Owner of the vessel(s) “CHLOE V” v UBS AG [2026] SGCA 7

Costs

It has been said that costs rules and orders have a profound impact on the final outcome of the legal proceedings; a litigant’s vindication on the merits may prove to be hollow if the fruits of success are soured by uncompensated costs (Ng Eng Ghee v Mamata Kapildev Dave [2009] 4 SLR(R) 155 at [1]). In an appeal where the costs of the proceeding below remains outstanding, the respondent is precisely one who has secured a victory that may be in name only as it remains out of pocket in legal fees. That being the case, it has every right to seek payment of the outstanding costs before being required to incur further costs in the appeal. When an appellate court is asked to stay the appeal on account of the outstanding costs order, the fundamental consideration would be to balance the right of the respondent to be paid the outstanding costs and the right of the appellant (whose case has been found to be without merit by the lower court) to pursue its appeal notwithstanding its failure or omission to pay the outstanding costs.

Costs

The present application, in which the respondent seeks a stay or dismissal of the appeal, CA/CA 26/2025 (“CA 26”), pending the payment of the outstanding costs ordered below and further security of costs for the appeal, presents an opportunity for this court to consider the applicable principles that would assist future courts in approaching this balancing exercise in the context of the Rules of Court 2021 (the “ROC 2021”). In developing the framework to deal with such applications, we have considered various arguments raised by litigants in previous cases, in addition to those raised in the present appeal.

Costs

The procedural history of the appeal informs that the respondent’s attempts at recovering costs from the appellant have at every turn been fraught with unnecessary difficulties. For context, the appellant is a special purpose vehicle incorporated in the British Virgin Islands and was at all material times the registered owner of the vessel, “Chloe V” (the “Vessel”). The respondent is a leading international financial bank. It was previously known as Credit Suisse AG, until it was absorbed into UBS AG by way of a statutory merger on 31 May 2024. It is not disputed that the surviving entity, UBS AG, has automatically succeeded to all the assets, rights and obligations of Credit Suisse AG. For convenience, we will simply refer to the surviving entity as the “respondent”.

Costs

The costs of SUM 5945 were fixed at S$80,000 on an indemnity basis, with disbursements to be agreed or fixed by the court. On 5 April 2022, the respondent’s solicitors sent a demand for the appellant to pay the costs ordered. The appellant did not respond.

Costs

The appellant appealed against AR Tan’s decision viz HC/RA 82/2022 (“RA 82”). On 18 May 2022, the Judge heard and dismissed the appeal with costs fixed at S$30,000 on an indemnity basis and disbursements. On the same day, the respondent’s solicitors sent another demand for the appellant to pay the outstanding costs, this time including the costs of RA 82. Again, the appellant did not respond.

Costs

Notwithstanding that it owed costs to the respondent, the appellant proceeded with its counterclaim. In the circumstances, the respondent applied for security for the costs of defending the counterclaim viz HC/SUM 2171/2022 (“SUM 2171”). On 14 September 2022, Assistant Registrar Colin Seow (“AR Seow”) ordered the appellant to furnish security in the sum of S$265,000 by way of payment into court or a first-class banker’s guarantee within 14 days, ie, by 28 September 2022, failing which the counterclaim would be automatically stayed.

Costs

The appellant’s refusal to make payment was not confined to the above costs orders. The following sums, which arose from various other applications in ADM 102, remained due and payable from the appellant to the respondent:

Costs

On 21 December 2022, the respondent’s solicitors sent a demand for the payment of S$5,500 (in relation to (c) above). The appellant again did not respond. A further demand was sent on 13 June 2023 for the payment of S$24,453.53, which constituted the outstanding costs incurred in relation to the respondent’s counterclaim (SUM 2171, RA 304, SUM 4267 and SUM 4110). The appellant was requested to make payment by 20 June 2023. Again (and unsurprisingly by this point), the appellant did not respond.

Costs

On 6 July 2023, the respondent’s solicitors sent a final demand for the payment of the outstanding costs. This time, the respondent asked the appellant whether it was prepared to consent to the respondent’s application for payment of outstanding costs from the security of S$265,000 previously paid into court on 29 December 2022.

Costs

The appellant’s solicitors replied on 12 July 2023, stating that the outstanding costs had already been paid out of the Sale Proceeds pursuant to Clause 34.5 of the Facilities Agreement. We reproduce the relevant portions of Clause 34.5 for convenience:

Costs

Leading up to the trial of the appellant’s counterclaim, the respondent filed an application for further security for costs viz HC/SUM 2973/2024. On 30 October 2024, the Judge heard the application and agreed that it was reasonable to order further security for costs, in view of the increase in the number of trial days from six to eleven days and an increase in the number of expert witnesses on the appellant’s part. The Judge ordered the appellant to provide further security of S$60,000 within 14 days of 30 October 2024, ie, by 13 November 2024.

Costs

On 13 November 2024, the appellant provided the security in the form of a solicitor’s letter of undertaking. As such, the respondent had security for costs in the total of S$303,046.47 (excluding any accrued interest) prior to the commencement of the trial of the counterclaim.

Costs

The trial of the counterclaim was heard from 1 November to 13 November 2024. On 28 July 2025, the Judge dismissed the counterclaim in its entirety (the grounds of his decision can be found in The “CHLOE V” [2025] SGHC 142 (“The “CHLOE V””) and invited submissions on costs. On 11 November 2025, the Judge issued his decision on costs:

Costs

Thereafter, the respondent’s solicitors sent a demand for payment of the sums owing pursuant to the costs order on 12 November 2025. The appellant did not respond. On 18 November 2025, the respondent’s solicitors sent a further demand for the appellant to make payment by 25 November 2025. The appellant did not respond.

Costs

On 28 November 2025, the respondent’s solicitors wrote to the appellant’s solicitors demanding payment of S$60,000 held as security pursuant to the solicitor’s letter of undertaking. On the same day, the respondent filed HC/SUM 3504/2025 (“SUM 3504”), seeking payment of the remaining sums held in court as security for the costs of defending the appellant’s counterclaim. The appellant’s solicitors finally responded on 3 December 2025 that they had arranged for the payment of S$60,000 and that they would not be objecting to SUM 3504. However, they maintained that the costs of and incidental to SUM 3504 ought not to be borne by the appellant as it was “not contested”.

Costs

On 9 December 2025, the respondent’s solicitors replied that the costs of and incidental to SUM 3504 ought to be borne by the appellant as it was necessitated by the appellant’s refusal to pay the outstanding costs, despite the respondent’s demands on 12 and 18 November 2025. The appellant did not respond.

Costs

Prior to the introduction of ROC 2021, the courts appeared to favour a more restrained approach towards staying or dismissing appeals pending payment of the outstanding costs by an appellant. While the court had inherent power (pursuant to O 92 r 4 of the Rules of Court 2014 (the “ROC 2014”)) to require an appellant to pay the outstanding costs on penalty of the appeal being stayed or dismissed, this court observed in Roberto Building Material Pte Ltd v Oversea-Chinese Banking Corp Ltd [2003] 2 SLR(R) 353 at [17], “[t]his inherent [power] should only be invoked in exceptional circumstances where there is a clear need for it and the justice of the case so demands. The circumstances must be special.” The mere fact that an appellant was able to but did not pay costs is insufficient to meet this threshold (Independent State of Papua New Guinea v PNG Sustainable Development Program Ltd [2020] 1 SLR 97 at [37]).

Costs

At the same time, O 21 r 2(6) of the ROC 2021 introduces a new and separate regime for staying or dismissing appeals pending payment of the outstanding costs by an appellant:

Costs

At the outset, we agree with the observations of the Appellate Division in Huttons Asia Pte Ltd v Chen Qiming [2024] 2 SLR 401 (“Huttons”) at [28]–[29] that, given the express power contained in O 21 r 2(6), there is no longer any need to resort to the court’s inherent powers, and that a more robust approach should prevail in response to an appellant’s failure or omission to pay the outstanding costs. However, that is not to say that the court’s inherent powers to stay appeals on account of outstanding costs orders can never be invoked again if O 21 r 2(6) for whatever reason does not apply. The decision in Huttons is in line with the approach taken by this court in two prior unreported decisions, CA/SUM 12/2023 and CA/SUM 20/2024 (see the discussion in Huttons at [26]; and in respect of the former decision, The Republic of India v Deutsche Telekom AG [2024] 1 SLR 56 at [37]). The subsequent High Court decision of Hahnemann Travel & Tours Pte Ltd v Hasnah bte Abdullah [2025] SGHC 250 adopted a similar approach (at [38]). In these decisions, the respective appellants were ordered to make full payment of the outstanding costs before their appeals could be heard. This is also in line with the Ideals set out in O 3 r 1(2) of the ROC 2021, in particular, to achieve fair and practical results suited to the needs of the parties. Indeed, as observed in Huttons at [27], “an appellant’s failure to pay the costs of proceedings at first instance, whilst continuing to pursue appellate proceedings, may be regarded as unfair to its counterparty, who is forced to be out of pocket in defending the appeal despite not having been paid costs for proceedings it was successful in”. In this spirit, we turn to the principles which are applicable to the exercise of the court’s power under O 21 r 2(6) of the ROC 2021.

Costs

As a starting point, given that the stay application is filed by the respondent, the respondent is required to show, on a prima facie basis, that the appellant has “refused or neglected” to pay the outstanding costs. The fact that the appellant has failed or omitted to pay the outstanding costs should suffice to demonstrate such a prima facie case.

Costs

The burden then falls on the appellant to explain why the outstanding costs order has not been satisfied and to provide a good reason why a stay should not be granted on account of the outstanding costs order. In our view, placing such a burden on the appellant is fair and sensible as only the appellant would know the true state of its own financial position (see Goldtrail Travel Ltd v Onur Air Tasimacilik AS [2018] 1 All ER 721 at [15]). If the appellant is unable to provide a good reason for its failure or omission to pay, a stay should ordinarily be granted as such an appellant would be treated as having “refused or neglected” to pay the outstanding costs. Any stay order should be limited to an appropriate period of time; if the costs order remains outstanding beyond that period, the appeal would be deemed to have been struck out automatically. This is to ensure that the appeal does not remain pending indefinitely on account of the appellant’s failure to pay the outstanding costs.

Costs

If the appellant claims that it lacks the financial resources to make payment in respect of the outstanding costs order, it is incumbent on such an appellant to explain its financial position, including the provenance of the funds for the litigation below and for the appeal. It is no answer to allege that the funding by a third party (such as controllers, shareholders, potential investors or related companies) was voluntary in nature and hence limited only to the costs for the pursuit of the claims. As the outstanding costs order, ie, the costs debt, arose as direct result of the funding provided by such third parties, there is no legitimate reason why such third parties should not be required to pay the outstanding costs if they wish to proceed with the appeal. We would add that, if third-party funders adopted such a position, that would be plainly self-serving, and it is precisely the type of conduct which was cautioned against in Frantonios Marine Services Pte Ltd v Kay Swee Tuan [2008] 4 SLR(R) 224 at [53]:

Costs

Likewise, it does not lie in the mouth of the appellant to claim that the respondent should take steps to enforce the outstanding costs order incurred as a direct result of the unsuccessful claim or defence below. The respondent should not have to incur additional costs and expenses to recover the outstanding costs. In this regard, we observe that such an invitation would typically be made when enforcement is not free of difficulty or inconvenience, including situations where the appellant is resident outside Singapore.

Costs

If the court is satisfied that the appellant does not have the financial resources to pay the outstanding costs (which would typically be the case if the appellant is a litigant-in-person), then the failure or omission to pay the outstanding costs might not properly be regarded as refusal or neglect to pay. In this regard, we found the observation of Chao Hick Tin JC (as he then was) in Ng Tai Tuan v Chng Gim Huat Pte Ltd [1990] 2 SLR(R) 231 to be very instructive as to what the word “neglect” entails, albeit in the context of s 254(2)(e) of the Companies Act (Cap 50, 2006 Rev Ed). Chao JC observed at [14] that “[m]ere omission to pay a debt on demand does not of itself constitute neglect to do so within the meaning of that provision”. He held that “neglect” in the context required an omission to pay without reasonable excuse. In such circumstances, O 21 r 2(6) of the ROC 2021 – which applies to situations where “a party refuses or neglects to pay any costs ordered” – is not engaged. The court should ordinarily allow the appeal to proceed so as to ensure that the appellant’s right to pursue a legitimate appeal is not stifled subject to the court’s inherent power to stay or dismiss the appeal where it is evident that the appeal is plainly hopeless. To show that the appeal is not hopeless, the appellant merely has to show that it has a good arguable case on appeal, ie, one that is more than barely capable of serious argument, but not necessarily one which a judge considers would have a more than even chance of success. Where the appeal turns on questions of fact which the trial judge has resolved against the claimant, it must be shown that there is a good arguable case that the trial judge’s assessment was “plainly wrong or against the weight of the evidence” (see JTrust Asia Pte Ltd v Group Lease Holdings Pte Ltd [2020] 2 SLR 490 at [34]). It bears reiterating that the court should not be required to engage in a detailed examination of the merits of the appeal at this juncture, ie, any contention about the merits of the appeal should be one that is readily apparent. In circumstances where the appellant is not even able to cross this threshold, the balance of justice tilts in favour of the respondent, who bears all the financial risks of an appeal that is hopeless with little prospect of recovering its costs. In our view, the combination of an impecunious appellant and a hopeless appeal qualifies as a special or exceptional circumstance in which the court should invoke its inherent power to stay or even dismiss the appeal.

Costs

On the other hand, even if the court is satisfied that the appellant has refused or neglected to pay the outstanding costs, it retains a discretion to refuse to stay or dismiss the appeal, pursuant to O 21 r 2(6) of the ROC 2021. The situations in which the court would exercise its discretion to allow the appeal to proceed should be extremely limited, given that an appellant should not ordinarily be allowed to ignore costs orders with impunity. The justice of the case must strongly demand that the appeal be heard. The facts of Third Eye Capital Corp v Pretty View Shipping SA [2025] SGHCR 16 (“Third Eye”) are illustrative of one such situation. That case involved an application by the defendants to set aside the service of an order for examination of judgment debtor and the order itself. The examinee was a director of the defendants. It was submitted by the plaintiff that the court should stay or dismiss the application, on account of the fact that previous costs orders made against the defendants had not been satisfied. Given that the defendants could afford the costs of counsel, it appeared that the defendants had the requisite means but were deliberately refusing to pay the outstanding costs. The court refused to stay the application, considering it significant that the application was brought “as a response” [emphasis in original] to the examination proceedings brought by the claimants. Accordingly, the balance of interests “weighed in favour of the defendants’ right to be heard regarding their objections about the [service of the examination order and the order itself]” (Third Eye at [21]). The issues raised went towards the court’s jurisdiction – it appears to us that these were important matters that the court would have had to satisfy itself of in any event.

Costs

It is uncontroversial that the appellant has failed or omitted to pay the outstanding costs in respect of its unsuccessful counterclaim. In the circumstances, the inquiry revolves around its reasons for its failure or omission to pay.

Costs

It is significant that, although the appellant does not appear to have any substantial assets in Singapore or elsewhere in the world, this has to date not impeded its ability to engage in costly legal proceedings. Similar observations were made by AR Seow at [40], [42] and [43] of his decision in SUM 2171 (published as Credit Suisse AG v Owner of the Vessel “CHLOE V” [2022] SGHCR 9 (“Credit Suisse AG”)), which was the respondent’s application for security for the costs of defending the appellant’s counterclaim:

Costs

There appears to be no pretence that the appellant has been financially supported by its controllers all this while. Its position in SUM 2171 was that the appellant’s controllers “did not offer the [appellant] financial support unconditionally” and that they “would have been prepared to invest additional funds in the [appellant] only if the [appellant] had entered into the New Koch Charterparty” (see Credit Suisse AG at [43]). In the present application, the appellant maintains that any financial support from its controllers remains “voluntary”. In other words, the appellant’s controllers are only prepared to provide financial support to the appellant when doing so is in their own interests; such financial support would not be forthcoming for the purposes of satisfying costs orders made against the appellant. But, as explained above, this is a self-serving response which we cannot accept. It flows from this that the appellant cannot be said not to have access to the financial resources to pay the outstanding costs. It must be emphasised that it was the funding provided by the appellant’s controllers to-date that has created the outstanding costs debt due to the respondent in the first place.

Costs

Indeed, not once has the appellant cited financial difficulty as a reason for its failure or omission to pay the outstanding costs. Instead, it takes issue with the respondent’s figure of S$633,510.24 in its demands. It argues:

Costs

We do, however, agree with the appellant that the respondent is not entitled to demand for the full sum outstanding without taking into account the security of S$303,046.47 which has already been provided by the appellant for the costs below. We note that the respondent has referred this court to the proposition that a creditor with several remedies at his disposal can choose which one to enforce, at what time, in which order, and in whatever way, subject only to the rule that he cannot recover more than is due to him. While that might be true, there is no good reason for the respondent not to take into account the balance security of S$243,046.67 held in court (the S$60,000 by way of solicitor’s undertaking has since been utilised – see [25] above). That balance security should be deducted against the outstanding costs order and once that is done, there would be no justification for the appellant to withhold payment of the balance amount. In fact, on 21 January 2026, the respondent’s solicitors sent a further demand for the appellant to pay the balance sum after taking into account the security sum provided by the appellant. But the appellant did not respond.

Costs

Third, even if the appellant disputes the respondent’s calculations, it should have taken steps to seek clarifications from the respondent. That it completely failed to do so strongly suggests that this was a mere afterthought in order to delay the payment of the outstanding costs.

Costs

In sum, the appellant has failed to provide any credible reason for its failure or omission to pay the outstanding costs. In our judgment, this amounts to a refusal or neglect to pay the outstanding costs.

Costs

For completeness, we observe that the appellant’s conduct in these proceedings would have in any event satisfied the higher threshold of special or exceptional circumstances which warrants the court’s exercise of its inherent power. At every opportunity, the appellant has refused or delayed or ignored the demands for the payment of costs ordered by the court, despite having sufficient access to financial resources. This was thoroughly abusive and cannot be countenanced.

Costs

We therefore order that the balance security of S$243,046.67 held in court shall be released to the respondents forthwith in partial satisfaction of the outstanding cost orders.

Costs

We also order a stay of CA 26 for four weeks from the date hereof pending payment of the balance outstanding costs in the sum of S$390,463.57. We arrived at this figure using the respondent’s calculations, which took into account the accrued interest:

Costs

The purpose of providing security for costs, which was summarised by the High Court in SW Trustees Pte Ltd v Teodros Ashenafi Tesemma [2023] 5 SLR 1484 at [20]–[22], is three-fold: (a) to protect the defendant, who cannot avoid being sued, by enabling him to recover costs from the plaintiff out of a fund within the jurisdiction in the event that the claim against him by the plaintiff proves to be unsuccessful; (b) to ensure, within the limits of protecting the defendant, that the plaintiff’s ability to pursue his claim is not stifled; and (c) to maintain a sense of fair play between the parties even amidst the cut-and-thrust of litigation.

Costs

In Yuanta Asset Management International Ltd v Telemedia Pacific Group Ltd [2017] SGCA(I) 2, this court observed at [3]–[4] that further security may be provided whenever it is just to do so; the court may take into account any circumstances for the purpose of making this determination. This includes the financial means of the appellant, foreign residency, the merits of the appeal, the conduct of the appellant (for example, whether he has acted in a manner which shows a clear intention to avoid potential liability for costs), potential difficulties in enforcing a judgment for costs including delay and expense and whether the application for further security is made promptly.

Costs

In our judgment, the conduct of the appellant (which has been examined in some detail above) has amply demonstrated that the respondent is likely to face continued difficulties in recovering costs from the appellant (who has access to financial resources to pay), in the event that it prevails in the appeal. We therefore order the appellant to furnish additional security of S$100,000 for the appeal within four weeks from the date hereof, which would result in a total amount of S$120,000 as security for costs for the appeal.