Since its inception in the UK in 1998, Security of Payment
Legislation has spread across many common law countries, including
Singapore, Malaysia, and Australia.
SOPL aims at improving payment practice in the construction
industry by establishing:
Statutory protection for payment
claims made for work done on construction contracts;
A system of Adjudication – a
quick dispute resolution mechanism to resolve disputes, on an
interim basis, over contractual payment claims; and
The statutory right to suspend works
where contractual payment is not satisfied
It seems as though such legislation is shortly to be enacted in
Hong Kong, and last August Hong Kong's construction industry
players made their responses to the Development Bureau's
consultation document. The consultation process is not over yet, so
the jury is still out, but the proposals as they stood included the
The right to suspend works comes only
after a sum admitted as due remains unpaid, or following an
Payment Claims can be made under the
contract, or under statute - only the latter activates the SOPL
Supply only contracts for plant and
material would be included;
Adjudication would last up to 55
days. However, should the parties agree, time can be further
After crystallisation of a dispute,
the Claimant must issue a notice of adjudication within 28
The adjudicator can disregard any
evidence or submission that was unknown to the responding party
when the adjudication was issued;
The adjudicator can resign if they
decide it is not possible to determine the matter fairly in the
If as expected, this legislation is introduced to Hong Kong by
2017, the legal dynamic of the construction industry will be
altered with the introduction of statutory adjudication, and we may
expect to see the number of arbitrations fall as payment disputes
are dealt with by adjudication.
It will be important for all parties to construction contracts
to be familiar with the processes of adjudication, and to have
developed internal systems to ensure that they can operate within
the tight time-frames that have been proposed.
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.
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The process for obtaining planning permission for development of property in the Cayman Islands has been updated as a result of the latest revision of the Development and Planning Law and accompanying regulations (July 2015).
In principle, when the parties agree to arbitrate, they shall be
bound by that agreement. It should therefore follow that when a
party initiates arbitration proceedings, the other party - the
respondent – will avail itself of the opportunity to present
its case and participate in the proceedings.
It is interesting to look at what is happening in Dubai's construction industry, which has been exposed to economic pressures as a result of the plunge in oil prices since mid-2014.
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