INTERNATIONAL RESEARCH CORPORATION PLC V LUFTHANSA SYSTEMS ASIA PACIFIC PTE

[2012] SGHC 226, Singapore High Court, Chan Seng Onn J, 12 November 2012

Arbitration - Cooperation Agreement containing tiered dispute resolution clause - Supplemental Agreements involving third party - Disputes arising under Supplemental Agreements - Whether Agreements to be construed as composite - Whether arbitration clause incorporated into Supplemental Agreements - Whether mediation provisions a condition precedent to arbitration - Whether mediation provisions had been followed

Under a Cooperation Agreement made in March 2005, Lufthansa agreed to supply, deliver and commission a new Maintenance, Repair and Overhaul System for Datamat, and that was in turn part of a system provided by Datamat to Thai Airways. The Cooperation Agreement contained a tiered dispute resolution clause which provided for mediation as a condition precedent to arbitration under SIAC Rules. In the light of Datamat's financial problems, in May 2005 Lufthansa, Datamat and IRCP entered into two Supplemental Agreements under which IRCP took on Datamat's payment obligations to Lufthansa. Disputes subsequently arose and Lufthansa commenced arbitration proceedings against Datamat and IRCP. In the arbitration IRCP asserted that it was not a party to the arbitration clause and that there had been no mediation, so that the arbitrators did not possess any jurisdiction. The arbitrators found against IRCP, which appealed to the Singapore High Court.