Case Details
- Citation: [2025] SGHCR 18
- Court: High Court of the Republic of Singapore (General Division)
- Date: 20 June 2025
- Judges: AR Gan Kam Yuin
- Case Title: Armira Capital Ltd v Ji Zenghe and others
- Proceeding: Bill of Costs No 171 of 2024
- Related Originating Claim: Originating Claim No 36 of 2023 (“OC 36”)
- Plaintiff/Applicant: Armira Capital Ltd
- Defendants/Respondents: Ji Zenghe; Fan Xianyong; Oriental Straits Fund III
- Legal Area: Civil Procedure — Costs
- Statutes Referenced: First Schedule to the Supreme Court of Judicature Act
- Other Key Procedural Instruments: Orders in OC 36 dated 29 December 2023, 7 May 2024, and 11 September 2024; applications SUM 1915, SUM 653, SUM 1463 (and related applications)
- Judgment Length: 51 pages, 14,760 words
- Cases Cited: [2016] SGHC 278; [2023] SGHC 195; [2025] SGHCR 18
Summary
This decision concerns the assessment of costs on an indemnity basis arising from multiple interlocutory and default-related orders made in OC 36. The applicant, Armira Capital Ltd (“Armira”), is a UK-based regulated financial advisory services company with no presence in Singapore. In OC 36, the respondents (Ji Zenghe, Fan Xianyong, and Oriental Straits Fund III (“OSF III”)) pursued claims in Singapore while failing to attend case conferences and, at key stages, failing to participate in the proceedings. As a result, the High Court set aside default judgments against Armira and made several costs orders in Armira’s favour on an indemnity basis, to be taxed if not agreed.
After those costs orders were made, Armira filed Bill of Costs No 171 of 2024 (“BC 171”) to obtain a formal assessment of the costs it claimed under the structured headings in the bill. The Assistant Registrar (AR) had to determine the correct approach to indemnity costs, the appropriate quantum for the work done in the cause (Section 1), work done for and in the assessment of costs (Section 2), and the disbursements and foreign lawyers’ fees claimed (Section 3). A further issue was how to treat a contractual indemnity for costs that Armira had received from another party.
The AR’s analysis emphasised the principles governing indemnity basis assessments under the Supreme Court’s costs framework, including the degree of latitude afforded to the receiving party and the relevance of reasonableness and proportionality even when the standard is not the same as party-and-party costs. The AR also addressed the evidential and contractual basis for disbursements and foreign legal fees, and clarified the practical impact of contractual indemnities on the assessment of costs payable by the respondents.
What Were the Facts of This Case?
The underlying dispute in OC 36 arose out of securities financing arrangements. Ji and Fan, together with Euro Credit Holdings 1 Limited (“Euro 1”), entered into Securities Debt Agreements (“SDAs”). Under the SDAs, Euro 1 agreed to lend US$25m each to Ji and to Fan (the “Loans”), while Ji and Fan agreed to pledge shares in The Place Holdings Limited as collateral (the “Pledged Shares”). OSF III was involved as guarantor and holder of the Pledged Shares, and it entered into addendums to the SDAs (the “ASDAs”) to guarantee the performance of Ji and Fan’s obligations.
Armira’s role was operational and custody-related. Euro 1, OSF III, and Armira entered into a Custodian Management Agreement (“CMA”). Armira arranged for custody of the Pledged Shares through its account with CACEIS Bank Spain SAU (“CACEIS”), which in turn arranged for the shares to be held by sub-custodians in Singapore. The CMA required Armira to adhere to Euro 1’s instructions regarding the Pledged Shares. Importantly, Clause 5.4 of the CMA provided that OSF III and Euro 1 would indemnify Armira against claims, including court costs and reasonable attorneys’ fees, as well as damages and disbursements.
The SDAs and CMA were also subject to Armira’s Terms of Business (“TOB”). The TOB contained an exclusive jurisdiction clause in favour of the English courts and an English governing law clause. It further contained indemnity provisions in which the respondents agreed to indemnify Armira for losses in relation to the TOB, including legal costs on a full indemnity basis. These contractual provisions became relevant when Armira sought to rely on them in the costs assessment, particularly for the indemnity basis costs ordered by the Singapore court.
In OC 36, the respondents sought substantial relief, including delivery up of the Pledged Shares, injunctions restraining dealings, damages for conversion (to be assessed), tracing orders, and an inquiry into dealings and proceeds. The respondents obtained without-notice injunctions and service-out orders in the absence of the OC 36 defendants. Default judgments were then entered against the OC 36 defendants, including Armira, when they did not appear. Armira subsequently applied to set aside the default judgments and related orders (SUM 1915). The court set aside the default judgments and made indemnity basis costs orders in Armira’s favour. Separately, the respondents repeatedly failed to attend case conferences, leading to further unless orders and additional costs consequences. Ultimately, the court dismissed some applications by the respondents but granted Armira’s SUM 1463, including an indemnity basis costs order.
What Were the Key Legal Issues?
The first issue was doctrinal: what approach should the court take when assessing costs on an indemnity basis under Section 1 of BC 171. Indemnity basis assessments are not identical to party-and-party assessments; they involve a different calibration of how costs are scrutinised and how doubts are resolved. The AR therefore had to articulate the correct legal framework for assessing the work done in the cause or matter (excluding assessment work).
The second and third issues concerned quantum and categorisation. The AR had to decide what the appropriate award should be for Section 1 (work done in the cause) and Section 2 (work done for and in the assessment of costs). These required the AR to examine the bill’s breakdown, the nature of the work performed, and whether the claimed costs fell within the scope of what the indemnity basis orders required.
The fourth and fifth issues related to disbursements and foreign lawyers’ fees under Section 3 of BC 171. The AR had to determine what disbursements were recoverable and whether foreign legal fees could be assessed and awarded as part of the indemnity basis costs, particularly where the applicant was represented by foreign counsel and incurred expenses outside Singapore.
The sixth issue was more nuanced and practical: what impact should be given to a contractual indemnity for costs that Armira had received from another party. This required the AR to consider whether the existence of a contractual indemnity affected the respondents’ liability for costs ordered by the court, and if so, how it should be reflected in the assessment.
How Did the Court Analyse the Issues?
On Issue 1, the AR focused on the governing principles for indemnity basis assessments. The court’s reasoning proceeded from the premise that an indemnity basis order signals a more generous approach to the receiving party than party-and-party costs. In practical terms, the receiving party is entitled to recover costs that are properly incurred and not unreasonable, and the assessment process is less stringent than the party-and-party standard. However, the AR did not treat indemnity basis as a licence to recover any and all costs regardless of relevance or necessity. The analysis therefore balanced the indemnity basis’s increased latitude with the continuing requirement that costs must be incurred in the litigation and be reasonably connected to the work done.
The AR also addressed how the structured headings in BC 171 should be applied. Section 1 concerned work done in the cause or matter, meaning the costs associated with the substantive and interlocutory steps leading to the orders. Section 2 concerned work done for and in the assessment of costs, which typically includes preparation of the bill, responding to objections, and attending the assessment process. Section 3 covered disbursements and foreign lawyers’ fees. The AR’s approach was to ensure that each category was assessed on its own terms, rather than treating the bill as a single undifferentiated claim.
On Issue 2, the AR examined the claimed costs under Section 1 and considered whether the work performed was necessary for the conduct of OC 36 and the applications that led to the indemnity basis costs orders. The AR’s reasoning reflected that indemnity basis costs are intended to compensate the receiving party more fully for costs incurred to vindicate its position, particularly where the court has already determined that indemnity basis costs are appropriate. Nonetheless, the AR scrutinised the claimed work to ensure it was not duplicative, excessive, or unrelated to the matters for which indemnity costs were ordered.
On Issue 3, the AR turned to Section 2 and assessed the work done in the assessment of costs itself. This category often attracts objections because it can include time spent preparing the bill, dealing with procedural steps, and responding to the other side’s submissions. The AR’s analysis emphasised that assessment work must be reasonably incurred to obtain the assessment and to address the issues that arose in the taxation process. Where the work was genuinely required to progress the bill or to clarify disputed items, it was more likely to be allowed. Where it was more in the nature of general correspondence or work that did not materially advance the assessment, it was less likely to be recoverable.
On Issues 4 and 5, the AR analysed disbursements and foreign lawyers’ fees under Section 3. The court’s approach required a careful evidential basis: disbursements must be properly incurred and supported, and foreign counsel fees must be shown to be reasonably incurred and connected to the litigation. The AR also considered whether the foreign lawyers’ fees were recoverable as “attorneys’ fees” or equivalent costs within the indemnity framework, particularly given the contractual indemnity provisions in the CMA and TOB that contemplated recovery of court costs and reasonable attorneys’ fees. The AR’s reasoning indicates that contractual language can support the recoverability of certain categories of costs, but it does not automatically eliminate the court’s assessment function.
Issue 6 required the AR to consider the effect of a contractual indemnity for costs received by Armira from another party. The AR’s reasoning addressed the relationship between contractual indemnities and court-ordered costs. The key point is that a contractual indemnity does not necessarily extinguish the respondents’ liability for costs ordered by the court; rather, it may affect how the receiving party’s overall position is reflected in the assessment to avoid double recovery. The AR therefore treated the contractual indemnity as relevant to the assessment of what Armira should recover from the respondents, but not as a complete bar to recovery where the court has already ordered indemnity basis costs. The analysis aimed to ensure that the respondents were not made to pay more than what the indemnity basis order and the principles of taxation require, while also recognising that the contractual indemnity is part of the overall cost allocation contemplated by the parties’ agreements.
What Was the Outcome?
The AR ultimately determined the appropriate awards for each section of BC 171: Section 1 (work in the cause), Section 2 (assessment work), and Section 3 (disbursements and foreign lawyers’ fees). The decision confirmed that indemnity basis assessment involves a more permissive approach than party-and-party costs, but still requires that costs be properly incurred, reasonably connected to the litigation, and not excessive or duplicative.
In practical terms, the outcome was an assessed costs award payable by the respondents to Armira on the indemnity basis, subject to the AR’s adjustments for disallowed or reduced items. The decision also clarified how contractual indemnities for costs are to be considered in taxation, ensuring that the assessment reflects the court’s costs order while managing the risk of double recovery.
Why Does This Case Matter?
This case is significant for practitioners because it provides a structured and detailed application of indemnity basis assessment principles in the context of a Singapore taxation of costs. While indemnity basis costs are frequently ordered, the actual assessment process can be contentious, particularly where bills include multiple categories of work and where foreign counsel and disbursements are involved. The AR’s approach demonstrates that indemnity basis does not remove the court’s scrutiny; instead, it changes the intensity and the evidential expectations for allowing costs.
For litigators, the decision is also useful on the practical drafting and evidencing of bills of costs. The separation of claims into Sections 1, 2, and 3 in BC 171 mirrors the court’s analytical framework. Lawyers preparing bills should ensure that each category is supported with adequate detail and that the claimed work can be tied to the specific applications and orders that triggered indemnity basis costs.
Finally, the treatment of contractual indemnities for costs is a valuable point of reference. Parties often include full indemnity cost provisions in custody, advisory, or commercial agreements. This decision indicates that such provisions may support the recoverability of certain costs, but they do not automatically determine the taxation outcome. Practitioners should therefore treat contractual indemnities as relevant context rather than a substitute for the court’s assessment.
Legislation Referenced
- First Schedule to the Supreme Court of Judicature Act
Cases Cited
- [2016] SGHC 278
- [2023] SGHC 195
- [2025] SGHCR 18
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.