Case Details
- Citation: [2024] SGHC(I) 8
- Title: Reliance Infrastructure Limited v Shanghai Electric Group Co Ltd
- Court: Singapore International Commercial Court (SICC)
- Originating Application No: Originating Application No 1 of 2023
- Date of Judgment: 16 April 2024 (judgment reserved on 6 March 2024)
- Judges: Philip Jeyaretnam J, Sir Vivian Ramsey IJ and Anselmo Reyes IJ
- Plaintiff/Applicant: Reliance Infrastructure Limited (“Reliance Infrastructure”)
- Defendant/Respondent: Shanghai Electric Group Co Ltd (“Shanghai Electric”)
- Legal Area: Civil Procedure — Costs — Assessment of costs in SICC proceedings
- Statutes/Rules Referenced (as stated in extract): Singapore International Commercial Court Rules 2021 (“SICC Rules 2021”); in particular O 22 r 3(1) and O 22 r 3(2); O 1 r 5(10)
- Cases Cited (as stated in extract): Reliance Infrastructure Ltd v Shanghai Electric Group Co Ltd [2024] SGHC(I) 3 (“Reliance Infrastructure (Merits)”); Qilin World Capital Ltd v CPIT Investments Ltd and another appeal [2019] 1 SLR 1; Senda International Capital Ltd v Kiri Industries Ltd [2023] 1 SLR 96 (“Senda v Kiri (Assessment of Costs)”)
- Judgment Length: 17 pages, 4,390 words
Summary
This SICC decision concerns the assessment of costs following the dismissal of Reliance Infrastructure’s application to set aside a Singapore-seated arbitral award. In the earlier merits judgment, the SICC dismissed Reliance Infrastructure’s Originating Application (OA 1) and awarded costs to Shanghai Electric. The present judgment addresses the remaining dispute: the quantum of costs payable by Reliance Infrastructure to Shanghai Electric.
The SICC held that Shanghai Electric’s costs were generally reasonable and proportionate, but moderated the Singapore counsel professional fees. Specifically, while the foreign counsel fees, expert fees, and other disbursements were granted in full, the court reduced the Singapore counsel professional fees from US$726,584.85 to US$550,000.00. Overall, costs were awarded to Shanghai Electric in the total amount of US$734,660.02.
What Were the Facts of This Case?
The underlying dispute arose from a Singapore-seated arbitration between Reliance Infrastructure and Shanghai Electric. On 12 March 2023, Reliance Infrastructure applied in OA 1 to set aside an arbitral award dated 8 December 2022. The arbitral tribunal had found Reliance Infrastructure liable to Shanghai Electric under guarantee obligations contained in a purported guarantee letter allegedly executed on 26 June 2008 (the “Guarantee Letter”). The award ordered Reliance Infrastructure to pay over US$146.309 million to Shanghai Electric, excluding post-award interest and any applicable reimbursement of final arbitration costs.
In OA 1, Reliance Infrastructure advanced two principal challenges. First, it alleged that the signature of its former officer on the Guarantee Letter was a forgery. Second, it argued that the former officer lacked authority to execute the arbitration agreement embedded within the Guarantee Letter. These issues were litigated through evidence from factual witnesses and handwriting experts, reflecting the documentary and signature-focused nature of the dispute.
The SICC dismissed OA 1 on 31 January 2024 after a two-day hearing (11–12 January 2024). The court heard evidence from three factual witnesses (two for Reliance Infrastructure and one for Shanghai Electric) and two handwriting experts (one from each party). Having dismissed the application, the court awarded costs to Shanghai Electric. It also provided a procedural mechanism for costs submissions if the parties could not agree the amount within a specified time.
After the merits judgment, the parties were unable to agree on costs. Reliance Infrastructure sought an extension of time to agree or submit costs, and the SICC granted the extension. Both parties then filed written submissions on costs on 6 March 2024. The costs assessment therefore turned on the reasonableness and proportionality of the costs claimed, particularly where there was a substantial disparity between the parties’ estimates for Singapore counsel fees.
What Were the Key Legal Issues?
The central legal issue was how the SICC should assess costs under the SICC Rules 2021, particularly the requirement that costs awarded be “reasonable and proportionate”. The court had to determine the correct approach to assessing costs in a SICC setting, including the weight to be given to the prevailing party’s entitlement to costs and the objective yardstick for reasonableness and proportionality.
A second, more specific issue was the significance of the disparity between the parties’ costs estimates. Reliance Infrastructure argued that Shanghai Electric’s costs were excessive, pointing to a large difference in the Singapore counsel professional fees claimed. Shanghai Electric, by contrast, argued that it should be reimbursed for the costs it subjectively incurred in defending OA 1, subject only to moderation where the court found objective grounds to do so.
Finally, the court had to decide whether to grant costs for all categories claimed—foreign counsel fees, expert fees, and disbursements—fully, or whether any of those categories should also be moderated in light of the overall reasonableness and proportionality analysis.
How Did the Court Analyse the Issues?
The court began by situating the costs assessment within the framework of the SICC Rules 2021. Under O 22 r 3(1), the court’s task is to assess whether costs are reasonable and proportionate. The court also emphasised that the starting point is that the prevailing party is generally entitled to the costs it incurred. This reflects the principle that costs follow the event, subject to the court’s supervisory role in ensuring that the quantum is not excessive.
However, the SICC tempered the prevailing-party entitlement with an objective yardstick. Relying on the Court of Appeal’s guidance in Senda International Capital Ltd v Kiri Industries Ltd, the court explained that even where costs are incurred in good faith, the court must assess both the manner in which costs were incurred and the quantum of those costs. In other words, the court is not limited to checking whether the costs were actually incurred; it must also determine whether they were reasonably incurred and proportionate in amount.
To operationalise this, the court found it helpful to compare the parties’ costs schedules. It treated the comparison as a “relevant and useful exercise”, citing Qilin World Capital Ltd v CPIT Investments Ltd and another appeal. In Qilin, the Court of Appeal had accepted that when both parties provide estimates for similar categories, the relative alignment (or divergence) can indicate whether the costs claimed are reasonable and proportionate. Here, the SICC used the parties’ own estimates as a benchmark for assessing reasonableness.
Applying these principles, the court first addressed the categories other than Singapore counsel professional fees. It held that Shanghai Electric’s costs for foreign counsel’s fees, expert fees, and all other disbursements were reasonably incurred and granted them in full. The court noted that these categories generally matched Reliance Infrastructure’s estimates of its own costs for the same categories. This alignment supported the inference that the costs were proportionate, and the court did not identify specific grounds to moderate them.
The court then turned to the disputed category: Singapore counsel professional fees. Here, the disparity was stark. Shanghai Electric claimed US$726,584.85 for six practitioners and 1,431.49 hours in total, whereas Reliance Infrastructure’s estimate for Singapore counsel professional fees was US$270,000 for four practitioners, with work described but no estimate of hours. The court framed the question as whether the large disparity—Shanghai Electric’s costs being more than 2.69 times Reliance Infrastructure’s for this category—justified a reduction, or whether the costs should be granted in full as reasonably incurred.
In answering that question, the court considered two factors. First, it compared the parties’ costs incurred and estimates for Singapore counsel. Second, it considered Shanghai Electric’s prior estimate of its own costs when it applied for security for costs in the merits proceedings (SIC/SUM 19/2023). This prior estimate served as an internal check: if the costs ultimately claimed were far removed from the earlier estimate, the court could more readily conclude that moderation was warranted on proportionality grounds.
While the extract does not reproduce the full reasoning beyond the moderation point, the court’s approach is clear from the structure of its analysis. It treated the disparity as a meaningful indicator that the Singapore counsel fees claimed were not fully proportionate. The court therefore moderated the Singapore counsel professional fees from US$726,584.85 down to US$550,000.00. This reduction reflects a balancing exercise: the court did not reject the entirety of the Singapore counsel fees, but it concluded that the claimed amount exceeded what was reasonable and proportionate in the circumstances.
Importantly, the court’s moderation was category-specific. It did not apply the same reduction logic to foreign counsel fees, expert fees, or disbursements. This indicates that the court’s concern was not with the overall litigation effort or the need for counsel, but with the quantum of Singapore counsel professional fees in particular, as evidenced by the disparity and the proportionality analysis.
What Was the Outcome?
The SICC awarded costs to Shanghai Electric in the total amount of US$734,660.02. The court granted in full Shanghai Electric’s costs for foreign counsel’s fees, expert fees, and all other disbursements, which together amounted to US$184,660.02. The court also moderated the Singapore counsel professional fees, reducing them to US$550,000.00.
Practically, the decision confirms that in SICC proceedings, even where a party is the successful litigant, the court will scrutinise the reasonableness and proportionality of costs—especially where there is a large disparity between parties’ estimates for the same cost category.
Why Does This Case Matter?
This case is a useful authority for practitioners on how the SICC will assess costs after a merits decision, particularly in arbitration-related set-aside proceedings. It reinforces that the court’s starting point is that costs follow the event, but that the court must apply an objective yardstick to ensure that costs are reasonable and proportionate. The decision therefore provides guidance on what will and will not be accepted at the assessment stage.
From a litigation strategy perspective, the judgment highlights the importance of producing coherent and defensible costs schedules. Where a party claims substantial professional fees for Singapore counsel, it should anticipate that the court may compare those fees with (i) the opposing party’s estimates and (ii) the party’s own earlier estimates (such as those made in security-for-costs applications). Large disparities can trigger moderation even if the prevailing party argues that the costs were subjectively incurred.
For law students and researchers, the decision also illustrates the SICC’s practical application of appellate principles from Senda v Kiri (Assessment of Costs) and the comparative approach endorsed in Qilin World Capital. The case demonstrates that proportionality analysis is not abstract: it is grounded in the evidence of costs schedules, category-by-category assessment, and the court’s evaluation of internal and external benchmarks.
Legislation Referenced
- Singapore International Commercial Court Rules 2021 (SICC Rules 2021), O 22 r 3(1) (reasonableness and proportionality of costs)
- Singapore International Commercial Court Rules 2021 (SICC Rules 2021), O 22 r 3(2) (factors relevant to assessment of reasonableness and proportionality)
- Singapore International Commercial Court Rules 2021 (SICC Rules 2021), O 1 r 5(10) (extensions of time)
Cases Cited
- Reliance Infrastructure Ltd v Shanghai Electric Group Co Ltd [2024] SGHC(I) 3 (“Reliance Infrastructure (Merits)”)
- Qilin World Capital Ltd v CPIT Investments Ltd and another appeal [2019] 1 SLR 1
- Senda International Capital Ltd v Kiri Industries Ltd [2023] 1 SLR 96 (“Senda v Kiri (Assessment of Costs)”)
Source Documents
This article analyses [2024] SGHCI 8 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the full judgment for the Court's complete reasoning.