Scope of the reference to arbitration

In Deutsche Bank AG v Tongkah Harbour Public Co Ltd [2011] EWHC 2251 (Comm) there were three separate but related contracts between the parties, two of which contained arbitration clauses. The question for Blair J was whether a reference to arbitration in respect of one of the contracts amounted to a reference to arbitration under the other and, if so, whether judicial proceedings under the third should be stayed pending the completion of the arbitration.

Deutsche Bank: the facts

The defendant, Tungkum, held licences for gold exploration and mining in Loei Province, Thailand. Its activities were initially funded by a loan made in 2005 by two Thai banks. On 18 April 2008 Tungkum entered into a facility agreement with the Bangkok branch of the claimant bank, designed to refinance existing indebtedness. Under the arrangement, the bank advanced US$35m to Tungkum, and there was a simultaneous export contract under which Tungkum was to repay the facility agreement in monthly instalments by selling gold to the bank’s London branch. There was a third contract, a guarantee under which Tungkum’s parent company, Tongkah, guaranteed the liabilities of Tungkum to the bank. Each of these three contracts contained different dispute resolution clauses.