P&K Insights: Ser Kim v GTMS Construction Pte Ltd & Ors SGHC(A) 34

Extension of Time for Force Majeure Events and invoking the EOT Certification scheme under the SIA Conditions

Ser Kim Koi concerned a construction dispute arising from a Singapore Institute of Architects’ Standard Form of Contract (the “SIA Conditions“) building contract for the construction of three bungalows.

The Singapore High Court (Appellate Division) (the “Court”) considered (i) whether the contractor was entitled to an extension of time (“EOT”) on the grounds of force majeure, and (ii) the effects of clause 24(3)(a) of the SIA Conditions (setting out an EOT Certification scheme) on the contractor’s liability for liquidated damages.

First, the Court determined what constituted a force majeure event, as the SIA Conditions did not define force majeure. The Court set out its guiding principles on how it interprets contractual force majeure provisions and what constitutes a force majeure event. The Court also commented obiter that the Covid-19 pandemic and its consequential impacts on a contractor’s performance could constitute a force majeure event.

Second, the Court noted that the factual circumstances meant that clause 24(3)(a) of the SIA Conditions should have been invoked to prevent liquidated damages from continuing to accrue. However, neither party referenced clause 24(3)(a) in their respective pleadings. As such the Court commented obiter on what factual circumstances attract the operation of clause 24(3)(a) and its effects. The court also gave obiter guidance on the issues parties should consider when invoking clause 24(3)(a) in their pleadings.

This article, written by Mino Han and Danielle Yap, reviews the judgment and provides useful practical takeaways for parties utilising the SIA Conditions.