RELIANCE INFRASTRUCTURE LIMITED v SHANGHAI ELECTRIC GROUP CO LTD

[2024] SGHC(I) 8 Singapore International Commercial Court 16 April 2024 • SIC/OA 1/2023 • 16 min read

6 cases cited Cited by 2 cases

Catchwords

Civil Procedure — Costs — Principles — Principles on assessment of costs for proceedings in Singapore International Commercial Court — Reasonableness and proportionality of costs — Disparity between quantum of costs estimates of parties Civil Procedure — Costs — Principles — Principles on assessment of costs for proceedings in Singapore International Commercial Court — Reasonableness and proportionality of costs — Factors relevant to assessment of reasonableness and proportionality of costs awarded pursuant to Order 22 rule 3(2) of Singapore International Commercial Court Rules 2021

Practice Areas

Civil Procedure

Case Significance

Reliance Infrastructure Ltd v Shanghai Electric Group Co Ltd [2024] SGHC(I) 8 was decided by the Singapore International Commercial Court (Originating Application No 1 of 2023), with Philip Jeyaretnam J delivering the judgment of the court (sitting with Sir Vivian Ramsey IJ and Anselmo Reyes IJ) on 16 April 2024 after a hearing on 6 March 2024. This judgment dealt with costs following the court's earlier decision in Reliance Infrastructure Ltd v Shanghai Electric Group Co Ltd [2024] SGHC(I) 3, in which it had dismissed the claimant Reliance Infrastructure Limited's application in SIC/OA 1/2023 to set aside an arbitral award that had awarded damages to the defendant, Shanghai Electric Group Co Ltd. Having awarded costs to Shanghai Electric, the court addressed the parties' inability to agree on the amount, considering principles on the assessment of costs in the SICC including the reasonableness and proportionality of costs under Order 22 rule 3(2) of the Singapore International Commercial Court Rules 2021 and the disparity between the parties' costs estimates.

[2024] SGHC(I) 8 explained

RELIANCE INFRASTRUCTURE LIMITED v SHANGHAI ELECTRIC GROUP CO LTD ([2024] SGHC(I) 8) is a Singapore judgment decided by the Singapore International Commercial Court on 16 April 2024. It is categorised under Civil Procedure. Within this corpus it has since been cited by 2 other reported Singapore judgments, a measure of how often later decisions have referred to it. This page summarises what the reported decision covers and links the primary sources — the full judgment, the statutes it cites, and the other cases it engages with — so the decision can be read in context. It is reference information, not legal advice, and it does not state the outcome or any holding beyond what the official judgment records.

What is [2024] SGHC(I) 8 about?

RELIANCE INFRASTRUCTURE LIMITED v SHANGHAI ELECTRIC GROUP CO LTD ([2024] SGHC(I) 8) is a Singapore International Commercial Court decision from 2024. Its published catchwords are “Civil Procedure — Costs — Principles — Principles on assessment of costs for proceedings in Singapore International Commercial Court — Reasonableness and proportionality of costs — Disparity between quantum of costs estimates of parties” and “Civil Procedure — Costs — Principles — Principles on assessment of costs for proceedings in Singapore International Commercial Court — Reasonableness and proportionality of costs — Factors relevant to assessment of reasonableness and proportionality of costs awarded pursuant to Order 22 rule 3(2) of Singapore International Commercial Court Rules 2021”, which indicate the subject matter the judgment addresses. The full reasoning and orders are in the judgment itself, linked below.

What earlier Singapore cases does [2024] SGHC(I) 8 cite?

Among the in-corpus authorities it refers to are [2024] SGHC(I) 5 and [2024] SGHC(I) 3. The complete list of cases cited, and of later cases that cite this decision, is shown on this page.

How influential is [2024] SGHC(I) 8?

Within this corpus, [2024] SGHC(I) 8 has been cited by 2 later reported Singapore judgments. That count reflects references from other decisions held in this corpus only and is a conservative lower bound on how often the case has actually been cited.

Summary

SUPREME COURT OF SINGAPORE

16 April 2024

Case summary

Reliance Infrastructure Ltd v Shanghai Electric Group Co Ltd [2024] SGHC(I) 8

Singapore International Commercial Court Originating Application No 1 of 2023

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Decision of Philip Jeyaretnam J, Sir Vivian Ramsey IJ and Anselmo Reyes IJ (delivered by Justice Jeyaretnam):

Outcome: SICC awarded costs to Shanghai Electric in the amount of US$734,660.02 as the successful party in defending the setting-aside application of Reliance Infrastructure

Background

1 The claimant (“Reliance Infrastructure”) sought to set aside an arbitral award which had awarded damages to the defendant (“Shanghai Electric”). The tribunal’s putative jurisdiction over the parties’ dispute was based on an arbitration clause found in a purported letter dated 26 June 2008 (“the Guarantee Letter”), in which Reliance Infrastructure had allegedly guaranteed the obligations of a related company owed to Shanghai Electric under a separate contract.

2 In its Originating Application, Reliance Infrastructure sought to set aside that award on the grounds that Shanghai Electric had forged the signature of its former officer on the Guarantee Letter and, in the alternative, that its former officer had no authority to execute agreements on its behalf.

3 The Court rejected Reliance Infrastructure’s setting-aside application and awarded costs in favour of Shanghai Electric. As Parties were unable to agree on the amount of costs, they filed written submissions on costs.

4 Shanghai Electric estimated the total amount of costs and disbursements it incurred to be US$911,244.87 and sought full reimbursement. Reliance Infrastructure argued that that sum was excessive and unreasonable. It argued that Shanghai Electric should be awarded no more than S$225,000 in costs.

The Court’s judgment

5 The Court held that Shanghai Electric had furnished sufficient information in its costs schedule to show that their costs were generally reasonable and proportionate (at [12] and [19]).

6 The Court then divided the Parties’ estimates of their own costs incurred into four categories – professional fees for local counsel; professional fees for foreign counsel; disbursements incurred for experts’ fees; and, lastly, all other disbursements (at [13]).

7 Having broken down the Parties’ costs estimates into these categories, the Court observed that Parties’ estimates were similar in quantum save only for their estimates for their respective local counsel’s professional fees (at [13]).

8 As the Parties’ estimates were similar in respect of foreign counsel’s fees and all disbursements incurred, the Court granted full reimbursement of Shanghai Electric’s costs for these categories, which amounted to US$184,660.02 in total (at [12], [14] and [32(b)]).

9 In respect of Parties’ local counsel’s fees, the Court noted that there was a significant disparity between the US$270,000 incurred by Reliance Infrastructure versus the sum of US$726,584.85 incurred by Shanghai Electric (at [13] and [20]). This large disparity in quantum justified a reduction in the costs claimed by Shanghai Electric for its local counsel as the sum was not objectively reasonable (at [17] and [21]).

10 Moreover, the Court recognised that Shanghai Electric had earlier estimated the costs it would incur in the proceedings at S$250,000 when applying for security for costs, whereas its present costs estimate was for a significantly higher sum, albeit that the figure of S$250,000 was only a conservative estimate of the minimum amount of costs they may incur (at [23] and [25]).

11 The Court calibrated the quantum claimed by Shanghai Electric for its local counsel’s fees from US$726,584.85 down to US$550,000 (at [12], [26], [31] and [32(a)]).

12 In arriving at the sum of US$550,000, the Court took into account such factors as the high amount of more than US$146 million at stake in the arbitral award which Reliance Infrastructure sought to set aside (at [26(a)]) as well as the severity of the allegation that Shanghai Electric had forged the signature of Reliance Infrastructure’s former officer on the Guarantee Letter (at [26(b)]). These factors increased the amount of costs that were reasonable for Shanghai Electric to have incurred to defend the setting-aside application (at [30]).

13 Thus, in the circumstances, the Court awarded a total of US$734,660.02 in costs to Shanghai Electric as the successful party in the setting-aside proceedings (at [12], [32] and [33]).

This summary is provided to assist in the understanding of the Court’s judgment. 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 judgment.

What did Reliance Infrastructure v Shanghai Electric [2024] SGHC(I) 8 concern?

The judgment concerned the assessment of costs in the Singapore International Commercial Court after Reliance Infrastructure Ltd's application to set aside an arbitral award was dismissed in [2024] SGHC(I) 3. The parties could not agree on quantum, so the court assessed costs payable to Shanghai Electric Group Co Ltd.

What principles governed the SICC costs assessment in [2024] SGHC(I) 8?

The court applied principles on assessing costs for SICC proceedings, focusing on the reasonableness and proportionality of costs under Order 22 rule 3(2) of the Singapore International Commercial Court Rules 2021. It considered factors relevant to reasonableness and the disparity between the parties' costs estimates.