Credit Suisse AG v Owner of Vessel “CHLOE V”: Security for Costs in Admiralty Claim

In Credit Suisse AG v Owner of the Vessel “CHLOE V”, the Singapore High Court addressed Credit Suisse AG's application for security for costs against Chloe Navigation Ltd, the vessel owner, regarding a counterclaim in an admiralty suit. The court considered the applicability of the Choice of Court Agreements Act, the potential stifling of the counterclaim, and the overlap between the claim and counterclaim. Ultimately, the court allowed the application, ordering Chloe Navigation Ltd to provide security for costs.

1. Case Overview

1.1 Court

General Division of the High Court of the Republic of Singapore

1.2 Outcome

Application allowed; defendant to provide security for costs.

1.3 Case Type

Admiralty

1.4 Judgment Type

Judgment

1.5 Jurisdiction

Singapore

1.6 Description

The High Court ordered Chloe Navigation Ltd to provide security for costs in Credit Suisse AG's admiralty claim counterclaim, concerning a loan facility.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Credit Suisse AGClaimant, Defendant in CounterclaimCorporationApplication allowedWon
Owner of the Vessel “CHLOE V”Defendant, Claimant in CounterclaimCorporationOrder to provide security for costsLost

3. Judges

Judge NameTitleDelivered Judgment
Colin SeowAssistant RegistrarYes

4. Counsels

Counsel NameOrganization
Daniel LiangAllen & Gledhill LLP
Corina SongAllen & Gledhill LLP
Teo Jen MinAllen & Gledhill LLP
Thomas TanHaridass Ho & Partners
Kashvinder KaurHaridass Ho & Partners

4. Facts

  1. Credit Suisse AG sought security for costs from Chloe Navigation Ltd regarding a counterclaim.
  2. The counterclaim arose from a dispute over a Facilities Agreement where Credit Suisse was the mortgagee.
  3. Chloe Navigation Ltd claimed Credit Suisse AG breached an implied obligation by refusing to issue a letter of quiet enjoyment.
  4. The vessel “CHLOE V” was arrested in Singapore due to events of default under the Facilities Agreement.
  5. The defendant is a corporation incorporated in the British Virgin Islands and not ordinarily resident in Singapore.
  6. The claimant argued that the defendant’s counterclaim was not genuine and had a high degree of success in defending it.
  7. The defendant had previously remitted a substantial sum to procure the release of another vessel, indicating financial resources.

5. Formal Citations

  1. Credit Suisse AG v Owner of the Vessel “CHLOE V”, HC/ADM 102 of 2021, [2022] SGHCR 9

6. Timeline

DateEvent
Facilities Agreement dated
Facilities Agreement amended and supplemented
Facilities Agreement amended and supplemented
Vessel became off-charter
First event of default occurred under the Facilities Agreement
Two valuations of the vessel carried out
Sixth event of default occurred under the Facilities Agreement
Defendant remitted US$7,072,852.49 into a trust account
Claimant commenced ADM 102 and obtained a warrant for the arrest of the vessel
Alexandros Lamprinaki's 2nd affidavit in ADM 64
Defendant entered its appearance in ADM 102
Claimant’s Statement of Claim was filed and served
Defendant’s filing and service of its Defence and Counterclaim
Claimant filed and served its Reply and Defence to Counterclaim
Claimant obtained an order for the sale of the vessel
Claimant brought an application seeking summary judgment on its claim in ADM 102
Randa Karami’s affidavit in the summary judgment proceedings in ADM 102
Application for summary judgment granted by an Assistant Registrar
Defendant filed a Registrar’s Appeal against the AR’s decision
Appeal heard by the Judge
Judge delivered an oral judgment dismissing the appeal
Defendant’s solicitors sent a letter to the claimant
Claimant filed the present summons seeking an order for security of costs
Mr Alexandros Lamprinakis’ 3rd affidavit in ADM 102
Mr Joshua Alexander Walter’s 6th affidavit in ADM 102
Application heard before the Assistant Registrar
Application heard before the Assistant Registrar
Claimant tendered written submissions
Defendant tendered written submissions
Claimant indicated that they did not find it necessary to file final response submissions
Final date for claimant to tender written submissions
Judgment rendered

7. Legal Issues

  1. Security for Costs
    • Outcome: The court ordered the defendant to provide security for costs.
    • Category: Procedural
    • Sub-Issues:
      • Whether the making of an order for security for costs will stifle the counterclaim
      • Whether there is a close overlap between the claim and the counterclaim
    • Related Cases:
      • [2006] 4 SLR(R) 817
      • [2008] 4 SLR(R) 224
      • [2016] 2 SLR 118
  2. Applicability of Choice of Court Agreements Act
    • Outcome: The court determined that the asymmetric jurisdiction clause in the Facilities Agreement falls outside the scope of the Hague Convention and the Choice of Court Agreements Act.
    • Category: Jurisdictional
    • Related Cases:
      • [2022] QB 303
      • [2017] 1 WLR 3497
      • [2020] QB 793

8. Remedies Sought

  1. Security for Costs

9. Cause of Actions

  • Breach of Contract
  • Breach of Implied Obligation

10. Practice Areas

  • Admiralty
  • Commercial Litigation
  • Security for Costs

11. Industries

  • Shipping
  • Finance

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Etihad Airways PJSC v FlötherEnglish Court of AppealYes[2022] QB 303England and WalesCited for the opinion that the Hague Convention should probably be interpreted as not applying to asymmetric jurisdiction clauses.
Commerzbank AG v Liquimar Tankers Management IncEnglish High CourtYes[2017] 1 WLR 3497England and WalesCited for the suggestion that the wording in the definition of “exclusive choice of court agreements” in Article 3(a) of the Hague Convention may potentially include asymmetric or unilateral jurisdiction clauses.
Etihad Airways PJSC v FlötherEnglish High CourtYes[2020] QB 793England and WalesCited for the suggestion that the wording in the definition of “exclusive choice of court agreements” in Article 3(a) of the Hague Convention may potentially include asymmetric or unilateral jurisdiction clauses.
The “Sahand” and other applicationsCourt of AppealYes[2011] 2 SLR 1093SingaporeCited for the principle that the interpretation of international instruments is not to be undertaken by reference only to the text.
Re Gearing, Matthew Peter QCHigh CourtYes[2020] 3 SLR 1106SingaporeCited for the application of the Vienna Convention on the Law of Treaties in the interpretation of treaties.
Ermgassen & Co Ltd v Sixcap Financials Pte LtdHigh CourtYes[2018] SGHCR 8SingaporeCited for considering the Hague Convention Explanatory Report as a useful guide in relation to a case concerning the application of the Hague Convention for the purpose of the enforcement of an English judgment in Singapore.
Creative Elegance (M) Sdn Bhd v Puay Kim Seng and anotherHigh CourtYes[1999] 1 SLR(R) 112SingaporeCited for the principle that the same principles apply whether the discretion is one to be exercised under Order 23 Rule 1(1)(a) of the Rules of Court or section 388 of the Companies.
Ong Jane Rebecca v Pricewaterhousecoopers and othersHigh CourtYes[2009] 2 SLR(R) 796SingaporeCited for the principle that the court is generally not required to embark on a detailed examination of the merits of the case, notwithstanding that the strength or weakness of the claim advanced by the party against whom security is sought may be a relevant factor for consideration.
Ho Wing On Christopher and others v ECRC Land Pte Ltd (in liquidation)Court of AppealYes[2006] 4 SLR(R) 817SingaporeCited for the holding that the law on security for costs is express recognition that impecunious companies do not have an unfettered freedom to commence legal actions against defendants who cannot be compensated in costs if they win.
Frantonios Marine Services Pte Ltd and another v Kay Swee TuanHigh CourtYes[2008] 4 SLR(R) 224SingaporeCited for the observations in ECRC Land were similarly relevant to “impecunious corporations, which are not in liquidation but whose litigation is being financed by interested third parties, whoever they may be”.
SIC College of Business and Technology Pte Ltd v Yeo Poh Siah and othersCourt of AppealYes[2016] 2 SLR 118SingaporeCited for the holding that while security for costs may generally be ordered in respect of a counterclaim, “a court will ordinarily not order security for costs in respect of a counterclaim that arises in respect of the same matter or transaction upon which the claim is founded if it is in substance the nature of a defence”.
Hutchison Telephone (UK) Ltd v Ultimate Response LtdUnknownYes[1993] BCLC 307United KingdomCited for the question of substance that needs to be answered is whether the defendant is “simply defending himself, or is he going beyond mere self-defence and launching a cross-claim with an independent vitality of its own?”

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute NameJurisdiction
Evidence Act 1893Singapore
Choice of Court Agreements Act 2016Singapore
Companies Act 1967Singapore
Rules of CourtSingapore

15. Key Terms and Keywords

15.1 Key Terms

  • Security for Costs
  • Counterclaim
  • Facilities Agreement
  • Letter of Quiet Enjoyment
  • Asymmetric Jurisdiction Clause
  • Choice of Court Agreements Act
  • Impecuniousness
  • Admiralty Suit
  • Events of Default
  • Minimum Security Value
  • Minimum Liquidity

15.2 Keywords

  • Security for Costs
  • Admiralty
  • Choice of Court Agreement
  • Jurisdiction
  • Shipping Finance

17. Areas of Law

Area NameRelevance Score
Security for Costs95
Admiralty and Maritime Law80
Civil Practice75
Shipping Law70
Contract Law60
Jurisdiction Clause50
Company Law40
Arbitration30

16. Subjects

  • Civil Procedure
  • Admiralty
  • Security for Costs
  • Jurisdiction