SUPREME COURT OF SINGAPORE
12 June 2024
Case summary
Re PT Garuda Indonesia (Persero) Tbk and another matter [2024] SGHC(I) 18
Singapore International Commercial Court Originating Application No 5 of 2022 --------------------------------------------------------------------------------------------------------------------------------------
Decision of the Singapore International Commercial Court (delivered by Christopher S Sontchi IJ):
Outcome: The Singapore International Commercial Court (“SICC”) ordered that the successful applicants in an application for recognition of foreign restructuring proceedings under the UNCITRAL Model Law on Cross-Border Insolvency were entitled to costs of US$228,503.70 along with disbursements, payable by the creditors who had raised objections to the application.
Background
1 On 18 January 2024, the Court delivered judgment on the substantive issues in Re PT Garuda Indonesia (Persero) Tbk and another matter [2024] SGHC(I) 1 (the “Judgment”). The Court allowed SIC/OA 5/2022 (“OA 5”), which was an application for recognition of Indonesian restructuring proceedings (“PKPU Proceeding”) in respect of PT Garuda Indonesia (Persero) Tbk (“Garuda Indonesia”) brought by foreign representatives of Garuda Indonesia under the UNCITRAL Model Law on Cross Border Insolvency (30 May 1997) as set out in the Third Schedule of the Insolvency, Restructuring and Dissolution Act 2018 (2020 Rev Ed). The Court granted reliefs for a stay of proceedings against Garuda Indonesia and recognition and enforcement of a restructuring plan approved in the PKPU Proceeding, subject to two carve-outs.
2 The applicants and the non-parties (the “Greylag Entities”) who had objected to the application did not dispute that the applicants were entitled to costs as the successful parties. It was also undisputed that Goods and Services Tax did not apply in respect of the applicants’ legal fees, and that the applicants were entitled to their disbursements as claimed, as well as their experts’ fees. However, the parties disputed the costs claimed by the applicants, as well as several items claimed as part of the applicants’ experts’ disbursements. The Greylag Entities further contended that the applicants should pay costs to them in respect of the carve-outs ordered by the Court and for costs wasted on account of the applicants’ withdrawal from proceedings in the US Bankruptcy Court for the Southern District of New York (the “SDNY proceedings”) in relation to which a joint hearing had been contemplated.
The Court’s Decision
3 The Court did not allow the applicants’ claim for pre-transfer costs incurred to review the papers filed in related foreign proceedings in order to anticipate objections the Greylag Entities might raise in the application and to conduct research on the same. It was not reasonable for the applicants to have incurred such costs as the Greylag Entities had not even raised their objections in the pre-transfer period. Further, allowing such costs would be tantamount to allowing Garuda Indonesia and the applicants to recover costs which should be provided for in the relevant foreign proceedings: at [12] to [14].
4 The Court allowed costs of US$201,008 incurred by the applicants in the period between the transfer of the application from the General Division of the High Court and the date of the Judgment. The Court rejected the Greylag Entities’ arguments that the costs as claimed were not reasonable, and found that the costs awards in prior cases decided by the Singapore International Commercial Court were not relevant as they did not share common features with the present case: at [19] to [25].
5 The Court allowed costs of US$13,174.10 to the applicants in respect of the Greylag Entities’ application in SIC/SUM 34/2023 (“SUM 34”) for production of documents: at [26] to [29].
6 The Court allowed only part of the costs claimed by the applicants for costs incurred after the issuance of the Judgment, amounting to US$2,121.60. The Court found that some of the costs claimed related to considering the implications of the Judgment on other proceedings. These were not incurred for the purpose of the application and could not be claimed: at [29] to [31].
7 In respect of costs incurred for the preparation of the costs submissions, the Court found the sum claimed by the applicants to be disproportionate compared to the complexity of the costs issues. The Court therefore awarded a lower sum of US$12,200: at [32] to [35].
8 The Court declined to order the applicants to pay costs to the Greylag Entities in respect of the carve-outs and the applicants’ withdrawal from the SDNY proceedings. The Greylag Entities had not satisfied the requirements to adopt an issue-based approach to costs set out in Comfort Management Pte Ltd v OGSP Engineering Pte Ltd and another [2022] 5 SLR 525, so as to justify a costs order against the applicants in respect of the carve-outs. The Court also found the claim in respect of the withdrawal from the SDNY proceedings to be unmeritorious: at [40] to [47].
9 As for the applicants’ experts’ disbursements, while the Greylag Entities claimed that several items overlapped and should be disallowed, the Court was satisfied on the basis of explanations furnished by the applicants that there were no overlaps, and allowed the disbursements as claimed: at [52].
10 The Court therefore ordered the Greylag Entities to pay the following amounts to the applicants:
a. US$228,503.70 for costs of OA 5 and SUM 34;
b. IDR 277,500,000 for the applicants’ experts’ fees;
c. S$784.08 and IDR 41,636,921 for the applicants' experts’ disbursements; and
d. S$11,293.71 for the applicants’ other disbursements.
This summary is provided to assist in the understanding of the Court’s grounds of decision. It is not intended to be a substitute for the reasons of the Court. All numbers in bold font and square brackets refer to the corresponding paragraph numbers in the Court’s grounds of decision.