Stay In Favour Of Arbitration For Call On Performance Bond

Performance bonds are commonly given in the construction industry in Singapore. So, what happens if a performance bond provides for disputes to be heard in court, the underlying main contract provides for disputes to be heard in arbitration, and a party applies to court to restrain the call on the performance bond? This issue arose in the case of Star Engineering Pte Ltd v Pollisum Engineering Pte Ltd & Anor [2024] SGHC 137.

Facts. The applicant, Star Engineering Pte Ltd, was engaged by the 1st respondent, Pollisum Engineering Pte Ltd, as its contractor for the design, construction and maintenance of works for a project titled "Proposed Design and Build New Erection of 4-Storey Building on Lot 01876W MK 13 at 41 Senoko Way" ([3] Star Engineering Pte Ltd v Pollisum Engineering Pte Ltd & Anor [2024] SGHC 137 ("Star Engineering")).