these proceedings against the appellants to recover the two sums together with interest. The appellants applied for a stay of further proceedings pursuant to s 7 of the Arbitration Act (Cap 10) (`the Act`) and the stay was granted by the assistant registrar. On appeal, the learned judge allowed it and set aside the order for a stay.

9. Appeal

The sole issue before us was whether the appellants were entitled to stay the proceedings pursuant to s 7 of the Act. The sub-contract by cl 30 of the condition provided for arbitration of any dispute between the parties. It is useful here to set out, in so far as material, the provisions of this clause which are as follows:

30 Arbitration

Provided always that in case of any dispute or difference except a dispute or difference as to rates of wages or conditions of employment of workmen employed by the Sub-Contractor in and for the purpose of this Contract including workmen employed by the authorised Sub-Contractors engaged directly by the Sub-Contractor shall arise between the Sub-Contractor, either during the progress or after completion of the Works or after the determination, abandonment or breach of this Sub-Contract as to the construction of this Sub-Contract, or as to any matter or thing arising thereunder, or as to the withholding by the Contractor of any certificate to which the Sub-Contractor may claim to be entitled, then either party shall give to the other notices in writing of such dispute or differences and such dispute or differences shall be referred to the arbitration and final decision of a person nominated and appointed by agreement between the Contractor and Sub-Contractor or, in event of his death or unwillingness or inability to act, or, if the Contractor or Sub-Contractor fail to agree, of an arbitrator nominated by the Superintending Officer, and the award of such arbitrator shall be final and binding on the parties. Such reference, except on the question of certificates, shall not be commenced until after the completion or alleged completion of the works, unless with the written consent of the Superintending Officer or the Contractor and

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