Australia: SICC continues to grow international construction law jurisprudence

Recently, the Singapore International Commercial Court (SICC) handed down its final decision in Teras Offshore Pte Ltd v Teras Cargo Transport (America) LLC.1 This proceeding had already been the subject of a decision of the SICC, in which it held that the dispute constituted an 'offshore case' and was therefore within the SICC's jurisdiction.2

Interestingly, this most recent decision is another instance of the SICC drawing on the expertise of one of the International Judges on its panel, with Sir Henry Bernard Eder (a former Judge of the High Court of England and Wales) handing down this decision.

Despite being in its infancy, the SICC is proving to be a key contributor to international construction law jurisprudence, no doubt aided by the high calibre of the international judges on it's panel.

In this latest instalment, the Court primarily considered a large back-charge claim made pursuant to sub-contracts for three major Australian Liquefied Natural Gas (LNG) projects. The judgment delivered provides an analysis of pay-when-paid clauses in the context of international authorities, notably Australia, Malaysia, Hong Kong and Singapore.


The dispute concerned works and services provided by Teras Offshore (Offshore) in relation to the construction of three LNG plants on Curtis Island – the APLNG, GLNG and QCLNG projects.3

Teras Cargo Transport (Cargo Transport) entered into separate contracts with Bechtel for these projects, whereby it agreed to provide 'tugs and barges, administrative, technical and professional services in the performance of marine transportation operations.'4 This work was subcontracted to Offshore on back-to-back terms under separate corresponding subcontracts.5 The works broadly involved the provision of tugs and barges and related services to transport large modules for use in the construction works at the LNG plants.

Offshore claimed USD$3.5M for advance payments made to Cargo Transport and USD$25M in back-charges for work done and services provided in relation to the LNG projects (which were claimed in debt and damages in the alternative).6 Cargo Transport denied the claims, and counterclaimed for approximately USD$14M.7

Cargo Transport sought to put in evidence thousands of documents that were originally annexed to the affidavits of witnesses it proposed to call, but subsequently elected, not to do so. 8 Following the Court's refusal to accept this evidence, Cargo Transport admitted Offshore's USD$3.5M claim and withdrew its set-off and counterclaim.9

What remained for determination was Offshore's US$25M back-charge.


In essence, Offshore's primary claim was that:

  • it performed works and services pursuant to the three subcontracts;
  • the works and services it performed were beyond scope, and performed at Cargo Transport's request or with its agreement; and
  • pursuant to such requests, it submitted invoices to Cargo Transport, which were accepted without any protest or query, or otherwise not rejected.10

The contentious aspect of these claims lay in whether the works and services were out of scope and whether Cargo Transport was obliged to pay these amounts under the subcontracts. It was not in issue whether the works and services related to the three sub-contracts had been performed, or that invoices were issued and received by Offshore or Cargo Transport.11

The Court noted that Offshore's entitlement to judgment for the full amount claimed by back-charge was subject to whether:

  • the sub-contracts and corresponding main contacts were 'all inclusive'; and
  • there was only an obligation for Cargo Transport to pay if it was paid a corresponding amount by Bechtel under the main contract.12

The Court considered these issues in turn.


It was plain, according to the Court, that while the scopes of works under the main and sub contracts were wide, they were not 'all-encompassing'.

This was particularly clear by clause 4 of Exhibit D of the main contracts titled 'WORK NOT INCLUDED,' the effect of which was to carve out work from the scopes of work in the main and sub contracts.

There were also other provisions in the main contracts which limited the works to be provided. While the Court examined the works and services performed by Offshore and identified and accepted some of it as being out of scope, it was not prepared to accept that these were all recoverable on this basis alone. The Court viewed this entitlement to recovery as a separate issue to the finding that the work or services were out of scope.13

The Court found that Offshore had to establish that the work or services were out of scope and further that they had been performed or provided 'pursuant to some special agreement ... or, at the very least, at the express or implied request of [Cargo Transport].'14 These 'dual related questions' were to be considered by reference to the various categories of claims set out in the Scott Schedule annexed to the affidavit of one of Offshore's witnesses.15

While there were some significant issues that the Court identified within each category, on balance it was satisfied that Offshore had satisfied its burden subject to the second point of principle,16 which was that Cargo Transport's liability only arose if a similar obligation for it to be paid existed under the main contracts with Bechtel (i.e. a pay when paid obligation).

The Court proceeded on the assumption that when properly construed, the contracts gave rise to an obligation for Cargo Transport to only pay Offshore the back-charges when it received equivalent payment from Bechtel.17 Unlike leading authorities on this issue, the Court described this case as unique in that there was no disclosure by Cargo Offshore about its dealings with Bechtel, and likewise the lack of witness testimony to this effect caused by Cargo Transport choosing not to call any of its witnesses.18

The Court identified a significant threshold issue regarding the burden of proof, stating that it was rightly with Cargo Transport to establish that it had not received the relevant payments from Bechtel in order for it to rely on the pay when paid provision in the sub-contracts.19

As it had not taken steps to do so, the Court found Offshore's claims to succeed in full.


1[2017] SGHC(I) 04.


3 Teras Offshore Pte Ltd v Teras Cargo Transport (America) LLC [2017] SGHC(I) 04, [2] (Sir Henry Bernard Eder IJ).

4 Ibid, [3] – [4].

5 Ibid, [4].

6 Ibid, [6] and [11].

7 Ibid, [7].

8 Ibid, [10] – [11].

9 Ibid, [10] – [11].

10 Ibid, [23].

11 Ibid, [24].

12 Ibid, [26] – [28].

13 Ibid, [30] – [31].

14 Ibid, [31].

15 Ibid, [34].

16 Ibid, [35] – [46].

17 Ibid, [56].

18 Ibid, [56].

19 Ibid, [59].

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

Chambers Asia Pacific Awards 2016 Winner – Australia
Client Service Award
Employer of Choice for Gender Equality (WGEA)

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

*** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.