PT Garuda Indonesia v. Birgen Air
Singapore Court of Appeals
[2002] 1 SLR 393 (2002)
- Written by Mary Katherine Cunningham, JD
Facts
In January 1996, PT Garuda Indonesia (Garuda) (plaintiff), an Indonesian company, entered an agreement with Birgen Air (Birgen) (defendant). Birgen agreed to lease its airplanes to Garuda for the transport of religious pilgrims. The contract provided for arbitration if disputes arose between the parties and provided that any arbitration would occur in Jakarta under Indonesia law. A dispute arose when Birgen proposed a substitution under the lease agreement, and the parties referred the matter to arbitration. The arbitral tribunal informed the parties that Jakarta was an inappropriate place given the significant political, social, and economic turmoil occurring in Indonesia between 1996 and 1998. The arbitral tribunal suggested arbitration occur in Singapore. The attorneys for Birgen and Garuda filed separate responses accepting the proposal to set arbitration in Singapore. In February 2000, the arbitrators conducted a hearing in Singapore and handed down an award. In February 2001, Garuda filed a motion to set aside the final award under Section 24 of the International Arbitration Act (IA Act) and Article 34 of the Model Law on International Commercial Arbitration adopted by the United Nations Commission on International Trade Law (the Model Law). Birgen argued that because the contract identified Jakarta as the place of arbitration, Singaporean courts lack jurisdiction. Garuda countered that the parties agreed to change the place of arbitration to Singapore, meaning the court could set aside the award under the Model Law and Singaporean law.
Rule of Law
Issue
Holding and Reasoning (Chao Hick Tin Ja, J.)
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