Does "Back To Back" Mean "Pay When Paid" In Construction Contracts?

Summary

In Sze Fung Engineering Limited v Trevi Construction Company Limited [2025] HKCA 278¹, the Hong Kong Court of Appeal ("CA") ruled that the "back to back" wording in that case was not a "pay when paid" clause, but governed only the timing of payment.

Background

These proceedings arose out of a construction project to build a new combined gas turbine unit. The plaintiff was a sub-sub-contractor ("SSC") and the defendant was the sub-contractor ("SC"). It was common ground between the parties that the quotation submitted by the SSC to the SC formed part of the sub-sub-contract between the parties.

Item 18 of the quotation provided that:

"Payment is based on 'back to back' principle and to be released to [SCC] within 3 days upon receipt of the same from Client."