Background
Jurong Port engaged SH Design & Build as the main contractor for several phases of a ready-mixed-concrete facility at Jurong Port. The contract incorporated the Public Sector Standard Conditions of Contract for Construction Works and required SH Design & Build to furnish a performance bond. HSBC Life issued the conditional bond for S$12,569,800 in Jurong Port’s favour.
After substantial delays to several phases, Jurong Port referred to the Superintending Officer under cl 35.1 the question of the total liquidated damages payable by SH Design & Build. The officer responded within the contractual 30-day period on 5 September 2025, but said that determining liquidated damages was the employer’s responsibility and did not quantify them. Following a request from Jurong Port that was not copied to the contractor, the officer stated on 6 October 2025 that liquidated damages totalled S$13,224,962.47.
Jurong Port then demanded the full bond amount, relying on the officer’s initial response and later clarification as a final and binding decision under cl 35.1. SH Design & Build sought injunctions preventing the call and payment pending arbitration, and the High Court had granted an interim injunction while the application was determined.
The Court’s Holding
The High Court held that the officer’s 5 September response did not decide the sole question referred—how much liquidated damages the contractor owed. Calling the letter a “preliminary response” was not decisive because its substance showed it was the officer’s final response, but it nevertheless contained no determination of quantum that could bind the parties under cl 35.1.
The 6 October clarification supplied the missing quantum but was invalid as a cl 35.1 decision because it came after the strict 30-day deadline. The court indicated that even a one-day delay would invalidate a late decision under this expedited regime. The clarification was also tainted by a breach of natural justice because Jurong Port’s clarification request was not copied to SH Design & Build and the contractor had no opportunity to respond.
Because the bond was conditional and Jurong Port’s demand falsely proceeded on the premise that a valid, binding cl 35.1 determination of liquidated damages existed, the demand was invalid. HSBC Life was therefore not obliged to pay on the basis stated, and Jurong Port’s attempt to set aside the injunction was dismissed.
Key Takeaways
- A decision under PSSCOC cl 35.1 must answer the question referred and be issued within the strict 30-day period to acquire temporary finality.
- A later “clarification” cannot cure the absence of a substantive decision if it materially supplies the answer only after the deadline.
- A party affected by a reference or clarification request must receive notice and an opportunity to respond; failure to provide that opportunity may invalidate the resulting decision.
Why It Matters
The judgment underscores that parties invoking the PSSCOC’s fast-track dispute mechanism must comply precisely with its deadline and procedural safeguards. A timely letter from the Superintending Officer is insufficient if it does not actually determine the matter referred.
For calls on conditional performance bonds, an employer cannot rely on a purportedly binding contractual determination that is incomplete, late, or procedurally invalid. The court observed, however, that a valid and timely determination of liquidated damages under cl 35.1 could provide a basis for a bond demand, although that observation was obiter.