BTN and another v BTP and another

• Jurisdiction: Singapore
• Judge: Belinda Ang Saw Ean JAD
• Judgment Date: 16 February 2021
• Neutral Citation: [2021] SGHC 38
• Published date: 19 February 2021
• Docket Number: Originating Summons No 683 of 2018
• Year: 2021
• Hearing Date: 05 January 2021
• Plaintiff Counsel: Yeo Khirn Hai Alvin SC, Koh Swee Yen, Low Sze Hui, Jasmine (Liu Sihui) and Quek Yi Zhi, Joel (Guo Yizhi) (Wongpartnership LLP)
• Citation: [2021] SGHC 38
• Defendant Counsel: Chew Kei-jin, Tan Silin, Stephanie (Chen Silin), Yeo Chuan Tat (Yang Quanda) and Tyne Lam (Ascendant Legal LLC)
• Court: High Court (Singapore)
• Subject Matter: Costs,Indemnity costs,Arbitration,Setting aside,Civil Procedure

Belinda Ang Saw Ean JAD: Introduction

The plaintiffs’ application in HC/OS 683/2018 (“OS 683”) to set aside a partial arbitral award was dismissed with costs by the High Court on 16 September 2019. The High Court’s decision is reported in BTN and another v BTP and another [2020] 5 SLR 1250) (“HC Judgment”). The plaintiffs’ appeal was also dismissed on 23 October 2020 (see BTN and another v BTP and another [2020] SGCA 105 (“CA Judgment”). As for the costs of the appeal, the Court of Appeal awarded the defendants costs fixed at the sum of $55,000 inclusive of disbursements on 3 November 2020.

Following the conclusion of the matters before the Court of Appeal, the defendants’ counsel, Mr Chew Kei-Jin (“Mr Chew”), applied to the High Court on 9 December 2020 to fix the quantum of costs. As parties were unable to amicably resolve the quantum of costs, both Mr Chew and counsel representing the plaintiffs, Ms Koh Swee Yen (“Ms Koh”), tendered their respective submissions on the appropriate quantum of costs for OS 683. This supplementary judgment pertains to the quantum of costs for OS 683.

It is important to bear in mind that the High Court dismissed OS 683 with costs. Unless the court orders otherwise, a dismissal with costs means that the party and party costs would be taxed on a standard basis. Notably, the defendants tried to persuade the Court of Appeal to order costs on an indemnity basis for OS 683, but the Court of Appeal declined, stating in clear terms that it would not disturb the costs order below. Therefore, it is impermissible for the defendants to try to re-argue before this court for higher quantum of costs by seeking to switch the basis of the costs ordered from standard to indemnity basis. All the defendants are permitted to do is to persuade this court not to follow the range of costs in the costs guidelines (as contained in Appendix G of the Supreme Court Practice Directions (“the Costs Guidelines”)) which is derived from party and party costs on a standard basis. To be clear, a decision not to follow the Costs Guidelines does not translate into determining the quantum of costs from a different basis from the one ordered. This costs judgment will decide on the appropriate quantum of costs based on a standard basis. In doing so, this costs judgment will take the opportunity to explain why, in the present case, this court ordered costs on the standard basis in September 2019 rather than subscribe to the position on indemnity costs now advocated by the defendants.

Whether costs should be on a standard or indemnity basis in failed applications to set aside an arbitral award

Mr Chew seeks full costs in the total sum of $285,308.41 (inclusive of disbursements of $6,183.56)¹. He makes several points to persuade this court not to apply the Costs Guidelines. It is convenient here to mention that Ms Koh argues that the Costs Guidelines should apply as there is no basis whatsoever in the circumstances of the present case to depart from an award of costs on a standard basis.

Essentially, Mr Chew urges this court to adopt the Hong Kong approach in assessing the quantum of costs on an indemnity basis. He argues that the plaintiffs in commencing OS 683 had put the defendants to considerable costs to fend off what were unmeritorious proceedings that ought not have been brought in the first place bearing in mind that the parties had agreed to resolve their disputes in arbitration and to honour any award made in the arbitration. Underlying this contention is the question of whether indemnity costs should be awarded against a party who unsuccessfully applied to set aside or resist enforcement of an arbitral award as a matter of course, save where there were exceptional circumstances. I will first deal with Mr Chew’s reliance on Hong Kong authorities before discussing his other points in the context of the conventional approach to seeking indemnity costs on the basis of applying costs principles under Order 59 of the Rules of Court (Cap 322, R 5, 2014 Rev Ed) (“ROC”).

The approach in Hong Kong

The Hong Kong courts adopt a default rule that indemnity costs will be granted when an arbitral award is unsuccessfully challenged in court proceedings unless special circumstances can be shown. The Hong Kong approach was first elucidated in A v R [2010] 3 HKC 67 (“A v R”), a decision of Reyes J in the Hong Kong Court of First Instance. As Reyes J explained, there are three considerations for the approach adopted. First, a person who obtains an award in his favour pursuant to an arbitration agreement should be entitled to expect that the court will enforce the award as a matter of course (at [67]). Hence, applications by an award debtor to appeal against or set aside an arbitral award should be regarded as exceptional...