Case Details
- Case Title: IRFAN SETIAPUTRA & Anor
- Citation: [2024] SGHCI 18
- Court: Singapore International Commercial Court (SICC)
- Originating Application: SIC/OA 5 of 2022
- Summons: SIC/SUM 34 of 2023
- Judgment Date (First Instance): 15 March 2024 (judgment reserved)
- Date of Judgment: 12 June 2024
- Judges: Kannan Ramesh JAD, Anselmo Reyes IJ, Christopher Scott Sontchi IJ
- Judgment Author: Christopher Scott Sontchi IJ (delivering the judgment of the court)
- Applicants/Foreign Representatives: Irfan Setiaputra; Prasetio
- Non-parties / Opponents: Greylag Goose Leasing 1410 Designated Activity Company; Greylag Goose Leasing 1446 Designated Activity Company
- Underlying Insolvency Matter: PT Garuda Indonesia (Persero) Tbk (“Garuda Indonesia”)
- Foreign Proceedings Recognised: Restructuring proceedings in the Jakarta Commercial Court (PKPU Proceeding)
- Legal Framework: 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) (“IRDA”)
- Key Procedural Rule Referenced: O 22 r 3(1) of the SICC Rules 2021
- Statutes Referenced (as per extract): Insolvency, Restructuring and Dissolution Act 2018 (IRDA); UNCITRAL Model Law on Cross-Border Insolvency (Third Schedule); Goods and Services Tax Act 1993 (2020 Rev Ed); Goods and Services Tax (International Services) Order (2008 Rev Ed)
- Cases Cited (as per extract): Re PT Garuda Indonesia (Persero) Tbk and another matter [2024] SGHC(I) 1; CJM and others v CJT [2021] 5 SLR 222; Asiana Airlines, Inc v Gate Gourmet Korea Co, Ltd [2022] 4 SLR 158; BXS v BXT [2019] 5 SLR 48; CYW v CYX [2024] 3 SLR 125
- Judgment Length: 21 pages; 5,138 words
Summary
This decision of the Singapore International Commercial Court (“SICC”) concerns the assessment of costs arising from an earlier recognition application in cross-border insolvency proceedings. The applicants, acting as foreign representatives of PT Garuda Indonesia (Persero) Tbk (“Garuda Indonesia”), had sought recognition and relief in Singapore under the UNCITRAL Model Law on Cross-Border Insolvency as implemented in Singapore through the Third Schedule of the Insolvency, Restructuring and Dissolution Act 2018 (“IRDA”). The SICC had previously granted the recognition and related reliefs in Re PT Garuda Indonesia (Persero) Tbk and another matter [2024] SGHC(I) 1 (“the Judgment”).
In the present costs judgment ([2024] SGHCI 18), the SICC accepted that the Greylag Entities—who opposed the application—were liable for the applicants’ costs as the successful parties. However, the court scrutinised the quantum and composition of the costs claimed, including whether certain heads of costs were reasonable, whether disbursements overlapped, and whether costs should be reduced due to wasted or unnecessary work. The court also addressed the treatment of pre-transfer costs incurred in other foreign proceedings and the extent to which post-transfer work was justified in light of the issues actually litigated in Singapore.
What Were the Facts of This Case?
The underlying substantive dispute involved Garuda Indonesia’s restructuring proceedings in Indonesia. The applicants sought recognition in Singapore of those proceedings as a “foreign main proceeding” within the meaning of Article 2(f) of the Third Schedule. In the earlier Judgment dated 18 January 2024, the SICC granted recognition and a suite of reliefs, including a mandatory stay of legal proceedings between Garuda Indonesia and the Greylag Entities under Article 20(1) of the Third Schedule, and recognition/enforcement of the restructuring plan homologated by the Jakarta Commercial Court under Article 21(1) (subject to carve-outs).
Procedurally, the application (SIC/OA 5/2022) was initially filed in the General Division of the High Court on 22 November 2022. It was later transferred to the SICC on 21 December 2022 pursuant to O 23A r 4 of the SICC Rules 2021. The cross-border nature of the matter was reflected in parallel proceedings abroad. It emerged that the Greylag Entities had raised similar objections in the US Bankruptcy Court for the Southern District of New York (“SDNY”) in Case No 22-11274 (LGB) (“the SDNY proceedings”).
To manage the parallel litigation efficiently, court-to-court communications were initiated and a joint case management hearing was held under protocols based on the Judicial Insolvency Network Guidelines. The parties were directed to submit a joint hearing protocol. However, shortly before the protocol was due, the applicants withdrew their application in the SDNY on 24 May 2023, rendering the joint hearing moot. This withdrawal later became relevant to the costs debate, with the Greylag Entities arguing that some costs were wasted and should not be recoverable.
In the Singapore proceedings, the Greylag Entities also brought an application for production of documents (SIC/SUM 34/2023) shortly before the hearing of OA 5. The SICC heard SUM 34 on the first day of the OA 5 hearing and dismissed it. The costs judgment therefore had to consider not only the costs of the successful recognition application but also whether work done in relation to SUM 34 should be excluded (as it was excluded from the applicants’ post-transfer costs claim).
What Were the Key Legal Issues?
The central legal issue was how costs should be assessed following the SICC’s grant of recognition and reliefs in OA 5. The parties agreed on the governing principle: under O 22 r 3(1) of the SICC Rules 2021, a successful party is entitled to costs, and the quantum will generally reflect the costs incurred, subject to proportionality and reasonableness. The Greylag Entities did not contest entitlement in principle, but they challenged the amount and the recoverability of specific items.
First, the Greylag Entities argued that the applicants’ claimed costs were unreasonable and disproportionate given the nature of the application and the issues involved. They contended that OA 5 was relatively straightforward, focusing mainly on a single public policy objection under Article 6 of the Third Schedule and on issues of Indonesian law. They also argued that the applicants should not recover costs for keeping the court updated on foreign proceedings beyond what was required.
Second, the Greylag Entities challenged particular disbursement items, asserting that some costs overlapped and should be disallowed. Third, they sought additional costs in their favour for matters connected to the carve-outs granted by the SICC and for alleged wasted costs arising from the applicants’ withdrawal of the SDNY application.
How Did the Court Analyse the Issues?
The SICC began by reaffirming the agreed starting point for costs. Under O 22 r 3(1) of the SICC Rules, costs follow the event: the successful applicants were entitled to costs, and the quantum should generally reflect costs incurred, but must be tempered by proportionality and reasonableness. This framework is particularly important in complex cross-border insolvency matters where the volume of work can be substantial, yet the Singapore hearing may focus on a limited set of legal questions.
On pre-transfer costs, the applicants sought US$14,441.20 for reviewing papers in foreign proceedings involving Garuda Indonesia and Garuda France to anticipate objections the Greylag Entities might raise in OA 5 and to conduct research with specific reference to Article 6 of the Third Schedule. The Greylag Entities argued that they had not even raised their objections during the pre-transfer period and that it was not reasonable to incur costs reviewing other proceedings not part of the cause in OA 5. The SICC agreed with the Greylag Entities and declined to award any pre-transfer costs. The court reasoned that allowing recovery in Singapore for costs incurred in other proceedings—particularly where those costs should properly be borne in those foreign proceedings—would amount to an impermissible attempt to shift costs across jurisdictions.
The court also emphasised that the applicants were officers of Garuda Indonesia and were personally involved in at least the SDNY proceedings. Where foreign proceedings had already raised potentially relevant issues, the applicants would already have had access to the relevant materials and/or been apprised of the issues. In that context, awarding pre-transfer costs would be tantamount to permitting recovery for work that was either already available internally or should have been addressed in the foreign forum. This analysis reflects a pragmatic approach to causation and necessity: costs are recoverable only to the extent they were reasonably incurred for the Singapore application, not merely because they were connected to the broader dispute.
For post-transfer costs, the SICC considered costs incurred between transfer and the date of the Judgment, excluding work done in respect of SUM 34. The applicants claimed US$201,008. The Greylag Entities proposed a far lower figure of US$50,000 and advanced several arguments. First, they argued the applicants’ solicitors spent disproportionate time on a relatively straightforward application with narrow issues. Second, they contended that the applicants should not recover costs for keeping up to date on foreign proceedings because the court did not require in-depth updates beyond those relating to the SDNY proceedings. Third, they argued the applicants did not need to prepare from scratch because they were already involved in arbitration proceedings with the Greylag Entities and were familiar with the factual circumstances and documents. Fourth, they compared the claimed quantum with costs awarded in prior SICC cases, arguing that the applicants’ costs were out of line with precedent.
In response, the applicants maintained that the Greylag Entities downplayed the complexity of OA 5. They also argued that it was necessary to keep the court informed of material developments in foreign proceedings because the Greylag Entities themselves had put the status of those foreign proceedings into issue at the hearing, including by arguing that OA 5 was brought prematurely in view of developments in the Indonesian courts. The SICC’s approach to this contention is consistent with the principle that costs should reflect work that was actually necessary to address the issues raised. If the opposing party places the timing and status of foreign proceedings in issue, it is generally reasonable for the applicant to provide updates relevant to those arguments.
Further, the applicants argued that the arbitration proceedings were fundamentally distinct from OA 5, undermining the Greylag Entities’ claim that familiarity with arbitration materials reduced the need for preparation. The court also addressed the Greylag Entities’ reliance on prior SICC costs awards, noting (as indicated in the extract) that some of those cases had negligible precedential value because they pre-dated a relevant Court of Appeal decision. While the extract truncates the remainder of the reasoning, the direction is clear: the SICC treated prior costs awards as contextual rather than binding, and focused on the proportionality and reasonableness of the specific work claimed in this case.
Although the extract does not include the final numerical assessment and the court’s ultimate disallowances, the analysis demonstrates that the SICC applied a structured costs review: it separated pre-transfer from post-transfer work, excluded costs relating to SUM 34, assessed necessity and causation, considered whether the opposing party’s litigation posture justified certain work (such as updates on foreign proceedings), and used proportionality to prevent recovery for work that was either redundant, not causally linked to the Singapore application, or properly attributable to other proceedings.
What Was the Outcome?
The SICC held that the applicants were entitled to costs as the successful parties in OA 5, and that the Greylag Entities were liable for those costs. However, the court declined to award the applicants’ claimed pre-transfer costs, finding that it was not reasonable to incur costs reviewing other foreign proceedings and researching anticipated objections that were not shown to have been raised in the pre-transfer period, particularly given the applicants’ existing access and involvement in the foreign proceedings.
On the remaining post-transfer costs, the court proceeded to assess reasonableness and proportionality in light of the nature of the application, the work actually required for the issues litigated, and the parties’ conduct (including the relevance of foreign proceedings updates). The final outcome would therefore involve a costs award reflecting permitted heads of costs while disallowing or reducing items that were not justified or were disproportionate, consistent with O 22 r 3(1) of the SICC Rules.
Why Does This Case Matter?
This costs decision is practically significant for practitioners involved in cross-border insolvency recognition applications in Singapore. While the substantive recognition framework under the Third Schedule is often the focus of litigation, costs outcomes can materially affect strategy, especially where multiple jurisdictions are involved and where parallel proceedings create overlapping workstreams. The SICC’s refusal to allow pre-transfer costs underscores that Singapore costs are not a mechanism to recover expenses incurred in other forums unless they are clearly necessary and causally linked to the Singapore application.
Second, the decision illustrates how proportionality and reasonableness operate in the SICC context. Even where a party is successful, the court will scrutinise the time spent and the necessity of tasks such as monitoring foreign proceedings. At the same time, the court recognised that updates may be reasonable where the opposing party puts the status and timing of foreign proceedings into issue. This balancing approach is useful for counsel preparing costs submissions: it is not enough to show that work was done; counsel must show why it was required for the issues actually contested in Singapore.
Third, the decision provides guidance on how courts may treat comparisons with prior costs awards. The SICC indicated that earlier cases may have limited precedential value depending on whether they pre-date later appellate guidance on costs assessment. For law students and practitioners, this reinforces the importance of grounding costs arguments in the current doctrinal framework rather than relying solely on historical quantum comparisons.
Legislation Referenced
- Insolvency, Restructuring and Dissolution Act 2018 (IRDA) (2020 Rev Ed), Third Schedule (UNCITRAL Model Law on Cross-Border Insolvency)
- Third Schedule, Article 2(f) (definition of “foreign main proceeding”)
- Third Schedule, Article 6 (public policy exception)
- Third Schedule, Article 20(1) (mandatory stay)
- Third Schedule, Article 21(1) (recognition and enforcement of foreign orders)
- Singapore International Commercial Court Rules 2021, O 22 r 3(1) (costs entitlement and proportionality/reasonableness)
- Goods and Services Tax Act 1993 (2020 Rev Ed), s 21(3)(k)
- Goods and Services Tax Act 1993 (2020 Rev Ed), s 3(1)
- Goods and Services Tax (International Services) Order (2008 Rev Ed), Second Schedule, para 1
Cases Cited
- Re PT Garuda Indonesia (Persero) Tbk and another matter [2024] SGHC(I) 1
- CJM and others v CJT [2021] 5 SLR 222
- Asiana Airlines, Inc v Gate Gourmet Korea Co, Ltd [2022] 4 SLR 158
- BXS v BXT [2019] 5 SLR 48
- CYW v CYX [2024] 3 SLR 125
Source Documents
This article analyses [2024] SGHCI 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.