Credit Suisse AG v Owner of the Vessel “CHLOE v”

• Jurisdiction: Singapore
• Judge: Colin Seow AR
• Judgment Date: 28 September 2022
• Docket Number: Admiralty Suit No 102 of 2021 (Summons No 2171 of 2022)
• Court: High Court Appellate Division (Singapore)

Credit Suisse AG

and

Owner of the Vessel “CHLOE V”

[2022] SGHCR 9

Colin Seow AR

Admiralty Suit No 102 of 2021 (Summons No 2171 of 2022)

General Division of the High Court

Civil Procedure — Costs — Security — Court's discretion to allow security — Whether security stifled counterclaim — Whether overlap between claim and counterclaim militated against grant of order for security

Conflict of Laws — Jurisdiction — Asymmetric jurisdiction clauses — Whether such clauses fell within scope of Choice of Court Agreements Act 2016 (2020 Rev Ed) — Choice of Court Agreements Act 2016 (2020 Rev Ed)

Held, allowing the application for security for costs:

[Editorial note: The paragraphs enclosed within parentheses in the holdings below are not reported; they can be found in the unreported version of the judgment ([2022] SGHCR 9) on LawNet. The “Case(s) referred to” and “Legislation referred to” below list the cases and legislation referred to in the headnote and/or the paragraphs reported below.]

(1) Asymmetric or unilateral jurisdiction clauses were not intended to fall within the scope of the Hague Convention, and therefore the CCAA. It was clear from the preparatory work of the Hague Convention and the circumstances of its conclusion that such clauses were excluded from the meaning of “exclusive choice of court agreements” in that Convention. Thus, an order for a stay or dismissal of the defendant's counterclaim could not fundamentally even begin to be engaged under s 12 of the CCAA, irrespective of whether such an order was being applied for by the claimant or otherwise being considered by the court on its own motion: at [16] and [19].

(2) The jurisdictional threshold necessary to invoke the court's discretion on whether to order security for costs to be furnished had been met under both O 23 r 1 of the Rules of Court (2014 Rev Ed) and s 388 of the Companies Act 1967 (2020 Rev Ed) (“Companies Act”): (at [28]).

(3) In considering whether the court's discretion should be exercised to allow the grant of security for costs against the defendant in the present case, the two main issues were, based on the parties' respective cases: (a) whether an order for security for costs would stifle the counterclaim which the defendant contended was a genuine one; and (b) whether there was a close overlap between the claim and counterclaim such as to militate against the grant of an order for security for costs against the defendant: (at [30]).

(4) On whether ordering security would stifle the defendant's counterclaim, the court was not convinced that the counterclaim could be said to be ingenuine or likely to fail at the outset. However, it did not follow that the counterclaim would be unduly stifled if an order was made requiring the defendant to furnish security for costs. In this regard, the defendant was a corporation and not a natural person; the defendant had not complied with any of its outstanding adverse costs orders arising out of earlier summary judgment proceedings; and despite the defendant's apparent lack of funds and assets, the evidence revealed that it had a demonstrated ability to muster substantial financial resources to fund its dispute resolution needs, if required. To the extent s 388 of the Companies Act was being considered, the case for ordering security was also more compelling as the defendant was not ordinarily resident in Singapore: (at [35], [36], [39], [40] and [44]).

(5) On whether there was a close overlap between the claim and counterclaim such as to militate against the grant of security, the counterclaim had clearly found a life of its own in the action, especially given the outcome in the earlier summary judgment proceedings: (at [49]).

(6) In determining the quantum of the security to be ordered, the court had complete discretion and the Appendix G cost guidelines were a useful starting point. Given the appreciable measure of legal and industry-central complexities requiring the engagement of a number of experts for the present case, the estimated number of trial days, and the estimated disbursements, a fair and just estimate of the quantum of security for costs was S$265,000. This sum was to be paid by the defendant either into court or by providing a first-class banker's guarantee on wording satisfactory to the claimant, within 14 days of this judgment failing which the counterclaim shall be stayed without need for further order or attendance: (at [65] and [66]).

Case(s) referred to

Commerzbank AG v Liquimar Tankers Management Inc [2017] 1 WLR 3497 (refd)

Ermgassen & Co Ltd v Sixcap Financials Pte Ltd [2018] SGHCR 8 (refd)

Etihad Airways PJSC v Flöther [2020] QB 793, HC (Eng) (refd)

Etihad Airways PJSC v Flöther [2022] QB 303, CA (Eng) (refd)

Gearing, Matthew Peter QC, Re [2020] 3 SLR 1106 (refd)

Sahand, The [2011] 2 SLR 1093 (refd)

Facts

The claimant was the mortgagee of a vessel in connection with a loan facility extended by...