JE Synergy Engineering Pte. Ltd. v Sinohydro Corporation Limited (Singapore Branch)

JE Synergy Engineering Pte Ltd, main contractor for a treatment facility at Tuas, subcontracted part of the works to Sinohydro Corporation Limited (Singapore Branch) in November 2018. Sinohydro brought two adjudications under the Building and Construction Industry Security of Payment Act against JE Synergy, which filed no response in either. In AD 132 (6 June 2020) the adjudicator awarded $1,115,788.51 on a payment claim JE Synergy had certified in full. In AD 150 (9 July 2020) Sinohydro was awarded $7,678,070.06. In July 2022 Sinohydro obtained leave to enforce both determinations.

JE Synergy has sued its own project director, Mr Niu Ji Wei, and senior project engineer, Ms Chen Zhe, in HC/S 950/2020. It alleges they received bribes, kickbacks or secret profits from Sinohydro, through a company Ms Chen later came to own, in return for helping Sinohydro win the subcontract and approving its payment claims without proper checks. It claimed this led to over-certification of about $3m. Sinohydro denies any fraud or corruption. JE Synergy also began arbitration against Sinohydro, and S 950 was stayed in its favour. In HC/OA 437/2022, JE Synergy applied to set aside both determinations and the enforcement order under s 27(6)(h) of the Act, on the ground that they were induced or affected by fraud or corruption, or else to stay enforcement pending S 950.

1. Whether the adjudication determinations should be set aside because their making was induced or affected by fraud or corruption.
2. Whether enforcement of the determinations should be stayed, wholly or in part, pending resolution of the underlying dispute.

JE Synergy rightly dropped its reliance on alleged corruption in winning the subcontract. Following Rakna Arakshaka Lanka Ltd v Avant Garde Maritime Services (Pte) Ltd [2019] 2 SLR 131 on the identically worded arbitration provision, the ground targets fraud or corruption tainting the determination itself, not the underlying contract.

The over-certification allegation, if proved, would be both fraudulent and corrupt. But it was intensely factual, hotly contested and the very subject of S 950 and the arbitration. The court does not review the merits on a setting-aside application; doing so would turn pay now, argue later into pay now, argue now and argue again later, on affidavits alone. Following Facade Solution Pte Ltd v Mero Asia Pacific Pte Ltd [2020] 2 SLR 1125, only compelling evidence leaving effectively no dispute on the merits would justify setting aside.

That threshold was not met. Sinohydro gave a plausible account of meetings to align payment claims. No allegation was made against the quantity surveyor's staff or the JE Synergy employees who signed the payment responses, and Mr Niu and Ms Chen's specific role in certification was not shown. Discrepancies in Sinohydro's certification of its own subcontractor ran both ways. The expert's method was arguably unsuited to a lump-sum contract, and over-certification alone did not prove fraud. Even on JE Synergy's best case, about $6m of the sums awarded were untainted, so setting aside both determinations entirely would be unjust.

No stay was justified: there was no evidence of Sinohydro's insolvency or that money paid would be unrecoverable, and the abuse of process argument rested on the same unproven allegations.

S Mohan J dismissed the application in its entirety, refusing both the setting aside and any full or partial stay. He ordered the security paid into court, with accrued interest, to be paid out to Sinohydro, and ordered JE Synergy to pay costs of $20,000, with disbursements later assessed at $30,000.