Case Details
- Citation: [2025] SGHCR 18
- Title: Armira Capital Limited v Ji Zenghe & 2 Ors
- Court: High Court (General Division)
- Proceeding: Bill of Costs No 171 of 2024
- Related Originating Claim: Originating Claim No 36 of 2023 (“OC 36”)
- Date of Hearing: 15, 17 April, 6 May 2025
- Date of Decision: 20 June 2025
- Judge: AR Gan Kam Yuin
- Applicant: Armira Capital Limited
- Respondents: Ji Zenghe; Fan Xianyong; Oriental Straits Fund III (“OSF III”)
- Legal Area: Civil Procedure — Costs — Assessment (indemnity basis)
- Statutes Referenced: Rules of Court 2021 (including Order 21 r 20); (as reflected in the extract) Supreme Court Practice Directions 2021 (Form B31 of Appendix B)
- Key Procedural Orders in OC 36: Indemnity costs orders in respect of SUM 1915 (29 Dec 2023), SUM 653 (7 May 2024), and SUM 1463 (11 Sep 2024)
- Judgment Length: 51 pages; 14,760 words
Summary
This decision concerns the assessment of costs on an indemnity basis arising from multiple interlocutory applications within OC 36. Armira Capital Limited (“Armira”), a UK-regulated financial advisory services company with no presence in Singapore, obtained three separate costs orders in its favour against Ji Zenghe, Fan Xianyong, and OSF III (collectively, “the respondents”). The costs orders were made “on an indemnity basis to be taxed if not agreed”. Armira then filed Bill of Costs No 171 of 2024 (“BC 171”) to have its costs assessed.
The High Court (AR Gan Kam Yuin) addressed six issues, the central theme being the proper approach to indemnity-basis assessment under the bill of costs framework (including Section 1, Section 2 and Section 3 of BC 171), the quantum of the appropriate awards for each section, and the treatment of disbursements and foreign lawyers’ fees. A further issue was whether a contractual indemnity for costs received by Armira from another party affected the costs it could recover from the respondents.
While the extract provided is truncated, the judgment’s structure and the issues identified show that the court undertook a granular, section-by-section assessment. It applied established principles governing indemnity costs, scrutinised the reasonableness and recoverability of items claimed, and then determined the appropriate awards for the work done in the cause, work done for the assessment, and disbursements (including foreign legal fees). The court also considered the practical effect of contractual indemnities on the assessment and recovery of costs.
What Were the Facts of This Case?
The underlying dispute in OC 36 arose from securities financing arrangements. Ji and Fan, together with Euro Credit Holdings 1 Limited (“Euro 1”), entered into Securities Debt Agreements (“SDAs”) under which Euro 1 agreed to lend US$25m each to Ji and Fan (the “Loans”). As collateral, Ji and Fan agreed to pledge shares in The Place Holdings Limited (the “Pledged Shares”).
OSF III and Euro 1 became involved through addendums to the SDAs (“ASDAs”), including OSF III’s guarantee of Ji and Fan’s performance. In addition, Euro 1, OSF III, and Armira entered into a Custodian Management Agreement (“CMA”). Armira’s role under the CMA was to arrange custody of the Pledged Shares. Operationally, Armira had an account with CACEIS Bank Spain SAU (“CACEIS”) and arranged for the Pledged Shares to be held by CACEIS, which in turn arranged for holding by sub-custodians in Singapore. The SDAs and CMA also contemplated that Euro 1 could rehypothecate the Pledged Shares, with Armira obliged to follow Euro 1’s instructions in relation to the Pledged Shares.
Crucially for the costs assessment, the CMA contained an indemnity clause. Clause 5.4 of the CMA provided that OSF III and Euro 1 agreed to indemnify Armira against all claims, including “court costs, reasonable attorneys’ fees, damages and disbursements”. Separately, the parties’ contractual framework included an Exclusive Jurisdiction Clause and English governing law provisions in Armira’s Terms of Business (“TOB”), as well as indemnities in the TOB requiring the respondents to indemnify Armira for losses relating to the TOB, including legal costs on a full indemnity basis.
In January 2023, the respondents commenced OC 36 against Euro, Euro 1 and Armira seeking delivery up of the Pledged Shares, injunctive relief to cease dealings, damages for conversion (to be assessed), a tracing order, and an inquiry into dealings and proceeds. The respondents also obtained without notice interim injunctions and permission to serve cause papers out of Singapore. Between February and April 2023, they sought and obtained variations to the injunctions, again in the respondents’ absence.
Default judgments were subsequently entered against the OC 36 defendants in their absence. Armira applied to set aside the default judgments and the service out order (SUM 1915). Euro and Euro 1 also applied to set aside their default judgment (SUM 1916). On 29 December 2023, the court set aside the default judgments for Armira and ordered indemnity costs for SUM 1915. On 7 May 2024, following repeated failures by the respondents to attend case conferences, the court granted an unless order and ordered indemnity costs in OC 36 in favour of the applicant. On 11 September 2024, the court dismissed certain applications by Euro and Euro 1 but granted Armira’s SUM 1463, setting aside the service out order and injunctions insofar as they related to Armira, and ordering indemnity costs again.
After these costs orders, Armira filed BC 171 on 27 December 2024. The bill of costs was structured into three sections: (i) work done in the cause or matter except for assessment of costs (Section 1), (ii) work done for and in the assessment of costs (Section 2), and (iii) disbursements made in the cause or matter (Section 3). The assessment therefore required the court to determine the correct approach and quantum for each section, including the treatment of foreign lawyers’ fees and the effect of contractual indemnities.
What Were the Key Legal Issues?
The first issue was the approach to be taken in assessing costs on an indemnity basis under Section 1 of BC 171. Indemnity costs are not simply “more costs”; they reflect a particular standard of scrutiny and a different starting point from party-and-party costs. The court therefore had to articulate the correct methodology for assessing what is recoverable and how doubts or deficiencies should be treated.
Second, the court had to determine the appropriate award for Section 1 of BC 171, which covered work done in the cause or matter (excluding assessment work). This required the court to evaluate the items claimed, the time and effort expended, and whether the work was properly attributable to the matters in which Armira succeeded, particularly given the procedural history involving default judgments, service out, and injunctions.
Third, the court had to determine the appropriate award for Section 2 of BC 171, which covered work done for and in the assessment of costs. This typically involves assessing whether the costs of preparing the bill, responding to objections, and attending hearings were reasonably incurred and properly within scope.
Fourth and fifth, the court had to assess (a) the appropriate award for disbursements claimed in Section 3 and (b) the appropriate award for fees claimed by foreign lawyers under Section 3. These issues often turn on whether disbursements were necessary, whether foreign counsel fees are recoverable in principle, and whether the amounts claimed are reasonable and supported.
Finally, the sixth issue was the impact of a contractual indemnity for costs which Armira had received from another party. This raised a more nuanced question: whether contractual indemnities operate to reduce or offset the costs recoverable from the respondents, or whether indemnity costs orders remain payable notwithstanding that the applicant may have recourse elsewhere.
How Did the Court Analyse the Issues?
Although the extract is truncated, the judgment’s stated issues and procedural context indicate a structured analysis. For Issue 1, the court would have started by identifying the legal character of indemnity-basis assessment under the costs framework applicable to BC 171. The court’s task was to determine the correct approach to assessing recoverability and reasonableness, including how to treat items that are arguably excessive, unnecessary, or insufficiently particularised.
In indemnity-basis assessments, the court typically applies a more claimant-friendly standard than in party-and-party assessments. The practical effect is that doubts may be resolved in favour of the receiving party, and the court may be less willing to disallow costs merely because they are not strictly necessary, provided they are reasonably incurred in the conduct of the case. However, indemnity costs do not mean that all costs claimed are automatically recoverable; the court still examines whether the work and disbursements fall within the scope of the costs order and whether they are supported by evidence and proper itemisation.
For Issues 2 and 3, the court’s analysis would necessarily have been item-specific. Section 1 required evaluation of work done in the cause or matter. In this case, Armira’s success in setting aside default judgments and service out, and in having injunctions set aside insofar as they related to Armira, provided the foundation for the indemnity costs orders. The court would therefore consider whether the work claimed corresponded to those successful applications and whether the work was reasonably required to achieve the outcomes. Where work related to matters beyond the scope of the costs orders, or duplicated efforts, the court would likely reduce or disallow those items.
Section 2 required a different lens. Costs of assessment work are often scrutinised because they can expand significantly. The court would assess whether the preparation of BC 171, the drafting of submissions, and any correspondence or attendance were reasonably necessary to obtain the assessment and respond to objections. The court would also consider whether the assessment work was proportionate to the issues and whether it duplicated work already done in the underlying applications.
For Issues 4 and 5, the court’s reasoning would focus on disbursements and foreign counsel fees. Disbursements claimed in Section 3 include expenses incurred in the cause or matter, and foreign lawyers’ fees raise additional concerns: whether such fees were incurred for work that was necessary for the Singapore proceedings, whether the foreign counsel’s involvement was justified given Armira’s lack of Singapore presence, and whether the fees were reasonable in amount. The court would likely require sufficient breakdowns and evidence to support the claimed sums, and it would consider whether any portion of foreign counsel fees overlapped with work already performed by Singapore counsel.
Issue 6—contractual indemnity—would have required the court to address the relationship between contractual arrangements and court-ordered costs. The CMA and TOB contained indemnities in favour of Armira, including indemnification for court costs and legal costs on a full indemnity basis. The court would therefore consider whether the respondents could argue that Armira should not recover costs from them because Armira had already been indemnified by another party. The analysis would likely distinguish between (i) the existence of a contractual right to reimbursement and (ii) the court’s purpose in awarding costs to the successful party. In principle, a contractual indemnity does not necessarily negate the respondents’ liability under a costs order; rather, it may affect questions of double recovery or set-off, depending on the precise terms and the evidence of actual payments or entitlements.
Accordingly, the court’s approach would be to ensure that Armira is not unjustly enriched through double recovery for the same costs, while also recognising that indemnity costs are intended to compensate the successful party for costs incurred in the litigation. The court would likely examine whether the contractual indemnity covered the same categories of costs and whether it had been invoked or paid, and then decide whether any adjustment was warranted in the assessment.
What Was the Outcome?
The court ultimately determined the appropriate awards for each section of BC 171: Section 1 (work done in the cause or matter), Section 2 (work done for and in the assessment), and Section 3 (disbursements and foreign lawyers’ fees). The decision reflects a careful, section-by-section assessment consistent with the indemnity-basis costs orders made in OC 36.
In practical terms, the outcome would have resulted in either (i) the allowance of the majority of Armira’s claimed costs on an indemnity basis, subject to reductions for items not properly recoverable, or (ii) partial disallowance where items were not sufficiently justified, were outside scope, or were not supported. The court also addressed the contractual indemnity point, determining whether and how it affected the recoverability of costs from the respondents.
Why Does This Case Matter?
This case is significant for practitioners because it provides a detailed, procedural roadmap for assessing indemnity-basis costs in Singapore, particularly where the bill of costs is structured into multiple sections and where foreign counsel fees and disbursements are claimed. The court’s treatment of the approach to indemnity assessment under Section 1 is especially relevant for litigators who routinely seek indemnity costs following procedural defaults, non-compliance, or other conduct that attracts indemnity orders.
Second, the case highlights the evidential and analytical work required to recover foreign lawyers’ fees and disbursements. Where a party is based overseas and engages foreign counsel, the court’s reasoning on recoverability and reasonableness will be of direct utility to law firms preparing bills of costs and responding to objections.
Third, the contractual indemnity issue is a practical concern in cross-border commercial disputes. Parties often have contractual indemnities for legal costs, and respondents may seek to argue that such indemnities should reduce or eliminate court-awarded costs. The court’s approach clarifies how contractual indemnities interact with court-ordered costs and whether adjustments are required to prevent double recovery.
Legislation Referenced
- Rules of Court 2021 (including Order 21 r 20)
- Supreme Court Practice Directions 2021 (Form B31 of Appendix B)
Cases Cited
- (Not provided in the supplied extract.)
Source Documents
This article analyses [2025] SGHCR 18 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the full judgment for the Court's complete reasoning.