Searching Case Laws & Precedent on Legal Query.....!
Analysing the retrieved Case Laws
Scanned Judgements…!
Searching Case Laws & Precedent on Legal Query.....!
Analysing the retrieved Case Laws
Scanned Judgements…!
Costs on Indemnity Basis - Generally Rare Exception: The prevailing principle across multiple cases is that costs awarded on an indemnity basis are only permitted in rare, exceptional circumstances. This is emphasized in several judgments, which state that indemnity costs are not the norm and are reserved for specific, extraordinary situations ["NG HAN SENG vs SCOTCH LEASING SDN BHD"], [](https://supremetoday.ai/doc/judgement/MYS_MARSDENLR_2003_1738), ["NG HAN SENG & ORS vs SCOTCH LEASING SDN BHD - Court Of Appeal"], [](https://supremetoday.ai/doc/judgement/MY_MLRA_2003_2_MLRA_103), ["Hanson Quarry Products Sdn Bhd & Ors vs Chong Boon Heng & Ors"], [](https://supremetoday.ai/doc/judgement/MY_MLRA_2015_3_MLRA_587), ["Abdul Latiff bin Hj Mohaideen vs Measat Broadcast Network Systems Sdn Bhd - High Court"], ["CHINA IDEA DEVELOPMENT LIMITED vs OOI KEE LIANG & ORS AND ANOTHER CASE - High Court"], ["VERTEX SUPERIEUR SDN BHD & ANOR vs SHELL MALAYSIA TRADING SDN BHD (ENCL 8) - High Court"], ["NG KIM HWA vs NG SEE CHOW"], ["NG KIM HWA vs NG SEE CHOW & ORS - High Court"], [](https://supremetoday.ai/doc/judgement/MY_MLRH_1993_5_MLRH_579).
Criteria for Awarding Indemnity Costs: Indemnity costs are typically awarded when proceedings are scandalous, vexatious, malicious, oppressive, or mala fide, or when a party prolongs litigation unnecessarily. Courts exercise discretion and do not readily grant indemnity costs unless clear exceptional circumstances are demonstrated ["CHINA IDEA DEVELOPMENT LIMITED vs OOI KEE LIANG & ORS AND ANOTHER CASE - High Court"], ["VERTEX SUPERIEUR SDN BHD & ANOR vs SHELL MALAYSIA TRADING SDN BHD (ENCL 8) - High Court"], ["NG KIM HWA vs NG SEE CHOW"], ["NG KIM HWA vs NG SEE CHOW & ORS - High Court"], [](https://supremetoday.ai/doc/judgement/MY_MLRH_1993_5_MLRH_579).
Specific Cases and Limitations: Several cases mention that indemnity costs are rarely awarded beyond the standard or costs on the indemnity basis where appropriate, indicating that such awards are exceptional and not the default ["NG HAN SENG vs SCOTCH LEASING SDN BHD"], ["NG HAN SENG & ORS vs SCOTCH LEASING SDN BHD - Court Of Appeal"], ["Hanson Quarry Products Sdn Bhd & Ors vs Chong Boon Heng & Ors"], [](https://supremetoday.ai/doc/judgement/MY_MLRA_2003_2_MLRA_103), ["CHINA IDEA DEVELOPMENT LIMITED vs OOI KEE LIANG & ORS AND ANOTHER CASE - High Court"]. For example, courts have explicitly dismissed claims for indemnity costs where no exceptional circumstances exist ["VERTEX SUPERIEUR SDN BHD & ANOR vs SHELL MALAYSIA TRADING SDN BHD (ENCL 8) - High Court"].
Legal Principles Supporting Rare Allowance: The courts recognize that the principle of indemnity is a safeguard against unjustified or oppressive litigation costs, but its application is limited to extraordinary cases, such as malicious or vexatious proceedings, or where the conduct of a party justifies such an award ["NG HAN SENG vs SCOTCH LEASING SDN BHD"], ["CHINA IDEA DEVELOPMENT LIMITED vs OOI KEE LIANG & ORS AND ANOTHER CASE - High Court"], ["VERTEX SUPERIEUR SDN BHD & ANOR vs SHELL MALAYSIA TRADING SDN BHD (ENCL 8) - High Court"].
Analysis and Conclusion:The consistent theme across the provided sources is that costs on an indemnity basis are only granted in exceptional, rare circumstances. The courts emphasize that indemnity costs serve as a safeguard against abuse of process or malicious conduct, and are not awarded as a matter of routine. Therefore, the statement that costs on indemnity basis will only be allowed in rare cases is well-supported by the jurisprudence, which underscores the rarity and exceptional nature of such awards ["NG HAN SENG vs SCOTCH LEASING SDN BHD"], ["NG HAN SENG & ORS vs SCOTCH LEASING SDN BHD - Court Of Appeal"], ["Hanson Quarry Products Sdn Bhd & Ors vs Chong Boon Heng & Ors"].
In litigation, the issue of who pays the legal costs can significantly impact the outcome for parties involved. A common question arises: costs on indemnity basis will only be allowed in rare case? The answer is generally yes—courts typically award costs on the standard basis, reserving the more generous indemnity basis for truly exceptional situations. This blog post delves into the principles governing cost awards, drawing from established case law to explain why indemnity costs are rare and what might justify them.
Note: This is general information based on legal precedents and not specific legal advice. Consult a qualified lawyer for your situation.
Costs awarded on an indemnity basis are only granted in exceptional cases; such awards are rare and require specific circumstances demonstrating that the conduct or facts of the case justify deviation from the standard basis. OU YANG CHOW MIN vs GREEN VENTURE CAPITAL SDN BHD & ANOTHER CASE - 2022 MarsdenLR 1406TOYOTA TSUSHO (MALAYSIA) SDN BHD vs FOO TSEH WAN & ORS - 2023 MarsdenLR 582
Under the legal framework, courts exercise discretion but default to the standard basis for cost awards. If no specific basis is indicated, the standard basis applies. OU YANG CHOW MIN vs GREEN VENTURE CAPITAL SDN BHD & ANOTHER CASE - 2022 MarsdenLR 1406 For instance, on the standard basis, courts only allow costs proportionate to the issues, resolving doubts in favor of the paying party. Alcon Electronics Pvt. Ltd. VS Celem S. A. of FOS 34320 Roujan, France - 2016 8 Supreme 465
This conservative approach ensures fairness and prevents routine escalation of cost recovery. Mere losing a case does not trigger indemnity costs; something more is needed. OU YANG CHOW MIN vs GREEN VENTURE CAPITAL SDN BHD & ANOTHER CASE - 2022 MarsdenLR 1406TOYOTA TSUSHO (MALAYSIA) SDN BHD vs FOO TSEH WAN & ORS - 2023 MarsdenLR 582SEE TEOW KOON vs KIAN JOO CAN FACTORY BERHAD & ORS - 2016 MarsdenLR 877
Indemnity costs allow recovery of all costs except those unreasonably incurred or unreasonable in amount, with doubts resolved in favor of the receiving party. TOYOTA TSUSHO (MALAYSIA) SDN BHD vs FOO TSEH WAN & ORS - 2023 MarsdenLR 582ECO HORIZON SDN BHD vs PENGHUNI-PENGHUNI ARULMIGU KUIL SRI MAHA MUTHU MARIAMMAN BATU KAWAN SEBERAN.... - 2022 MarsdenLR 1009GLOBE ENGINEERING SDN BHD vs BINA JATI SDN BHD - 2010 MarsdenLR 83 However, this is an exceptional power of the court, not to be exercised lightly. OU YANG CHOW MIN vs GREEN VENTURE CAPITAL SDN BHD & ANOTHER CASE - 2022 MarsdenLR 1406
Courts repeatedly stress that indemnity awards are for rare cases, often involving:- Misconduct or bad faith.- Unreasonable or egregious conduct.- Other circumstances that make standard costs inadequate.
The phrase rare case or exceptional circumstances is consistently used in judgments. ECO HORIZON SDN BHD vs PENGHUNI-PENGHUNI ARULMIGU KUIL SRI MAHA MUTHU MARIAMMAN BATU KAWAN SEBERAN.... - 2022 MarsdenLR 1009GLOBE ENGINEERING SDN BHD vs BINA JATI SDN BHD - 2010 MarsdenLR 83
While courts have discretion, it is constrained: indemnity costs are not the norm. Unless the case involves unreasonable or malicious conduct, the default remains standard basis. OU YANG CHOW MIN vs GREEN VENTURE CAPITAL SDN BHD & ANOTHER CASE - 2022 MarsdenLR 1406TOYOTA TSUSHO (MALAYSIA) SDN BHD vs FOO TSEH WAN & ORS - 2023 MarsdenLR 582
In one case, costs were assessed on an indemnity basis where a defendant was awarded 60% of its costs, highlighting that even when granted, they are tailored. Peter Beck Und Partner Vermogensverwaltung Gmbh VS Prakash Industries Limited - 2023 Supreme(Del) 514 Similarly, in enforcing foreign judgments, costs on indemnity basis were considered but tied to specific contractual or procedural grounds. Alcon Electronics Pvt. Ltd. VS Celem S. A. of FOS 34320 Roujan, France - 2016 8 Supreme 465
Exceptional conduct is key. For example:- Contractual Guarantees: In a claim under a Guarantee/Indemnity, the court allowed summary judgment with costs, noting provisions for indemnity on a full indemnity basis against... costs whatsoever. However, this was linked to clear contractual wording, not routine practice. HANSON QUARRY PRODUCTS SDN BHD vs CHONG BOON HENG & ORS- Medical Negligence and Indemnity Schemes: Courts have clarified that indemnity under government schemes for failed sterilizations applies in rare procedural failures, but compensation requires proof of negligence—not mere failure. AMUTHA.J vs THE DIRECTOR - 2024 Supreme(Online)(MAD) 33345 In another negligence case involving uterine perforation, the insurer was held liable under a professional indemnity policy, with costs quantified at Rs. 10,000/-. Veenita Chandok VS Meera Sanghi- Foreign Judgments and Execution: When executing foreign decrees, costs on indemnity basis were awarded where agreements specified full indemnity basis, but courts scrutinized for triable issues. Abraaj Investment Management Ltd. VS Neville Tuli - 2015 Supreme(Bom) 1017TRADEMAN INTERNATIONAL PVT. LTD. VS DEBTS RECOVERY APPELLATE TRIBUNAL, ALLAHABAD - 2012 Supreme(All) 2585- Procedural Contexts: In partnership disputes or debt recovery, indemnity costs were referenced but not broadly applied without justification. Dinesh Narayan Jha And Anr. VS State Of Bihar - 2010 Supreme(Pat) 1902
These examples illustrate that while indemnity costs appear in varied contexts like guarantees, insurance, and international enforcement, they remain tied to exceptional factors such as explicit contracts, proven negligence, or procedural defaults. Mere negligence or ordinary litigation does not suffice. ECO HORIZON SDN BHD vs PENGHUNI-PENGHUNI ARULMIGU KUIL SRI MAHA MUTHU MARIAMMAN BATU KAWAN SEBERAN.... - 2022 MarsdenLR 1009
Courts recognize potential for indemnity costs in cases of bad faith, unreasonable resistance, or misconduct. However, ordinary conduct or negligence typically falls short. ECO HORIZON SDN BHD vs PENGHUNI-PENGHUNI ARULMIGU KUIL SRI MAHA MUTHU MARIAMMAN BATU KAWAN SEBERAN.... - 2022 MarsdenLR 1009
For instance, in foreign judgment enforcement under Section 44A CPC, costs were not deemed penalties but allowable if contractually provided, yet still exceptional. Alcon Electronics Pvt. Ltd. VS Celem S. A. of FOS 34320 Roujan, France - 2016 8 Supreme 465 The principle: Penalty normally means a sum payable to the State, not to a private claimant—Cost imposed on the basis of the indemnity is not a penalty. Alcon Electronics Pvt. Ltd. VS Celem S. A. of FOS 34320 Roujan, France - 2016 8 Supreme 465
In summary of case law:- Indemnity costs only in exceptional circumstances, rare overall. GLOBE ENGINEERING SDN BHD vs BINA JATI SDN BHD - 2010 MarsdenLR 83- Not full indemnity; limited to reasonable costs. GOLDEN STAR & ORS vs LING PEEK HOE & ANOR & ANOTHER APPEAL - 2024 MarsdenLR 740
Costs on an indemnity basis will only be allowed in rare cases where exceptional conduct or circumstances justify deviation from the standard basis. Courts adopt a cautious stance, prioritizing proportionality and fairness. OU YANG CHOW MIN vs GREEN VENTURE CAPITAL SDN BHD & ANOTHER CASE - 2022 MarsdenLR 1406TOYOTA TSUSHO (MALAYSIA) SDN BHD vs FOO TSEH WAN & ORS - 2023 MarsdenLR 582
Key Takeaways:- Default to standard basis; indemnity is exceptional.- Justify with evidence of bad faith or misconduct.- Review contracts for indemnity clauses, but courts still apply discretion.- In cross-border or specialized claims (e.g., medical, guarantees), rarity persists.
Understanding these nuances can help manage expectations in litigation. For tailored advice, engage a legal professional familiar with your jurisdiction's rules.
#IndemnityCosts, #LegalCosts, #CourtCosts
In the present case, the 1st and 3rd appellants were two months outside the time allowed whereas the 2nd appellant was seven months. ... The Appeal Learned counsel for the appellants admitted at the outset that the appellants' applications to set aside the JID in encls. 15 and 21 were filed outside the time allowed. However, he contended that the appellants' case had merits which would justify setting aside the JID. ... It cannot be challenged thus collaterally in any proceedings as regards its validity save in a very ....
In the present case, the 1st and 3rd appellants were two months outside the time allowed whereas the 2nd appellant was seven months. ... It cannot be challenged thus collaterally in any proceedings as regards its validity save in a very few rare exceptions ... ... With respect, we agreed with the learned counsel for the respondent that there was no defence on the merits and thereby we dismissed the appeal with costs. The order of the learned judge was affirmed. The deposit was ordered to be paid out to the respondent to ....
In the present case, the 1st and 3rd appellants were two months outside the time allowed whereas the 2nd appellant was seven months. ... & Indemnity at p. 0207 of the appeal record. ... It cannot be challenged thus collaterally in any proceedings as regards its validity save in a very few rare exceptions ... ... With respect, we agreed with the learned counsel for the respondent that there was no defence on the merits and thereby we dismissed the appeal with costs. The order of the learned judge was aff....
In the present case, the 1st and 3rd appellants were two months outside the time allowed whereas the 2nd appellant was seven months. ... Guarantee & Indemnity at p. 0207 of the appeal record. ... It cannot be challenged thus collaterally in any proceedings as regards its validity save in a very few rare exceptions ... ... With respect, we agreed with the learned counsel for the respondent that there was no defence on the merits and thereby we dismissed the appeal with costs. The order of the learned jud....
Can Plaintiff Claim For Costs On An Indemnity Basis Against 1st Defendant? ... Defendant for an indemnity "on a full indemnity basis against... costs whatsoever which [Plaintiff] may sustain or incur in consequence of or arising from [Plaintiff's Supplies (GN)]". ... There are no words in O 59 r 22(1)(c)(i) RC similar to the wording in Order 42 r 12 RC which can authorize the court to give effect to cl 9(ii) by ordering costs on an indemnit....
Can Plaintiff claim for costs on an indemnity basis against 1st Defendant? ... on a standard or indemnity basis. ... ; and (d)whether the Plaintiff can claim from the 1st Defendant for costs of Enc. 21 on an indemnity basis pursuant to Clause 1(b). ... [48]Clause 1(b) has expressly stated that the Plaintiff can claim from the 1st Defendant for an indemnity “on a full indemnity basis against … #HL....
This limit is (in accordance with the indemnity principle) costs on the standard basis (or costs on the indemnity basis where appropriate) and applies both to the plaintiff in a same-party case and a third-party case - subject (possibly) to the exceptionally rare (and indeed, almost hypothetical) instance ... Put simply, it is unlikely that this court would have awarded the appellants damages in the quantum that went beyond #HL_STAR....
[61]For the reasons stated above, I allowed this Appeal and set aside the Sessions Court’s Order dated 8.11.2021 with costs of RM15,000/- in favour of the Appellant. ... The Appellant should be allowed to prove its case against the Respondent at the trial of this matter. I reiterate paragraphs 36 to 44 above that at this stage the Court should not decide the merits of the Appellant’s claim against the Respondent. ... [45]In the circumstances, it is unnecessary for me to analyse the cases cited by both learned counsel ....
This writ petition is partly allowed. No costs. Consequently, connected miscellaneous petition is closed. ... This is for the reason that in certain rare and exceptional cases, even if the operation had been performed in a proper manner, it can still fail. However, the indemnity scheme issued by the Government provides for payment of Rs.30,000/- for failure of sterilization. ... The petitioner's case is that notwithstanding the same, she conceived again and gave brith to a child. Seeking compensation, ....
The opposite parties shall also bear complainant’s costs of this complaint and the same is quantified at Rs. 10,000/- ... Complaint allowed. ... ******* ... Opposite party No. 2 – New India Assurance Company Ltd. subsequently added as opposite party to this case, admitted that opposite party No. 1 is insured with it under a professional indemnity insurance policy for Rs. 10 lakhs. However it denied any negligence on the part of the insured, Dr. ... The risk of perforation though rare, is very much ther....
The Defendant be awarded 60% of its costs of the case to be assessed on the indemnity basis if not agreed.
Where the amount of costs is to be assessed on the standard basis, the court will only allow costs which are proportionate to the matters in issue and will resolve any doubt which it may have as to whether costs were reasonably incurred or reasonable and proportionate in amount in favour of the paying party. Where the amount of costs is to be assessed on the indemnity basis, the court will resolve any doubt which it may have as to whether costs were reasonably incurred or were reasonable in amount in favour of the receiving party. The Part 44 of the Civil Procedure Rules (CPR) in the USA con....
The learned Judge granted costs as the purchase agency agreement expressly referred to indemnity “on a full indemnity basis”. The learned Judge considered the claim for compound interest to be determined at the time of obtaining the money judgment.
(c) such further order or other relief as the Court thinks fit.” “(a) the sum of US$486,200.44 as at 31 March 2002 and contractual interest thereon from 31 March 2002 at the rate of 2.5% per annum above the Plaintiffs’ US dollar prime lending rate until full payment is made; (b) all solicitor and client costs against the Defendants on an indemnity basis;
In view of the above discussions of the facts as well as law, I do not find any force in the submissions of the learned Counsel for the respondent-State of Bihar. If they object, they may apply for indemnity against costs. If the other partners do not object to his so doing.
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
