Call On Performance Bond Stopped – Not Unconscionability Or Fraud

In Chian Teck Realty Pte Ltd v SDK Consortium and another [2023] SGHC 210, a call on a performance bond was successfully restrained. But not on the grounds of unconscionability or fraud. How was the call restrained?

Background. Chian Teck Realty Pte Ltd ("Chian Teck") was engaged by SDK Consortium ("SDK") to carry out works for a project.

In accordance with its subcontract obligations, Chian Teck procured a performance bond from Lonpac Insurance Bhd ("Lonpac") in favour of SDK.

It was undisputed that unconscionability was not a ground that can be relied upon for restraining a call on the performance bond as the parties had agreed that a call on the performance bond could not be restrained on the ground of unconscionability.