TRI-MG INTRA ASIA AIRLINES V NORSE AIR CHARTER LTD

[2009] SGHC 13, Singapore High Court, Darius Chan AR

Arbitration – Stay of proceedings – Agreement containing both arbitration and exclusive jurisdiction clauses – Whether arbitration clause to be given priority over jurisdiction clause – Whether dispute between the parties – Whether stay should be granted

Under an agreement dated 17 January 2007 TMG (an Indonesian company) leased an aircraft to Norse (a Mauritian company) for one year from 1 February 2007. The agreement contained both an arbitration clause and a jurisdiction clause. The arbitration clause, clause 15, provided for all disputes to be resolved under the conciliation and arbitration rules of the International Chamber of Commerce. The governing law and jurisdiction clause, clause 22, stated that the contract was governed by the law of Singapore and that the courts of Singapore were to have exclusive jurisdiction. Disputes arose between the parties, and in August 2008 TMG commenced proceedings against Norse in Singapore, seeking the sum of US$324,485.42 allegedly due and owing under the lease, and a further US$$420,000 by way of damages for Norse’s purported early termination of the lease. Norse applied for a stay of the judicial proceedings. The court ruled that a stay should be granted. (1) Primacy was to be given to the arbitration clause, and the jurisdiction clause was to be construed as referring only to the curial powers of the Singapore courts. (2) In the absence of any admission of liability, there was a dispute to be referred to arbitration and the proceedings would be stayed.