CYW v CYX

Facts

CYW lost an arbitration against CYX in which it had disputed its liability on accepted bills of exchange and the validity of a security deed, and CYX had counterclaimed to enforce the deed. CYW then applied in SIC/OA 3/2022 to set aside the award for breach of natural justice, complaining of the tribunal's refusal to extend time for expert evidence and translations of Indonesian documents. The case was transferred to the Singapore International Commercial Court. The SICC dismissed the application in an earlier judgment and ordered CYW to pay CYX's costs; this judgment fixed the amount.

CYX claimed S$218,744.10 including GST and disbursements, split between costs before the transfer, three post-transfer periods, costs of the costs submissions, and disbursements. It relied on clause 14.2 of the security deed, which gave it an indemnity for legal expenses on a full indemnity basis, and on the size of the dispute, including CYW's claim of US$100m in the arbitration. CYW argued that Appendix G of the Supreme Court Practice Directions 2021 should apply, that the hearing took only half a day, that much of the affidavit material was already familiar from the arbitration, and that five counsel, including two partners, were redundant.

Issues

1. Whether pre-transfer costs should be assessed within the Appendix G ranges despite the contractual indemnity in clause 14.2.
2. Whether CYX's post-transfer costs were proportionate, reasonably incurred and reasonable in amount under O 22 r 3 of the SICC Rules.

Holding

The SICC allowed CYX's costs claim in part, ordering CYW to pay costs of S$174,734.41 inclusive of GST and disbursements: pre-transfer costs cut to S$10,700, the first two post-transfer periods allowed in full at S$43,335 and S$3,196.80, the hearing-preparation period reduced to S$95,580, and costs of the costs submissions of S$16,383.60 and disbursements of S$5,539.01 allowed.

Reasoning

Following Senda International Capital Ltd v Kiri Industries Ltd [2023] 1 SLR 96 and CBX and another v CBZ and others [2022] 1 SLR 88, pre-transfer costs are assessed under the General Division regime and generally stay within Appendix G. Sheila Kazzaz and another v Standard Chartered Bank and others [2021] 3 SLR 1 did not allow Appendix G to be disregarded wherever there was a contractual indemnity; the indemnity was relevant but not decisive. The pre-transfer work was preliminary, and about 330 pages of the 1,067-page affidavit were of limited relevance, so S$10,000 plus GST was appropriate.

Post-transfer, SICC costs aim to compensate a party for expense sensibly incurred, and the burden is on the claiming party to show its costs are reasonable. The hourly rates were reasonable and lower than CYW's own. The first period, covering CYX's main affidavit, was allowed in full given the issues, their importance and the indemnity, and the short sealing-application period was reasonable. But 228.1 hours preparing for a three-hour hearing, compared with CYW's own costs and the full award already made for the earlier period, was disproportionate and to a not insignificant extent unreasonably incurred, so fees for that period were cut by approximately 25% to S$88,500. CYX carried the costs application, so those costs were not unreasonable, and CYW did not dispute the disbursements.

From the judgment