CNA v CNB and another

This was the costs judgment following CNA v CNB and another and other matters [2023] SGHC(I) 6, in which the Singapore International Commercial Court found for the defendants, CNB and CNC, in four originating summonses arising from an arbitration (SIC/OSes 2, 3, 4 and 5 of 2022). CNA was the plaintiff in two of them and CND and CNE in the other two. The summonses began in the High Court and were transferred to the SICC on 4 January 2022. The transfer order directed that pre-transfer costs be assessed under O 59 r 7 of the Rules of Court 2014, with the approach to post-transfer costs left to the SICC.

The parties agreed that the plaintiffs would bear the defendants' costs in equal halves, that post-transfer costs would be assessed under O 110 r 46, and that the court could decide on written submissions. The defendants' revised costs schedule showed fees of S$266,127 before transfer and S$921,903 after, plus disbursements in Singapore dollars and Korean won, the won sums relating mainly to their Korean law expert, Professor Kwon, and their Korean counsel, KL Partners (KL). The plaintiffs did not dispute that these sums were incurred, but said too much had been put after transfer and that the figures far exceeded the defendants' case management costs plan (CMP), which had estimated S$350,000 of further fees.

1. Whether the costs schedule or the estimates in the case management costs plan should govern the division of fees before and after transfer
2. What pre-transfer costs should be awarded, and whether the court should depart from the Appendix G guidelines
3. What post-transfer costs were reasonable under O 110 r 46
4. How the disbursements, including the fees of the Korean law expert and Korean counsel, should be treated

Where an adequately detailed costs schedule differs sharply from a CMP estimate, the court held that the schedule is accepted as accurate unless the paying party shows otherwise; for pre-transfer costs any excess is moderated by Appendix G and, where fit, the CMP, while for post-transfer costs the gap from the CMP is one factor in reasonableness. The plaintiffs raised some concerns, noting a 22/78% split, but fees tend to be back-loaded before a three-day hearing, and they had declined to produce their own costs statements. The court therefore used the schedule's split.

Appendix G would have allowed at most S$26,400 for pre-transfer costs. The defendants pointed to some 20 interlocking agreements and issues of Singapore and Korean law, and the court found the matters exceedingly complex, so a departure was justified. A return of less than 12% on fees incurred was not objectively reasonable, and about 25% was more appropriate, giving S$50,000, the figure all parties had proposed, though for different reasons.

For post-transfer costs, the defendants had acted reasonably in high-value, complex claims. The plaintiffs relied on the CMP figure and then sought a further reduction, which was illogical without showing anything unreasonable in it. In the absence of the plaintiffs' own schedules, the "best evidence" described in Senda International Capital Ltd v Kiri Industries Ltd [2023] 1 SLR 96 was missing. The court rejected any standard 30% discount based on other cases, but accepted the defendants' own concession of 70% of their post-transfer fees, S$645,332.10.

Ordinary disbursements and expert fees were allowed in full. KL's fees were treated as counsel's fees rather than disbursements. Their involvement was not a luxury, but only 25% of KL's fees and disbursements were taken into account, then adjusted in line with the pre-transfer and post-transfer approaches.

The court ordered each set of plaintiffs to pay the defendants S$25,000 for pre-transfer fees of Singapore counsel and KRW2,677,606 for KL's pre-transfer fees; S$322,666.05 for post-transfer fees of Singapore counsel and KRW13,211,852.50 for KL's post-transfer fees; and, as disbursements, S$33,938.50 in ordinary disbursements, KRW45,356,575 for Professor Kwon's fees and costs, and KRW929,753.25 for disbursements of Korean counsel and Professor Kwon.