CYW v CYX

• Jurisdiction: Singapore
• Judge: Thomas Bathurst IJ
• Judgment Date: 31 October 2023
• Neutral Citation: [2023] SGHC(I) 17
• Court: International Commercial Court (Singapore)
• Docket Number: Originating Application No 3 of 2022
• Hearing Date: 15 March 2023
• Citation: [2023] SGHC(I) 17
• Year: 2023
• Plaintiff Counsel: Suhaimi bin Lazim, Mohamed Hashim H Sirajudeen (Mirandah Law LLP) and Abdul Rohim bin Sarip (A. Rohim Noor Lila LLP)
• Defendant Counsel: Herman Jeremiah, Aw Sze Min, Lee Qiu Li and Tan Yi Xi Joie (Dentons Rodyk & Davidson LLP)
• Subject Matter: Civil Procedure,Costs
• Published date: 31 October 2023

Thomas Bathurst IJ: Introduction

These proceedings arose out of an arbitration between CYW as claimant and CYX as respondent in which CYW claimed it was not liable on a certain bills of exchange accepted by it and that a security deed between it and CYX (the “Security Deed”) was invalid. It also claimed consequential damages arising from CYX’s alleged failure to practise prudential banking or conduct due diligence as required by Indonesian law.

CYX by counterclaim sought to enforce the Security Deed and counterclaimed for the amount unpaid on the accepted Bills.

The facts giving rise to the arbitration are summarised in CYW v CYX [2023] SGHC (1) 10 at [4]–[16] (the “Setting Aside Judgment”) and it is unnecessary to repeat them.

CYW was unsuccessful in the arbitration and brought SIC/OA 3/2022 (“OA 3”) seeking orders setting aside the award on the ground that it was denied natural justice. It relied in support of the application on s 24(b) of the International Arbitration Act 1994 (2020 Rev Ed) and Art 34(2)(a)(ii) of the UNCITAL Model Law on International Commercial Arbitration as enacted under the First Schedule to the IAA. The grounds of CYW’s application are set out in more detail in the Setting Aside Judgment at [17]–[60] but they essentially arose out of the refusal of the arbitral tribunal (the “Tribunal”) to grant extensions of time to file expert evidence and provide translations of Indonesian documents relevant to the proceedings. It should be noted that although the arbitration proceedings undoubtedly were complex, the proceedings to set aside the award involved relatively narrow issues.

I dismissed CYW’s application, the reasons for which are set out in the Setting Aside Judgment. Accordingly, I ordered that CYW pay the costs of CYX (Setting Aside Judgment at [103]). This is my judgment on the quantum of costs.

The costs claimed

CYX has claimed a total of S$218,744.10 in costs (inclusive of Goods and Services Tax (“GST”) and disbursements). The claim is made up as follows: Costs of S$23,443.70 for work done prior to the transfer of the proceedings to the Singapore International Commercial Court (the “SICC”), comprising costs of S$21,910 plus GST at 7% of S$1533.70. Costs of S$173,377.80 for work done subsequent to the transfer of the proceedings to the SICC, comprising the following: costs of S$40,500 plus GST at 7% of S$2,835 for the period between 7 October 2022 and 31 December 2022; costs of S$2,960 plus GST at 8% of S$236.80 for the period between 1 January 2023 and 26 January 2023; and costs of S$117,450 plus GST at 8% of S$9,396 for the period between 27 January 2023 and 16 March 2023 (including the date of the hearing of OA 3 on 15 March 2023). Costs of S$16,383.60 for work done in preparing submissions on costs comprising costs of S$15,170 plus GST at 8% of S$1,213.60. Disbursements totalling S$5,539.01 comprising: (i) S$5,359.01 for the period up to the Setting Aside Judgment; and (ii) S$180 in respect of the submissions on costs. The disbursements have been itemised and it was not contended by CYW that any of them were unreasonably incurred.

CYX also provided detailed schedules supporting the costs summary which I have set out above. The schedule also included the time spent by the various counsel engaged in the matter and their hourly charge out rate.

In opposing the application, CYW filed a costs schedule stating that its total costs were S$84,800 inclusive of GST amounting to S$6,173. Although made up somewhat differently to the schedule furnished by CYX, it would appear that CYW’s costs in the pre-transfer period totalled S$12,519 (inclusive of GST at 7% of S$819) and its costs from then up to the time of the case management conference on 29 November 2022 totalled S$11,718 (inclusive of GST at 8% of S$868), whilst its costs from then up to the conclusion of the hearing on 15 March 2023 totalled S$50,087 inclusive of GST at 8% of S$3,710.

In respect of the costs of this application, CYW stated that its costs were S$10,476 inclusive of GST at 8% of S$776.

The relevant rules

The power of the court to fix or assess costs is contained in O 21 r 2(1) of the Rules of Court 2021 (the “ROC 2021”). O 21 r 2(2) further provides as follows:

Powers of Court (O. 21, r. 2)

…

(2) In exercising its power to fix or assess costs, the Court must have regard to all relevant circumstances, including – (a) efforts made by the parties at amicable resolution; (b) the complexity of the case and the difficulty or novelty of the questions involved; (c) the skill, specialised knowledge and responsibility required of, and the time and labour expended by, the solicitor; (d) the urgency and importance of the action to the parties; (e) the number of solicitors involved in the case for each party; (f) the conduct of the parties; (g) the principle of proportionality; and (h) the stage at which the proceedings were concluded.

Appendix G to the Supreme Court Practice Directions 2021 (“Appendix G”) provides guidelines for the assessment of costs. The guidelines suggest a range of costs of between S$13,000 and S$40,000 for originating applications concerning arbitration.

By contrast, the following rules apply to proceedings commenced in the SICC or to costs incurred on the transfer of a case from the General Division of the High Court (the “General Division”) to the SICC. Order 22 r 2(2)(a) of the Singapore International Commercial Court Rules 2021 (the “SICC Rules”) confers upon the court the power to determine all issues relating to the costs of or incidental to the proceedings. Order 22 r 3 of the SICC Rules provides as follows:

Entitlement to costs and assessment of costs

3.—(1) Without affecting the scope of the Court’s discretion in Rule 2(1), and subject to any provisions to the contrary in these Rules, a successful party is entitled to costs and the quantum of any costs award will generally reflect the costs incurred by the party entitled to costs, subject to the principles of proportionality and reasonableness. (2) In considering proportionality and reasonableness, the Court may have regard to all relevant circumstances, including — (a) the complexity of the case and the difficulty or novelty of the questions involved; (b) the skill, specialised knowledge and responsibility required of, and the time and labour expended by, the counsel; (c) the urgency and importance of the action to the parties; (d) the number of counsel involved in the case for each party; (e) the conduct of the parties, including in particular — (i) conduct before, as well as during the application or proceeding; (ii) whether it was reasonable for a party to raise, pursue or contest a particular allegation or issue; (iii) the manner in which a party has pursued or contested a particular allegation or issue; and (iv) whether the conduct of the parties, including conduct in respect of alternative dispute resolution, facilitated the smooth and efficient disposal of the case; (f) the amount or value of the claim; (g) the stage at which the proceedings were concluded; (h) the existence of any offer to settle, the date the offer was made, the terms of the offer and the extent to which the claimant’s judgment is more favourable than the terms of the offer to settle; (i) the existence of an agreement as to the amount of, basis for, or mechanics for, the determination of a costs award; and (j) the estimates provided in a costs schedule. (3) If the defendant pays the amount claimed within the time and in the manner required by the endorsement on the Originating Application, the costs allowed are to be fixed at $10,000. (4) The party who discontinues any application, action or appeal wholly or partly must pay any other party the costs of the matter discontinued, unless the parties otherwise agree or the Court otherwise directs. (5) In the case of any proceedings transferred to the Court from the General Division, the Court will assess — (a) costs up to the date of transfer taking into account the circumstances of the case including that the General Division costs regime as set out in the domestic Rules of Court would have applied to those costs; and (b) costs after the date of transfer taking into account the circumstances of the case and in this regard, the Court is not precluded from taking into account the General Division costs regime as set out in the domestic Rules of Court.

The manner in which these provisions are to be applied in assessing costs was explained by the Court of Appeal in Senda International Capital Ltd v Kiri Industries Ltd [2023] 1 SLR 96 (“Senda”). The court pointed out at [27] that costs awarded in the General Division are assessed at such a level as would enable a litigant with reasonable means to pursue justice, which requires the application of an objective standard. It stated at [49] that the effect of Appendix G was that even catering for the specificities of individual cases, the level of recoverable costs would generally remain within the ranges set out therein, which represent the level of fees which members of the public and the legal profession would generally regard as reasonable.

The court further stated that in contrast to the cases in the General Division, parties who come before the SICC would generally be better resourced and also more willing to incur greater expense on litigation in part because of the amount in stake and also because the cost of such litigation is generally seen as part of the necessary expense entailed in the pursuit of commercial objectives. It stated that the policy of enhancing access to justice is therefore less relevant in the SICC and the “ordinary expectation stemming from the indemnity...