CES v IATA: Jurisdiction Challenge in International Arbitration
In CES v International Air Transport Association, the Singapore International Commercial Court addressed CES's application to set aside an arbitral tribunal's ruling on jurisdiction. The dispute arose from a claim by IATA against CES for money due from airline ticket sales. The court, presided over by Roger Giles IJ, dismissed CES's originating summons, declaring that the tribunal has jurisdiction to hear IATA's claim. The court found that CES could have initiated a review by the Travel Agency Commissioner (TAC) and cannot rely on the absence of a TAC decision to dispute the tribunal’s jurisdiction.
1. Case Overview
1.1 Court
Singapore International Commercial Court1.2 Outcome
Originating Summons dismissed
1.3 Case Type
Civil
1.4 Judgment Type
Judgment
1.5 Jurisdiction
Singapore
1.6 Description
Singapore court dismisses CES's challenge to arbitral jurisdiction in a dispute with IATA over unpaid airline ticket sales, affirming the tribunal's authority.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| CES | Applicant | Corporation | Application Dismissed | Lost | |
| International Air Transport Association | Respondent | Association | Tribunal's Jurisdiction Affirmed | Won |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Roger Giles | International Judge | Yes |
4. Counsels
4. Facts
- CES is an Indian travel agent; IATA is a Canadian trade association representing member airlines.
- IATA appointed CES as an accredited travel agent under a Passenger Sales Agency Agreement (PSA).
- IATA claimed INR 124,31,69,623 from CES for unpaid airline tickets sold in March 2013.
- CES failed to remit monies received from ticket sales by the stated dates.
- IATA declared CES in default and terminated the PSA due to non-payment.
- CES did not initiate a timely review by the Travel Agency Commissioner (TAC) of IATA's actions.
- IATA commenced arbitration proceedings against CES in Singapore.
5. Formal Citations
- CES v International Air Transport Association, Originating Summons No 7 of 2019, [2020] SGHC(I) 08
6. Timeline
| Date | Event |
|---|---|
| Passenger Sales Agency Agreement signed | |
| Start of period for unpaid domestic and international airline tickets | |
| End of period for unpaid domestic and international airline tickets | |
| IATA demands payment from CES | |
| IATA declares CES in default and withdraws ticketing facilities | |
| IATA gives notice of termination of the PSA | |
| IATA terminates the PSA with immediate effect | |
| CES writes to the TAC | |
| TAC replies to CES | |
| IATA begins proceedings against CES in Delhi, India | |
| CES and M file an application to reject the suit | |
| Court refers parties to arbitration | |
| IATA submits a Request for Arbitration to the ICC | |
| CES submits a Written Statement/Reply | |
| Hearing before the Tribunal | |
| Tribunal issues the Award, holding that he has jurisdiction to hear the claim | |
| CES applied to the Singapore High Court to set aside the Tribunal’s ruling | |
| The application was transferred to the Singapore International Commercial Court | |
| Hearing date | |
| Hearing date | |
| Judgment reserved | |
| IATA wrote that it did not object to CES’s request for confidentiality but asking that, if that were done, its name be redacted |
7. Legal Issues
- Jurisdiction of Arbitral Tribunal
- Outcome: The court held that the arbitral tribunal has jurisdiction to hear IATA's claims.
- Category: Jurisdictional
- Sub-Issues:
- Failure to initiate review by Travel Agency Commissioner
- Waiver of pre-condition to arbitration
- Estoppel from disputing jurisdiction
- Related Cases:
- [2009] 3 Arb LR 303
- (2012) 4 CTC 748
8. Remedies Sought
- Declaration that the Tribunal has no jurisdiction
- Setting aside the Tribunal’s ruling
9. Cause of Actions
- Breach of Contract
- Failure to remit monies
10. Practice Areas
- Commercial Arbitration
- International Arbitration
- Commercial Litigation
11. Industries
- Travel
- Aviation
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Delhi Express Travels Pvt Ltd v International Air Transport Association & others | Delhi High Court | Yes | [2009] 3 Arb LR 303 | India | Cited for the principle that a party cannot avoid arbitration due to its own default in fulfilling a pre-requisite step. |
| International Air Transport Association v All India Travel Agency (Madurai) Private Ltd | Unknown | Yes | (2012) 4 CTC 748 | India | Cited to support the principle established in Delhi Express that the absence of a TAC decision is not a bar to arbitration if the party could have initiated a review. |
| Sanum Investments Ltd v Government of the Lao People’s Democratic Republic | Singapore Court of Appeal | Yes | [2016] 5 SLR 536 | Singapore | Cited to clarify that the application is a hearing de novo, not a review of or an appeal from the Tribunal’s decision |
| M.K. Shah Engineers and Contractors v State of Madhya Pradesh | Supreme Court of India | Yes | (1999) 2 SCC 594 | India | Cited to support the principle that waiver may be a different way of saying that CES cannot rely on its own default |
| Ameet Lalchand Shah v Rishabh Enterprises | Supreme Court of India | Yes | (2018) 15 SCC 678 | India | Cited for the principle that where there is an arbitration clause in an agreement, it is mandatory for the court to refer the parties to arbitration. |
| Hema Khattar and another v Shiv Khera | Supreme Court of India | Yes | (2017) 7 SCC 716 | India | Cited for the principle that where there is an arbitration clause in an agreement, it is mandatory for the court to refer the parties to arbitration. |
| M/S Sundaram Finance Limited v T Thankam | Supreme Court of India | Yes | (2015) 14 SCC 444 | India | Cited for the observation that the approach of the court should not be to see whether it has jurisdiction, but to see whether its jurisdiction has been ousted. |
| Hindustan Petroleum Corporation v M/S Pinhcity Medway Petroleums | Supreme Court of India | Yes | (2003) 6 SCC 503 | India | Cited for the principle that referral was mandatory because there was an arbitration clause in the agreement between the parties, even though “the applicability thereof is disputed by the respondent”. |
| Pacific Recreation Pte Ltd v SY Technology Inc and another appeal | Singapore Court of Appeal | Yes | [2008] 2 SLR (R) 491 | Singapore | Cited for the principle that foreign law is a matter of fact, which must be proved by evidence. |
| MCC Proceeds Inc v Bishopsgate Investment Trust plc | Unknown | Yes | [1999] CLC 417 | England and Wales | Cited for the function of an expert witness on foreign law. |
| Re Application by Dow Jones (Asia) Inc | High Court of Singapore | Yes | [1987] SLR(R) 627 | Singapore | Cited for the function of evidentiary affidavits. |
| Gleeson v J Wippell & Co Ltd | Unknown | Yes | [1977] 3 All ER 54 | England and Wales | Cited for the function of evidentiary affidavits. |
13. Applicable Rules
| Rule Name |
|---|
| Rules of Court (Cap 322, R 5, 2014 Ed) |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| International Arbitration Act (Cap 143A, 2002 Rev Ed) | Singapore |
| Arbitration and Conciliation Act, 1996 | India |
15. Key Terms and Keywords
15.1 Key Terms
- Arbitration
- Jurisdiction
- Passenger Sales Agency Agreement
- Travel Agency Commissioner
- International Air Transport Association
- UNCITRAL Model Law
- Originating Summons
- Accredited Travel Agent
- Billing and Settlement System
- Partial Award on Jurisdiction
- Sales Agency Rules
15.2 Keywords
- arbitration
- jurisdiction
- IATA
- travel agent
- Singapore
- international
- commercial
- contract
- tribunal
- TAC
- passenger sales agency agreement
17. Areas of Law
16. Subjects
- Arbitration
- Contract Law
- Agency Law
- Civil Procedure