GENERAL INFORMATION

THE NOT SO GREAT WALL

Blondaise. The name and the face of luxury real estate for many years in the United States of
Buschem (“USB”).

Blondaise has a fantastic track record for developing luxurious, high-end hotels targeted at the
who’s who of the world. It was founded in 1986 by Charlie Chaos, a young, enterprising and
intoxicatingly brash entrepreneur. Described as something of a swashbuckler of the luxury seas,
he was given the nickname “Captain Chaos”. Since its inception, Blondaise has won multiple
prestigious awards such as the Andrew Harper Grand Awards and was recognised as ‘One of the
World’s Best Hotel Groups’ by Telegraph Travel Awards (UK). Currently, it operates almost 100
hotels in 30 countries worldwide, alongside the likes of the Shangri-La Hotel Group, The Ritz-
Carlton and Four Seasons Hotels and Resorts. Recently, Blondaise has begun work on a re-
branding exercise beginning with a series of eco-friendly resorts titled the “Submarine” series, to
cater to busy professionals who despite being carried away by life’s currents need to surface for
air from time to time. The Yellow Submarine is to be the first of these hotels, constructed in the
beautiful state of Texania, USB.

Texania is supported mainly by its agricultural industry, situated at the base of impressive
mountains and valleys. Ancient volcanic activity in Texania has resulted in a network of hot
springs, geysers, extensive cave systems, and beautiful calderas. The coast of Texania is also
home to pristine coral reefs, Instagrammable locations for diving and snorkelling.

The Yellow Submarine (“TYS”) was given a site in a secluded cove, a small distance away from
the nearest town for Blondaise’s elite guests to have their privacy. TYS was designed as a refuge
for Blondaise’s elite clientele to have the best of both worlds – a place to recharge while
contributing to a worthy cause – with 5% of all room charges donated by Blondaise towards
environmental conservation efforts.

TYS would feature deluxe spa services and luxury rooms, set within an environment that
supported local products. It would use only natural and sustainable materials and be built to
integrate with the natural surroundings. TYS furniture is made from 100% natural bamboo, and
the hotel is 99% powered by solar panels. A fleet of bicycles are available for guests 24/7, and
the hotel uses only 100% organic cotton sheets, towels and mattresses. TYS will also organise
exclusive local tours and picnics at the nearby mountain trails, with food prepared by Michelin-
starred chefs utilising locally-grown produce.

Being environmentally-conscious however, is not cheap, especially for Blondaise’s target

clientele, whose need for confidentiality and privacy are paramount. To accommodate this,
Captain Chaos decided that a sophisticated wall needed to be built around TYS in order to attract
their usual customers. In particular, the wall had to be secure enough to ensure that it was
impossible for any outsiders to scale over it and peep at the villas in the resort. Moreover, it had
to be built into the environment, without any kind of demolition or excavation work on the
surroundings. For this special project, Blondaise engaged the services of a local construction
company, Bôrder.

Bôrder is a Texanian company formed in 1955 by a group of local community leaders who wanted
to grow the Texanian community and support Texania’s economy. It is a household name in
Texania construction, with a tagline of “Honest work for ordinary Texanians”. Hence, when
Blondaise was looking for tenders for building its wall, Bôrder came highly recommended. The
location of the wall, as well as the TSY compound are indicated on the map below in Diagram 1.

THE AGREEMENT
In mid-2018, Captain Chaos met with Bôrder’s CEO, Olivia Hepburn the 2nd, to iron out the details
of the walls. While most projects did not require the involvement of such senior management, this
project was especially unique since this was the first Blondaise project for Texania.

One of Captain Chaos’ requests was that the wall must be painted in gold, which would be the
only way to portray the thematic exquisiteness of TYS. In order to achieve this, H2O (as she is
known) suggested painting the wall a new shade known as Sparkling Gold that was developed
by internationally renowned paint manufacturing company, Noppin Paint Pte Ltd.

Further, the parties agreed on the following payment structure:

1. The entire project was to be completed within 8 months.
2. A contract sum of SGD 24 million, was to be paid in 2 tranches.
3. 30% of the contract sum was to be paid upfront upon confirmation of the project, with
another 30% to be paid upon completion of the physical wall and the remaining 40% to be
paid after completion of the entire project.

With Blondaise’s approval, Bôrder commenced work on 1st October 2018.

At the end of January 2019, Bôrder was pleased to report to Blondaise that the physical
construction of the wall had been completed ahead of schedule. Thus, Bôrder issued an invoice
to Blondaise for the 30% payment that was due. Meanwhile, in the interest of time, Bôrder
commenced painting works.

THE DISPUTE
At first, many Texanians were thrilled about the idea of having an environmentally-conscious
luxury hotel in their state. However, public opinion started to shift once they found out that the
wall was going to overlap with an existing natural reserve, potentially causing significant damage
to local flora and fauna. In January 2019, angry Texanians began gathering once a week outside
the TSY compound to protest the wall’s construction. In almost no time, #PreserveReserve was
the most trending hashtag on social media.

When Captain Chaos was informed that the physical construction had been completed, he was
so excited that he cancelled all of his outstanding meetings for that week just to visit the worksite.
To his horror, he saw that instead of a sparkling, shiny golden wall, an ugly mustard yellow façade
greeted his eyes! Captain Chaos immediately phoned H2O to demand that Bôrder re-paint the
wall. Angry, he declared that the second instalment of 30% was to be cancelled and the remaining
40% was not to be paid to Bôrder until Bôrder took rectification action. Furthermore, he insisted
that the timeline for completion of the wall should not be delayed as a result of their unsatisfactory
work, effectively leaving Bôrder with 1 month to re-do the painting.

Shortly after his declaration, Captain Chaos sent an in-house engineering team to survey the half-
painted wall and to determine if the offending mustard paint could be painted over. Unfortunately,
the team arrived in the middle of yet another one of the protests by the Texanians and had to be
escorted by local security forces into the compound. The situation was so hostile that the security
forces even had to deploy rubber bullets and tear gas canisters to clear the crowd.
The next day, Captain Chaos received a call from his in-house engineering team. Apparently, a
5 m wide indented crater had been discovered near the intersection of the wall section facing the
town. Needless to say, Captain Chaos was livid. Captain Chaos assumed that this was yet
another example of Bôrder cutting corners and determined that this was the last straw. When he
contacted H2O, she was adamant that the hole was caused by the actions of the local security
forces, who were in turn acting to protect Blondaise’s engineering team. In other words, she
insinuated that Captain Chaos, by sending his in-house engineering team, was responsible for
the crater.

Within the week, Bôrder’s lawyers sent a letter of demand to Blondaise, claiming:
• The unpaid 30% of the contract sum that was owing and due since end January 2019;
• A late-payment fee of 5% of the contract sum; and
• Additional rectification expenses for the crater.

In response, Blondaise responded with its own lawyer’s letter denying Bôrder’s claims and setting
out a counterclaim for damages of 300% of the contract sum for breach of contract. After a few
weeks of communication between the lawyers, a preliminary hearing date was set for December
2019 in the Texanian courts. Meanwhile, the protests only grew worse. A few weeks ago, the
protests even spread to the offices of Bôrder and Blondaise located on the other side of town!
Things were getting out of hand.

In June 2019, Blondaise’s lawyers received a letter from Bôrder’s lawyers requesting that the
parties attempt mediation before going to court. A few days later, Blondaise’s lawyers grudgingly
agreed, on the condition that a mediator from a reputable organisation and with the relevant
experience was used. Bothlawyers eventually agreed on using a Singapore International
Mediation Institute (SIMI) Mediator, and for the mediation to be conducted ad-hoc at a neutral
venue in Singapore. This was to avoid any perception that the mediation would favour either
company. In the lead up to the mediation, it turned out that the CEOs of both firms were unable
to attend the mediation, but would authorise their respective counsel to attend on their behalf.