0Question No Q01 (TOTAL 50 MARKS)
Law of Adjudication
The Building and Construction Industry Security of Payment (SOP) Act was last enacted in 2006. In Oct 2018, Parliament passed the Amendment Bill to introduce wide sweeping changes.
Carry out an academic research and report on at least five (05) principal areas of changes, with
comparison and contrasts to the existing Act, and reasons for the changes.
One point (150 words)
Yilia
S18
Amendment:
By deleting the words” paid the adjudicated amount to the claimant” in subsection (3) and substituting the words”paid the adjudicated amount to the authorised nominating body”
Reason:
Adjudicated amount that a respondent is required to pay to nominating body except claimant, the nominating body as a third party, so as to safeguard the same pending the outcome of an adjudication review application brought by the respondent, in addition, the adjudicated amount pay to nominating body, so the money can be secured first, in order to prevent some claimants from going bankrupt purposely and shifting assets after receiving extra amount before or during the adjudication review period.
S11(1)
Amendment:
In construction contract, the response is made by providing a payment response to the claimant, if contract is silent, Default timeline for submission of payment responses increased from 7 to 14 days.
Reason: 7 days is lengthen to 14 days. A payment response must
- Be in writing and addressed to the claimant
- Identify the payment claim to which it relates
- State the response amount
- State the reasons for any amount withheld complete with breakdown and calculation
- Be accompanied by supporting documents
Normally,to fulfil above mentioned requirements, , 7 days is too short for respondent to prepare the payment response. Especially, for some main contractor QS, each payment period, they have to provide more than 50 payment responses for suppliers and subcontractors. 7 days is so tough for them to struggle with the payment response
Jiayi
SOP Act s4 – Application of Act
Clause 3 inserts a new subsection (2A) into section 4 which allows prefabrication works to be protected under the amended act. However, this clause is only limited to:
- works done overseas for use of local projects
- works to be exported for project overseas, only if the contracting parties are registered locally
Reason: Due to the immature prefabrication industry in Singapore, a lot of prefabrication-related contract are signed with overseas vendors. Hence, section 4 is amended to further expand its scope in accordance with the increasing importance of productive technologies in the construction industry.
S37
Amendment:
The current approach allows the service of document to be delivered to a person by electronic method. This is to address any ambiguity on the point as to whether email is acceptable.
Reason:
In the past when the electronic transaction act yet legislated, email was not recognised as an official and legal form of communication in law of contract. The service of document can only be sent by post or in hand where a hard copy is required.
S10
In the previous act, claimants are entitled to claim for their work done with a limitation period of 6 years. This unreasonably long period makes the assessment of claim difficult, especially when the work is completed in long time ago.
It is now shorten to 30 months after taking into account the time to settle final payment claims and the defects liability period, which typically ranges from 12 to 18 months. However, it is believed that 30 months is too short after taking into account that some of the contract period are more than 30 months. common
Question No Q02 (TOTAL 50 MARKS)
Law of Arbitration
You are a team of advisors engaged by a Client to draft an Agreement with a Dispute Resolution
Clause.
List at least five (05) advantages and disadvantages of referring any dispute arising to arbitration, instead of litigation.
Also, remember to include a valid dispute resolution clause to refer such disputes to arbitration.
Remember to include all the essential terms to ensure the clause is enforceable.
Ting
Advantage
-Enforceability
Governing Law. This Agreement shall be governed by and construed in accordance with the laws of Singapore.
International Arbitration Act
Arbitration awards are normally comprehended to be final and binding and may only set aside in certain limited situation. The final arbitration awards not only are biding rather than a proposal, it is enforceable nationally and have additional regional enforceability in more than 120 nations. Arbitration awards are different for the judgement by the litigation which may only enforced in own country due to every country have different law. In today’s global business environment, international arbitration act can eliminate the biased of national courts or lack of capability to give a satisfactory resolution for the global business dispute. Parties may either delegate an arbitrator from another nation or request a international arbitrator to organize an appointment. Along these lines they obtain neutrality in the decision of law, venue, methodology and tribunal.
Terms of reference
Disadvantages
-Decision may not be fair no jury (cannot be appeal)
The decision of the arbitrator may not be fair because arbitration is not evidence-based and it is depend on the experience of arbitrator to settle the dispute on the privilege legitimate decision. However, the arbitration awards is final. They are not available for appeal to the Singapore Court of Appeal. Regardless of whether one party feels that the decision was out of line, unjust or biased, they cannot appeal the award that given by the arbitrator. Furthermore, in the event arbitration cases are confidential, although it is an advantage for certain individuals in certain situation but there is likewise lack of transparency, which is not as same as the open court that can be heard by public. Sometime, the decision made by arbitrator can be questionable and more likely to be one-sided but the awards of arbitration are infrequently investigated by the courts. There is no jury and from the claimant’s perspective that might be a genuine disadvantage.
. Exclusion of the right to appeal to the Singapore Court of Appeal
https://www.sicc.gov.sg/docs/default-source/guide-to-the-sicc/sicc_model_clauses.pdf
-Lack of evidence
In the intervention procedure, there is a constraint of time for discovery which can lead prompt to shock evidence and declaration happening during an arbitration process. Arbitrator may make an award on wide standard of justice and equity and not really depends on principles of law of evidence. During arbitration process, the parties may not have the necessary information which is important to fully assess the case. There is lack of formal discovery process although it could save the arbitration cost. Consequently, a party may show its case to an arbitrator without being conscious of the appropriate facts that could have been uncovered had more formal discovery, for example interrogatories, and testimonies been conducted.
https://www.louisianalawblog.com/business-and-corporate/advantages-and-disadvantages-of-arbitration/
Wang Feng
Advantage
-Time efficiency,TOR
One of the advantages of arbitration is usually the process is fairly quick than litigation,once an arbitrator is selected,the case can be heard immediately,in other words arbitration is less formal process that arbitrators are not judges which means arbitrators does not necessarily follow the precedent or exclude evidence,therefore,it is possible to consider key information that it not be admissible in court because of arbitrator have discretion what evidence can be submitted,they can decide at their own discretion without bound precedent.furthermore,The parties and the arbitral tribunal have the power to extend the time limit for signing the terms of reference. If one of the parties fails to sign the terms of reference, it may decide to proceed with the arbitration. The main purpose of exercising this power through the terms of reference is to avoid either party from impeding the arbitral proceedings.
-Flexible SIAC Rules
Arbitration provides greater flexibility of process and procedure than litigation,in arbitration process the arbitrator is nominated by the parties which any arbitrator may be challenged and can be remove the arbitrator if all parties agree challenge,in litigation the judge is appointed.Meanwhile,procedural deadline and venue for hearings can be more flexible and informal,parties can extend the time limit if all parties are agreed,in litigation the procedural deadlines are more rigid.
Clause
(The venue for hearings could be any one physical location convenient to the parties or even electronically e.g. a hearing by way of teleconference and videoconference.)