Presscrete Engineering Pte Ltd v SsangYong-Wai Fong Joint Venture [2023] SGHC 8

Sushant Shukla

Case Details

Citation: [2023] SGHC 8
Court: General Division of the High Court of the Republic of Singapore
Decision Date: 10 January 2023
Coram: S Mohan J
Case Number: Originating Claim No 28 of 2022 (Registrar’s Appeal No 269 of 2022)
Hearing Date(s): 29 September 2022, 10 October 2022
Claimant / Plaintiff: Presscrete Engineering Pte Ltd
Respondent / Defendant: SsangYong-Wai Fong Joint Venture
Counsel for Claimant: Twang Kern Zern and Simone Bamapriya Chettiar (Central Chambers Law Corporation)
Counsel for Respondent: Luis Inaki Duhart Gonzalez (Selvam LLC)
Practice Areas: Arbitration; Stay of court proceedings; Construction Law

In Presscrete Engineering Pte Ltd v SsangYong-Wai Fong Joint Venture [2023] SGHC 8, the General Division of the High Court addressed the critical threshold for staying court proceedings in favour of domestic arbitration under Section 6 of the Arbitration Act 2001. The dispute arose from a construction subcontract involving ground improvement works for the North South Corridor project. The central conflict concerned whether claims for "disputed works"—which the claimant alleged fell entirely outside the scope of the original subcontract—were nevertheless subject to the subcontract's arbitration agreement.

The Assistant Registrar (AR) had initially dismissed the defendant’s application for a stay, finding that the claimant had shown a "clear case" that the dispute fell outside the arbitration agreement. On appeal, S Mohan J reversed this decision, reinforcing the "prima facie" standard established in Tomolugen Holdings Ltd and another v Silica Investors Ltd and other appeals [2016] 1 SLR 373. The Court held that the dispute, which involved claims for additional payments for Jet Grout Pile (JGP) and Wet Speed Mixing (WSM) works, was at the very least "in connection with" the subcontract, thereby triggering the mandatory stay provision.

This judgment is significant for its robust application of the principle that courts should not conduct a prolonged or microscopic examination of the merits of a dispute at the stay stage. Instead, the court’s role is limited to determining whether a prima facie case for a stay exists. By granting the stay, the Court affirmed that even where a party characterises works as being "outside the contract," the broad language of modern arbitration clauses (covering disputes "arising out of or in connection with" the contract) will generally encompass such claims.

Ultimately, the decision underscores the Singapore judiciary's pro-arbitration stance in domestic matters, mirroring the approach taken in international arbitrations. It serves as a stern reminder to practitioners that attempts to bypass arbitration agreements by re-characterising contractual disputes as extra-contractual claims will face a high hurdle at the interlocutory stage.

Timeline of Events

11 July 2019: The claimant, Presscrete Engineering Pte Ltd, submitted a quotation for Jet Grout Pile (“JGP”) and Wet Speed Mixing (“WSM”) works (the “Quotation”).
21 August 2019: The defendant, SsangYong-Wai Fong Joint Venture, issued a Letter of Intent to the claimant for the Ground Improvement (“GI”) works.
8 November 2019: The parties entered into a formal subcontract for the GI works (the “Subcontract”), described as a “Fixed Price Sub-Contract with Bill of approximate Quantities.”
07 May 2021: The claimant submitted a claim for additional costs related to "disputed JGP works" and "disputed WSM works," which the defendant subsequently refused to certify as variations.
6 December 2021: The claimant commenced court proceedings via HC/OC 28/2022 (“OC 28”) seeking S$1,608,202.71 for the disputed works.
28 July 2022: The Assistant Registrar dismissed the defendant’s application (SUM 2805) for a stay of proceedings in favour of arbitration.
23 August 2022: The defendant filed Registrar’s Appeal No 269 of 2022 against the AR's decision.
29 September 2022: The substantive hearing of the appeal took place before S Mohan J.
10 October 2022: S Mohan J delivered the decision allowing the appeal and granting the stay of OC 28.
10 January 2023: The full written judgment was released.

What Were the Facts of This Case?

The defendant, SsangYong-Wai Fong Joint Venture, was the main contractor for the construction of a tunnel for the North South Corridor between Victoria Street and Kampong Java Road (the “N102 Project”). The claimant, Presscrete Engineering Pte Ltd, was engaged as a subcontractor to perform Ground Improvement (“GI”) works, specifically Jet Grout Pile (“JGP”) and Wet Speed Mixing (“WSM”) works. The relationship was governed by a Subcontract dated 8 November 2019, which followed a Quotation submitted by the claimant on 11 July 2019.

The Subcontract was a "Fixed Price Sub-Contract with Bill of approximate Quantities." It contained a comprehensive dispute resolution mechanism in Clause 43. Clause 43.1 provided that, save for matters inconsistent with the Building and Construction Industry Security of Payment Act, "any dispute or difference... with regards to any matter or thing of whatsoever nature arising out of the Sub-Contract or in connection therewith" should be finally resolved by arbitration. Clause 43.2 specified that the arbitration would be conducted in accordance with the SIAC Rules.

The dispute centered on two categories of work performed by the claimant:

Disputed JGP Works: The claimant argued that the defendant failed to ensure the site was free of obstructions (such as restrictive hoardings and sheet pilings), which prevented the use of standard vertical JGP rigs. Consequently, the claimant had to perform inclined JGP works using different machinery. The claimant sought S$910,293.57 for these works, arguing they were not contemplated by the Subcontract.
Disputed WSM Works: The claimant alleged that underground piles, which the defendant was responsible for extracting, remained in the ground. This necessitated the use of smaller diameter WSM piles and additional "pre-boring" works. The claimant sought S$61,173.34 and other sums, totaling S$1,608,202.71 across all claims in OC 28.

The claimant's primary factual contention was that these works were "extra-contractual." They argued that because the defendant refused to certify these works as "variations" under the Subcontract's variation clauses (Clauses 3.3 and 3.5), the works must have been performed under a separate, collateral, or implied contract. The claimant pointed to the fact that the defendant had made some payments (e.g., S$100,000 and S$402,040), which the defendant labeled as "COVID-19 support payments," but which the claimant interpreted as recognition of the extra-contractual nature of the work.

The defendant's position was that all works performed were within the scope of the Subcontract or were at least "in connection with" it. They argued that the claimant’s own Statement of Claim in OC 28 repeatedly referred to the Subcontract and attributed losses to the defendant’s "breaches of the [Subcontract]" (at para 14 of the SOC). The defendant maintained that the dispute was a classic construction dispute over whether certain works constituted variations or were part of the original lump-sum scope, and that such disputes were precisely what Clause 43 was intended to cover.

Procedurally, the claimant commenced OC 28 in December 2021. The defendant responded by filing SUM 2805 seeking a stay under Section 6 of the Arbitration Act 2001. The AR dismissed the stay application, accepting the claimant's argument that the dispute fell outside the arbitration agreement because the works were not "Sub-Contract Works" as defined. The defendant appealed this dismissal to the High Court.

What Were the Key Legal Issues?

The primary legal issue was whether the dispute in OC 28 fell within the ambit of the Arbitration Agreement contained in Clause 43 of the Subcontract, such that a stay of proceedings was mandatory under Section 6 of the Arbitration Act 2001.

To resolve this, the Court had to address several sub-issues:

The Standard of Review: Whether the court should apply a "prima facie" test or a "full merits" review when determining the scope of an arbitration agreement under the Arbitration Act 2001.
The Scope of Clause 43.1: Whether the phrase "arising out of or in connection with" the Subcontract was broad enough to encompass claims for works that one party alleged were "extra-contractual" or "outside the scope."
The "Ready and Willing" Requirement: Whether the defendant had satisfied the requirement under Section 6(2)(b) of the AA to remain "ready and willing to do all things necessary to the proper conduct of the arbitration."
The Effect of Non-Certification: Whether the defendant's refusal to certify the works as variations under the contract's machinery precluded the dispute from being "under" or "in connection with" the contract for the purposes of arbitration.

How Did the Court Analyse the Issues?

The Court began by confirming that the Tomolugen Holdings test applies to stay applications under Section 6 of the Arbitration Act 2001, even though that case originally concerned the International Arbitration Act. S Mohan J noted that the stay applicant must establish a prima facie case that:

There is a valid arbitration agreement;
The dispute falls within the scope of that agreement; and
The agreement is not null and void, inoperative, or incapable of being performed.

The Court emphasized that the "prima facie" standard is intentionally low. Quoting Tjong Very Sumito and others v Antig Investments Pte Ltd [2009] 4 SLR(R) 732 at [23], the Court noted:

"The court should only refuse a stay when it is very clear that the dispute does not fall within the arbitration agreement."

In analyzing the scope of the dispute, the Court adopted a "robust application of judicial common sense" (at [34]). It rejected the claimant's argument that the dispute fell outside the Subcontract simply because the claimant labeled the works as "extra-contractual." The Court observed that the claimant’s own pleadings in OC 28 relied heavily on the Subcontract. Paragraph 14 of the Statement of Claim specifically attributed the claimant’s losses to the defendant’s “breaches of the [Subcontract].” The Court found it contradictory for the claimant to sue for breach of contract while simultaneously arguing the dispute was not "in connection with" that same contract.

The Court then parsed the language of Clause 43.1. The phrase "arising out of or in connection with" is traditionally given a broad, generous interpretation. The Court held that even if the "disputed works" were technically outside the original "Sub-Contract Works" definition, the dispute over whether they should be paid for certainly "connected" to the Subcontract. The dispute involved interpreting the Subcontract's variation clauses, the site access obligations, and the payment schedules. As the Court noted at [46], the claimant's case was essentially that the defendant's breach of the Subcontract (failing to provide an obstruction-free site) necessitated the additional works.

Regarding the claimant's argument that the defendant's refusal to certify the works as variations meant they were not "under" the contract, the Court found this logic flawed. A dispute over whether a variation exists is itself a dispute "arising out of" the contract. The Court cited Chow Kok Fong's Law and Practice of Construction Contracts to support the view that variation claims are inherently contractual in nature, even if the formal certification process has not been completed.

Finally, the Court addressed the "ready and willing" requirement under Section 6(2)(b) of the AA. The claimant argued that the defendant's failure to propose an arbitrator or initiate arbitration showed a lack of willingness. The Court rejected this, holding that the "ready and willing" requirement does not require the stay applicant to have already commenced arbitration. It only requires that they are prepared to proceed with arbitration once the court proceedings are stayed. The defendant's consistent insistence on arbitration through its stay application was sufficient evidence of its willingness.

What Was the Outcome?

The High Court allowed the defendant's appeal and reversed the decision of the Assistant Registrar. The Court granted a stay of the entirety of OC 28 in favour of arbitration. The operative order was as follows:

"I reversed the AR’s decision dismissing SUM 2805 and, in its place, I made an order under s 6 of the AA staying OC 28 in favour of arbitration, as prayed for by the defendant in SUM 2805." (at [88])

The Court found that the defendant had successfully established a prima facie case that the dispute fell within the scope of the Arbitration Agreement. The claimant had failed to show that this was one of the "clearest of cases" where a stay should be refused. The Court also found that the defendant remained ready and willing to arbitrate.

In terms of costs, the Court awarded the defendant:

S$13,000 (all-in) for the costs of the application before the Assistant Registrar.
S$10,000 (all-in) for the costs of the appeal (RA 269).

The Court noted that the increased figure for the application below (S$13,000) took into account the differences in the parties' disbursements. The claimant was ordered to pay these sums to the defendant.

Why Does This Case Matter?

This case is a significant addition to the jurisprudence on domestic arbitration in Singapore, particularly in the construction sector. It clarifies that the pro-arbitration principles established in the context of the International Arbitration Act (IAA) apply with equal force to the Arbitration Act 2001 (AA). For practitioners, the judgment provides three critical takeaways.

First, it reinforces the supremacy of the "prima facie" standard. The Court's refusal to engage in a deep dive into whether the works were "extra-contractual" at the stay stage protects the arbitral process. If a court were to decide whether works were "outside the scope" of a contract to determine if a stay should be granted, it would effectively be deciding the merits of the dispute—the very task the parties reserved for the arbitrator. S Mohan J’s judgment ensures that the "gatekeeper" role of the court remains limited, preventing "trial by affidavit" during interlocutory stay applications.

Second, the case clarifies the breadth of standard arbitration clauses. In construction, disputes often arise where one party claims work was "additional" or "outside the contract" to avoid contractual caps or procedural hurdles (like time-bars for variation claims). This judgment makes it clear that as long as the dispute has a "connection" to the underlying contract—such as arising from a breach of site access or involving the same parties and project—it will likely be caught by a standard "arising out of or in connection with" clause. This limits the ability of claimants to "forum shop" by re-characterizing contractual claims as restitutionary or extra-contractual claims in court.

Third, the judgment provides practical guidance on the "ready and willing" requirement. By confirming that a defendant does not need to have already initiated arbitration to be "ready and willing," the Court provides a shield for defendants who are sued in court in breach of an arbitration agreement. It confirms that the stay application itself is a primary indicator of willingness to arbitrate.

In the broader Singapore legal landscape, this case aligns the domestic arbitration regime more closely with the international one, promoting Singapore as a consistent and predictable seat for arbitration regardless of whether the dispute is local or international. It discourages tactical litigation aimed at bypassing agreed-upon dispute resolution mechanisms, thereby upholding the principle of party autonomy.

Practice Pointers

Drafting Scope: When drafting arbitration clauses, use broad language such as "arising out of, in connection with, or relating to" the contract. This judgment confirms such language is a powerful tool to capture disputes even when they are characterized as "extra-contractual."
Pleading Consistency: Practitioners should be wary of pleading a breach of contract in a Statement of Claim while simultaneously arguing that the dispute is "outside the scope" of the contract's arbitration clause. Such inconsistency was a key factor in the Court's decision to grant the stay.
Variation Claims: In construction disputes, remember that a refusal by a superintendent or main contractor to certify a variation does not "remove" the dispute from the contract. It creates a contractual dispute that is prima facie arbitrable.
Stay Applications: When applying for a stay under Section 6 of the AA, focus on the "prima facie" threshold. Avoid getting bogged down in the technical merits of whether the work was "extra-contractual" unless it is "very clear" and "obvious" on the face of the documents.
Ready and Willing: To satisfy Section 6(2)(b) of the AA, ensure the defendant clearly states its willingness to arbitrate in its supporting affidavits. There is no need to have commenced SIAC proceedings before filing the stay application.
Costs Strategy: Be aware that unsuccessful resistance to a stay application can result in significant cost orders, as seen here with the S$23,000 total award against the claimant.

Subsequent Treatment

As a 2023 decision, Presscrete Engineering stands as a contemporary authority for the application of the Tomolugen Holdings prima facie test to the Arbitration Act 2001. It reinforces the "robust application of judicial common sense" when interpreting the scope of arbitration agreements. There are no recorded instances in the extracted metadata of this case being overruled; it continues to represent the High Court's pro-arbitration stance in domestic construction disputes.