The profile is currenly unclaimed by the seller. All information is provided by CB Insights.

acudrive.sg

Stage

Other Investors | Alive

About Acudrive

Acudrive is a fleet management system and solutions platform. The company offers real-time monitoring, and GPS tracking, historical routes, dashboard, comprehensive reports, alert notification solutions. It is based in Singapore.

Acudrive Headquarter Location

8 Tuas Avenue 18

Singapore, 638892,

Singapore

Predict your next investment

The CB Insights tech market intelligence platform analyzes millions of data points on venture capital, startups, patents , partnerships and news mentions to help you see tomorrow's opportunities, today.

Latest Acudrive News

Construction performance bonds: "extend or pay"

Jan 28, 2022

To embed, copy and paste the code into your website or blog: <iframe frameborder="1" height="620" scrolling="auto" src="//www.jdsupra.com/post/contentViewerEmbed.aspx?fid=26f06cdc-7d1a-471d-8ad0-abdbdfa8e699" style="border: 2px solid #ccc; overflow-x:hidden !important; overflow:hidden;" width="100%"></iframe> "Extend or pay" provisions are sometimes used in construction performance bonds and bank guarantees as a way of ensuring that performance security is provided for the period it is needed. Can a beneficiary be stopped from invoking an "extend or pay" provision if the procurer of it (e.g. the contractor) believes the beneficiary has no entitlement to do so? A Singapore case from January 2022 provides some insight into this important issue. "Extend or pay" provisions An "extend or pay" provision in a time-limited performance bond or bank guarantee is one which entitles the beneficiary of the bond or bank guarantee (typically the employer) to require the bondsman (typically a bank or other financial institution) to extend the period of the validity of the bond or bank guarantee, or, alternatively, to make payment for the amount specified in the bond or bank guarantee. The need for this type of provision comes about because of the possibility that the anticipated period of a project will be extended (for various reasons) so as to ensure that the bond or bank guarantee is available to meet any claims against it during the relevant project period. Sometimes the entitlement of a beneficiary to invoke an "extend or pay" provision may be contested by the party who provided the security. For example, where a project has been delayed and, in the contractor’s opinion, the delay is the responsibility of the employer, the contractor may take the view that the employer is not entitled to require the relevant bond or bank guarantee to be extended (at the expense of the contractor) because the need for the extension arises from employer-caused delay. Can a contractor seek and obtain an injunction against an employer to restrain it from invoking an "extend or pay" provision in a bond or bank guarantee? There is a substantial body of law concerned with when a contractor may obtain an injunction against an employer from making a demand under a bond or bank guarantee but to date there has been no case law regarding whether a contractor may restrain an employer from invoking an "extend or pay" provision. However, a recent case from Singapore has considered this very issue. Goldbell Engineering Pte Ltd v Etiqa Insurance Pte Ltd v Range Construction Pte Ltd [2022] SGHC 1 Range Construction Pte Ltd ("Range") was engaged as contractor by Goldbell Engineering Pte Ltd ("Goldbell") for the construction of a workshop and an ancillary office in Singapore. Range provided to Goldbell a performance bond (the "Bond") in the amount of 20 percent of the contract price (SGD 3.8 million), which was issued by Etiqa Insurance Pte Ltd ("Etiqa"). The Bond was expressed to expire on 30 November 2019 unless it was further renewed or extended by Etiqa. Clause 6 of the Bond contained an "extend or pay" provision. This gave Goldbell the option to demand, at any time, that Etiqa either extend the validity period of the Bond or, in lieu of such extension, make payment of the secured amount. A number of disputes arose over the course of the project, including in relation to delay and alleged defective work, which eventually resulted in Goldbell’s request that Etiqa extend the validity of the Bond (the "Extend or Pay Request"). Etiqa did not do so. Its rationale was that it had not received a fresh indemnity from Range so that it could agree to such an extension. The parties then became involved in a series of proceedings relating to interim injunctions and the effect of the Bond. In the present case, one of the questions for the court to consider was whether a new injunction preventing any payment under the Bond should be granted. In refusing to order an injunction, the court confirmed that Goldbell had in fact made a valid request under the "extend or pay" provision contained within the Bond. This was clear, as Goldbell had repeated the wording used in clause 6 in its Extend or Pay Request. Range had attempted to argue that Goldbell’s demand for payment under the Bond was unconscionable, but the court’s view was that this argument was in fact an argument about the unconscionability of the Extend or Pay Request. The court rejected the argument that the Extend or Pay Request was in truth a call on the Bond. It followed that Etiqa’s obligation to make payment arose from the Extend or Pay Request itself. Upon receipt of the Extend or Pay Request and in accordance with clause 6 of the Bond, it was then up to Etiqa to choose whether to extend the validity of the Bond or to make payment of the secured sum to Goldbell. It was not open for Range to complain about the outcome of the "extend or pay" provision being operated, as this outcome reflected the allocation of risk that the parties had agreed by choosing to use this form of security and including the "extend or pay" provision. Commercial Implications "Extend or pay" provisions in performance bonds and bank guarantees can serve a valuable purpose, i.e. ensuring that a delayed project is adequately covered in terms of the performance security which is available to the employer. On the other hand, provisions of this nature are potentially open to abuse, or at least they may give rise to disagreement where (as in Goldbell) an employer wishes to extend a time-limited security, whereas the contractor may take the view that an extension of the security is unjustified in view of employer delay, unless the contractor is otherwise compensated for the cost of the security being extended. Under the common law, the courts will intervene in certain circumstances to restrain an employer from making what appears to be an abusive demand for payment under a security such as a bond or bank guarantee. The classic instance of where this will occur is where the demand is characterised as fraudulent in nature. Other circumstances include where the making of the demand breaches a provision of the underlying construction or engineering contract that prohibits a demand from being made. In Singapore and Australia, a demand on a bond or bank guarantee may additionally be restrained where it is unconscionable for the employer to make the demand. Indeed, in Goldbell, the contractor sought to rely upon "unconscionability" as a basis for seeking to prevent Etiqa from making payment to Range. In refusing to grant an injunction on such a basis, the Singapore court made a critical distinction between: An employer’s demand for payment under a bond or bank guarantee; versus An employer’s requirement that the bondsman "extend or pay". The court reasoned that the criteria for preventing a demand on a bond (e.g. due to the demand being unconscionable) do not apply where an "extend or pay" provision is activated. This approach, if widely followed, highlights a significant risk for contractors who provide performance bonds and bank guarantees which contain "extend or pay" provisions. If the courts are unwilling (or at least reluctant) to interfere with a beneficiary’s requirement that the term of a bond be extended or payment be made of the amount of the bond, the capacity for abusive behaviour is extended. 1 The construction contract provided that the secured sum would be held as security by Goldbell until the expiry of the Bond (i.e. the period of extension as requested by Goldbell).

  • Where is Acudrive's headquarters?

    Acudrive's headquarters is located at 8 Tuas, Singapore.

  • What is Acudrive's latest funding round?

    Acudrive's latest funding round is Other Investors.

Discover the right solution for your team

The CB Insights tech market intelligence platform analyzes millions of data points on vendors, products, partnerships, and patents to help your team find their next technology solution.

Request a demo

CBI websites generally use certain cookies to enable better interactions with our sites and services. Use of these cookies, which may be stored on your device, permits us to improve and customize your experience. You can read more about your cookie choices at our privacy policy here. By continuing to use this site you are consenting to these choices.