Report on the Building and Construction Industry Security of Payment Act and Corporate Insolvency and Restructuring

Always revitalising and evolving

 

 

About the project

The Singapore Academy of Law’s SOPA-Insolvency Law Reform subcommittee prepared this report which explores certain issues arising at the intersection of the statutory adjudication process under the Building and Construction Industry Security of Payment Act (“SOPA”) and Singapore’s insolvency and restructuring regime. 

The report also addresses related questions regarding the validity of ipso facto clauses, since such clauses can have a significant impact in the industry.

Summary of Findings

Following its review, the subcommittee’s report recommends:

  • Reforms to SOPA to permit – where a claimant is subject to formal insolvency proceedings or undergoing restructuring – statutory adjudication awards to be paid to a stakeholder pending final determination of the underlying payment dispute. Suggested legislative provisions to give effect to such reforms are annexed to the report.
  • That consideration be given for a separate dedicated review into whether direct payments from principals to claimants should be permitted when a respondent contractor is undergoing restructuring.

In the other areas it reviewed, having had regard to the competing interests at hand, the existing legal framework and the potential options for reform, the sub-committee supported maintaining the status quo.

Regarding ipso facto clauses, the subcommittee welcomes the proposed changes (via the Insolvency, Restructuring and Dissolution Act) to limit enforcement of such clauses, and recommends their adoption in full. 

Project status: Completed

The report was published in April 2020.

Click here to view the full report.

 

 

 

Areas of law

 Building & construction law

Insolvency law



 

Click on the image above to view the report

Last updated 24 April 2020

 

Law Reform Page Tag