Siva Industries v Foreguard Shipping: Security for Costs Application
In a civil suit between Siva Industries and Holdings Ltd (Plaintiff) and Foreguard Shipping I Singapore Pte Ltd (Defendant), the Singapore High Court addressed the Defendant's application for security for costs. The court found that Siva Industries, an Indian company, was likely unable to pay costs if Foreguard Shipping won. The court ordered Siva Industries to provide security for costs, conditional on Foreguard Shipping discontinuing its counterclaim against Siva Industries if Siva Industries' claim is struck out for failure to provide security.
1. Case Overview
1.1 Court
High Court of the Republic of Singapore1.2 Outcome
Plaintiff to provide security for Defendant's costs, conditional on Defendant discontinuing counterclaim if Plaintiff's claim is struck out.
1.3 Case Type
Civil
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
Singapore High Court orders Siva Industries to provide security for costs to Foreguard Shipping due to Siva's financial status and location.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Siva Industries and Holdings Ltd | Plaintiff | Corporation | Security for costs to be provided | Other | |
| Foreguard Shipping I Singapore Pte Ltd | Defendant | Corporation | Security for costs ordered | Won |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Paul Tan | Assistant Registrar | Yes |
4. Counsels
4. Facts
- Plaintiff is a company incorporated in India.
- Defendant is a company incorporated in Singapore.
- Plaintiff’s claim is pursuant to a deed of counter-guarantee dated 28 September 2012.
- Defendant applied for an order that the Plaintiff provide security for costs.
- Plaintiff's auditors qualified their opinion of the Standalone Accounts.
- There is a valid and binding Singapore order of court giving leave to enforce the Masdar Award.
- Defendant willing to discontinue the counterclaim against the Plaintiff if the Plaintiff’s claim is struck out for failure to provide security for costs.
5. Formal Citations
- Siva Industries and Holdings Ltd v Foreguard Shipping I Singapore Pte Ltd, Suit No 1090 of 2016 (Summons No 301 of 2017), [2017] SGHCR 5
6. Timeline
| Date | Event |
|---|---|
| Deed of counter-guarantee entered into by Plaintiff and Defendant | |
| Masdar Award rendered by a tribunal in London | |
| Date of Plaintiff’s standalone financial statements | |
| Leave granted to enforce Masdar Award in Singapore | |
| Plaintiff filed its Statement of Claim (Amendment No 1) | |
| Defendant’s Counsel wrote to Plaintiff’s Counsel asking if the Plaintiff would provide security for costs | |
| Application for security for costs filed | |
| Hearing on the issue of whether the Plaintiff should be made to provide security | |
| Decision given |
7. Legal Issues
- Security for Costs
- Outcome: The court ordered the Plaintiff to provide security for the Defendant's costs, conditional on the Defendant giving a written undertaking to discontinue its counterclaim against the Plaintiff if the Plaintiff’s claim is struck out for failure to provide security.
- Category: Procedural
- Sub-Issues:
- Impecuniosity of Plaintiff
- Plaintiff ordinarily resident out of jurisdiction
- Overlap between Defence and Counterclaim
- Delay in application
- Related Cases:
- [1999] 1 SLR(R) 112
- [2004] 2 SLR(R) 427
- [2016] 2 SLR 118
- [2008] 4 SLR(R) 224
- [2006] 4 SLR(R) 817
- [2010] EWCA Civ 1469
- (1990) 59 BLR 43
- [2010] CLC 661
- [2009] 3 SLR(R) 1017
8. Remedies Sought
- Security for Costs
9. Cause of Actions
- Breach of Deed of Counter-Guarantee
10. Practice Areas
- Commercial Litigation
11. Industries
- Shipping
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Creative Elegance (M) Sdn Bhd v Puay Kim Seng and another | High Court | Yes | [1999] 1 SLR(R) 112 | Singapore | Cited for the principles applicable to applications for security for costs under O 23 r 1(1)(a) of the ROC or under s 388 of the Companies Act. |
| Jurong Town Corp v Wishing Star Ltd | Court of Appeal | Yes | [2004] 2 SLR(R) 427 | Singapore | Cited regarding the inappropriateness of ordering security for costs where there is substantial overlap between the Defence and the Counterclaim; distinguished on the basis that the plaintiff was not impecunious. |
| SIC College of Business and Technology Pte Ltd v Yeo Poh Siah and others | Court of Appeal | Yes | [2016] 2 SLR 118 | Singapore | Cited regarding the inappropriateness of ordering security for costs where there is substantial overlap between the Defence and the Counterclaim. |
| Frantonios Marine Services Pte Ltd and another v Kay Swee Tuan | High Court | Yes | [2008] 4 SLR(R) 224 | Singapore | Cited for the principle that the legislative intent and public policy under s 388 of the Companies Act lean in favour of the court ordering security to be provided when the Plaintiff is an impecunious corporation. |
| Ho Wing On Christopher and others v ECRC Land Pte Ltd (in liquidation) | High Court | Yes | [2006] 4 SLR(R) 817 | Singapore | Cited for the principle that the legislative intent and public policy under s 388 of the Companies Act lean in favour of the court ordering security to be provided when the Plaintiff is an impecunious corporation. |
| Autoweld Systems Ltd v Kito Enterprises LLC | English Court of Appeal | Yes | [2010] EWCA Civ 1469 | England and Wales | Cited for the principle that if an impecunious plaintiff was not ordered to provide security for costs, the defendant in that case would be in a “lose-lose” situation. |
| B J Crabtree (Insulation) Ltd v GPT Communication Systems Ltd | English Court of Appeal | Yes | (1990) 59 BLR 43 | England and Wales | Cited regarding factors militating against the ordering of security for costs where there is substantial overlap between the Defence and the Counterclaim. |
| Dumrul v Standard Chartered Bank | High Court | Yes | [2010] CLC 661 | England and Wales | Cited regarding the principle that ordering security for costs in such a situation may result in a plaintiff succeeding in his defence to the counterclaim by relying on the same issues he raised in his main claim, and after having incurred all the costs required to bring that claim to judgment in the prosecution of his defence of the counterclaim he may still be unable to secure judgment on his claim. |
| Zhong Da Chemical Development Co Ltd v Lanco Industries Ltd | High Court | Yes | [2009] 3 SLR(R) 1017 | Singapore | Cited for the principle that the defendant should not be required to experience the inconvenience and expense of enforcing his judgment in a different jurisdiction. |
13. Applicable Rules
| Rule Name |
|---|
| Rules of Court (Cap 322, R5, 2014 Rev Ed) |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Companies Act (Cap 50, 2006 Rev Ed) | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Security for costs
- Impecuniosity
- Counterclaim
- Standalone Accounts
- NTT Docomo Award
- Masdar Award
- Undertaking to discontinue counterclaim
15.2 Keywords
- Security for costs
- Singapore High Court
- Impecunious Plaintiff
- Counterclaim
- Companies Act
- Rules of Court
17. Areas of Law
| Area Name | Relevance Score |
|---|---|
| Security for Costs | 90 |
| Civil Practice | 75 |
| Company Law | 60 |
| Contract Law | 50 |
| Arbitration | 30 |
16. Subjects
- Civil Procedure
- Company Law
- Security for Costs