Ng Faye Xiang

On the court record

Ng Faye Xiang appears in the corpus in arbitration-related litigation concerning the calling of a performance bond, argued in the High Court (Mahkamah Tinggi) and the Court of Appeal (Mahkamah Rayuan), all arising from the same underlying dispute between engineering contractors and a refining company. One High Court matter, appearing for the plaintiff, was an ex parte application under section 11 of the Arbitration Act 2005 for an injunction to restrain the defendant, its servants or agents from making a demand under a performance bond, heard together with the defendant's application under Orders 29, 32, 42 and 92 of the Rules of Court 2012 to set aside the ex parte order and to assess damages. Two further matters, in the Court of Appeal and appearing for the respondent, concerned the appeal from that contest: the application to set aside the ex parte order granted under section 11 of the Arbitration Act 2005, the treatment of the injunction as an interim measure in aid of arbitration, questions of security for costs, and, at the centre of the dispute, whether the appellant's demand on the performance bond was unconscionable. The unconscionability of a call on an on-demand bond is a recognised and closely guarded exception to the principle that such bonds are the equivalent of cash and are to be honoured according to their terms, and it is the fulcrum on which applications of this kind turn. Because an on-demand performance bond is designed to give the beneficiary quick access to a sum of money without first proving its underlying claim, a court will restrain a call on the bond only in a clear case, and the whole of this dispute — from the ex parte injunction through to the appeal — was a contest over whether that high threshold had been crossed. Across the appearances the practice is concentrated on the intersection of construction security and arbitration — the use of the court's interim powers under the Arbitration Act 2005 to restrain the calling of a performance bond pending the resolution of the underlying dispute, and the exacting standard of unconscionability that an applicant must meet to obtain that relief.