In terms of contract law, this is what has happened.

1. Bai Ying and Seah Ling had an agreement; Seah Ling promises to deliver x pieces of an item to Bai Ying. In exchange, Bai Ying promises to pay $y to Seah Ling.
2. Bai Ying finds something wrong with part of the x pieces of goods delivered. Seah Ling did not entirely fulfill his promise.
3. Right or wrong, Bai Ying retaliates by not fulfilling his own promise to pay $y.

In any legal action (regardless of whether it happens by a suit in court, through arbitration or mediation), the attack and thec ounterattacks happen this way:

Assuming that Seah Ling (who is more affected by the incident) feels more badly treated, he starts his claim by himself orthrough a lawyer. To make his case understandable to the judge or neutral umpire, his claim should cover these points:

1. How did Seah Ling and Bai Ying reach an agreement? For instance, there was a signed contract on a certain date, or they had a conversation at a certain time and place (or over the telephone at a certain time).
2. What exactly were the items which they had agreed on? For instance, 2,000 pieces of marble tiles at $10,000.
3. How did Seah Ling fulfill his part of the bargain? For instance, Seah Ling can explain that his delivery man had sent the tiles to Bai Ying on a certain date and also point out that Bai Ying had signed a delivery order which states "Received the above-mentioned goods in satisfactory condition".
4. How did Bai Ying fail to honour his promise to pay? For instance, Bai Ying only paid a $1,000 deposit upon confirming the order. After that he did not pay anything further.
5. What is the total amount which Seah Ling is claiming? For instance, $9,000 as the balance of the purchase price, an extra $300 for a surveyor to inspect the tiles when Bai Ying complained that some of the marble tiles looked stained after they were laid on the floor of Bai Ying's house.