Court of Appeal clarifies applicability of s.17(2A) of the SOP Act to liquidated damages (or does it)?

In Range Construction Pte Ltd v Goldbell Engineering Pte Ltd [2021] SGCA 34, the Court of Appeal dismissed the Appellant’s appeal against the decision of the High Court and upheld the Judge’s finding, inter alia, that the Adjudicator had not acted in excess of jurisdiction by considering Goldbell’s claim for liquidated damages under the pre-2019 amendment SOP Act.  In doing so, the Court of Appeal rejected the Appellant’s argument that the 2019 amendments, in particular Section 17(2A) of the SOP Act, was merely declaratory of the pre-existing position, and “simply clarified but did not change the legal position under the pre-amendment SOPA”.

While the case concerned the pre-amendment SOP Act (and specifically that set-offs for liquidated damages could be brought under the pre-amendment SOP Act), the broader significance of the Court of Appeal’s decision is in the explicit holding that the 2019 amendments, especially the introduction of Section 17(2A) and the amendments to Section 15(3), did indeed change the position on set-offs for claims related to damage and loss and expense.

In the High Court decision in Range, Justice Lee Seiu Kin had stated that he “did not consider the introduction of s 17(2A) of the SOP Act to be any signal of parliamentary disapproval of adjudicators considering liquidated damage claims under the SOP regime”, which some adjudicators have accepted as binding authority that Section 17(2A) of the SOP Act does not apply to claims/set-offs for liquidated damages.  In view of the Court of Appeal’s finding (at [41] and [42]) that Section 17(2A) has indeed altered the legal positon under the pre-amendment SOP Act, it would appear that save as expressly provided for, Section 17(2A) now precludes an adjudicator from considering a claim/set-off for liquidated damages.  However, by not directly addressing Justice Lee’s aforesaid statement on the applicability of Section 17(2A) to liquidated damages, the Court of Appeal left a sliver of ambiguity on this issue, especially given its residual comment (at [53]) that the exclusion of complicated claims for damages, loss or expense from payment responses was not a “foregone” conclusion.

One comment

  1. Can’t wait for more posting from the Honorable Mr. Melvin Chan. An easy to digest and informative piece of work. Thank you for the posting.

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