DEUTSCHE BANK AG V TONGKAH HARBOUR PUBLIC CO LTD

[2011] EWHC 2251 (QB), Queen's Bench Division, Mr Justice Blair, 24 August 2011

Arbitration - Three separate agreements, two containing optional arbitration clauses - Judicial proceedings brought in respect of two agreements and arbitration in respect of the third - Whether proceedings should be stayed - Inherent jurisdiction - Arbitration Act 1996, section 9

Tungkum held licences for gold exploration and mining in Thailand. On 18 April 2008 Tungkum entered into a Facility Agreement with the Bangkok branch of the claimant bank, designed to refinance existing indebtedness. The agreement contained a non-exclusive English jurisdiction clause and conferred upon the bank the right to refer disputes to LCIA arbitration in London. On the same day the parties entered into an export contract under which Tungkum was to repay the facility agreement in monthly instalments by selling gold to the bank's London branch. This contained the same jurisdiction and arbitration provisions. By a third contract between Tungkum's parent company and the Amsterdam branch of the bank, Tongkah guaranteed the liabilities of Tungkum. The guarantee contained a non-exclusive English jurisdiction clause but made no provision for arbitration. In December 2010 the bank asserted that Tungkum had defaulted under the facility agreement, and it gave notice terminating both the facility agreement and the export contract. In February 2011 the bank started an action in the Commercial Court against Tungkum seeking repayment of sums allegedly due under the facility agreement. On the same day it also started a Commercial Court action against Tongkah under the guarantee. At the same time the bank commenced LCIA arbitration proceedings against Tungkum for the sum allegedly due under the export contract. In the present proceedings Tungkum sought a stay of the claim under the Arbitration Act 1996, section 9, of the claim under the facility agreement, and Tongkah sought a stay of the claim under the guarantee by an exercise of the court's inherent jurisdiction.