Adjudication in Singapore set to reach new heights in 2014

Out-Law News | 22 Aug 2014 | 10:37 am | 1 min. read

The number of construction industry adjudications in Singapore in the first half of 2014 has risen significantly, continuing a trend which started in 2013, according to the latest data available from Singapore’s Building and Construction Authority (BCA).

The BCA, the government agency responsible for the adjudication legislation, does not provide detailed annual breakdowns of adjudications. However, an indication of the number of cases can be derived from the running sequence serial numbers assigned to adjudication cases by the agency.

The figures are a strong indicator of the growing confidence and acceptance of adjudication in Singapore as an attractive and viable alternative to traditional arbitration.

Mohan Pillay of Pinsent Masons MPillay, the Singapore joint law venture partner of Pinsent Masons, the law firm behind Out-Law.com, said: "Singapore has one of the shortest time lines anywhere in the world to complete the adjudication process. The adjudicator has 14 days to decide the dispute unless the parties agree to an extension.”

The adjudication regime is seen as providing quick and effective enforcement with direct access to court enforcement procedures. Singapore’s courts, including the Court of Appeal, have also laid down clear guidelines for the adjudication process over recent years.

Pillay said: “These factors, combined with increasing concerns about the cost and length of arbitration, may be fuelling what is clearly a growing preference for adjudication in Singapore."

According to the BCA data, there has been a slow but gradual increase in cases from a single case in 2005, when the adjudication regime came into force, rising to around 140 to 160 between 2009 and 2012.

However, the steady rise was broken in 2013 when adjudication cases jumped to around 250. This represented an increase of some 50% to 60% over the average 140-160 benchmark seen over the preceding four years.

2014 shows every sign of being an equally busy year. By June 2014, case numbers had already reached around 180, which is in excess of the full-year totals seen between 2009 and 2012. Latest figures indicate that 2014 could reach a new high, possibly approaching if not hitting the 300 cases mark.

The adjudication regime in Singapore is governed by the Building and Construction Industry Security of Payment Act, which was enacted in April 2005 to facilitate payments for construction work done or for related goods or services supplied.

The Act provides that any party who has carried out construction work or supplied related goods or services under a contract made in writing has a statutory right to receive progress payment, even in the absence of such a provision in the contract. In a dispute, an independent adjudicator, whose determination is binding, decides the amount to be paid in a claim made under the Act and the adjudicated amount must be paid by a set date.