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Getting The Deal Through (GTDT) – Lexology : Construction 2021 – Singapore Chapter

Co-authored by experts from HKA and Freshfields Bruckhaus Deringer, this chapter provides expert local insight into the field of construction law in Singapore, covering such areas as: joint ventures, foreign penetration of the local market and licensing procedures, labour requirements, local labour law and health and safety regulation, construction contracts, insurance, contracting with government entities, bribery and foreign corruption, force majeure and acts of God, dispute resolution mechanisms, international environmental law, international bilateral treaties and currency controls.

Local market

Foreign pursuit of the local market

If a foreign designer or contractor wanted to set up an operation to pursue the local market, what are the key concerns they should consider before taking such a step?

The key concerns that a foreign designer or contractor should consider include:

  • Choice of business structure. There are four main types of business structures: sole proprietorship or partnership, limited partnership, limited liability partnership and company. The Accounting and Corporate Regulatory Authority provides a guide to choosing between these structures.
  • Registration and licensing requirements. Architects and builders may be required to comply with these requirements before they can carry out any work.
  • Immigration matters (eg, visa requirements). The EntrePass allows eligible foreigners to start and operate a new business in Singapore. If the foreign designer or contractor intends to work as an employee in Singapore, he or she will need an appropriate work pass from the Ministry of Manpower.
  • Local labour and tax laws. Singapore has a mandatory social security savings scheme funded by contributions from employers and employees known as the Central Provident Fund (CPF).

Regulation and compliance

Licensing procedures

Must foreign designers and contractors be licensed locally to work and, if so, what are the consequences of working without a licence?

Yes. Contractors need a builder’s licence to carry out building works where plans are required to be approved by the Commissioner of Building Control, or work in specialist areas that have a high impact on public safety.

There are three classes of builder’s licence: class 1 general builder’s licence, class 2 general builder’s licence, and specialist builder’s licence. The class 1 general builder’s licence applies to contracts of any value, and the class 2 general builder’s licence applies to contracts of an estimated final price of not more than S$6 million. The specialist builder’s licence is required for specialist building works such as piling works, ground support and stabilisation works, site investigation work, structural steelwork, pre-cast concrete work and in-situ post-tensioning work.

In addition, all building works must be carried out under the supervision of an appropriate qualified person. This qualified person can either be an architect or a professional engineer holding a practising certificate issued under the Architects Act or the Professional Engineers Act respectively.

Any unlicensed person carrying out any building works that require a builder’s licence is liable on conviction to a fine not exceeding S$20,000 or to imprisonment for a term not exceeding one year or both, and to further fines if the offence is continuing.

Any person who supplies or offers to supply architectural services or professional engineering services in Singapore without complying with the registration requirements under the Architects Act or Professional Engineers Act (as applicable) is liable on conviction to a fine not exceeding S$5,000 and to further fines or imprisonment for repeat offenders.

Competition

Do local laws provide any advantage to domestic contractors in competition with foreign contractors?

No.

Competition protections

What legal protections exist to ensure fair and open competition to secure contracts with public entities, and to prevent bid rigging or other anticompetitive behaviour?

Singapore is a contracting party to the Agreement on Government Procurement under the World Trade Organisation, which requires the Singapore government to treat the goods or services offered by the suppliers of other contracting parties no less favourably than those offered by domestic suppliers. The Agreement is given effect through the Government Procurement Act and Government Procurement Regulations 2014.

More generally, the Competition Act prohibits agreements, decisions and concerted practices which have as their object or effect the prevention, restriction or distortion of competition within Singapore, including those that directly or indirectly fix purchase or selling prices or any other trading conditions, such as bid-rigging. However, the Competition Act does not apply to activities carried out by, agreements entered into or conduct on the part of the Singapore government, any statutory body or any person acting on behalf of the government or that statutory body in relation to that activity, agreement or conduct.

Bribery

If a contractor has illegally obtained the award of a contract, for example by bribery, will the contract be enforceable? Are bribe-givers and bribe-takers prosecuted and, if so, what are the penalties they face? Are facilitation payments allowable under local law?

Contracts tainted by bribery are not enforceable under Singapore law. Any person who gives or receives bribes may be prosecuted under the Prevention of Corruption Act and may be liable on conviction to a fine not exceeding $100,000 or to imprisonment for a term not exceeding five years or to both.

Facilitation payments are illegal under Singapore law. Under section 12 of the Prevention of Corruption Act, offering gratification to a member of a public body as an inducement or reward for the member’s aid in procuring or expediting the performance of any official act is an offence that is punishable by a fine not exceeding S$100,000 or imprisonment for a term not exceeding seven years or both. Evidence that any gratification, including facilitation payments, is customary in any profession, trade, vocation or calling is inadmissible in any civil or criminal proceeding under the Act.

Reporting bribery

Under local law, must employees of the project team members report suspicion or knowledge of bribery of government employees and, if so, what are the penalties for failure to report?

Yes. It is an offence for a public servant to take a bribe. Every person aware of the commission of or the intention of any other person to commit that offence is required, in the absence of reasonable excuse, to immediately give information to the officer in charge of the nearest police station or to a police officer of the commission or intention. A failure to comply with this requirement is punishable with imprisonment for a term that may extend to six months, or with fine that may extend to $5,000, or with both.

Further, where a person:

  • knows or suspects that any property directly or indirectly represents the proceeds of, was used in connection with, or is intended to be used in connection with, any act that may constitute criminal conduct; and
  • the information or matter on which the knowledge or suspicion is based came to his or her attention in the course of his or her trade, profession, business or employment,

that person is required to disclose the knowledge or suspicion or the information or other matter on which that knowledge or suspicion is based to a Suspicious Transaction Reporting Officer as soon as is reasonably practicable after it comes to his or her attention. A failure to do so is punishable with a fine not exceeding S$250,000 or to imprisonment for a term not exceeding three years or to both.

Political contributions

Is the making of political contributions part of doing business? If so, are there laws that restrict the ability of contractors or design professionals to work for public agencies because of their financial support for political candidates or parties?

No. There are no laws restricting the ability of contractors or design professionals to work for public agencies because of their financial support for political candidates or parties. Political contributions can only be made by ‘permissible donors’, which include Singapore citizens not less than 21 years of age and a Singapore-controlled company that carries on business wholly or mainly in Singapore. A Singapore-controlled company is a company incorporated in Singapore and the majority of whose directors and members are Singapore citizens. Foreigners are not permissible donors.

Compliance

Is a construction manager or other construction professional acting as a public entity’s representative or agent on a project (and its employees) subject to the same anti-corruption and compliance as government employees?

There are certain anti-corruption laws that apply specifically to government employees, such as the presumption that where any gratification is paid or given to or received by a government employee by or from a person or agent of a person who has, or seeks to have, any dealing with the Singapore government, that gratification shall be deemed to have been paid or given and received corruptly as an inducement or reward.

Other international legal considerations

Are there any other important legal issues that may present obstacles to a foreign contractor attempting to do business in your jurisdiction?

Singapore adopts a strict, zero-tolerance approach to the enforcement of its anti-bribery and corruption laws. Foreign contractors should be aware that business practices that may be considered acceptable and part of their country’s culture or custom may be illegal and subject to enforcement action under Singapore’s laws.


Contracts and insurance

Construction contracts

What standard contract forms are used for construction and design? Must the language of the contract be the local language? Are there restrictions on choice of law and the venue for dispute resolution?

Generally, the public sector uses the following standard contract forms published by the Building and Construction Authority:

  • Public Sector Standard Conditions of Contract (PSSCOC) for Construction Works;
  • PSSCOC for Design and Build; and
  • Standard Conditions of Nominated Sub-Contract for use in conjunction with the PSSCOC for Construction Works published by the Building and Construction Authority.

Some statutory boards may use their own bespoke contract forms.

For the private sector, the more commonly used standard contract forms for construction and design are:

  • The suite of SIA Building Contracts published by the Singapore Institute of Architects comprising the ‘SIA Building Contract 2016 Without Quantities’; the ‘SIA Building Contract 2016 Quantities’; the ‘SIA Building Contract 2016 Design & Build’ and the ‘SIA Sub-Contract 2016’.
  • The ‘REDAS Design and Build Conditions of Main Contract’ and the ‘REDAS Design and Build Conditions of Sub-Contract’ published by the Real Estate Developers’ Association of Singapore.

Some engineering projects may use the FIDIC Forms of Conditions of Contract published by the Fédération Internationale des Ingénieurs-Conseils, typically, these are the Yellow Book for Plant and Design-Build or the Silver Book for EPC/turnkey projects.

The above standard forms are usually amended to reflect risk distribution between the parties and project-specific requirements.

There is no restriction on choice of language, choice of law or venue for dispute resolution for contracts in relation to construction and design. It is generally common for contracts to be in English, and for them to be governed by Singapore law. Certain mandatory local laws will apply to construction projects in Singapore regardless of the choice of law under the contract.

Payment methods

How are contractors, subcontractors, vendors and workers typically paid and is there a standard frequency for payments?

Contractors, subcontractors, suppliers and workers are typically paid by electronic payment or by cheque. Payments are generally made on a monthly basis based on progress of the works or by milestones basis.

There is a statutory right for contractors, subcontractors, suppliers and consultants in the building and construction industry to progress payments under the Building and Construction Industry Security of Payment Act (SOPA). SOPA’s default payment scheme sets out statutory timelines for the submissions of progress payment claims; certifications (payment responses); payment including adjudication in the event of payment disputes or failure to pay within the stipulated time. Basic information can be obtained from the Building & Construction Industry Security of Payment Information Kit published by the Building Construction Authority. As such, a contract (as defined under the SOPA) should provide a progress payment claim date for each amount due under the contract, a period for certification (payment response) and the period between the certification (payment response) date and the date on which the amount is due

In the event of failure to make a payment within the required time pursuant to the SOPA, the affected party (eg, contractor, subcontractor, supplier or consultant) can apply for adjudication, and any amount determined as payable by the adjudicator will be binding unless and until leave of court to enforce the adjudication determination is refused, the dispute is finally determined by a court or tribunal or at any other dispute resolution proceeding, or the dispute is settled by the agreement of the parties.

Contractual matrix of international projects

What is the typical contractual matrix for a major project in your jurisdiction in terms of the contractual relationships among the various construction project participants?

The typical contractual matrix for most major projects is for owners to contract through build-only arrangements or design and build arrangements directly with contractors with nominated subcontractors or novation of subcontract options. Contracting through construction managers to trade contractors is rare.

In some instances, public-private partnerships may be used for public sector projects such as infrastructure and utilities. Under such arrangements, Government Procuring Entities (GPEs) work with private firms to design, plan, finance, construct and operate projects.

PPP and PFI

Is there a formal statutory and regulatory framework for PPP and PFI contracts?

There is no formal statutory or regulatory framework mandating the use of PPPs and PFIs.

PPPs are considered a form of procurement approach and Government Procuring Entities (GPEs) have the discretion to use PPPs based on the merits of their projects. An implementation guide issued by Ministry of Finance (MOF) provides broad guidelines on the use of PPPs for public projects. The guidelines require GPEs to comply with the Government Procurement Act and Regulations, which govern the conduct of government procurement activities.

PFI contracts are not typically used.

Joint ventures

Are all members of consortia jointly liable for the entire project or may they allocate liability and responsibility among them?

The allocation of liability among members of consortia will depend on the underlying agreement(s) and business structure(s) adopted by them. For example:

  • A consortium may operate through a limited liability company, with the members of the consortium as shareholders of the company, the company itself will usually be liable to the owner. There may be a shareholders’ agreement among members of the consortium governing how liability will be allocated among the members and as between the members and the company. Members of the consortium may also agree to guarantee any liability owed by the company to the owner.
  • A consortium may operate through an unincorporated joint venture, with a joint venture agreement among the members of the consortium that sets out the members’ rights and obligations and allocates risk among them.

Tort claims and indemnity

Do local laws permit a contracting party to be indemnified against all acts, errors and omissions arising from the work of the other party, even when the first party is negligent?

Generally, parties are free to negotiate and enter into indemnities that are broad in scope, including agreements to indemnify one party against losses arising from their own negligence. However, if the indemnity effectively restricts or excludes one party’s liability to another under a contract, that indemnity will be subject to the Unfair Contract Terms Act. The Act provides that a person cannot restrict his or her liability for death or personal injury resulting from negligence. It also provides that in the case of other loss or damage, a person cannot exclude his or her liability for negligence except insofar as the term or notice relied on to exclude liability satisfies the requirement of reasonableness.

Liability to third parties

Where a contractor constructs a building that will be sold or leased to a third party, does the contractor bear any potential responsibility to the third party? May the third party pursue a claim against the contractor despite the lack of contractual privity?

Under the Contract (Rights of Third Parties) Act, a third party may under certain circumstances sue the contractor on the building contract if the third party is expressly identified in the contact by name or as a member of a class as someone on whom the contract purports to confer a benefit. Such third parties will enjoy the same remedies and be subject to any defences as would have been available as if the third party had been a party to the contract.

A third party may also pursue an alternative claim in tort as against the contractor, most likely the tort of negligence. However, to succeed, the third party must show that the contractor owed it a duty of care and that that duty of care was breached. To establish a duty of care, the third party must show that the contractor had voluntary assumed responsibility vis-à-vis the third party, and the latter had relied on the contractor’s exercise of due care and skill. Even if this is shown, policy considerations may militate against the finding of a duty of care.

Insurance

To what extent do available insurance products afford a contractor coverage for: damage to the property of third parties; injury to workers or third parties; delay damages; and damages due to environmental hazards. Does the local law limit contractors’ liability for damages?

Except for insurance against liquidated damages which is generally not available, all of the above insurance products are available. Contractor coverage will typically involve some or all of the following insurance:

  • Contractor’s All Risks;
  • Contractor’s Plant and Equipment;
  • Professional Indemnity;
  • Workmen Compensation Insurance;
  • Marine Insurance;
  • Motor Vehicle;
  • Performance Bond; and
  • Delay Start-Up.

Coverage for damages to environmental hazards include insurance products such as the Contractors Pollution Liability (CPL) policy, which offers protection for third-party environmental liabilities arising out of the covered operations of the contractor.

The law does not generally limit liability for damages. The parties may agree to a cap under the contract although such cap may not apply to third parties or the contract may provide that the cap will not apply in cases of wilful misconduct or gross negligence. There may be limits on the amount of coverage that an insurer is willing to provide in respect of a particular risk, such that the contractor is exposed to liability for damages sustained more than the policy limits.


Labour and closure of operations

Labour requirements

Are there any laws requiring a minimum amount of local labour to be employed on a particular construction project?

The minimum amount of local labour required is determined by a quota requirement which differs across different categories of work passes. The quota requirement for each category is as follows:

  • Work Permit (for semi-skilled foreign workers) – seven work permit holders for every local employee who earns the local qualifying salary (of at least S$1,400 per month).
  • S Pass (for mid-level skilled staff earning at least S$2,500 a month and meeting the assessment criteria) – 18 per cent of total workforce (to be reduced to 15 per cent of total workforce from 1 January 2023).
  • Employment Pass (for foreign professionals, managers and executives earning at least S$4,500 a month and have acceptable qualifications) – no quota.

In addition, a monthly levy of S$330 to S$650 per S Pass holder is payable depending on the proportion of the total workforce constituted by S Pass holders. As for Work Permit holders, a monthly levy of S$300 to S$950 is payable depending on the skill level and home countries of the foreign workers. No levy is payable for Employment Pass holders.

Local labour law

If a contractor directly hires local labour (at any level) for a project, are there any legal obligations towards the employees that cannot be terminated upon completion of the employment?

Gerneally, no.

Labour and human rights

What laws apply to the treatment of foreign construction workers and what rights do they have? What are the local law consequences for failure to follow those laws?

The Employment of Foreign Manpower Act applies to the treatment of foreign construction workers. Under the Act, an employer can only employ foreign construction workers who hold valid work passes.

The Ministry of Manpower imposes conditions and rules on the issuance of work passes to foreign construction workers, including requiring workers to complete prescribed safety courses, a ‘settling-in programme’ to understand, among other things, Singapore employment law and work injury compensation rights, and requiring employers to obtain medical insurance for their foreign construction workers.

Close of operations

If a foreign contractor that has been legally operating decides to close its operations, what are the legal obstacles to closing up and leaving?

Generally, there are no significant legal obstacles. If the foreign contractor was operating through a Singapore-incorporated company, the contractor will have to apply to wind-up the company. The foreign contractor will also need to ensure that it has paid all outstanding taxes.


Payment

Payment rights

How may a contractor secure the right to payment of its costs and fees from an owner? May the contractor place liens on the property?

The Building and Construction Industry Security of Payment Act provides a fast-track adjudication process for claims by contractors for overdue payment.

Where an adjudicator determines that an owner should pay an adjudicated amount to a contractor, and the owner fails to make payment within the required time frame, the contractor can obtain a lien on goods supplied by it to an owner that are unfixed and that have not been paid for.

‘Pay if paid’ and ‘pay when paid’

Does local law prohibit construction contracts from containing terms that make a subcontractor’s right to payment contingent on the general contractor’s receipt of payment from the owner, thereby causing the subcontractor to bear the risk of the owner’s non-payment or late payment?

Yes. The Building and Construction Industry Security of Payment Act provides that ‘pay when paid’ provisions of contracts are unenforceable and have no effect in relation to any payment for construction work carried out or undertaken to be carried out, or for goods or services supplied or undertaken to be supplied, under the contract.

Contracting with government entities

Can a government agency assert sovereign immunity as a defence to a contractor’s claim for payment?

No.

Statutory payment protection

Where major projects have been interrupted or cancelled, do the local laws provide any protection for unpaid contractors who have performed work?

The Building and Construction Industry Security of Payment Act provides protection for unpaid contractors who have performed work. Such contractors can apply for their payment claims to be adjudicated under the Act.


Force majeure

Force majeure and acts of God

Under local law are contractors excused from performing contractual obligations owing to events beyond their control?

Absent express contractual provisions, contractors may rely on the common law doctrine of frustration to be excused from performing contractual obligations. However, frustration can only be invoked in extremely limited circumstances, such as where a supervening event occurs that renders it physically or commercially impossible for the contract to be fulfilled, or has altered the parties’ contractual obligations into something radically or fundamentally different from what has been agreed in the contract.

Singapore and international standard form construction contracts (such as the SIA Conditions of Contract and the FIDIC standard form contracts, respectively) generally contain provisions setting out circumstances considered to be beyond the parties’ control and stipulating any modification or cessation of the parties’ contractual obligations upon the occurrence of those circumstances.


Disputes

Courts and tribunals

Are there any specialised tribunals that are dedicated to resolving construction disputes?

The Building and Construction Industry Security of Payment Act was introduced to facilitate payments for construction work done or for related goods or services supplied in the building and construction industry, and for matters connected therewith. The Act introduced a statutory right to refer a payment dispute to adjudication in Singapore. Whilst there are no ‘dedicated’ construction courts in Singapore, there is a commercial list under the High Court where construction matters go before judges who are experienced in or previously practised as construction lawyers. The same applies to the Singapore International Commercial Court.

Dispute review boards

Are dispute review boards (DRBs) used? Are their decisions treated as mandatory, advisory, final or interim?

DRBs are not common in Singapore projects but are growing in prominence across the region, in part because of the prevalence of FIDIC contracts. In CRW Joint Operation v PT Perusahaan Gas Negara (Persero) 4 SLR 305 [2011], the Singapore courts held that a DAB decision has the effect of interim finality pending the final determination of the dispute. That court decision significantly bolstered the standing of DAB decisions under Singapore law.

Mediation

Has the practice of voluntary participation in professionally organised mediation gained acceptance and, if so, how prevalent is the practice and where are the mediators coming from? If not, why not?

Mediation of business disputes has long been established in Singapore and that extends to construction. The Building and Construction Aauthority promotes dispute resolution through mediation using organisations such as the Singapore Mediation Centre (SMC). The SMC are additionally the authorised nominating body under SOPA administering the statutory adjudication scheme in Singapore.

SMC’s mediators comprise, among others, professionals with construction experience drawn from architects, engineers and quantity surveyors.

Construction standard forms of contract in Singapore may make reference to mediation as a dispute resolution option open to the parties albeit there is no obligation to engage in mediation.

Confidentiality in mediation

Are statements made in mediation confidential?

Yes, statements made in mediation are confidential, meaning that they cannot be repeated in any formal proceedings such as court proceedings or arbitration.

Under the Singapore Mediation Act, a person must not disclose any mediation communication relating to a mediation to a third party to the mediation. If mediations are conducted at the Singapore Mediation Centre, the mediators and the parties are also bound by a confidentiality agreement.

However, there are certain exceptions. The Singapore Mediation Act provides that mediation statements may be disclosed to a third party in certain circumstances, such as when there are reasonable grounds to believe that the disclosure is necessary to prevent or minimise danger of injury to a person, for purposes of seeking legal advice or for purposes of disclosing or disputing a mediated settlement agreement, among others.

Arbitration of private disputes

What is the prevailing attitude towards arbitration of construction disputes? Is it preferred over litigation in the local courts?

Parties to construction contracts often agree to refer their disputes to arbitration instead of litigation, and the standard form contracts used in Singapore reflect this approach. The Singapore courts are pro-arbitration and will not interfere with pending arbitrations or set aside arbitral awards unless they have good reasons to do so. In 2019, 16 per cent of the claims filed at the Singapore International Arbitration Centre were construction or engineering disputes.

The local courts are also held in high regard with a number of experienced judges and commissioners drawn from a construction law background known to exercise effective case management over matters brought before them. That has been extended to internationally matters through a bench of experienced international jurists with construction experience sitting in the Singapore International Commercial Court.

Governing law and arbitration providers

If a foreign contractor wanted to pursue work and insisted by contract upon international arbitration as the dispute resolution mechanism, which of the customary international arbitration providers is preferred and why?

There is no clear preference for any international arbitration institute, though both the Singapore International Arbitration Centre and the International Chamber of Commerce are common choices. Both institutions are highly regarded and have strong pools of arbitrators, including many who are highly experienced in construction disputes. Parties often agree to use Singapore as the seat of the arbitration, in light of the pro-arbitration legal regime in Singapore.

The choice of governing law is often down to party preference. Singapore law is viewed as supportive of the aims of arbitration and is internationally respected.

Dispute resolution with government entities

May government agencies participate in private arbitration and be bound by the arbitrators’ award?

Yes.

Arbitral award

Is there any basis upon which an arbitral award issued by a foreign or international tribunal may be rejected by your local courts?

The Singapore courts have adopted a pro-arbitration stance, and generally recognise and enforce arbitral awards.

The relevant legislation in Singapore is the International Arbitration Act, which incorporates the UNCITRAL Model Law on International Commercial Arbitration and the New York Convention. The legislation provides for very limited grounds to (1) set aside an arbitral award when the seat of the arbitration is Singapore and (2) refuse enforcement of an arbitral award. The main grounds are when:

  • a party to the arbitration agreement was under some incapacity;
  • a party was not given proper notice of the appointment of the arbitrator or of the arbitration proceedings or was otherwise unable to present its case;
  • the award deals with a dispute that does not fall within the terms of the submission to arbitration;
  • the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties; and
  • the award is in respect of a matter that is not capable of settlement by arbitration or it would be contrary to public policy to recognise or enforce the award.

Limitation periods

Are there any statutory limitation periods within which lawsuits must be commenced for construction work or design services and are there any statutory preconditions for commencing or maintaining such proceedings?

An action founded on the breach of contract or tort has a statutory limitation period of six years from the date on which the cause of action accrued.

Where the damages suffered is latent and resulting from a breach of duty whether arising out of a contract or otherwise, the statutory limitation period is three years from the earliest date on which the plaintiff first had both the knowledge required for bringing an action for damages in respect of the relevant damage and a right to bring such an action. The limitation period is also subject to a long-stop date of 15 years from the date on which there occurred any act or omission (1) which is alleged to constitute negligence, nuisance or breach of duty; and (2) to which the injury or damage in respect of which damages are claimed is alleged to be attributable (in whole or in part).

Where the action relates to claims for personal injuries, the statutory limitation period is the later of:

  • three years from the date on which the injury was sustained; and
  • three years from the earliest date on which the plaintiff has the knowledge required for bringing an action for damages in respect of the relevant injury.

The statutory limitation period for claims for personal injuries is also subject to a long-stop date of 15 years from the date on which there occurred any act or omission (1) that is alleged to constitute negligence, nuisance or breach of duty; and (2) to which the injury or damage in respect of which damages are claimed is alleged to be attributable (in whole or in part).


Environmental regulation

International environmental law

Is your jurisdiction party to the Stockholm Declaration of 1972? What are the local laws that provide for preservation of the environment and wildlife while advancing infrastructure and building projects?

Singapore is not a party to the Stockholm Declaration of 1972.

The local laws that provide for preservation of the environment and wildlife while advancing infrastructure and building projects include:

  • Building Control Act;
  • Control of Plants Act;
  • Environmental Public Health Act;
  • Environmental Protection and Management Act;
  • Fire Safety Act;
  • Hazardous Waste (Control of Export, Import and Transit) Act;
  • National Environment Agency Act;
  • Parks and Trees Act;
  • Poisons Act;
  • Prevention of Pollution of the Sea Act;
  • Radiation Protection Act;
  • Sewerage and Drainage Act;
  • Wild Animals and Birds Act;
  • Workplace Safety and Health Act;
  • Guidelines for Good Indoor Air Quality in Office Premises;
  • Code for Environmental Sustainability for Buildings;
  • Code of Practice on Pollution Control; and
  • Code of Practice on Sewerage and Sanitary Works.

Local environmental responsibility

What duties and liability do local laws impose on developers and contractors for the creation of environmental hazards or violation of local environmental laws and regulations?

The liability accompanying the creation of environmental hazards or violation of local environmental laws and regulations generally relates to water pollution, air pollution, land pollution and noise pollution. Liability can include fines, imprisonment and an obligation to take remedial actions as provided in the Environmental Protection and Management Act and other environmental legislations.

In addition, the Director-General of Environmental Protection may require any person intending to carry out any activity that in the opinion of the Director-General, is likely to cause substantial pollution of the environment or increase the level of such pollution, to carry out a study on environmental pollution control and to submit a proposal containing measures for the prevention, reduction or control of pollution for the Director-General’s approval.

The National Environment Agency may also direct activities that it has reason to believe that is likely to cause pollution of the environment or be injurious to public health or safety to cease.


Cross-border issues

International treaties

Is your jurisdiction a signatory to any investment agreements for the protection of investments of a foreign entity in construction and infrastructure projects? If so, how does your model agreement define ‘investment’?

Singapore is a party to a number of multilateral and bilateral foreign investment agreements. A full list of these agreements can be found on the Singapore government’s Ministry of Trade and Industry website available here.

Singapore does not have a model agreement.

The definition of ‘investment’ varies in the various agreements. Generally, ‘investment’ is broadly defined to include ‘every kind of asset permitted by each contracting party in accordance with its laws and regulations’, followed by a non-exhaustive list of examples that generally include movable and immovable property, shares, stocks, claims to money, intellectual property rights, licences and permits.

Tax treaties

Has your jurisdiction entered into double taxation treaties pursuant to which a contractor is prevented from being taxed in various jurisdictions?

Yes. Singapore has entered into over 100 double taxation treaties with countries around the world. The full list of the treaties is available at https://www.iras.gov.sg/irashome/Quick-Links/International-Tax/List-of-DTAs–limited-treaties-and-EOI-arrangements/.

Currency controls

Are there currency controls that make it difficult or impossible to change operating funds or profits from one currency to another?

There are no foreign exchange or currency restrictions in relation to operating funds or profits and their remittance in and out of Singapore. The Monetary Authority of Singapore only restricts the amount of Singapore dollars that can be loaned to non-resident financial institutions.

Removal of revenues, profits and investment

Are there any controls or laws that restrict removal of revenues, profits or investments from your jurisdiction?

There are no controls or laws restricting the removal of revenues, profits or investments from Singapore, save for anti-money laundering laws and laws relating to transfer of funds for crime and terrorism.

However, the removal of revenues, profits or investments from Singapore must be carried out by a licensed payment service provider as required by the Payment Services Act 2019.


Update and trends

Emerging trends

Are there any emerging trends or hot topics in construction regulation in your jurisdiction?

On 30 September 2020, Part 8 of the COVID-19 (Temporary Measures) Act came into force. Part 8 provides relief for certain construction contracts affected by covid-19, including the following:

  • A party to an affected contract may apply for an assessor to be appointed to ‘adjust’ the contract, by determining, among other things, whether it is just and equitable for any term of the contract to be varied or for a party to be released or discharged from that term.
  • The completion date for construction works under certain specified construction contracts would be extended. The length of the extension would be determined in accordance with the provisions of Part 8.
  • Parties to certain construction contracts will be required to share some of the additional costs incurred as a result of covid-19.

Part 2 of the Act also provides that under certain circumstances, parties cannot make calls on performance bonds given pursuant to construction contracts at any time earlier than seven days before the date of expiry of the performance bond.

Separately, on 15 December 2019, the Building and Construction Industry Security of Payment Act 2004 (SOPA) was amended. Among other things, the amendments:

  • clarify and expand the scope of the SOPA (eg, to include prefabrication work done overseas for construction work in Singapore);
  • improve the adjudication process under the SOPA (eg, by permitting claimants (and not only respondents) to seek adjudication review under certain circumstances); and
  • introduce a new limitation period for payment claims that applies only to construction contracts entered into after 15 December 2019.

You can access this link to view the chapter and compare law and regulation between jurisdictions on Lexology Getting The Deal Through.


Authors

Andrei Soltan
Associate Director, HKA

Andrei Soltan is an engineer with 10 years of construction and civil engineering experience. He has been appointed as a delay expert and has acted as an assistant to the named expert on more than 10 occasions.

Andrei has been cross-examined in the International Chamber of Commerce (ICC) International Court of Arbitration, including giving concurrent evidence (hot-tubbing). He also assists in the production of expert reports and delay analysis for varied disputes and is experienced in presenting to adjudication proceedings.

Andrei specialises in a wide range of analysis techniques including time impact analysis, impacted as-planned, and as-planned versus as-built. Benefits to his client include providing clarity and focus in the identification of periods of critical, and near critical, delay on the projects and the potential causes of those delays. He has supported clients for projects with values up to £850 million and disputed values in excess of £80 million.

Andrei has a background in quality management and health and safety; including expertise in management systems and compliance with design supervision and execution of works contracts. He has worked as a planner and delay analyst for both contracting and consulting companies on projects ranging from infrastructure and industrial to technology and residential buildings.

Andrei is recognised as a ‘Future Leader’ by Who’s Who Legal in their Arbitration and Construction Expert Witness categories. He is a practising member of the Academy of Experts, a member of the Association for the Advancement of Cost Engineering and the Society of Construction Law and holds a 5-year diploma (master’s degree equivalent) in engineering and management of technological systems. Andrei has also completed an advanced professional award in expert witness evidence (LETAPAEWE), accredited by Legal Experience Training, UK.

Lee Guat Moi
Director, HKA

Lee Guat Moi has over 35 years of professional experience in the construction industry in Middle East and Asia. She gained early experience as a site agent on a residential project and subsequently gained extensive quantity surveying and contractual experience with local and international contractors, government bodies, quantity surveying consultancies, construction consultants and developers covering the full spectrum of the contractual and commercial functions from all parties’ perspectives.

The diverse experience deepened Guat Moi’s understanding about the needs and requirements of various parties and this also influenced her balanced and knowledgeable approach in problem solving. She has worked on projects in the industrial and manufacturing (petrochemical plant, power plant, wafer plant, production facility), transportation infrastructure (tunnels, rail, airport), health and environmental (hospitals, wastewater treatment), leisure (integrated resort, water park, ice skating rink, cinemas), commercial/ retail/ residential (hotels, offices, shopping centres, condominiums) and educational (schools, university) sectors.

The above broad-based experience has resulted in a composite all round professional capable of undertaking any quantity surveying, contractual and commercial management task.

To date, Guat Moi’s geographical experience includes China, Indonesia, Lao PDR, Malaysia, Philippines, Qatar, Singapore, Thailand, the Netherlands, the United Arab Emirates and Vietnam.

Hamish Egan
Associate Director, HKA

Hamish is a Chartered Accountant and a Chartered Financial Analyst (CFA) Charterholder with more than 15 years of experience including forensic accounting, business valuation, audit and corporate finance.

Hamish specialises in forensic accounting on complex contentious matters and has been appointed as an expert forensic accounting witness, acting as an expert on a matter with disputed values of up to US$125 million. He has worked across multiple forums ranging from international arbitration and court litigation, to mediation.

Based in Singapore for almost a decade, Hamish’s forensic accounting experience includes business valuations, arising from shareholder, M&A and post-acquisition disputes; estimation of loss of profits, arising from alleged breaches of contracts, agreements and insured events; and the analysis of complex accounting information.

Hamish has worked across various sectors including oil and gas, energy, mining, financial services, manufacturing, food, and services; with clients or assets in jurisdictions across Asia including Singapore, Malaysia, Indonesia, Philippines, China, Vietnam and Thailand. He also worked for the sovereign wealth fund of Singapore, where he was involved in developing the firm-wide valuation policy and reviewing the valuations of private equity investments.

Hamish holds a degree in economics and finance and a diploma in accounting. He is a member of the CFA Institute and the CFA Society of Singapore as well as the Chartered Accountants Australia & New Zealand.

Derek Nelson
Partner, HKA

Derek Nelson is a Chartered Quantity Surveyor and Chartered Engineering Surveyor, with over 35 years of construction and engineering experience. He has acted as expert on over 70 occasions in delay, disruption and quantum matters.

Derek is both an accredited and certified expert witness, fellow and current chairman of The Academy of Experts and has acted as a delay and quantum expert witness in arbitration, conciliation, litigation and mediation and as an expert determiner. He has been cross-examined on over 10 occasions and has delivered concurrent evidence in disputes from Belize to Brunei and Scotland to Singapore. Alongside his work as an expert adviser for ongoing projects, Derek undertakes the role of ‘project neutral’, independently reviewing international projects in preventative, on-the-job dispute resolution.

Derek has held senior commercial and contracts positions for major international contractors and owners across Asia, Europe and the Middle East. His expertise includes matters of quantity surveying practice, valuation, damages, contract administration, contract management, commercial management and cost management, which he combines with his tested planning and delay analysis capabilities.

Aside from his extensive accreditations and wide experience, Derek is often called upon to deliver training and seminars on contractual problems, claims preparation, negotiation and dispute resolution. Derek is a contributing author to Delay and Disruption in Construction Contracts, 5th Edition First Supplement, Chapter 17, Disruption to Progress and Lost Productivity. In October 2018, he was welcomed as a Freeman in the Worshipful Company of Arbitrators.

Chan Yong Wei
Counsel, Freshfields Bruckhaus Deringer

Yong Wei Chan specialises in international arbitration and complex commercial and corporate litigation. He has advised and acted for corporates, State entities and high net-worth individuals in a broad range of matters, including disputes relating to coal, steel, precision electronics, telecommunications, share options, investment trusts, structured finance, M&A, public-private partnerships, bribery and corruption, and fine art. He has an international practice, having handled disputes arising in Asia, Europe, the United States, South America and other parts of the world. He has extensive experience as an advocate in international arbitrations, both ad hoc and institutional; and before the Singapore courts, where he has also appeared as amicus curiae.

Yong Wei is admitted to practice in Singapore, and is a Fellow of the Chartered Institute of Arbitrators. He is fluent in both English and Mandarin.

Kate Apostolova
Senior Associate, Freshfields Bruckhaus Deringer

Kate Apostolova has experience in both international commercial and investor-State arbitrations.

Ranked No. 1 on Who’s Who Legal’s “Most Highly Regarded” list of non-partner international arbitration practitioners in Asia-Pacific for 2020, and described by clients as “a fine arbitration lawyer with outstanding knoweldge in the field,” “articulate and responsive,” “quick in analysing complex legal situations,” and “extraordinarily bright and quick on her feet,” Kate has extensive experience representing clients in a wide-range of industries, including oil & gas, mining, nuclear power, construction, finance, technology. She has been involved in cases before the US courts, ICTY, ECHR, ITLOS, and all major arbitral institutions. She has also undertaken sovereign advisory work in international law-related areas.

Kate was adjunct faculty at the National University of Singapore, Faculty of Law from 2015 to 2017. She also served on the board of directors of Solutions to End Poverty (STEP).

Kate previously worked as an associate at a prestigious international law firm in New York. Prior to that, she was a law clerk to the President of the International Criminal Tribunal for the Former Yugoslavia and a research assistant to the late Professor David D. Caron. 

Kate has a juris doctorate degree from the University of California, Berkeley School of Law, where she was editor-in-chief of the Berkeley Journal of International Law. She is admitted to practice in England & Wales, New York, before the Supreme Court of the United States and the Singapore International Commercial Court. 

Kate speaks English, Bulgarian and Russian.