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Koh Brothers Eco Engineering is facing potential legal liabilities of up to S$57.6 million following the disclosure of three separate disputes involving a joint venture, consortium partners and a former subcontractor. The engineering and construction company disclosed the disputes on August 18, shortly before shareholders voted in favour of its proposed transfer from the Catalist board to the Singapore Exchange mainboard.
Three major disputes
The company is currently facing three separate disputes involving a joint venture, consortium partners and a former subcontractor.
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Joint venture dispute – up to S$20.5 million
The most significant dispute involves a joint venture, with Koh Brothers Eco Engineering estimating its maximum potential exposure at S$20.5 million. On August 6, the Singapore High Court dismissed applications by its subsidiary, Koh Brothers Building & Civil Engineering Contractor (KBCE), to set aside partial arbitration awards. The JV partner subsequently applied to the arbitration tribunal for final payment orders. Koh Brothers noted that more than S$40 million remains in undistributed funds in the JV account.
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Consortium dispute – approximately S$23.3 million
A separate dispute involves consortium partners seeking approximately S$23.3 million from KBCE. The partners allege that KBCE failed to pay its share of capital injections. A hearing for the dispute has been postponed, with a new date yet to be confirmed. This represents the largest potential claim among the three disputes.
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Subcontractor claim – up to S$13.78 million
The third dispute involves a former subcontractor seeking between S$9.18 million and S$13.78 million from KBCE and Koh Brothers’ non-executive, non-independent chairman, Koh Keng Siang. The claim concerns alleged wrongful termination and conspiracy. The parties have agreed to undergo mediation, while Koh Brothers has stated that it intends to file a counterclaim against the subcontractor.
Construction disputes can create significant financial exposure
The developments highlight how construction disputes can extend beyond the immediate value of a contract. Payment obligations, termination decisions, joint venture arrangements and consortium responsibilities can all become sources of significant financial and legal risk.
For contractors, subcontractors and project stakeholders, clear contractual provisions and effective contract administration can play an important role in managing these risks. Accurate documentation of variations, payments, delays, instructions and project correspondence can also become critical when disagreements escalate into formal claims or arbitration.
While Koh Brothers said the disputes do not create significant doubt about its ability to continue as a going concern, the company reported a S$5.7 million loss for the first half of 2026, compared with a S$3 million profit in the corresponding period a year earlier. The company attributed the loss partly to a 39 per cent increase in cost of sales, driven by higher material and procurement costs within its engineering and construction division amid geopolitical tensions and supply-chain disruptions.
Managing risk in a challenging construction environment
Despite the legal disputes and first-half loss, Koh Brothers Eco Engineering reported an order book of approximately S$1 billion as at June 30, while cash and bank balances stood at S$61.3 million. Its ongoing projects include the proposed multi-storey bus depot at Lorong Halus, works associated with a Toa Payoh integrated development, the Tuas Water Reclamation Plant and a joint-venture contract involving Changi Airport Terminal 5’s intra-terminal tunnels.
The situation serves as a reminder of the financial pressures that can arise when construction claims and disputes develop alongside rising costs and supply-chain uncertainty. For the wider built environment, stronger cost control, careful contract management and early identification of potential claims can help project teams respond to risks before they develop into more complex disputes.
As construction projects become increasingly complex, having reliable project records and well-defined commercial processes remains important for protecting the interests of contractors, consultants, developers and subcontractors.
References
Singapore Law Watch. “Koh Brothers Eco Engineering faces up to S$57.6 million in potential legal liabilities.” 19 August 2026. https://www.singaporelawwatch.sg/Headlines/Koh-Brothers-Eco-Engineering-faces-up-to-S576-million-in-potential-legal-liabilities
