PROPOSING AMENDMENTS TO THE SINGAPORE �S BUILDING AND CONSTRUCTION INDUSTRY SECURITY OF PAYMENT ACT IN THE ASPECT OF ADJUDICATION OF THE FINAL PAYMENT CLAIM: A DELICATE BALANCING ACT

Abstract

Indisputable is the fact that cash flow forms the backbone of the construction industry in Singapore. Before the enactment of Singapore’s Building and Construction Industry Security of Payment Act (SOP Act), contractors often found themselves between a rock and a hard place: having to fund the work in advance out of their pocket only to be put down by employers’ unscrupulous payment behaviour. Since the SOP Act came into force in 2005, the contractors, instead of having to bring their grievance to Court, can now opt for a fast and more cost-effective dispute resolution.

However, like everything else, the SOP Act is not perfect; it brings together with the benefits its own set of problems. Since our SOP Act is largely based on foreign statutes of similar nature, the SOP Act needs to be adapted to our local industry and legal context, resulting in various issues. This dissertation therefore has identified one major issue where the SOP Act requires amendments: the current inclusion of the Final Payment Claim as a type of “Progress Payment Claim” and therefore effectively subjecting it to the adjudication scheme introduced with the SOP Act.

Upon studying local cases pertaining to this subject, relevant provisions of the SOP Act are then assessed, reviewed and amendments are proposed. The proposed amendments suggest releasing the Respondent from the unilateral initiation mechanism of the adjudication scheme for Final Payment Claims in order to seek a better and potentially more final determination by an arbitration tribunal.

Lastly, due to the lengthy nature of arbitration, matters of preventing disputing parties from dissipating one’s assets were also considered.