SK Lateral v Lateral Solutions: Security for Costs in International Commercial Dispute

In a dispute before the Singapore International Commercial Court, SK Lateral Rubber & Plastic Technologies (Suzhou) Co Ltd (“SKL”) sued Lateral Solutions Pte Ltd (“Lateral”) for USD 10.3 million for parts supplied. Lateral counterclaimed for defective parts, sums paid to a casings supplier, wrongful detention of equipment, and breach of a long-term supply agreement. Lateral applied for security for costs, which was dismissed by International Judge Roger Giles. The court found that Lateral did not sufficiently demonstrate SKL's inability to pay costs or that ordering security was just, considering the overlap between the claim and counterclaim.

1. Case Overview

1.1 Court

Singapore International Commercial Court

1.2 Outcome

Application dismissed.

1.3 Case Type

Civil

1.4 Judgment Type

Judgment

1.5 Jurisdiction

Singapore

1.6 Description

Singapore court dismisses application for security for costs by defendant Lateral Solutions against plaintiff SK Lateral in a commercial dispute.

1.7 Decision Date

16 April 2020

2. Parties and Outcomes

Party Name	Role	Type	Outcome	Outcome Type	Counsels
Lateral Solutions Pte Ltd	Defendant, Counterclaimant	Corporation	Application dismissed	Lost	Tan Chuan Thye of Rajah & Tann Singapore LLP Disa Sim of Rajah & Tann Singapore LLP Jared Kok of Rajah & Tann Singapore LLP James Kwong of Rajah & Tann Singapore LLP Chiang Yuan Bo of Rajah & Tann Singapore LLP
SK Lateral Rubber & Plastic Technologies (Suzhou) Co Ltd	Plaintiff, Counterdefendant	Corporation	Application dismissed	Won	Jimmy Yim of Drew & Napier LLC Kevin Lee of Drew & Napier LLC Eunice Lau of Drew & Napier LLC Ho Wah Jiang of Drew & Napier LLC

3. Judges

Judge Name	Title	Delivered Judgment
Roger Giles	International Judge	Yes

4. Counsels

Counsel Name	Organization
Tan Chuan Thye	Rajah & Tann Singapore LLP
Disa Sim	Rajah & Tann Singapore LLP
Jared Kok	Rajah & Tann Singapore LLP
James Kwong	Rajah & Tann Singapore LLP
Chiang Yuan Bo	Rajah & Tann Singapore LLP
Jimmy Yim	Drew & Napier LLC
Kevin Lee	Drew & Napier LLC
Eunice Lau	Drew & Napier LLC
Ho Wah Jiang	Drew & Napier LLC

4. Facts

SKL is a company established under the laws of the People’s Republic of China.
Lateral is a Singapore incorporated company.
In 2011, SKL and Lateral entered into an agreement under which SKL was to manufacture and supply parts for Lateral.
SKL claims USD 10.3 million from Lateral for parts supplied.
Lateral counterclaims against SKL on a number of grounds.
Proceedings were commenced in the High Court in October 2017 and transferred to the SICC in December 2019.
Lateral applied for an order that SKL furnish security for its costs to the end of the trial.

5. Formal Citations

SK Lateral Rubber & Plastic Technologies (Suzhou) Co Ltd v Lateral Solutions Pte Ltd, Suit No 6 of 2019 (Summons No 13 of 2020), [2020] SGHC(I) 09

6. Timeline

Date	Event
2011-01-01	SKL and Lateral entered into an agreement.
2017-01-01	Relationship between SKL and Lateral deteriorated and ended.
2017-10-01	Proceedings commenced in the High Court.
2017-11-01	SKL ordered to provide security for Lateral’s costs up to the conclusion of discovery.
2018-02-28	Pleadings closed.
2018-04-01	SKL applied for summary judgment.
2019-01-01	Application for summary judgment dismissed.
2019-05-01	Defence and counterclaim amended.
2019-11-01	Lists of documents filed.
2019-12-01	Proceedings transferred to the SICC.
2020-03-02	Case management conference held.
2020-03-06	Defence and counterclaim amended again.
2020-03-13	Lateral’s application filed.
2020-03-30	Judgment reserved.
2020-04-17	Judgment delivered.
2020-07-21	Trial fixed to commence.

7. Legal Issues

Security for Costs
- Outcome: The court dismissed the application for security for costs, finding that the conditions for ordering security were not met and that it would not be just to order security in the circumstances.
- Category: Procedural
- Sub-Issues:
  - Impecuniosity of Plaintiff
  - Plaintiff Ordinarily Resident Out of Jurisdiction
  - Overlap between Claim and Counterclaim
  - Stifling of Claim

8. Remedies Sought

Monetary Damages
Security for Costs

9. Cause of Actions

Breach of Contract
Wrongful Detention
Conversion

10. Practice Areas

Commercial Litigation
International Arbitration

11. Industries

Manufacturing
Electronics

12. Cited Cases

Case Name	Court	Affirmed	Citation	Jurisdiction	Significance
B2C2 Ltd v Quoine Pte Ltd	High Court	Yes	[2018] 5 SLR 105	Singapore	Cited for the principle that a defendant should not lose its entitlement to security for costs due to the transfer of proceedings to the SICC.
Jurong Town Corp v Wishing Star Ltd	Court of Appeal	Yes	[2004] 2 SLR(R) 427	Singapore	Cited for the principle that all circumstances are considered to determine whether it is just that security should be ordered, without a presumption in favor of, or against, an order.
Ong Jane Rebecca v Pricewaterhousecoopers	High Court	Yes	[2009] 2 SLR(R) 796	Singapore	Cited for the principle that the court will not enter into a detailed consideration of the merits of the case unless a high probability of success one way or the other can be clearly demonstrated.
Amer Hoseen Mohammed Revai v Singapore Airlines	High Court	Yes	[1994] 3 SLR(R) 290	Singapore	Cited for the principle that the court can conclude that the plaintiff has a good chance of success when considering the strength of the claim.
Tjong Very Sumitomo v Chan Sing En	High Court	No	[2010] SGHC 344	Singapore	Cited for the principle that implausibility in both the claim and the defence can be identified when considering the strength of the claim.
Sembawang Engineering Pte Ltd v Priser Asia Engineering Pte Ltd	High Court	Yes	[1992] 2 SLR 290	Singapore	Cited for the principle that matters standing out on the pleadings can satisfy the court that the plaintiff’s claim is bona fide and has a reasonable prospect of success.
Creative Elegance (M) Sdn Bhd v Puay Kim Seng	High Court	Yes	[1991] 1 SLR(R) 112	Singapore	Cited as an illustration of taking account of the vicissitudes of an economic crisis when considering whether ordering security for costs would stifle a claim.
P T Muliakeramik Indahraya TBK v Nam Huat Tiling & Panelling Co Pte Ltd	High Court	Yes	[2006] SGHC 154	Singapore	Cited for the principle of ordering security in a lesser amount than the costs to the end of the trial.

13. Applicable Rules

Rule Name
Order 110 Rule 45 of the Rules of Court
Order 23 Rule 1(1) of the Rules of Court

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
Foreign Plaintiff
Cash Flow Defence
Overlap between Claim and Counterclaim
Stifling of Claim
Memorandum of Guidance

15.2 Keywords

security for costs
singapore international commercial court
international litigation
commercial dispute
civil procedure

17. Areas of Law

Area Name	Relevance Score
Security for Costs	90
Costs	80
Civil Practice	75
Civil Procedure	75
Commercial Litigation	50
Breach of Contract	30
Contract Law	30

16. Subjects

Civil Procedure
Security for Costs
International Commercial Disputes