Kiri Industries Ltd v Senda International Capital Ltd and another

• Jurisdiction: Singapore
• Judge: Kannan Ramesh JAD
• Judgment Date: 29 August 2024
• Neutral Citation: [2024] SGHC(I) 25
• Hearing Date: 03 June 2024
• Docket Number: Suit No 4 of 2017 (Summons No 24 of 2023)
• Citation: [2024] SGHC(I) 25
• Court: International Commercial Court (Singapore)
• Year: 2024
• Published date: 29 August 2024

[LawNet Admin Note: The following judgment is displayed as received from source]

Kannan Ramesh JAD (delivering the judgment of the court): Introduction

In SIC/SUM 24/2023 (“SUM 24”), we ordered an en bloc sale of the shareholdings of Kiri Industries Ltd (“Kiri”) and Senda International Capital Ltd (“Senda”) in DyStar Global Holdings (Singapore) Pte Ltd (“DyStar”). The sale was to be managed by court-appointed receivers. Out of the proceeds of sale, after deducting the remuneration of the receivers and the expenses of the sale, Kiri was to receive US$603.8m in priority, with Senda receiving the balance. This was to be in substitution of our previous order for Senda to buy out Kiri’s shareholding for US$603.8m (the “Buy-Out Order”). The full grounds of our decision were issued in Kiri Industries Ltd v Senda International Capital Ltd and another [2024] SGHC(I) 14 (the “GD”). In this judgment, we address the costs of SUM 24.

Each of Kiri, Senda and DyStar was represented and had made substantive submissions in the proceedings. None contests the general rule that costs should follow the event, but each contends to have been the successful party entitled to costs.

Given the parties’ disparate positions, it is necessary for us to determine who was the successful party in SUM 24. The court must ask itself which party in substance and reality succeeded, taking a realistic and commercially sensible view of the outcome, as opposed to a technical one: Comfort Management Pte Ltd v OGSP Engineering Pte Ltd and another [2022] 5 SLR 525 (“Comfort Management”) at [28].

As DyStar’s role in SUM 24 was a limited one (something which DyStar itself did not necessarily appreciate, as we explain below), we will address the issue of costs as between Kiri and Senda separately from costs as between Kiri and DyStar.

Costs as between Kiri and Senda

Kiri submits that it has substantially succeeded as the applicant in SUM 24, having obtained substitute relief in light of Senda’s failure to comply with the Buy-Out Order. However, recognising the fact that it did not prevail on all the issues raised in SUM 24, Kiri submits that it should receive 50% of its costs.

Senda submits that it is the successful party as Kiri had either abandoned or failed in all of its substantive prayers in SUM 24. The order for an en bloc sale was ultimately in line with Senda’s proposal, which Kiri had initially objected to. Senda, however, acknowledges that it did not succeed on some of the issues, namely the appointment of receivers to manage the sale (as opposed to an investment banker as Senda sought), and Kiri’s entitlement to a priority in the distribution of the sale proceeds (which Senda opposed in favour of a ratable sharing). In light of this, Senda contends that it should be entitled to 70% of its costs.

In our judgment, Kiri is the successful party. The event in these proceedings is not to be determined by a technical reading of Kiri’s prayers, or a comparison of the parties’ proposals for relief. The fundamental question is whether it was necessary for Kiri to bring SUM 24 for substitute relief. In our view, that must be answered in the positive. It must be remembered that our order was premised upon Senda’s failure to comply with the Buy-Out Order. As we stated in the GD at [18], it is irrelevant whether this failure was a matter of inability or unwillingness. Given that we have granted Kiri’s request for substitute relief, although not in the terms initially...