L & M Concrete Specialists Pte Ltd v United Eng Contractors Pte Ltd

• Jurisdiction: Singapore
• Judge: Choo Han Teck JC
• Judgment Date: 11 August 2000
• Neutral Citation: [2000] SGHC 166
• Date: 28 September 2001
• Subject Matter: Agreement,Arbitration,Whether right to arbitration waived,Contractual terms,Arbitration clause,Party wanting to rely on arbitration clause previously commencing action in court,Whether arbitration clause incorporated into contract,Waiver of arbitration clause,Incorporation of arbitration clause into contract,Contract,Main contractor alleging to incorporation of arbitration clause into contract,Whether clause incorporated
• Docket Number: Suit No 600131 of 2000 (Registrar's Appeal No 300225 of 2000),Suit No 600131 of 2000 (Registrar's
• Published date: 19 September 2003
• Defendant Counsel: Ramalingam Kasi (Raj Kumar & Rama)
• Court: High Court (Singapore)
• Plaintiff Counsel: S Bhaskaran (J Koh & Co)

: This was an appeal by the plaintiffs (`L & M`) against the order of the assistant registrar dismissing L & M`s application for a stay of the defendants` (`United Eng`) counterclaim. This application was made under s 7 of the Arbitration Act (Cap 10) (referred to as the `Act`). At the material time, L & M were the main contractors and United Eng were the subcontractors for two building projects, namely, the `Hilltop Project` and the `Sinsov Project`. Both projects have since been completed. L & M`s claim against United Eng in this suit is in respect of structural rectification works carried out at Hilltops Apartment (`Hilltop Project`).

This action is a continuing saga in a series of actions in court between the parties. On 2 September 1998 it was United Eng who filed a claim against L & M (in Suit 1523/98) for the unpaid balance sum in respect of the `Hilltop Project`. L & M sought a stay of proceedings on the ground that there was a binding arbitration clause in the `Standard Subcontract` referred to in a Letter of Award dated 11 October 1996 purportedly agreed by parties. The assistant registrar granted the application for stay. United Eng appealed before GP Selvam J who allowed the appeal on the ground that the contract between parties made no reference to the arbitration clause which L & M were seeking to rely on. The Letter of Award which was the purported written agreement between parties and the standard conditions were in such a form that they required the signatures of the parties to signify their agreement to all the terms by signing them. These two documents were never signed by United Eng and they were therefore not bound by them (see United Eng Contractors Pte Ltd v L & M Concrete Specialists Pte Ltd [2000] 2 SLR 196 ).

Subsequently, the matter went for trial and, on 4 February 2000, judgment was entered in favour of United Eng. L & M`s counterclaim was struck out (for want of particulars in their pleadings) with liberty to file a fresh suit. Consequently, to restore that counterclaim, L & M filed this present suit against United Eng. As part of its defence to this claim, United Eng raised a counterclaim for moneys due to them by L & M in respect of the `Sinsov Project`.

For the purposes of this appeal, the relevant contract between parties is that relating to the `Sinsov Project`, namely, the Letter of Award (`LOA`) dated 23 September 1996. It was not disputed that United Eng accepted the LOA with minor amendments and duly signed on every page of the LOA and the accompanying Annexure (detailing the scope of work and the agreed prices) referred to therein. It was also not disputed that although the LOA referred to the `Standard Conditions of Subcontract`, that document was never given to United Eng. Neither was it disputed that this latter document was not signed or executed by the parties. The arbitration clause relied upon by L & M is found in cl 17 of the `Standard Sub-Contract (Domestic) For Labour and Materials`. This document was also an unsigned document. There is neither any reference to arbitration in the LOA or the accompanying Annexure.

The application by L & M before the assistant registrar to stay proceedings was made under s 7 of the Act which provides that the court has the power to stay any legal proceedings provided that first, there is a valid and binding arbitration agreement between the parties; and, secondly, the applicant had not taken any other steps in the proceedings.

Further, under s 7(2) of the Act, the court has to be satisfied that the applicant was at the time when the proceedings were commenced, and still remains, ready and willing to do all things necessary for the proper conduct of the arbitration before an order for stay of proceedings can be made.

The two issues before me in this appeal were, first, whether the arbitration clause in L & M`s standard form contract had been incorporated into the contract with United Eng, and secondly, if so, had L & M waived their rights under that clause. Mr, Rama, counsel for United Eng, submitted that United Eng were unaware of the arbitration clause referred to in the `Standard Conditions of the Subcontract` at the material time and cannot therefore be bound by it. He argued that there must be incorporation of the arbitration clause specifically in the LOA, rather than the mere reference of the existence of another document, namely, the `Standard Conditions of Subcontract` as in the present case (see Manchaster Trust v Furness [1895] 2 QB 539).

To this end, Mr Rama relied on Halsburys` Laws of Singapore `Arbitration` , which recites the proposition that a reference in a contract to a document containing an arbitration clause constitutes an arbitration agreement provided that the contract is in writing and the reference is such as to make that clause part of the contract. He further added that as an arbitration clause in a contract is considered a separate and independent agreement, words of its incorporation must be specific. An example of specific words to be incorporated, as in the case of The Merak [1965] P 223[1965] 1 All ER 230, are as follows

`including the arbitration clause` or `all the terms, conditions, clauses, and exceptions including cl 31 ...` (being one which contains the arbitration clause).

In the English case of The Varenna ; Skips A/S Nordheim & Ors v Syrian Petroleum Co Ltd & Anor [1984] QB 599[1983] 3 All ER 645, the Court of Appeal there held that whilst general words of inclusion may be sufficient to incorporate terms referred to in another document as part of the contract, an arbitration clause being a collateral agreement cannot be so incorporated. This case concerned conditions contained in a charterparty contract which were to be referentially incorporated into a bill of lading and it was held that such conditions to be incorporated were only limited to conditions under which the goods were to be carried and delivered and did not extend to a collateral term such as an arbitration clause. It is also one of the more...