Lao Holdings NV v Government of the Lao People's Democratic Republic

• Jurisdiction: Singapore
• Judge: Quentin Loh JAD,Sir Vivian Ramsey IJ,Douglas Jones IJ
• Judgment Date: 13 April 2022
• Docket Number: Originating Summonses Nos 5 and 6 of 2020
• Court: High Court (Singapore)

Lao Holdings NV

and

Government of the Lao People's Democratic Republic and another matter

[2022] SGHC(I) 6

Quentin Loh JAD, Sir Vivian Ramsey IJ and Douglas Jones IJ

Originating Summonses Nos 5 and 6 of 2020

Singapore International Commercial Court

Civil Procedure — Costs — Principles — Singapore International Commercial Court (“SICC”) — Case commencing in General Division of High Court being later transferred to SICC — Principles underlying applicability of O 110 Rules of Court (2014 Rev Ed) — Orders 59 and 110 Rules of Court (2014 Rev Ed)

Civil Procedure — Costs — Principles — Singapore International Commercial Court (“SICC”) — Issue of applicable costs regime being reserved to SICC when case was transferred to SICC — What was applicable approach to issue of costs

Civil Procedure — Costs — Principles — Singapore International Commercial Court (“SICC”) — Issue of applicable costs regime being reserved to SICC when case was transferred to SICC — Whether Appendix G Supreme Court Practice Directions applicable to issue of costs post-transfer to SICC

Held, awarding costs of S$222,000 to the defendant and costs of S$8,000 to the plaintiffs for the sealing applications:

(1) A distinction should be maintained between costs incurred pre-transfer of proceedings to the SICC and costs which were incurred post-transfer to the SICC. In relation to the pre-transfer costs, the costs guidelines found in Appendix G were always the starting point, and a judge would have to decide whether the circumstances of the case supported a lesser degree of dependence on Appendix G and whether there were factors that justified a higher assessment of the costs: at [29].

(2) In relation to costs in the SICC, the costs considerations differed from typical civil proceedings in several ways. First, as the cases heard were by definition international and commercial, parties were likely to be more knowledgeable and sophisticated. Secondly, parties would generally have agreed to submit to the SICC's jurisdiction except in the instance of a transfer case where the High Court had ordered a transfer on its own motion. Thirdly, costs in the SICC were governed by O 110 r 46(1) of the ROC which set out a list of factors that the SICC could consider in arriving at an assessment of reasonable costs. Fourthly, there were different policy considerations, such as a lessened emphasis on access to justice and/or the availability of third-party funding: at [33] to [74].

(3) Under O 110 of the ROC, the SICC had a wide discretion to order costs. The overriding and primary policy in the SICC was to compensate the successful party, as far as it was reasonable, for costs incurred in the pursuit of a claim or maintenance of a defence that was meritorious: at [75] and [83].

(4) The starting point in assessing costs in the SICC would be costs actually incurred by the successful party. This was subject to an attenuation for reasonableness, which was to be assessed in line with the considerations laid out in the SICC Practice Directions: at [83] and [84].

(5) Order 59 of the ROC and Appendix G did not apply to cases commenced in the SICC. For cases which were transferred to the SICC from the High Court, O 59 of the ROC and Appendix G remained relevant as part of the broader context. However, it would generally be inappropriate to use Appendix G to quantify costs in the SICC: at [85].

(6) International investor-state arbitration cases bore similarities with international commercial arbitration cases, and the history of the arbitration was a material factor in assessing appropriate costs. Investor-state disputes were also generally at the more substantial end of international arbitration cases, given the nature of the claims and the parties involved: at [88] and [90].

(7) Costs of the SICC proceedings in international arbitration cases which sought to compensate the successful party almost entirely for reasonable costs incurred were justified, given: the parties commercial expectations; participation in arbitration; and to discourage challenges to the finality of arbitration: at [89].

(8) For the pre-transfer costs, having taken into account the parties' estimated costs provided at a joint case management plan submitted about one month after the transfer to the SICC, Appendix G, the number of days the hearing spanned and the work done pre-transfer, costs were fixed at S$42,000 all in: at [97] and [101].

(9) For the post-transfer costs, considering the quantum involved in the substantive dispute, the length of the dispute, the work done, the nature of the arguments raised, and the significant complexity of the history and underlying dispute, costs were fixed at S$180,000 all in: at [97] and [104] to [106].

(10) The defendant was to pay the plaintiffs costs for the Sealing Applications at S$8,000 all in: at [111].

(11) After setting off the respective costs awarded, the plaintiffs were to pay the defendant S$214,000 on a joint and several basis: at [114].

[Observation: Order 22 r 3(1) of the Singapore International Commercial Court Rules 2021 did not change the principles and considerations underlying costs in the SICC, which applied under O 110 r 46(1) of the ROC. It merely made clear that the costs regime of the SICC stood on its own and was sui generis when compared to the costs regime under O 59 of the ROC: at [86] and [87].]

Case(s) referred to

Astro Nusantara International BV v PT Ayunda Prima Mitra [2013] 1 SLR 636 (refd)

B2C2 Ltd v Quoine Pte Ltd [2019] 5 SLR 28 (refd)

BXS v BXT [2019] 5 SLR 48 (refd)

BYL v BYN [2020] 4 SLR 1, SICC (refd)

BYL v BYN [2020] 4 SLR 204, SICC (refd)

CBX v CBZ [2021] 3 SLR 10, SICC (refd)

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

China Machine New Energy Corp v Jaguar Energy Guatemala LLC [2018] SGHC 101 (refd)

China Machine New Energy Corp v Jaguar Energy Guatemala LLC [2020] 1 SLR 695, CA (refd)

CJM v CJT [2021] 5 SLR 222 (refd)

CPIT Investments Ltd v Qilin World Capital Ltd [2018] 4 SLR 38 (refd)

Government of the Lao People's Democratic Republic v Sanum Investments Ltd [2015] 2 SLR 322 (refd)

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

Lao Holdings NV v Government of the Lao People's Democratic Republic [2021] 5 SLR 228 (refd)

Maryani Sadeli v Arjun Permanand Samtani [2015] 1 SLR 496 (folld)

Millenia Pte Ltd v Dragages Singapore Pte Ltd [2019] 4 SLR 1075 (refd)

Sanum Investments Ltd v Government of the Lao People's Democratic Republic [2016] 5 SLR 536 (refd)

Sanum Investments Ltd v ST Group Co, Ltd [2020] 3 SLR 225 (refd)

ST Group Co Ltd v Sanum Investments Ltd [2020] 1 SLR 1, CA (refd)

ST Group Co Ltd v Sanum Investments Ltd [2022] 1 SLR 1280, CA (refd)

Then Khek Koon v Arjun Permanand Samtani [2014] 1 SLR 245 (folld)

Facts

Lao Holdings NV and its wholly-owned subsidiary, Sanum Investments Ltd (“the plaintiffs”) had partnered with a Laotian conglomerate, ST Group Co Ltd (“ST Group”) to conduct business in Laos. Their business relationship deteriorated subsequently, and proceedings were commenced between the plaintiffs and ST Group. The plaintiffs also commenced two arbitrations against the Government of the Lao People's Democratic Republic (“the defendant”).

The plaintiffs' claims were eventually dismissed by the arbitration tribunal, and the plaintiffs were ordered to pay costs. The plaintiffs then filed applications to set aside the “BIT Awards” in the Singapore High Court in HC/OS 1389/2019 and HC/OS 1390/2019. These applications were subsequently transferred to the SICC in SIC/OS 5/2020 and SIC/OS 6/2020 (“OS 5” and “OS 6” respectively, and “the Applications” collectively). The plaintiffs also applied for the Applications to be heard otherwise than in open court and for the court file to be sealed in HC/SUM 5593/2019 and HC/SUM 5579/2020 (“the Sealing Applications”). Both OS 5 and OS 6 were eventually dismissed by this court, with the defendant being able to resist the Applications almost entirely. The present judgment only concerned the issue of costs consequent to the dismissal of OS 5 and OS 6.

At the time of transfer, the plaintiffs contended that the costs regime under O 59 of the Rules of Court (2014 Rev Ed) (“ROC”) and Appendix G of the Supreme Court Practice Directions (“Appendix G”) should continue to apply. The defendant disagreed and submitted that there was no reason why O 110 of the ROC should not apply. The court ruled that the parties shall continue to pay court and hearing and fees that were payable in the High Court, but whether the High Court costs under O 59 of the ROC should continue to apply after transfer was a question reserved to the SICC.

In their submissions on the issue of costs, the plaintiffs argue that Appendix G should apply to the pre-transfer costs, and should remain a relevant factor in the assessment of the post-transfer costs. The plaintiffs took the position that the defendant should be entitled to S$71,921.17 (all in) in costs, and that they were entitled to S$12,000 in costs for the Sealing Applications. The defendant argued that Appendix G should not apply at all. The defendant took the position that it was entitled to S$400,000 in costs, and that there should be no order as to costs for the Sealing Applications.

Legislation referred to

Choice of Court Agreements Act (Cap 39A, 2017 Rev Ed)

Civil Law Act (Cap 43, 1999 Rev Ed) s 5B(2)

Civil Law (Third-Party Funding) Regulations 2017 r 3

Civil Law (Third-Party Funding) (Amendment) Regulations 2021

International Arbitration Act (Cap 143A, 2002 Rev Ed) s 24(b)

Rules of Court (2014 Rev Ed) O 59, O 59 r 1–O 59 r 37, O 110, O 110 r 1(2), O 110 r 1(2)(a), O 110 r 1(2)(b), O 110 r 3, O 110 r 7(1), O 110 r 12, O 110 r 12(3B), O 110 r 12(3B)(b), O 110 r 12(4), O 110 r 12(5), O 110 r 13, O 110 r 46, O 110 r 46(1), O 110 r 46(6), O 110 r 57, O 110 r 57(1), O 110 r 57(2)(a), O 110 r 57(2)(b), O 110 r 58

Singapore International Commercial Court...