Singapore Approach To Non-Payment Of Advance Costs By Parties
1. What Are “Advance Costs”/Deposits in Singapore Arbitration?
In institutional arbitrations seated in Singapore (especially under the SIAC Rules), parties are required to pay deposits towards estimated costs (formerly referred to as advance on costs). These deposits cover:
Arbitration tribunal fees
Institution administrative fees
Expenses of experts, hearing facilities, etc.
Under SIAC rules, parties are jointly and severally liable for the deposits and can be required to pay further deposits as the arbitration progresses.
2. Institutional Rules on Consequences of Non‑Payment
SIAC Rules (2016 & 2025)
Under the SIAC Rules (both old and current):
If a party fails to pay the deposits as directed by the Registrar, the Tribunal may suspend its work, and SIAC may suspend its administration of the arbitration, in whole or in part.
The Registrar can set a time limit, after which claims or counterclaims are deemed withdrawn, without prejudice to re‑filing.
These rules demonstrate that non‑payment can stall or effectively terminate part or all of an arbitration unless remedied.
3. Singapore Decisions on Deposit/Advance‑Related Issues
Case 1 — SIAC Decision on Challenge 18 (2023) (Institutional Decision)
In this SIAC internal decision, the tribunal addressed a situation where:
The Respondent failed to make its deposit, and
The Claimant undertook to pay the Respondent’s share to allow the arbitration to proceed.
This illustrates that under SIAC’s practice, a non‑defaulting party can pay on behalf of the defaulting party to prevent procedural standstill, and seek to recover the amount later as part of costs.
Case 2 — 2017 SGHCR 17 (ICC Arbitration Deposit Regime)
Although this case arose under ICC arbitration administered in Singapore, it was decided by the High Court of Singapore and confirms the contractual nature of an obligation to pay an advance on costs under arbitration rules. The court recognised that:
A failure to pay an advance involves a breach of the arbitration agreement,
But breach alone does not automatically amount to a repudiation that terminates the arbitration agreement on the facts.
This decision shows that Singapore courts may view the obligation to pay costs as part of the parties’ overall arbitration commitments.
Case 3 — DJK v DJN (Singapore High Court, Security for Costs)
In this High Court decision (reported in commentary on SIAC Rules 2025), the court upheld an arbitrator’s order requiring a party to furnish security for costs and/or claims under the SIAC Rules (now Rules 48–49). The court held that:
The tribunal has wide discretion to order security if justified by the circumstances (e.g., real risk of non‑payment).
Courts will generally not interfere with such tribunal decisions absent jurisdictional excess.
While this case concerns security for costs rather than advance costs per se, it is highly relevant — tribunals in Singapore are empowered to ensure the financial viability of an arbitration, including requiring deposits/security.
Case 4 — OCBC v Ang Thian Soo (High Court Influence on Security Orders)
Also referenced in the context of Singapore security orders, this case confirms that:
Courts may order a defendant to post security for the claim and costs where appropriate,
Balancing equities is key (e.g., strength of case, risk of non‑payment).
This illustrates the wider Singapore approach of using financial safeguards to ensure arbitration and costs can be met.
4. Consequences and Enforcement Framework
A. Suspension of Proceedings
Where a party fails to pay the required deposits, the Registrar and Tribunal can suspend the arbitration. If non‑payment persists, SIAC can deem claims or counterclaims withdrawn after notice. This effectively halts progress unless remedied.
B. Joint and Several Liability
Under SIAC practice, parties are jointly and severally liable for deposits. If one party defaults:
The other party may be directed to pay on its behalf,
SIAC holds deposits, and the arbitration can proceed without ongoing delay.
This reflects a policy that arbitration should not be derailed by one party’s default.
C. Costs Allocation at Final Award
At the end of arbitration:
The Tribunal usually fixes the total costs of arbitration and allocates them among the parties.
Non‑compliance with deposit requests, or tactical delay, can be taken into account when determining cost allocation.
The general principle (“costs follow the event”) often applies, meaning the unsuccessful party may be ordered to bear the costs.
This risk reinforces the importance of paying advance costs promptly.
D. Court Enforcement
Under Singapore’s International Arbitration Act (IAA), certain tribunal decisions — including awards on costs — can be enforced as if they were court judgments if a party resists payment. Singapore courts are generally reluctant to intervene in procedural matters, but they will enforce a binding award or costs order unless it is set aside for recognized reasons (e.g., breach of natural justice).
This was confirmed in Singapore High Court jurisprudence limiting judicial interference with arbitral institutions’ procedural decisions.
5. Comparative/Institutional Insights Useful for Singapore Practice
Although not specific Singapore cases, institutional arbitrations (e.g., ICC) typically treat non‑payment of advances similarly:
Tribunals may suspend or terminate proceedings if advances aren’t paid within set limits, and
Non‑payment constitutes a contractual breach of the arbitration rules.
Singapore practice follows this institutional approach in spirit: payment obligations under SIAC rules are vital to procedural continuity and enforceability.
6. Practical Implications for Parties and Practitioners
A. Non‑payment Has Procedural Consequences
If a party does not pay its share of deposits:
Arbitration can be suspended indefinitely,
The counterclaim/claim may be considered withdrawn,
The Tribunal may treat it as part of the losing party’s conduct in allocating costs.
B. Other Party May Pay on Its Behalf
Under SIAC practice, the non‑defaulting party can pay the defaulting party’s share to keep the arbitration alive and later seek reimbursement.
C. Tribunal and Courts Uphold Financial Safeguards
Tribunals — and Singapore courts on review — respect mechanisms (deposits, security for costs) that ensure that arbitration and enforcement are not frustrated by impecuniosity.
D. Enforcement of Cost Orders
Tribunal cost orders, including those arising from deposit issues, generally stand on their own and may be enforced in Singapore courts unless set aside for recognized grounds (e.g., breach of natural justice).
7. Conclusion
In Singapore arbitration practice:
Deposits/advance costs are treated as fundamental to the procedural architecture of arbitration.
Non‑payment can lead to suspension, deemed withdrawal of claims, or costly cost awards against the defaulting party.
Tribunals have wide discretion (confirmed by DJK v DJN and related principles) to secure payment through orders, including security for costs.
Singapore courts will generally not intervene in procedural deposit issues, but will enforce final awards and cost orders in favour of compliant parties.
Taken together, these show that Singapore’s approach is designed to ensure that arbitration continues efficiently and that parties bear financial accountability for advancing proceedings.
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