W. POWER GROUP EOOD v MINGYANG WIND POWER (INTERNATIONAL) CO. LTD

Facts

Ming Yang Wind Power (International) Co. Ltd, a Hong Kong-incorporated wind turbine manufacturer, applied by summons filed on 30 May 2023 for security for costs against W. Power Group EOOD, a Bulgarian company, in SIC/OA 2/2023. The case had been transferred to the Singapore International Commercial Court, with the transfer ordered on 7 March 2023.

The claimant alleges that the parties entered into a joint venture agreement on 3 July 2011 to develop two wind farm projects through a joint venture company, and that the defendant breached it by failing to secure financing for the second project and withdrawing a performance guarantee, causing a claimed loss of profits of €37.5 million. The defendant denies breach; it says the project became unviable after Bulgarian regulatory changes and was abandoned by agreement in 2012, and it pleads estoppel, waiver, time bar and lack of standing.

The defendant sought S$80,000 as security up to trial. It relied on the claimant's residence abroad, its 2012 accounts showing liabilities exceeding receivables, and declarations that it had carried on no business in 2018, 2019 and 2020. The claimant said its receivables exceeded likely costs, that it was a special purpose vehicle whose impecuniosity was caused by the defendant's breach, and that the application was late.

Issues

1. Whether security for costs should be ordered under O 9 r 12 of the Rules of Court 2021 and s 388 of the Companies Act 1967.
2. Whether delay in applying, or the risk of stifling a meritorious claim, should defeat the application.
3. What amount of security was appropriate.

Holding

The SICC allowed the application in part, ordering the claimant to provide security of S$70,000, rather than the S$80,000 sought, for the defendant's costs up to trial within seven days, staying further proceedings until it is given, granting liberty to apply for further security, and ordering the claimant to pay the costs of the application.

Reasoning

The claimant's residence outside Singapore was undisputed, and the requirements of s 388 were clearly made out: the 2012 accounts showed it was then insolvent, and the evidence suggested it had not traded since. Its counsel properly conceded that Bulgaria's membership of the Choice of Court Convention did not help. Because the factors were not evenly balanced, the court did not need to choose between the competing authorities on that situation.

There was no substantial delay: only pleadings had been filed, and the claimant was told of the application at the first case management conference. The court accepted that security should be refused if the defendant caused the claimant's impecuniosity or the application would stifle a legitimate claim, but no evidence showed either; the claimant merely repeated its pleaded allegations, and its own statement of claim described it as an international developer rather than a special purpose vehicle.

On quantum, the defendant estimated its costs to trial at S$325,000. Costs after transfer would be assessed on the SICC regime and likely be higher, while the Practice Directions guidance gave pre-trial costs between S$25,000 and S$70,000. Considering the complexity of the matter, S$70,000 was appropriate.

From the judgment