Is An Adjudicator's Finding That A Payment Claim Was Validly Served A Determination On The Merits?

• Published date: 30 November 2022
• Subject Matter: Litigation, Mediation & Arbitration, Real Estate and Construction, Trials & Appeals & Compensation, Construction & Planning
• Law Firm: Chancery Law Corporation
• Author: Mr Tian Luh Tan and Yap Xuan Wei

In Emergent Engineering Pte Ltd v China Construction Realty Co Pte Ltd [2022] SGHC 276, Justice Tan Siong Thye dismissed the Respondent's application to set aside the Adjudication Determination and the consequent Order of Court which enforced the Adjudication Determination. Among others, Tan J held that the Adjudicator's finding that the payment claim in question was validly served was a determination on the merits which the Court was not entitled to review.

Facts. Emergent Engineering Pte Ltd v China Construction Realty Co Pte Ltd [2022] SGHC 276 ("Emergent Engineering") arose from an Adjudication Determination rendered in Adjudication Application No. SOP/AA 093 of 2022 ("AA 93") (at [1] Emergent Engineering).

The Adjudication Determination was made in respect of a Payment Claim No 25 ("PC 25") served on 6 May 2022 (at [7] Emergent Engineering).

PC 25: Post-termination payment claim. However, PC 25 was served after the Respondent issued a Notice of Termination on 22 April 2022 seeking to terminate the Sub-Contract (at [5] Emergent Engineering), and after the Applicant responded with its notice on 30 April 2022 stating that the Respondent had wrongfully terminated the Sub-Contract and was therefore in repudiatory breach (at [6] Emergent Engineering).

In its Notice of Termination, the Respondent purportedly relied on, amongst others, clause 5.10.1 of the Letter of Acceptance ("Clause 5.10.1") as the basis for terminating the Sub-Contract (at [5] Emergent Engineering). The relevant portion of Clause 5.10.1, termed by Tan J as the "Termination Provision" (at [5] Emergent Engineering), entitled the Respondent to terminate the employment of the Applicant by written notice with immediate effect, if the specified scenario(s) under the clause was met.

Payment Suspension Provision. Clause 5.10.1 also contained a portion termed by Tan J as the "Payment Suspension Provision" (at [32] Emergent Engineering), which provided (among others) that:

"...

Upon the termination of [the Applicant's] employment under this Clause, [the Respondent] is not obliged to certify any further payment under the [SOPA]. Further, [the Respondent] is entitled to retain any payment which would otherwise be due and owing to [the Applicant] under the [SOPA]."

Tan J noted that s 4(2)(c) of the Building and Construction Industry Security of Payment Act 2004 (2020 Rev Ed) ("SOPA") excluded the application of the SOPA to any terminated contract which permitted "the respondent to suspend progress...