Security for Costs in Singapore (2026): When Courts Order It, How to Apply, and Strategic Steps for Defendants & Claimants

Security for costs Singapore applications remain a sharp strategic lever in 2026, as cross-border commercial claims continue to rise and the growing use of third-party litigation funding reshapes how defendants, claimants and funders assess their exposure. This guide explains when a Singapore court or arbitral tribunal will order security for costs, how to make or oppose an application, and the tactical steps each stakeholder should consider. It is written for in-house counsel, defendants, litigation funders, foreign claimants and their advisers who need to decide whether to pursue or resist security, and to implement the procedural steps that follow. Throughout, we anchor legal propositions to primary sources and highlight the practical differences between court and arbitration practice.

Last updated: 30 Sep 2026. This article is provided for general information only and does not constitute legal advice. Readers should confirm the latest court practice and obtain tailored advice before acting.

What this guide covers and why 2026 matters

A security for costs order is a court or tribunal direction requiring a claimant to provide funds or a guarantee to cover the defendant’s legal costs if the claim ultimately fails. In Singapore, the topic sits at the intersection of civil procedure, arbitration practice and, increasingly, litigation funding policy. The expansion of permitted third-party funding in Singapore has raised the profile of security for costs practice because funded and foreign claimants now feature more prominently in commercial litigation, and defendants want assurance that a favourable costs order will actually be recoverable.

Two forums matter. In court proceedings the power derives from the Rules of Court and is shaped by established authority. In arbitration seated in Singapore, tribunals derive the power from the applicable arbitral rules and the statutory framework. The two forums share underlying principles but differ materially on procedure, timing and enforceability, differences we set out in a dedicated comparison later in this guide.

1. What is security for costs? Definition, purpose and policy

Security for costs is a protective mechanism. Where a defendant faces a real risk that it will win the case but be unable to recover its costs from the claimant, it may apply for an order requiring the claimant to put up security, typically a payment into court, a bank guarantee or funds held in escrow. If the claim succeeds, the security is released back to the claimant; if it fails, the defendant can look to the security to satisfy a costs order.

In the courts, the power to order security for costs is provided for in the Rules of Court 2021, published on Singapore Statutes Online, and the principles have been developed through High Court and Court of Appeal decisions available through the Judiciary of Singapore. The policy rationale is straightforward: a defendant compelled into litigation should not be left with an unenforceable costs judgment against an impecunious or elusive claimant.

Policy trade-offs

The countervailing concern is access to justice. An order for security must not be used as an instrument of oppression that stifles a genuine claim brought by a claimant of limited means. Singapore courts therefore weigh the defendant’s legitimate need for protection against the risk that an order will shut out a bona fide litigant. This balancing exercise runs through the reported decisions and explains why the court retains a broad discretion rather than applying a mechanical test. Academic commentary from the National University of Singapore Faculty of Law usefully frames these trade-offs in the context of cross-border enforcement, where the tension between protection and access is at its most acute.

2. When will a Singapore court order security for costs? Triggers and factors

The question of when a court will order security for costs is answered by reference to both the Rules of Court and the discretionary factors the courts have identified. There is no single trigger; instead, the court considers a range of circumstances and asks, overall, whether it is just to require security. The most commonly cited gateways include the claimant being ordinarily resident outside the jurisdiction, and the claimant being a company in respect of which there is credible testimony that it will be unable to pay the defendant’s costs if the defence succeeds.

In assessing a security for costs Singapore application, the court will typically weigh factors such as:

• Residence and assets of the claimant. A claimant based abroad with no readily enforceable assets in Singapore presents a heightened enforcement risk.
• Impecuniosity. Where a corporate claimant appears unable to meet an adverse costs order, this weighs towards security, subject to the access-to-justice caveat.
• Risk of dissipation. Evidence that the claimant is moving or concealing assets strengthens the application.
• Bona fides and merits. The court may take a broad view of the strength of the claim, though it will not conduct a mini-trial.
• Funded claims. The presence of a third-party funder, and the terms on which it has agreed to fund, can be relevant both to the risk and to the appropriate response.
• Conduct and timing. Delay in applying, or conduct by the defendant that has contributed to the claimant’s position, may count against an order.

These principles are drawn from the body of High Court and Court of Appeal authority accessible through the Judiciary of Singapore judgments database, and readers should consult the current decisions for the precise formulation applied in their circumstances.

Common fact patterns: foreign claimants and corporate insolvency

Two fact patterns dominate practice. The first is the foreign claimant, an individual or company suing in Singapore with no meaningful local presence. Here the defendant’s concern is not merely the claimant’s solvency but the practical difficulty and cost of enforcing a Singapore costs order abroad. The second is the corporate claimant in financial distress, where the risk is that any costs order will rank as an unsecured claim against an insolvent estate. In both patterns the security for costs analysis turns on realistic prospects of recovery, not theoretical solvency.

Evidence required to establish risk

An applicant must put credible evidence before the court. This usually means an affidavit exhibiting company searches, financial statements or accounts, correspondence indicating an inability to pay, evidence of the claimant’s foreign residence, and where relevant, material suggesting asset dissipation or the absence of enforceable local assets. Bald assertions of impecuniosity will not suffice; the court expects a properly documented case that identifies the specific enforcement risk the defendant faces.

Timeframe for application

Timing matters. An application made promptly, before significant costs have been incurred, is more likely to succeed and to be proportionate. A late application, brought on the eve of trial after the claimant has already committed substantial resources, invites scrutiny and may be refused or limited. Defendants should therefore assess the need for security early, ideally once pleadings have crystallised the shape of the dispute and the claimant’s position is apparent.

3. Procedure: How to apply for a security for costs order in the High Court

The security for costs procedure in the High Court follows a familiar interlocutory pattern, but the details reward careful preparation. The essential steps are set out below, and readers should verify current filing requirements against the Supreme Court of Singapore practice directions and the Rules of Court on Singapore Statutes Online before filing.

1. Assemble the evidence. Before drafting, gather the material that establishes the enforcement risk, company searches, accounts, evidence of foreign residence, and any indications of insolvency or dissipation.
2. Prepare the application. The application is made by summons (interlocutory application) under the Rules of Court, supported by an affidavit setting out the grounds and exhibiting the supporting evidence.
3. Draft the supporting affidavit. The affidavit should identify the claimant’s status, quantify the costs to be secured with a reasoned estimate, explain the enforcement risk, and address the balance of justice.
4. Specify the quantum and form. State the amount of security sought and the proposed mechanism, payment into court, bank guarantee or escrow, and justify the figure by reference to a costs estimate for the relevant stage of proceedings.
5. Serve the application. Serve on the claimant in accordance with the Rules, allowing time for a responding affidavit.
6. Attend the hearing. The application is heard inter partes in the ordinary course. Where urgency arises, for example, an imminent step that would prejudice the defendant, expedited relief may be sought, and the court will expect full and frank disclosure.

Security for costs procedure: forms and drafting tips

Precision in drafting improves outcomes. State the quantum sought with a clear basis; courts respond poorly to inflated or unsupported figures. Break the costs estimate down by phase so the court can, if minded, order security for a defined stage rather than the whole action. Address the access-to-justice point head-on: pre-empt the argument that security would stifle the claim by showing either that the claimant can obtain funds or that the sum sought is modest relative to the claimant’s resources. Always confirm the current form names and filing mechanics against the Supreme Court practice directions, as these are updated from time to time.

Using undertakings and guarantees

Security need not always take the form of cash paid into court. A first-class bank guarantee is frequently acceptable and is often preferable to a claimant because it does not tie up working capital. Undertakings from a solvent parent company or funder may also be offered, though the court will scrutinise the covenant strength behind any such undertaking. Where a claimant proposes an alternative form of security, the defendant should assess whether the proposed instrument is genuinely enforceable in Singapore without further litigation.

Sample order wording (short form)

A typical order will provide that the claimant furnish security in a stated sum, in a stated form, by a stated date, with the proceedings stayed in the meantime and liable to be struck out or dismissed if the security is not provided. The order will usually reserve liberty to apply for further security as the action progresses and costs mount. This is illustrative only; the precise wording should be settled by reference to the Supreme Court’s forms and current practice.

4. Opposing an application: tactical and evidential responses for claimants and funders

A claimant facing a security for costs Singapore application has several avenues of resistance, and the strongest responses are evidence-led rather than merely argumentative. The overarching theme is to demonstrate that an order is either unjustified on the facts or would work an injustice by stifling a genuine claim.

Grounds commonly deployed to oppose include:

• Genuine local assets. Evidence that the claimant holds enforceable assets within the jurisdiction undercuts the enforcement-risk rationale.
• Bona fide claim with reasonable prospects. While the court will not try the merits, a plainly meritorious claim weighs against an order that would stifle it.
• Stifling and access to justice. Evidence that an order would prevent a legitimate claim from proceeding is often decisive.
• Delay and conduct. A late application, or one prompted by the defendant’s own conduct, may be refused.
• Waiver or estoppel. Where the defendant has acted inconsistently with an intention to seek security, the claimant may resist on that basis.
• Offers of alternative security. Proposing a conditional or staged form of security can neutralise the application while preserving cash flow.

Funders’ evidence: funding agreements and solvency

Where a claim is funded, the funder’s position is central. The defendant may argue that the very existence of external funding demonstrates the claimant’s inability to meet costs, while the claimant may argue that a well-capitalised funder standing behind the claim reduces the enforcement risk. In practice, the claimant may need to disclose aspects of the funding arrangement, for example, whether the funder has agreed to meet an adverse costs order or has provided an after-the-event insurance policy. Evidence of the funder’s solvency and of any indemnity for costs can be a powerful answer to the application.

Note that under the Legal Profession (Professional Conduct) Rules, a lawyer must disclose to the court and other parties the existence of a third-party funding contract and the identity of the funder.

When to offer limited or alternative security

Tactically, a claimant who senses that some order is likely may seize the initiative by offering limited security, for example, security for a single phase of the proceedings, or a modest sum backed by a guarantee. A sensible offer can cap exposure, demonstrate good faith to the court, and remove settlement leverage the defendant might otherwise obtain from a contested application. Funders and claimants should model the cash-flow impact of each option before making any offer.

5. Security for costs in arbitration v court proceedings

Security for costs arbitration Singapore practice shares the same commercial logic as court practice but operates within a different procedural and enforcement framework. In arbitration seated in Singapore, the tribunal’s power to order security derives from the applicable institutional rules, such as the SIAC Rules published by the Singapore International Arbitration Centre, and from the statutory framework governing arbitration (the International Arbitration Act 1994 for international arbitration, or the Arbitration Act 2001 for domestic arbitration). The exercise of that power is more flexible and confidential than a court application, but it carries its own enforcement considerations.

SIAC and Singapore arbitration practice notes

Parties arbitrating under the SIAC Rules should consult the current rules text and any accompanying practice notes on the SIAC website to confirm the precise basis and procedure for a security application before the tribunal. Tribunals seated in Singapore generally have a wide discretion to order interim measures, including security for costs, but will apply the same underlying caution against stifling a genuine claim. The confidentiality of arbitration means that, unlike court practice, there is no publicly reported body of tribunal decisions to draw upon, so practitioners rely more heavily on the rules text and the tribunal’s own directions.

Drafting tribunal applications

An application to a tribunal should be framed within the procedural timetable and supported by focused evidence of the respondent’s exposure and the claimant’s inability to meet an adverse award on costs. Because the tribunal controls its own procedure, parties can often agree a bespoke security mechanism, a phased guarantee, for instance, that a court might be slower to fashion. Where enforcement of the tribunal’s order against a recalcitrant claimant may be needed, the applicant should consider at the outset how a court would be asked to assist.

6. Special focus: security for costs against foreign claimants and funded claims

Security for costs against foreign claimant scenarios are the classic use case, and the expanding use of litigation funding has added a further dimension. Where the claimant is based abroad, the defendant’s real concern is enforcement: even a clear Singapore costs order is of limited value if it must be enforced in a jurisdiction where recognition is uncertain, slow or expensive. This enforcement risk is often a decisive factor in favour of an order, though, on its own, mere foreign residence is not automatically conclusive, and the court will still weigh the overall justice of an order.

Enforcement and jurisdictional steps

When assessing a foreign claimant, defendants should map the enforcement landscape early. Does the claimant hold assets in Singapore or in a jurisdiction with a favourable reciprocal enforcement regime? Is there a realistic route to enforcing a costs order abroad, and at what cost? The weaker the enforcement position, the stronger the case for requiring security to be held within Singapore in a form, such as payment into court or a Singapore bank guarantee, that avoids any further cross-border enforcement step. Academic commentary from the National University of Singapore Faculty of Law provides useful doctrinal context on the enforcement risks that underpin these applications.

Funding disclosure and protective measures

Third-party funding in Singapore is permitted for prescribed categories of proceedings, including international arbitration and certain related court and mediation proceedings, with the categories set by the Ministry of Law by regulation. Lawyers acting for a funded party are subject to disclosure obligations under the professional conduct rules. Where a claim is externally funded, the terms of that funding, and in particular whether the funder has agreed to meet an adverse costs order, are increasingly material to a security application. Defendants dealing with funded foreign claimants should probe whether the funding arrangement includes an indemnity for costs or after-the-event insurance, and whether the funder is itself of substance.

Greater transparency around funding can make it easier for defendants to calibrate their applications and, in some cases, may reduce the need for security where a substantial funder stands behind the claim. Practitioners should consult the Ministry of Law materials for the current scope of permitted funding and the applicable disclosure requirements.

7. Practical checklists, templates and sample evidence bundle

Preparation is the difference between a persuasive application and one that founders on inadequate evidence. The following checklist distils the essentials for both sides of a security for costs Singapore dispute.

Ten-point checklist for defendants applying for security:

1. Identify the claimant’s residence, corporate status and asset position through searches.
2. Gather documentary evidence of impecuniosity, foreign residence or dissipation.
3. Assess the enforcement landscape for any costs order.
4. Estimate recoverable costs by phase and settle a defensible quantum.
5. Decide the appropriate form of security to request.
6. Draft the supporting affidavit exhibiting all evidence.
7. Consider timing, apply early to maximise proportionality.
8. Address the access-to-justice point pre-emptively.
9. Prepare proposed order wording, including phased and further-security provisions.
10. Confirm current forms and filing steps against the Supreme Court practice directions.

Checklist for claimants and funders opposing:

• Evidence of enforceable local assets or a substantial funder.
• Material showing the claim is bona fide and has real prospects.
• Evidence that an order would stifle a genuine claim.
• Grounds based on delay, conduct, waiver or estoppel.
• A costed proposal for limited or alternative security.
• Where funded, appropriate disclosure of any costs indemnity or insurance.

A sample evidence bundle should be indexed logically: company searches first, then financial statements, then correspondence, then residence and enforcement evidence, with the affidavit cross-referencing each exhibit. A timeline matrix running from application through service to hearing and order helps both the court and the client understand the procedural path.

8. Costs consequences, security release and enforcement of the order

Once security is ordered, its life cycle must be managed. If the claim succeeds, the security is released to the claimant. If it fails, the defendant looks to the security to satisfy the costs order, avoiding the risk that made the application necessary in the first place. The court will usually deal with the mechanics of release and application of the security when it deals with the final costs order.

Variation and discharge

An order for security is not immutable. As proceedings progress and costs estimates change, either party may apply to vary the amount, a defendant seeking further security for later phases, or a claimant seeking a reduction where circumstances have changed. Where the basis for the original order falls away, for example, the claimant establishes substantial local assets, an application to discharge may be appropriate. These applications are governed by the same discretionary principles that inform the original order.

Enforcement against guarantors

Where security took the form of a bank guarantee or a third-party undertaking, enforcement on a failed claim runs against the guarantor. This is why the covenant strength and enforceability of any guarantee should be assessed at the outset: a guarantee from an institution of doubtful standing, or one drafted so as to require further litigation to call, undermines the protection the order was meant to provide. Funds paid into court, by contrast, are directly available and avoid this risk entirely.

Conclusion, tactical recommendations and next steps

Security for costs Singapore practice rewards early, evidence-led decision-making. Defendants should assess enforcement risk as soon as the shape of the claim is clear, apply promptly, and request a defensible, phased quantum backed by proper evidence. Claimants should prepare to demonstrate local assets, genuine merits and, where relevant, a substantial funder, and should consider offering limited or alternative security to neutralise a contested application. Funders should anticipate that their arrangements may come into focus and should be ready to disclose costs indemnities where doing so strengthens the claimant’s position. In every case, the choice between court and arbitration will shape the procedure, the acceptable forms of security and the enforcement route.

Because the applicable rules and practice directions are periodically updated, parties should verify the current position against the primary sources and take specific advice on their facts.

Sources

1. Singapore Statutes Online (Attorney-General’s Chambers)
2. Judiciary of Singapore, Judgments and Practice Directions
3. Supreme Court of Singapore
4. Singapore International Arbitration Centre (SIAC), Rules & Resources
5. Ministry of Law (Singapore)
6. Law Society of Singapore
7. Singapore Academy of Law
8. National University of Singapore, Faculty of Law