Lightweight Concrete Pte Ltd v JDC Corporation and Another

• Jurisdiction: Singapore
• Judge: Lai Siu Chiu J
• Judgment Date: 23 May 1998
• Neutral Citation: [1998] SGHC 178
• Court: High Court (Singapore)
• Published date: 25 February 2013
• Year: 1998
• Plaintiff Counsel: Paul Fitzgerald (Arthur Loke & Partners)
• Defendant Counsel: Rebecca Yeo (Drew & Napier)
• Citation: [1998] SGHC 178

Judgment:

GROUNDS OF DECISION

The background

1. This was an appeal by the plaintiff against the decision of the court below that further proceedings be stayed. At the conclusion of the hearing, I allowed the plaintiff’s appeal with costs against which decision the defendants have appealed (Civil Appeal No. 92 of 1998).

The facts

2. The defendants are the main contractor for the construction of a new administration and operations building at Pasir Panjang ("the Project") for the Port of Singapore Authority ("the PSA").

3. On or about 17 May 1996, the plaintiff entered into a Nominated Sub-Contract ("the Sub-Contract") with the defendants for the supply and installation of external wall cladding and glazing for the Project. The Sub-Contract incorporates the PSA’s Standard Form of Conditions of Sub-Contract ("Sub-Contract Conditions").

4. Clause 30 of the Sub-Contract Conditions provides as follows:

ARBITRATION

5. By letter dated 29 December 1997, the defendants informed the plaintiff that they (the defendants) were lodging claims under cl 19 of the Sub-Contract for "losses incurred to-date and possible claims" and would be recovering an "interim total" thereunder of $2,426,230 from payments due to the plaintiff in reliance on cl 12 of the Sub-Contract.

6. Clause 12 of the Conditions confers on the Contractor a right of deduction and 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."

7. On or about 12 January 1998, the defendants set-off the sum of $345,050 due and payable to the plaintiff under Interim Certificate No. 19.

8. On or about 26 January 1998, the defendants set-off the sum of $86,520 due and payable to the plaintiff under Interim Certificate No. 20.

9. The plaintiff commenced this suit to recover the sums payable under Interim Certificates Nos. 19 and 20.

10. The defendants applied for and were granted a stay of proceedings.

The issue

11. The only issue for determination is whether, pursuant to Section 7 of the Arbitration Act Cap. 10 ("the Act"), there is sufficient reason why the matter should not be referred to arbitration in accordance with the arbitration clause contained in the Sub-Contract.

The decision

12. There is no doubt that a Court has the powers to stay the proceedings either under its own inherent jurisdiction or pursuant to section 7 of the Act which states:

"(1) If any party to an arbitration agreement, or any person claiming through or under him, in respect of any matter agreed to be referred, any party to the legal proceedings may at any time after appearance, and before delivering any pleadings or taking any other steps in the proceedings, apply to the court to stay the proceedings.

(2) The court or a judge thereof, if satisfied that there is no sufficient reason why the matter should not be referred in accordance with the arbitration agreement, and that the applicant was, at the time when the proceedings were commenced, and still remains, ready and willing to do all things necessary to the proper conduct of the arbitration may make an order staying the proceedings."

13. The approach adopted towards arbitration agreements is that stated in Uni-Navigation Pte Ltd v Wei Loong Shipping Pte Ltd [1993] 1 SLR 876 (at p 879)

"Where the claim is undisputed or indisputable the Courts and not the arbitrators have the jurisdiction to decide upon the claim even though the arbitration agreement stipulates for disputes to be referred to arbitration.

Where the arbitration agreement provides for disputes to be decided by arbitrators, the Court should adopt a holistic and common sense approach to see if there is a dispute. If the Defendant makes out a prima facie case of disputes the Court should not embark on an examination of the validity of the disputes as though it were an application for summary judgment"....

(per Selvam J)

14. The main issue is whether the claim is one which is undisputed. In Ellis Mechanical Services v Wates Construction [1978] 1 LR 33, Lord Denning commented :

"There is a point on the contract which I might mention upon this. There is a general arbitration clause. Any dispute or difference arising on the matter is to go to arbitration. It seems to me that if a case comes before the Court in which, although a sum is not exactly quantified and although it is not admitted, nevertheless the Court is able, on an application of this kind, to give summary judgment for such sum as appears to be indisputably due, and to refer the balance to arbitration."

Bridge L J in the same case commented:

"To my mind the test to be applied in such a case is perfectly clear. The question to be asked is: is it established beyond reasonable doubt by the evidence before the Court that at least $x is presently due from the defendant to the plaintiff? If it is, then judgment should be given for the plaintiff for that sum, whatever x may be, and in a case where, as here, there is an arbitration clause, the remainder in dispute should go to arbitration."

15. In my opinion, the defendants should not be given the opportunity to escape summary liability when it is clearly justified in the circumstances. Here, the delay involved in having the action stayed would cause hardship to the plaintiff. As Lawton L J in Ellis Mechanical Services Ltd v Wates Construction Ltd said:

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