Tri-M.G. Intra Asia Airlines v Norse Air Charter: Stay of Proceedings & Arbitration Clause Interpretation

In P. T. Tri-M.G. Intra Asia Airlines v Norse Air Charter Limited, the Singapore High Court addressed Norse's application for a stay of proceedings under the International Arbitration Act, concerning a dispute over an aircraft lease agreement. Tri-M.G. sued Norse for US$324,485.42 and US$420,000 for breach of contract. The central legal issue was the interpretation of conflicting arbitration and jurisdiction clauses within the agreement. The court allowed Norse's application, ordering a stay of proceedings in favor of arbitration, determining that the jurisdiction clause pertained to the supervisory role of Singapore courts over the arbitration process.

1. Case Overview

1.1 Court

High Court

1.2 Outcome

Norse's application to stay the proceedings in favour of arbitration is allowed.

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Singapore High Court judgment regarding a stay of proceedings in favor of arbitration. The key legal issue involves interpreting conflicting arbitration and jurisdiction clauses.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
P. T. Tri-M.G. Intra Asia AirlinesPlaintiffCorporationApplication for stay of proceedings allowedLost
Norse Air Charter LimitedDefendant, ApplicantCorporationStay of proceedings grantedWon

3. Judges

Judge NameTitleDelivered Judgment
Darius ChanAssistant RegistrarYes

4. Counsels

Counsel NameOrganization
Ooi Oon TatSalem Ibrahim & Partners
Shanna Rani GhoseT S Oon & Bazul

4. Facts

  1. P. T. Tri-M.G. Intra Asia Airlines leased a Boeing B737-210QC aircraft to Norse Air Charter Limited under an agreement dated 17 January 2007.
  2. The lease term was from 1 February 2007 to 31 January 2008.
  3. Tri-M.G. filed a suit against Norse on 18 August 2008, seeking US$324,485.42 and US$420,000.
  4. The agreement contained both an arbitration clause (Clause 15) and a jurisdiction clause (Clause 22).
  5. Tri-M.G. sought Norse's consent to vary the arbitration clause to have the arbitration conducted under SIAC rules.
  6. Norse did not respond to Tri-M.G.'s proposal to vary the arbitration clause within the imposed deadline.
  7. Norse applied for a stay of proceedings in favour of arbitration.

5. Formal Citations

  1. P. T. Tri-M.G. Intra Asia Airlines v Norse Air Charter Limited, Suit 574/2008, SUM 3972/2008, [2009] SGHC 13

6. Timeline

DateEvent
Aircraft Lease Agreement signed
Lease term began
Purported early termination of the Agreement
Tri-M.G. filed a suit against Norse
Dave Avnit, the CEO of Norse, filed an affidavit
Judgment reserved

7. Legal Issues

  1. Interpretation of Arbitration Clause
    • Outcome: The court held that the arbitration clause was valid and enforceable, and the jurisdiction clause referred to the supervisory jurisdiction of the Singapore courts over the arbitration.
    • Category: Substantive
    • Sub-Issues:
      • Conflicting jurisdiction clause
      • Validity of arbitration agreement
  2. Stay of Proceedings
    • Outcome: The court granted a stay of proceedings in favour of arbitration.
    • Category: Procedural
    • Sub-Issues:
      • Application of s 6 of the International Arbitration Act
      • Existence of a dispute
  3. Repudiatory Breach of Arbitration Agreement
    • Outcome: The court rejected the argument that Norse had committed a repudiatory breach of the arbitration agreement.
    • Category: Substantive

8. Remedies Sought

  1. Monetary Damages

9. Cause of Actions

  • Breach of Contract

10. Practice Areas

  • Commercial Litigation
  • Arbitration

11. Industries

  • Aviation

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Sembawang Engineers and Constructors Pte Ltd v Covec (Singapore) Pte LtdHigh CourtYes[2008] SGHC 229SingaporeCited for its detailed treatment of section 6 of the International Arbitration Act.
Paul Smith Ltd v H & S International Holding IncNot AvailableYes[1991] 2 Lloyd’s Rep 127EnglandCited for the principle that a jurisdiction clause can be interpreted as referring to the law governing the arbitration.
Shell International Petroleum Co Ltd v Coral Oil Co LtdNot AvailableYes[1999] 1 Lloyd’s Rep 72EnglandCited as an example where the court felt that the existence of an arbitration clause was strongly indicative of the parties’ intentions.
Law Debenture Trust Corp Plc v Elektrim Finance BVHigh CourtYes[2005] EWHC 1412England and WalesCited for the principle that a dispute resolution provision can give one party an option to litigate.
“The Dai Yun Shan”Not AvailableYes[1992] 2 SLR 508SingaporeCited for recognizing that an arbitration agreement could give either party a choice between arbitration and litigation.
AL Stainless Industries Pte Ltd v Wei Sin Construction Pte LtdHigh CourtYes[2001] SGHC 243SingaporeCited for the canon of construction whereby when there are two inconsistent clauses in a contract, the later clause is to be rejected as repugnant and the earlier clause prevails.
The NeranoNot AvailableYes[1994] 2 Lloyd’s Rep 50EnglandCited for the principle that a reference to English jurisdiction was not inconsistent with a submission to arbitration; it simply meant that the English court was to retain supervisory jurisdiction over the arbitration.
The NeranoNot AvailableYes[1996] 1 Lloyd’s Rep 1EnglandCited for affirming the principle that a reference to English jurisdiction was not inconsistent with a submission to arbitration; it simply meant that the English court was to retain supervisory jurisdiction over the arbitration.
Axa Re v Ace Global Markets LimitedNot AvailableYes[2006] EWHC 216 (Comm)England and WalesCited for applying Paul Smith and holding that the reference to English jurisdiction fixed the supervisory court of the arbitration.
Indian Oil Corporation v Vanol IncNot AvailableYes[1991] 2 Lloyd's Rep 634EnglandCited as a case where the terms of the written document, which contained the specifically agreed clause as to English law, took precedence over the arbitration clause.
Indian Oil Corporation v Vanol IncNot AvailableYes[1992] 2 Lloyd’s Rep 563EnglandCited as a case where the terms of the written document, which contained the specifically agreed clause as to English law, took precedence over the arbitration clause.
MH Alshaya Company WLL v Retek Information Systems IncNot AvailableYes[2001] Masons C.L.R. 99England and WalesCited as a decision which did not give effect to the arbitration clause when faced with two ex facie competing dispute resolution clauses.
McConnell Dowell Constructors (Aust) Pty Ltd v National Grid Gas plcNot AvailableYes[2006] EWHC 2551 (TCC)England and WalesCited for the view that the reconciliation of the dispute resolution provisions according to the approach in Paul Smith made good commercial sense and was in accordance with the expressed intention of the parties.
Ace Capital Ltd v CMS Energy CorporationNot AvailableYes[2008] EWHC 1843 (Comm)England and WalesCited for the principle that the arbitration clause ought to be accorded primacy and the “Service of Suit Clause” was only concerned with ensuring that the underwriters were amenable to United States jurisdiction in proceedings to enforce any arbitration award.
Premium Nafta Products Ltd v Fili Shipping Co LtdHouse of LordsYes[2007] 4 All ER 951EnglandCited for the principle that the courts would be slow to attribute to reasonable parties an intention that there should be in any foreseeable eventuality two sets of proceedings, viz arbitration and litigation.
Arta Properties Limited v Li Fu Yat Tso and orsNot AvailableYes[1998] HKCU 721Hong KongCited for the principle that the reference to the jurisdiction of the Hong Kong courts referred to the supervisory jurisdiction of the courts over the arbitration.
Yien Yieh Commercial Bank Ltd v Kwai Chung Cold Storage Co LtdPrivy CouncilYes[1989] 2 HKLR 639 (PC)Hong KongCited for the principle that where the document has been drafted as a coherent whole, repugnancy is extremely unlikely to occur.
Tjong Very Sumito and ors v Antig Investments Pte LtdHigh CourtYes[2008] SGHC 202SingaporeCited for the law that the court is not to consider whether there is in fact a dispute or whether there is a genuine dispute.
Dalian Hualiang Enterprise Group Co Ltd v Louis Dreyfus Asia Pte LtdHigh CourtYes[2005] 4 SLR 646SingaporeCited for the law that the court is not to consider whether there is in fact a dispute or whether there is a genuine dispute.
Getwick Engineers Ltd v Pilecon Engineering LtdNot AvailableYes(2002) 1020 HKCU 1Hong KongCited for the principle that a dispute will exist unless there has been a clear and unequivocal admission not only of liability but also quantum.
Louis Dreyfus v. Bonarich International (Group) LimitedNot AvailableYes[1997] 3 HKC 597Hong KongCited for the principle that a dispute will exist unless there has been a clear and unequivocal admission not only of liability but also quantum.
Tai Hing Cotton Mill Limited v. Glencore Grain Rotterdam BVNot AvailableYes[1996] 1 HKC 363Hong KongCited for the principle that a dispute will exist unless there has been a clear and unequivocal admission not only of liability but also quantum.
Glencore Grain Ltd v Agros Trading CoNot AvailableYes[1999] 2 Lloyd’s Rep 410EnglandCited for the principle that there must be an admission as to both liability and quantum before a dispute ceases to be a dispute.
Greenline-Onyx Envirotech Phils, Inc v Otto Systems Singapore Pte LtdHigh CourtYes[2007] 3 SLR 40SingaporeCited for the principle that “without prejudice” privilege only serves to protect admissions of interest made in the course of settlement negotiations so as to promote out-of-court settlement of disputes.
Sin Lian Heng Construction Pte Ltd v Singapore Telecommunications LtdHigh CourtYes[2007] 2 SLR 433SingaporeCited for the principle that “without prejudice” privilege only serves to protect admissions of interest made in the course of settlement negotiations so as to promote out-of-court settlement of disputes.
P.T. Garuda Indonesia v Birgen AirHigh CourtYes[2002] 1 SLR 393SingaporeCited for the principle that the stipulation of Singapore as the seat of arbitration does not pre-determine the ultimate venue of the arbitral hearings.
The Messiniaki BergenNot AvailableYes[1983] 1 Lloyd’s Rep 424EnglandCited as an example of a case where the relevant clause read: 40 (a) This charter shall be construed and the relations between the parties determined in accordance with the law of England. (b) Any dispute arising under this charter shall be decided by the English Courts to whose jurisdiction the parties agree . . . Provided that either party may elect to have the dispute referred to the arbitration of a single arbitrator in London in accordance with the provisions of the Arbitration Act, 1950
The Stena PacificaNot AvailableYes[1990] 2 Lloyd’s Rep 234EnglandCited as an example of a case where the relevant clause read: … (b) Any dispute arising under the charter shall be decided by the English Courts to whose jurisdiction the parties hereby agree. (c) Notwithstanding the foregoing, but without prejudice to any party's right to arrest or maintain the arrest of any maritime property, either party may, by giving written notice of election to the other party, elect to have any such dispute referred to the arbitration of a single arbitrator in London …

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute NameJurisdiction
International Arbitration Act (Cap 143A, 2002 Rev Ed)Singapore

15. Key Terms and Keywords

15.1 Key Terms

  • Arbitration Clause
  • Jurisdiction Clause
  • Stay of Proceedings
  • International Arbitration Act
  • Supervisory Jurisdiction
  • Repudiatory Breach
  • Aircraft Lease Agreement
  • Governing Document

15.2 Keywords

  • Arbitration
  • Jurisdiction
  • Stay of Proceedings
  • Aircraft Lease
  • Singapore
  • International Arbitration Act

17. Areas of Law

Area NameRelevance Score
Arbitration95
International Commercial Arbitration80
Jurisdiction75
International Commercial Contracts70
Contract Law60
Private International Law50

16. Subjects

  • Arbitration
  • Contract Law
  • Civil Procedure