ENGLISH HIGH COURT STAYS COURT PROCEEDINGS IN FAVOUR OF ARBITRATION AND INTERPRETS CONFLICTING DISPUTE RESOLUTION PROVISIONS

In Helice Leasing S.A.S v PT Garuda Indonesia (Persero) TBK [2021] EWHC 99 (Comm), the English High Court interpreted seemingly conflicting dispute resolution provisions in an aircraft operating lease (the “Lease”). The Lease included an arbitration clause providing for “any dispute” to be resolved by the London Court of International Arbitration (“LCIA”) and gave the lessor an option to “proceed by appropriate court action” in case of an Event of Default, which included non-payment. When the lessor commenced court proceedings to recover rent arrears, the lessee retaliated by successfully applying to stay proceedings in favour of arbitration under s9 of the Arbitration Act 1996 (the “Act”). The High Court held that the parties had agreed to refer disputes to arbitration despite the existence of the allegedly conflicting option to proceed by court action, and set out some guidance on what constituted a “dispute” in an arbitration clause.

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