Razer (Asia-Pacific) Pte Ltd v Capgemini Singapore Pte Ltd

• Jurisdiction: Singapore
• Judge: Lee Seiu Kin J
• Judgment Date: 19 January 2023
• Docket Number: Suit No 1233 of 2020
• Court: High Court (Singapore)

Razer (Asia-Pacific) Pte Ltd

and

Capgemini Singapore Pte Ltd

[2023] SGHC 195

Lee Seiu Kin J

Suit No 1233 of 2020

General Division of the High Court

Civil Procedure — Costs — Gaming company seeking indemnity costs against professional services company based on its contractual entitlement — Whether party had sufficiently pleaded its contractual entitlement to indemnity costs

Held, allowing the claim:

(1) The relevant test to determine whether a party had sufficiently pleaded its contractual right to indemnity costs would be whether the defendant could reasonably say that the plaintiff had expressed the intention to invoke a specific contractual term to recover costs against the defendant on an indemnity basis. The court had to bear in mind that the fundamental purpose of a pleading is to give the opposing party notice of the case against it so that it is not taken by surprise or prejudiced by an unexpected claim (Vestwin Trading Pte Ltd and another v Obegi Melissa and others[2006] 3 SLR(R) 573). Including the specific term of the contract in one's pleading would allow the other party to make an informed decision at the early stages of the trial as to whether there is a need to adduce evidence to address the enforceability or applicability of that contractual provision: at [22].

(2) On the facts, Razer had sufficiently pleaded that it would enforce its contractual rights directly under the Indemnity Clauses. Razer pleaded that it would “rely on the full terms, meaning and effect of” the indemnity clauses in cl 12 of the CSA and cl 12 of the DPA, pursuant to which Capgemini agreed to indemnify Razer against “reasonable legal fees and costs of suit” (per cl 12 of the CSA) and “against losses damages, costs or expenses (including legal fees) incurred by [Razer]” (per cl 12 of the DPA). It was not necessary for Razer to go beyond these pleadings to rely on its contractual entitlement to indemnity costs: at [24].

Case(s) referred to

Abani Trading Pte Ltd v BNP Paribas[2014] 3 SLR 909 (folld)

CCM Industrial Pte Ltd v Uniquetech Pte Ltd[2009] 2 SLR(R) 20; [2009] 2 SLR 20 (refd)

NSL Oilchem Waste Management Pte Ltd v Prosper Marine Pte Ltd[2020] SGHC 204 (folld)

Razer (Asia-Pacific) Pte Ltd v Capgemini Singapore Pte Ltd[2022] SGHC 310 (refd)

Singapore Airlines Ltd v Tan Shwu Leng[2001] 3 SLR(R) 439; [2001] 4 SLR 593 (refd)

Tan Shwu Leng v Singapore Airlines Ltd[2001] SGHC 51 (refd)

Telemedia Pacific Group Ltd v Credit Agricole (Suisse) SA[2015] 4 SLR 1019 (refd)

United Overseas Bank Ltd v Sin Leong Ironbed & Furtniture Manufacturing Co (Pte) Ltd[1988] 1 SLR(R) 76; [1988] SLR 247 (folld)

Vestwin Trading Pte Ltd v Obegi Melissa[2006] 3 SLR(R) 573; [2006] 3 SLR 573 (refd)

In the previous tranche of this suit, Razer (Asia-Pacific) Pte Ltd (“Razer”) succeeded in its claim for breach of contract and negligence against Capgemini Singapore Pte Ltd (“Capgemini”) for misconfiguration of a server file, leading to a leak of the plaintiff's non-public consumer data: see Razer (Asia-Pacific) Pte Ltd v Capgemini Singapore Pte Ltd[2022] SGHC 310 (“Razer (Asia-Pacific)”).

On the assessment of the costs to be awarded to Razer, Razer submitted, among other arguments, that it was contractually entitled to indemnity costs. This was by virtue of cl 12 of the consulting services agreement (“CSA”) and cl 12 of the Data Processing Addendum (“DPA”). These clauses set out Razer's contractual entitlements to indemnity costs against Capgemini (collectively, the “Indemnity Clauses”). In response, Capgemini averred that Razer had not clearly and properly pleaded that it would be pursuing a contractual remedy of indemnity costs under the Indemnity Clauses. Therefore, the Indemnity Clauses were only one relevant factor in the court's exercise of discretion in determining the costs to be awarded to Razer. It was undisputed that the Indemnity Clauses were engaged, in light of the decision in Razer (Asia-Pacific).

Legislation referred to

Rules of Court (2014 Rev Ed) O 22A r 1, O 22A r 9, O 59 r 27(3)

Wong Hin Pkin Wendell and Andrew Chua Ruiming (Drew & Napier LLC) for the plaintiff;

Tan I Kwok Lionel, Tan Zhen Wei VictoriaandSamuel Lim Tien Sern (Rajah & Tann Singapore LLP) for the defendant.

19 July 2023

Lee Seiu Kin J:

Introduction

1 In the previous tranche of this suit (“Suit 1233”), I found the defendant liable for breach of contract and negligence against the plaintiff for misconfiguration of a server file, leading to a leak of the plaintiff's non-public consumer data. This decision concerned the assessment of the costs to be awarded to the plaintiff, and it raised the question of the level of specificity required to plead a contractual entitlement to indemnity costs.

Facts

The parties

2 The plaintiff, Razer (Asia-Pacific) Pte Ltd (“Razer”), is a company incorporated in Singapore. It is in the business of high-performance gaming hardware, software, services and systems, financial technology services and digital payments.

3 The defendant, Capgemini Singapore Pte Ltd (“Capgemini”), is a professional services company incorporated in Singapore. It provides information technology consultancy services.

Background

4 Razer commenced Suit 1233 on 29 October 2020. Razer claimed that Capgemini, acting through its employee, Mr Argel Cabalag (“Mr Cabalag”), was responsible for the disabling of security settings on Razer's Kibana application. This caused unauthenticated access to the Kibana application, resulting in a leak of non-public information relating to Razer's customers (the “Data Leak”): Razer (Asia-Pacific) Pte Ltd v Capgemini Singapore Pte Ltd[2022] SGHC 310 (“Razer (Asia-Pacific)”) at [29]. One Mr Bob Diachenko published an article on Linkedin titled, “Thousands of Razer customers order and shipping details exposed on the web without password”. Consequently, the Data Leak received media coverage on multiple websites over the course of September 2020: Razer (Asia-Pacific) at [27]–[28].

5 Razer claimed that Capgemini had breached the express and implied terms of the agreements between them: Razer (Asia-Pacific) at [34]–[35]. Further, Capgemini's alleged contractual breaches caused the Data Leak between 18 June 2020 and 9 September 2020 and caused Razer to suffer, among other things, reputational damage, which caused its sales revenue to decrease significantly: Razer (Asia-Pacific) at [36]. For context, these agreements referred to the consulting services agreement (“CSA”) and the Data Processing Addendum (“DPA”) which Razer had entered into with White Sky Labs (Singapore) Pte Ltd (“WSL”) on 1 March 2019 and 20 March 2019, respectively. On 1 June 2020, after Capgemini acquired WSL, Capgemini assumed the obligations of WSL under the agreements: Razer (Asia-Pacific) at [4], [15] and [18].

6 In the alternative, Razer claimed that Capgemini was negligent when assisting Razer to resolve its inability to log into and access the Kibana server and/or its application (the “Login Problem”) on 18 June 2020, and/or that Capgemini was vicariously liable for the injury, loss and damage sustained as a result of Mr Cabalag's negligence: Razer (Asia-Pacific) at [19] and [39]. The resulting negative press caused Razer to suffer loss of profits and loss of chance to secure potential business opportunities: Razer (Asia-Pacific) at [40].

7 I gave my decision on liability on 9 December 2022: see Razer (Asia-Pacific) at [122]. I found that Mr Cabalag's assistance on the Login Problem was covered under the statement of work for “Adaptive Managed Services” and was performed in his capacity as an employee of Capgemini: Razer (Asia-Pacific) at [122]. Further, Capgemini had breached the terms of cl 3 of the CSA dated 1 March 2019 and cl 7 of the DPA dated 20 March 2019: Razer (Asia-Pacific) at [56]. In the alternative, Capgemini was negligent in its response to the Login Problem (Razer (Asia-Pacific) at [56]). I ordered Capgemini to pay Razer a sum of US$6,518,738.81 in damages: Razer (Asia-Pacific) at [160].

8 On 18 January 2023, I delivered my decision on costs. The grounds of my decision are as follows.

The parties' cases

9 The crux of the parties' disagreement was whether I should order indemnity costs against Capgemini.

10 Razer's case was three-fold. First, by virtue of cl 12 of the CSA and cl 12 of the DPA (the “Indemnity Clauses”), it was contractually entitled to costs and disbursements on an indemnity basis. In the alternative, Capgemini's wasteful conduct in Suit 1233 warranted an award of costs and disbursements on an indemnity basis. Finally, at minimum, Razer submitted that it was entitled to costs and disbursements on an indemnity basis from 27 June 2022, pursuant to O 22A r 1 of the Rules of Court (2014 Rev Ed) (the “ROC”). Razer had sent an offer to settle on that date (the “OTS”), the terms of which were more favourable than the court's decision in Suit 1233 on 18 January 2023.

11 In response, Capgemini argued that Razer did not clearly and properly plead that it would be pursuing a contractual remedy of indemnity costs under the Indemnity Clauses:...