Case Details
- Citation: [2024] SGHC(I) 20
- Court: Singapore International Commercial Court (SICC)
- Originating Application No: Originating Application No 1 of 2024
- Summons: Summons No 8 of 2024 (SIC/SUM 8/2024)
- Judgment Date: 31 May 2024
- Date of Hearing: 19 April 2024
- Judge: Bernard Eder IJ
- Parties: Pertamina International Marketing & Distribution Pte Ltd (Claimant/Applicant) v P-H-O-E-N-I-X Petroleum Philippines, Inc (Defendant/Respondent) (also known as Phoenix Petroleum Philippines, Inc.)
- Procedural Posture: Costs decision following dismissal of Phoenix’s application in SIC/SUM 8/2024
- Issue Decided: Quantum of costs (proportionality and reasonableness) in relation to SUM 8
- Legal Area: Civil Procedure — Costs
- Key Cost Heads (claimed by PIMD): Singapore counsel costs $208,275.28; arbitration counsel costs $26,813.66; ACCRALAW fees $6,416.16; disbursements $1,964.25
- Key Cost Heads (Phoenix’s position): 50% discount sought for Singapore and arbitration counsel costs
- Final Costs Award: $205,880.41 (with interest at the Judgment rate until payment)
- Interest: Judgment rate until payment
- Judgment Length: 10 pages, 1,999 words
Summary
Pertamina International Marketing & Distribution Pte Ltd v P-H-O-E-N-I-X Petroleum Philippines, Inc ([2024] SGHC(I) 20) is a Singapore International Commercial Court decision concerned solely with costs. The court had earlier dismissed Phoenix Petroleum Philippines’ application in SIC/SUM 8/2024. After that dismissal, the parties were unable to agree on the quantum of costs payable by Phoenix to Pertamina International Marketing & Distribution Pte Ltd (“PIMD”). Phoenix accepted that PIMD, as the successful party, was entitled to costs in principle, leaving only the amount in dispute.
The costs dispute focused on whether the professional fees claimed by PIMD—particularly Singapore counsel costs and arbitration counsel costs—were proportionate and reasonable. Although Phoenix argued for a substantial reduction (a 50% discount for the two main heads of professional costs), the court declined to apply such a blanket reduction. Instead, it assessed the costs by reference to the complexity and value of the underlying dispute, the extent to which Phoenix’s conduct expanded the scope of work, and the need for PIMD to address difficult factual and legal issues, including Philippines law and the effect of arbitral findings.
Ultimately, the court awarded PIMD $205,880.41 in costs for SUM 8, which reflected a “small discount” to account for potential duplication and some objections raised by Phoenix. The court also awarded interest at the Judgment rate until payment, reinforcing the practical significance of costs orders in international arbitration-related litigation.
What Were the Facts of This Case?
The underlying dispute between PIMD and Phoenix arose in an international arbitration context. The judgment on costs is not a merits decision; rather, it follows an earlier decision in which Phoenix’s application in SIC/SUM 8/2024 was dismissed. The costs now determined therefore relate to the procedural contest in SUM 8, not to the substantive validity or enforceability of the arbitral award itself.
Nevertheless, the court’s costs reasoning necessarily depended on the broader context. The decision records that, pursuant to a final arbitral award signed on 28 November 2023 (“Award”), the amount at stake was considerable—approximately US$142 million including interest up to the date of the Award, with further interest accruing at a rate of 5.33% per annum (equivalent to roughly US$120,000 per week or US$18,000 per day) until payment. The Award remained unsatisfied at the time of the costs hearing, underscoring the high stakes and the commercial importance of the litigation.
In the period leading up to the SUM 8 proceedings, Phoenix initiated proceedings in the Republic of the Philippines, described in the judgment as the “Philippines Action” (Civil Case No. R-DVO-23-6338-SC). PIMD’s Singapore counsel had to engage with the procedural posture and legal characterisation of those Philippines proceedings, including how they interacted with the arbitral award and the enforcement framework relevant to international arbitration.
Critically, the court had previously found that Phoenix’s steps in the Philippines were in breach of orders of the SICC, amounting to contempt of court. The judgment on costs refers to Phoenix’s failure to bring an SICC order (ORC 5/2024) to the attention of the Philippines court and Phoenix’s continued pursuit of the Philippines Action despite being well aware of ORC 5. The court also observed that Phoenix did not apologise or provide an excuse for the contempt, and that Phoenix’s arguments in the SICC proceedings were, in the court’s view, untenable or misconceived. These findings were relevant to the assessment of costs because they bore on the conduct of the parties and the reasonableness of Phoenix’s contestation.
What Were the Key Legal Issues?
The principal legal issue was the quantum of costs payable by Phoenix to PIMD following the dismissal of Phoenix’s application in SIC/SUM 8/2024. While Phoenix accepted that PIMD was entitled to costs in principle, the parties disputed the amount. The court therefore had to apply the established costs principles governing proportionality and reasonableness in the SICC context.
In particular, the court had to decide whether the professional fees claimed by PIMD—broken into Singapore counsel costs, arbitration counsel costs, and additional fees/disbursements—were reasonably incurred and proportionate to the matters in issue. Phoenix’s submissions urged the court to reduce the claimed costs substantially, arguing that certain workstreams involved excessive time, duplication, or disproportionate effort compared with Phoenix’s own costs and compared with costs awarded in other SICC cases.
A secondary issue was how to treat costs associated with specialised work. PIMD’s claim included fees to engage ACCRALAW on Philippines law matters, as well as disbursements such as filing fees, translation fees, courier charges, and overtime transport expenses. Phoenix did not dispute those heads (ACCRALAW fees and disbursements), so the court’s analysis concentrated on the two main professional cost heads: Singapore counsel and arbitration counsel.
How Did the Court Analyse the Issues?
The court began by identifying the applicable principles. It noted that the quantum of costs is subject to proportionality and reasonableness, and that the court may have regard to all relevant circumstances. The judgment expressly references the SICC Rules 2021, O 22 r 3(1), which sets out factors such as the complexity and difficulty or novelty of the questions involved; the skill, specialised knowledge and responsibility required of counsel; the time and labour expended; the conduct of the parties (including whether it was reasonable to raise, pursue or contest particular allegations or issues and the manner in which those issues were pursued); and the amount or value of the claim.
With those principles in mind, the court addressed the two disputed heads of professional costs. For Singapore counsel costs, Phoenix advanced multiple arguments aimed at demonstrating that PIMD’s claimed amount was disproportionately high and unreasonable. These arguments were granular and comparative, including: (i) that a large bulk of the costs related to “Stage A5” work (preparing written submissions and bundles, reviewing Phoenix’s submissions and bundles, and preparing for hearing including research), with Phoenix pointing to 113.63 hours for Stage A5 and comparing it to Phoenix’s own time and cost for the same scope; (ii) that comparisons with other recent SICC cost awards showed PIMD’s costs were too high; (iii) that the time claimed for taking instructions and preparing a third witness statement was excessive; (iv) that “getting-up and attending hearing” costs for four Singapore lawyers were excessive compared with Phoenix’s two attending lawyers; (v) that costs for preparing the cost submissions were excessive; (vi) that PIMD’s total hours were not reasonably incurred when compared with Phoenix’s hours, particularly given the number of witness statements filed; and (vii) that the disparity in professional fees between the parties supported a finding of unreasonableness.
The court’s response to these submissions was not to accept a mechanical comparison or to apply a uniform percentage discount. Instead, it evaluated the context and the reasons why PIMD’s counsel had to do more work. The court emphasised the high value of the dispute and the continuing accrual of interest, which made the litigation commercially significant. It also acknowledged that while some issues might have been relatively straightforward, Phoenix’s points raised potentially difficult factual and legal issues, thereby expanding the scope of work required of PIMD.
Most importantly, the court linked the expanded scope to Phoenix’s conduct. It accepted PIMD’s explanation that counsel needed to explain properly the nature and course of the Philippines proceedings initiated by Phoenix and to correct any misimpressions. The court also highlighted that Phoenix’s steps in the Philippines were in breach of SICC orders amounting to contempt of court. The court noted Phoenix’s failure to bring ORC 5 to the attention of the Philippines court and Phoenix’s continued pressing of the Philippines Action. In the court’s view, Phoenix’s main focus—that its Philippines proceedings were merely an attempt to resist enforcement—was untenable, and Phoenix had raised other misconceived arguments, including arguments about in personam jurisdiction and the voidness of the award due to the absence of an arbitration agreement, despite Phoenix not having sought recourse within the relevant time limit. The court further observed that Phoenix urged the SICC to decline jurisdiction as a matter of discretion due to the progress of the Philippines proceedings, even though those proceedings were, as the court had held, in breach of SICC orders and contemptuous.
These findings were central to the costs analysis because they bear on the “conduct of the parties” factor. The court reasoned that these factors strongly favoured PIMD’s approach to costs. It also addressed Phoenix’s reliance on comparisons with other SICC cases, stating that while such comparisons can provide a useful check, each case turns on its own facts and circumstances. In the present case, given the court’s assessment of the issues raised and Phoenix’s conduct, it was not surprising that PIMD’s Singapore counsel costs were somewhat higher than Phoenix’s, nor did the court find them outside what one would ordinarily expect.
Applying the above approach, the court “allowed the full amount of costs claimed” under the Singapore counsel head, but with a “small discount” to account for potential duplication of work and at least some of the objections raised by Phoenix. The court therefore assessed Singapore counsel costs at $180,000 rather than the claimed $208,275.28. This partial reduction reflected the court’s acceptance that some duplication or overreach might have occurred, while still recognising the overall reasonableness of the work performed in light of the case’s complexity and Phoenix’s conduct.
For arbitration counsel costs, Phoenix again sought a 50% discount. The court considered two main points: (i) that the time spent drafting the third witness statement (3MFN) was excessive; and (ii) that the time spent and costs incurred by two members of PIMD’s arbitration team to attend the hearing were neither proportionate nor reasonable. The court indicated it saw “some force” in these submissions. It then assessed arbitration counsel costs at $17,500, rather than the claimed $26,813.66. This approach mirrored the court’s broader methodology: it did not accept Phoenix’s proposed blanket reduction, but it did recognise that certain time and attendance-related costs warranted trimming.
Finally, the court accepted Phoenix’s position that the ACCRALAW fees for Philippines law matters and the disbursements were not disputed. Those heads were therefore included in the final costs figure without reduction.
What Was the Outcome?
The court assessed PIMD’s costs of SUM 8 at $205,880.41. The figure comprised $180,000 for Singapore counsel costs, $17,500 for arbitration counsel costs, $6,416.16 for ACCRALAW fees, and $1,964.25 in disbursements. The court ordered that Phoenix pay this sum forthwith to PIMD.
The court also ordered interest at the Judgment rate until payment. Practically, this meant that Phoenix’s financial exposure extended beyond the principal costs amount, and the interest component would incentivise prompt compliance with the costs order.
Why Does This Case Matter?
This decision is a useful reference point for practitioners because it illustrates how the SICC approaches costs assessment in high-value international arbitration-related disputes. Although the case is formally about costs only, the court’s reasoning demonstrates that costs are not evaluated in a vacuum. The court considered the underlying stakes, the complexity of the issues, and—crucially—the conduct of the parties, including whether a party’s procedural choices increased the scope of work and whether those choices were reasonable.
For lawyers, the case highlights that proportionality and reasonableness do not necessarily translate into a percentage-based discount. Phoenix’s attempt to secure a 50% reduction for major cost heads was rejected. Instead, the court applied a contextual assessment and made targeted reductions where it found force in specific criticisms (such as potential duplication and certain time/attendance issues). This approach is consistent with the SICC’s emphasis on granular, fact-sensitive evaluation rather than formulaic reductions.
The judgment also underscores the importance of party conduct in costs. The court’s earlier findings of contempt and Phoenix’s failure to bring ORC 5 to the attention of the Philippines court were not merely background facts; they materially influenced the costs outcome. Practitioners should therefore treat compliance with court orders and accurate procedural communication across jurisdictions as not only substantive obligations but also cost-relevant considerations.
Legislation Referenced
- Singapore International Commercial Court Rules 2021, O 22 r 3(1)
Cases Cited
- None expressly identified in the provided judgment extract.
Source Documents
This article analyses [2024] SGHCI 20 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the full judgment for the Court's complete reasoning.