Selangor Jaya Sdn. Bhd.

VS UEM Genesys (2004)

Situation:

Selangor Jaya Sdn. Bhd. (main contractor) instructed by their client Subang Jaya Hotel
Development Sdn Bhd to appointed and selected UEM Genesys Sdn. Bhd. (NSC) to execute
the Air Conditioning & Mechanical Ventilation Services Subcontract work for a tender sum of
Ringgit Malaysia: Two Million Five Hundred and Ninety Three Thousand Eight Hundred and
Sixty Two Only (RM 2,593,862.00) with a completion period of 28 weeks.
However, during construction period client become insolvent and NSC work has been done. NSC
claimed the balance payment of their works. The main contractor refuse to pay as they don’t
received payment from the main contractor. They also shows the NSC has agreed with
supplementary agreement for the term “Pay when Paid”. The NSC are dissatisfied with the main
contractor bring the case to court.
Court held
The main contractor is not entitled to pay the NSC. This is based on the agreement that had been
agreed by both party with term “Pay when Paid”. In this case the main contractor does not
received payment from the client so he does not has responsible to pay the NSC claimed.

Interpro Engineering v Sin Heng Construction Co [1998]

Situation
The plaintiff was a nominated sub-contractor (Interpro Engineering ) and the defendant was (Sin
Heng Construction ). They used contract SLR 694. Employer Tavica empire electronic appointed
main contractor to a factory at Yishun Industrial Park A. Employer also appointed Interpro
Engineering as their NSC.

The plaintiff commenced work in November 1992 and completed work in December 1993. The
architect certified payment of approximately S$4.86 million from Tavica to the defendant.
However, Travia did not paid the defendant for two months. The defendant also did not paid
plaintiff for the work that had been done. The plaintiff claimed the balance outstanding under the
subcontract.
Court held
The court held, giving full effect to Clause 7, that its plain meaning was that the plaintiff was not
entitled to any progress payments unless such payments were first received by the defendant
from Tavica. Clause 7 in SLR 694 stated :

Clause 7 - the 'pay when paid' clause - provided that when Tavica provided the defendant
with a progress payment the defendant was then required to make payment to the plaintiff.

Plantif claimed for work done under the subcontract. The defendant was itself the subcontractor
to Tavica Development. Tavica was employed by Empire Electronics (the owner) to construct a
factory at Yishun Industrial Park A. used contract SLR 694
Clause 7 - the 'pay when paid' clause - provided that when Tavica provided the
defendant with a progress payment the defendant was then required to make payment
to the plaintiff.

The plaintiff commenced work in November 1992 and completed work in December
1993. The architect certified payment of approximately S$4.86 million from Tavica to
the defendant. However, Travia did not paid the defendant for two months. The
defendant also did not paid plaintiff for the work that had been done. The plaintiff
claimed the balance outstanding under the subcontract.

The court held, giving full effect to Clause 7, that its plain meaning was that the
plaintiff was not entitled to any progress payments unless such payments were first
received by the defendant from Tavica.