Owner of the vessel(s) CHLOE V (IMO No. 9457452) v UBS AG

The appellant, a British Virgin Islands special purpose vehicle, owned the vessel Chloe V. The respondent bank, UBS AG (successor to Credit Suisse AG), sued in HC/ADM 102/2021 for sums due under a facilities agreement secured by a mortgage on the vessel, arrested it and obtained summary judgment, while the vessel was sold by the court. The appellant pursued a counterclaim alleging that the bank had wrongly refused a letter of quiet enjoyment. Throughout the action the appellant ignored repeated demands for costs, was late in furnishing security of S$265,000 for its counterclaim, and later gave further security of S$60,000 by a solicitor's undertaking.

After a trial in November 2024 the High Court dismissed the counterclaim in The "CHLOE V" [2025] SGHC 142 and fixed costs at SGD 650,000 plus disbursements in four currencies, with interest at 5.33% per annum. The appellant filed CA/CA 26/2025 against that decision but did not pay the costs despite further demands. The respondent applied in Summons No 32 of 2025 for a stay or dismissal of the appeal pending payment of the outstanding costs, and for further security for the costs of the appeal.

1. Whether the appeal should be stayed or dismissed under O 21 r 2(6) of the Rules of Court 2021 pending payment of the outstanding costs
2. What framework governs such stay applications and where the burden of explanation lies
3. Whether the appellant should be ordered to furnish further security for the costs of the appeal

The court explained that O 21 r 2(6) of the Rules of Court 2021 gives an express power to stay or dismiss proceedings where a party refuses or neglects to pay costs, so the restrictive pre-2021 approach based on inherent powers, which required special circumstances, no longer applies. Agreeing with Huttons Asia Pte Ltd v Chen Qiming [2024] 2 SLR 401, it set out a framework. The respondent need only show non-payment. The burden then shifts to the appellant to explain why the costs remain unpaid and why a stay should not follow, since only the appellant knows its finances. An appellant pleading lack of means must explain how its litigation has been funded, and it is no answer that third-party funding was voluntary or that the respondent should enforce the order. A truly impecunious appellant would not be refusing or neglecting to pay, and its appeal should usually proceed unless plainly hopeless. Even where refusal or neglect is shown, the court keeps a narrow discretion to let an appeal proceed where justice strongly demands it. Any stay should be time-limited, with automatic striking out if payment is not made.

Applying this, the appellant never claimed financial difficulty and had shown it could marshal funds from its controllers. Its complaints about the respondent's interest calculation were contrived: a breakdown had been provided, the foreign currency sums were not disputed, the discrepancy was minor and the appellant's own arithmetic was wrong. The court did agree that the security already in court should be credited. Its conduct amounted to refusal or neglect and would also have met the higher threshold for inherent powers.

On further security, the appellant's history showed the respondent would likely face continued difficulty recovering costs, so further security was just.

The Court of Appeal allowed the application without an oral hearing. It ordered the balance security of S$243,046.67 held in court to be released to the respondent, stayed the appeal for four weeks pending payment of the balance outstanding costs of S$390,463.57, £85,900, US$83,626.76 and CHF 93,875.12, and ordered further security of S$100,000 for the appeal. If the payment or security is not made within four weeks, the appeal is deemed struck out automatically. The appellant was ordered to pay the costs of the application, inclusive of disbursements, forthwith.