Soilbuild Construction unit receives writ of summons from condo developer

SOILBUILD Construction Group's wholly-owned subsidiary, Precast Concrete Builders (PCB), on Tuesday received a writ of summons and a statement of claim filed in the High Court of Singapore.

The documents were filed by the lawyers of TG Development, the developer of luxury condominium The Peak @ Cairnhill II, at 61 Cairnhill Circle, near the Newton and Orchard MRT stations.

PCB allegedly breached its obligations in a warranty, in relation to a proprietary wall system for the project, said Soilbuild Construction in a filing on Wednesday night.

Under the writ, PCB is required to satisfy TG Development's claim of more than S$1.4 million in damages due to defects, among other things. Otherwise, PCB has to enter an appearance within eight days.

Soilbuild Construction's board said it believes these claims, if materialised, will not materially nor adversely affect the group's financial position.

In 2014, the project's main contractor, Thye Chuan Engineering Construction (TCEC), engaged PCB as a sub-contractor to supply precast elements. At the time, PCB was still known as Sembcorp EOSM; this was before it was acquired by Soilbuild Construction's wholly-owned unit Precast Concrete Pte Ltd (PCPL) in November 2018, and changed its name the following month.

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The project was completed in November 2015. As per its sub-contract agreement with the main contractor, PCB then issued a warranty in favour of the developer in January 2016, to warrant the satisfaction of its precast elements' workmanship, materials, performance, specification or requirement of the sub-contract works.

However, PCB allegedly breached its obligations under that warranty, by failing to effectively rectify and/or carry out and complete additional works and tests in a manner and within a time directed by the developer TG Development.

The proprietary wall system, the subject of the writ, was designed, supplied and delivered by the former Sembcorp EOSM, said Soilbuild Construction.

After the share sale-and-purchase agreement for the acquisition of the former Sembcorp EOSM was completed, neither PCB nor PCPL had continued with the design, production, supply and/or delivery of these wall elements.

The sellers of Sembcorp EOSM's shares had also provided an indemnity to the Soilbuild Construction group and PCPL, in respect of any claim or demand arising from any project warranty obligations of Sembcorp EOSM, as a result of projects it undertook before Nov 21, 2018.

Soilbuild Construction said it has engaged legal counsel to represent itself and/or PCB in the case, and is taking legal advice on its options.

The Peak @ Cairnhill II is a freehold 18-storey apartment project with 60 units. Its facilities including a swimming pool, spa pool, pavilion, sky deck, sky gym and a sky bar.

Shares of Soilbuild Construction were flat at 6.6 Singapore cents at Wednesday's close.