Cna v Cnb

• Jurisdiction: Singapore
• Judge: Philip Jeyaretnam J,Simon Thorley IJ,Yuko Miyazaki IJ
• Judgment Date: 02 August 2023
• Docket Number: Originating Summonses Nos 2 to 5 of 2022
• Court: High Court (Singapore)

CNA

and

CNB and another and other matters

[2023] SGHC(I) 12

Philip Jeyaretnam J, Simon Thorley IJ and Yuko Miyazaki IJ

Originating Summonses Nos 2 to 5 of 2022

Singapore International Commercial Court

Arbitration — Costs — Awarded — Case management costs plan — Whether costs actually incurred reasonable

Held, allowing costs and disbursements in favour of the defendants:

(1) The correct approach in the Singapore International Commercial Court (“SICC”) where there was a significant difference between the costs actually incurred as set out in an appropriately detailed costs schedule and the estimated costs set out in a case management costs plan was as followed: (a) the detailed costs schedule would be accepted as being accurate both as to the costs incurred and the date on which they were incurred and the burden would then be on the paying party to demonstrate that the detailed costs statement was inaccurate; and (b) in so far as it was suggested by the paying party that the costs incurred were excessive, rather than inaccurate: (i) in the case of an award of pre-transfer costs, any excess would be moderated both by reference to Appendix G and, if appropriate, by reference to the costs estimated in the case management costs plan; or (ii) in the case of post-transfer costs, where reasonableness was the test, one of the factors that the court could take into account in the circumstances of any given case was the contrast between the costs actually incurred and the costs estimated in the case management costs plan: at [14].

(2) It was a feature of the litigation process which led to an oral hearing, in this case a three-day hearing involving two different sets of plaintiffs, separately represented, that the fees incurred would be likely to be back-loaded, more being spent later in the proceedings than in the former. In assessing whether this was a case where fees were significantly back-loaded, the court might have been assisted by being provided with a costs statement by each set of plaintiffs which would serve to demonstrate the balance between the pre-transfer and post-transfer fees incurred by them: at [18] and [19].

(3) While it was accepted that the plaintiffs' submissions did raise some concerns as to the accuracy of the Costs Schedule, these were not sufficient for the court to cease to place reliance on the Costs Schedule as being an accurate analysis of when the fees were incurred. The court proceeded on the basis that the correct division of fees pre- and post- transfer was 22/78%: at [20] and [21].

(4) The matters raised had been exceedingly complex and the arguments were wide ranging. Extensive written submissions were provided notwithstanding which three full days were required for oral arguments. In consequence, the court was satisfied that this was a case where under para 3 of Appendix G of the Supreme Court Practice Directions 2013 (“Appendix G”), it would be appropriate to depart from a strict application of the guidelines. The actual fees incurred pre-transfer were S$266,127 and Appendix G would suggest that only S$26,400 should be awarded. Even having regard to the contention that these fees were in excess of those which should have been incurred, it could be seen that Appendix G would serve to give a very limited return to a party that was wholly successful. Applying the objective standard required by O 59, the court did not consider in the circumstances of this case that a return of less than 12% by way of an award over the costs actually incurred would be seen to be objectively reasonable. A figure of around 25% was more appropriate and an award of S$50,000, as suggested by all parties, would constitute a proper award for pre-transfer fees although the court reached this figure for different reasons from those proposed by any of the parties. Each set of plaintiffs was therefore ordered to pay S$25,000 to the defendants' Singaporean counsel in relation to pre-transfer costs: at [30] to [32].

(5) The starting point to assessing post-transfer costs under O 110 r 46 ROC 2014 was a subjective enquiry into what costs were actually incurred by the successful party and then to apply a test of reasonableness to reach an appropriate award. The test of reasonableness was to be guided by the considerations outlined in para 152(3) of the Singapore International Commercial Court Practice Directions Pt XXIII Costs. In the present case it was understandable that the costs incurred would be high and the correct approach would be to have regard as a starting point to the sums actually incurred and then identify any aspect of costs which could be said to be unreasonably incurred, with the burden being on the losing party to do this: at [33] and [35].

(6) Although the plaintiffs contended that the magnitude of fees incurred by the defendant post-transfer was almost three times higher than the sum estimated in the CMP, they did not themselves file costs schedules. The best evidence that an unsuccessful party could adduce to discharge its evidential burden was information as to costs that it correspondingly incurred for the matter, which might operate as a sound proxy by which the trial court could determine what the appropriate level of costs in the particular case was. The court therefore did not consider it appropriate to accept the plaintiffs' submission to take the figure estimated in the CMP or to make any deduction from that figure. Each set of the plaintiffs would pay S$322,666.05 in respect of the defendants' post-transfer fees for their Singaporean counsel: [36] to [41] and [45].

(7) For the “normal” pre-and post- transfer disbursements charged in Singapore dollars, the court saw no reason why these should not be paid in full in the normal way. It was conventional for expert's fees and attendant costs to be allowed in full unless they were unreasonably incurred. Each set of plaintiffs would pay S$33,938.50 in relation to “normal” disbursements and 45,356,575 South Korean won (“KRW”) in relation to Prof Kwon's fees and attendant costs, and KRW929,753.25 in disbursements. In relation to pre-transfer fees, each set of plaintiffs was to pay KRW2,677,606 in fees to the defendants' Korean counsel, KL Partners. In relation to post-transfer fees, each set of plaintiffs was to pay KRW13,211,852.50 in fees to the defendants' Korean counsel: at [51] and [57] to [59].

Case(s) referred to

BLG v BLI [2018] SGHC 86 (folld)

CBX v CBZ [2022] 1 SLR 88 (folld)

CNA v CNB [2023] SGHC(I) 6 (refd)

Kiri Industries Ltd v Senda International Capital Ltd [2022] 3 SLR 174 (refd)

Lao Holdings NV v Government of Lao People's Democratic Republic [2022] SGHC(I) 6 (refd)

Senda International Capital Ltd v Kiri Industries Ltd [2023] 1 SLR 96 (folld)

Facts

The plaintiffs, CNA, CND and CNE, applied to set aside the partial award on liability (the “First Partial Award”) made in an arbitration commenced under the International Chamber of Commerce (the “ICC”) (the “Present Arbitration”), pursuant to Arts 34(2)(a)(i) and/or 34(2)(a)(iii) of the UNCITRAL Model Law on International Commercial Arbitration read with s 3 of the International Arbitration Act 1994 (2020 Rev Ed) on the basis that the tribunal (“Tribunal”) did not have jurisdiction over the dispute. On the same basis, the plaintiffs applied also to set aside the award on costs arising from the findings made in the First Partial Award (the “Second Partial Award”, collectively with the First Partial Award, the “Partial Awards”). The court dismissed the setting-aside applications in CNA v CNB[2023] SGHC(I) 6 (the “Substantive Judgment”).

Following the Substantive Judgment, the court directed that parties should seek to agree on an appropriate order as to costs. Whilst a measure of agreement was reached between the defendants and the plaintiffs, CNA in SIC/OS 2/2022 and SIC/OS 5/2022 and CND and CNE in SIC/OS 3/2022 and SIC/OS 4/2022, the parties were unable to reach full agreement and filed written submissions and, subsequently, reply written submissions in support of their respective contentions. These originating summonses were commenced in the High Court and were all transferred to the Singapore International Commercial Court on 4 January 2022 by order of the deputy registrar. By that order the learned deputy registrar directed that costs incurred prior to the date of transfer should be assessed on the basis of the costs regime under O 59 r 7 of the Rules of Court (2014 Rev Ed) (“ROC 2014”), but that the approach to costs after transfer should be reserved to this court.

The parties were agreed that: (a) the plaintiffs should pay the defendants' costs and disbursements, when assessed, in equal proportions so that the costs should be assessed as a unitary whole with CNA paying 50% and CND and CNE paying the other 50%; (b) the costs incurred post-transfer should be assessed on the basis set out in O 110 r 46 ROC 2014; and (c) this court should assess costs on the basis of the written submissions alone without the need for an oral hearing.

However, the parties were split on whether it was significant that the sums claimed by the defendant in their revised costs schedule (the “Costs Schedule”) differed from those projected in their case management costs plan (“CMP”). The defendants contended that the Costs Schedule was an accurate reflection of the fees incurred pre- and post- transfer. In the main, although CNA and CND/CNE filed separate submissions on costs, the same points were taken and they were referred to collectively as the plaintiffs save where it was necessary to distinguish between the two sets of plaintiffs. Whilst the plaintiffs did not contest that these were the sums that the defendants actually incurred, they asserted that a disproportionately large amount of those fees had been incorrectly allocated to the post-transfer stage and that the sums claimed differ significantly from those projected in the CMP so that...