State Courts Practice Directions

PART XXII: Business-to-Business Debt Claims

144. Pre-action protocol for business-to-business debt claims

Definitions of “business” and “business-to-business claim”

(1) For the purposes of this Practice Direction —

“business entity” includes —

(a) a sole proprietorship;

(b) a partnership;

(c) a company, including a foreign company;

(d) a limited partnership; and

(e) a limited liability partnership.

“business-to-business claim” means a claim by a business entity (being the creditor) against another business entity (being the debtor) for a contractual debt that falls within the following categories:

(a) a claim for payment for the sale of goods or the supply of services (except for construction and renovation services);

(b) a claim for payment for rental or for the hire-purchase of goods;

(c) a claim under a banking, overdraft, or other credit facility; and

(d) a claim under a guarantee.

Compliance with pre-action protocol

(2) This Practice Direction and the pre-action protocol (“the Protocol”) set out in Appendix L to these Practice Directions apply to all actions for business-to-business claims that are commenced in the State Courts from 4 May 2020 onwards. The previous Protocol as set out in Practice Directions Amendment No. 6 of 2019 shall continue to apply for actions commenced prior to 4 May 2020.

(3) Except as otherwise provided by the Protocol, a creditor in a business-to-business claim must comply with the Protocol before commencing Court proceedings.

(4) All creditors and debtors in a business-to-business claim must comply in substance and spirit with the terms of the Protocol.

(5) A breach by one party will not exempt the other parties in the action from complying with the Protocol insofar as they are able to do so.

(6) The Protocol operates in addition to the simplified process in O 108 of the Rules of Court (Cap 322, R 5), but does not affect the small claims process under the Small Claims Tribunals Act (Cap 308).

Sanctions for non-compliance with Protocol

(7) In exercising its discretion as to costs, the Court will consider whether the Protocol has been complied with.

(8) If non-compliance with the Protocol has led to unnecessary costs, the Court may —

(a) disallow in part or in whole the costs claimed by the defaulting party, even if the defaulting party has succeeded in the action;

(b) order the defaulting party to pay to the other party or parties their costs of the proceedings, whether in whole or in part; and/or

(c) order that the defaulting party pay the costs above on an indemnity basis.

(9) The Court will consider whether the Protocol has been complied with when exercising its discretion in determining the amount of interest payable (except when it has been agreed between the parties), and may —

(a) award a party that has succeeded in the action and that has complied with the Protocol interest from a period earlier than the date of the writ; and

(b) deprive a party that has succeeded in the action but that has not complied with the Protocol interest in respect of any period as the Court deems fit.

(10) Where there are good reasons for non-compliance with the Protocol, including such cases of “exceptional urgency” as listed at paragraph 11A of the Protocol, the Court will not impose any sanction against the defaulting party.

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