CES v International Air Transport Association

CourtInternational Commercial Court (Singapore)
JudgeRoger Giles IJ
Judgment Date25 March 2020
Neutral Citation[2020] SGHC(I) 8
Citation[2020] SGHC(I) 8
Defendant CounselToh Wei Yi, Leong Shan Wei Jaclyn, Lem Jit Min Andy and Ng Hua Meng Marcus (Huang Huaming, Marcus) (Eversheds Harry Elias LLP)
Published date07 May 2020
Plaintiff CounselPateloo Eruthiyanathan Ashokan and Soon Meiyi Geraldine (Withers KhattarWong LLP)
Hearing Date09 January 2020,09 December 2019,13 April 2020
Date25 March 2020
Docket NumberOriginating Summons No 7 of 2019
Subject MatterArbitral tribunal,Jurisdiction,Arbitration
Roger Giles IJ: Introduction

CES is an Indian company, carrying on business as a travel agent. International Air Transport Association (“IATA”), a Canadian company, is a trade association of member airlines. On behalf of its member airlines, IATA appointed CES as an accredited travel agent under a Passenger Sales Agency Agreement dated 18 January 2005 (“the PSA”).1

One of IATA’s functions is to manage a billing and settlement system on behalf of its members. These proceedings concern an arbitrator’s jurisdiction to hear a claim by IATA against CES for money due to the airlines, being money received from the sale of domestic and international airline tickets sold in March 2013, in a total sum of INR 124,31,69,623 (in the order of USD 19 million) and interest thereon.2

In a Partial Award on Jurisdiction dated 16 May 2019 (“the Award”), the learned Arbitrator (“the Tribunal”) held that he has jurisdiction to hear the claim.3 Being dissatisfied, by an Originating Summons filed on 17 June 2019, CES applied to the Singapore High Court, pursuant to s 10 of the International Arbitration Act (Cap 143A, 2002 Rev Ed) (“IAA”) read with Article 16(3) of the UNCITRAL Model Law on International Commercial Arbitration, to set aside the Tribunal’s ruling (more correctly, for the Court to decide the matter). The application was transferred to the Singapore International Commercial Court on 26 August 2019.4

For the reasons which follow, the Tribunal has jurisdiction to hear the claim. A declaration should be made accordingly, and the Originating Summons should be dismissed.

Facts The PSA5

The PSA is in the form of an agreement between CES, called the Agent, and “each IATA Member (hereinafter called “Carrier”) which appoints the Agent, represented by the Director General of IATA acting for and on behalf of such IATA Member”.6 No point was taken in the application as to the standing of IATA, rather than the Carriers, as the claimant in the arbitration. In Delhi Express Travels Pvt Ltd v International Air Transport Association & others [2009] 3 Arb LR 303 (“Delhi Express”)7 it was held (at [17]), in relation to a similar PSA, that although it was entered into by IATA as an agent for its members, IATA was itself bound by the PSA; hence, presumably, the acceptance of its standing.

By cl 2.1 of the PSA, the “terms and conditions governing the relationship between the Carrier and the Agent” are set forth in Resolutions and other provisions in the Travel Agent’s Handbook (“the Handbook”) as published from time to time. The Handbook is said to incorporate, inter alia, the Sales Agency Rules.8

By cl 3.1, the Agent is authorised to sell air passenger transportation on the services of the Carrier or of other air services authorised by the Carrier, together with such ancillary and other services as the Carrier may authorise.9 The substance of cl 7 is that monies received by the Agent for transportation and ancillary services are held on trust for the Carrier and must be remitted by the Agent to the Carrier.10

Relevantly to arbitration, cl 14 provides:11 ARBITRATION

If any matter is reviewed by Arbitration pursuant to the Sales Agency Rules, the Agent hereby submits to arbitration in accordance with such Rules and agrees to observe the procedures therein provided and to abide by any arbitration award made thereunder.

By cl 17, with a qualification not presently material, the PSA is to be interpreted and governed by the law of the principal place of business of the Agent.12 In this case, that is Indian law.

The Handbook

It is common ground that the June 2012 edition of the Handbook governs the parties’ relationship in this application.13 The Handbook is principally a collection of a number of Resolutions: if those in evidence are typical, the Resolutions may be described as a collection of ill-fitting provisions in desperate want of draftsmanship. Central to the application is the interlocking operation of Resolutions 818g and 820e.

An overview is helpful. Resolution 818g is the Passenger Sales Agency Rules (“the Rules”), being the Sales Agency Rules referred to in the PSA.14 Amongst other things, it provides for the conduct by IATA of the billing and settlement system. That involves various decisions and actions, and Resolution 820e provides for the review of decisions and actions of the Agency Administrator, being a designated officer of IATA and in practical terms, IATA: I will generally simply refer to IATA. The review is by the Travel Agency Commissioner (“the TAC”), an office established under Resolution 820d.15 Returning to Resolution 818g, the Rules then provide for de novo review by arbitration of a decision of the TAC: this is taken up in cl 14 of the PSA (see [8] above).

Review by the TAC

In more detail, I start with the provisions for review by the TAC.

Resolution 820e begins:16

RESOLVE that, as established under Resolution 820d, the Travel Agency Commissioner (“the Commissioner”) shall conduct reviews and act with respect to decisions and/or actions affecting Agents and applicants under the Agency Program (it being understood that the definitions in Resolution 866 apply to this Resolution), within the Commissioner’s jurisdiction, in accordance with this Resolution 820e.

The TAC’s jurisdiction is found in Section 1 of the Resolution. It provides in the preamble:17

All disputes arising out of or in connection with matters enumerated in the present Section shall be finally settled, subject to review by arbitration pursuant to Section 4 herein, by the Commissioner, in accordance with this Resolution.

Paragraph 1.1 then provides, under the heading “Review Initiated by Agent or Applicant”, for review and ruling by the TAC “on cases initiated by” an Agent or an applicant for accredited agency. The instances are listed in sub-paras 1.1.1 to 1.1.10. So far as is presently material, the paragraph provides:18

Subject to paragraph 1.4, the Commissioner shall review and rule on cases initiated by: an Agent who has received formal notice from the Agency Administrator of impending removal of the Agent or an Approved Location of the Agent from the Agency List, or of any action or impending action by the Agency Administrator with regard to the Agent, that unreasonably diminishes the Agent’s ability to conduct business in a normal manner;

Sub-paragraph provides that, with an exception not presently relevant, a request for review of a decision or action of the Agency Administrator must be submitted within 30 days of “the date of the Agency Administrator’s notice of the decision in question”.19

Paragraph 1.3, under the heading “Review Initiated by Agency Administrator”, then provides for review initiated by IATA. It commences:20

The Agency Administrator, on his own initiative or at the request of any Member, a group of Members, or of the Agency Services Manager, shall initiate a review to determine whether the Agent or Location has breached its Passenger Sales Agency Agreement, including IATA Resolutions incorporated into it, when the Agency Administrator has determined that a credible case has been made, in particular in respect of any of the following…

A number of instances are set out in sub-paras 1.3.1 to 1.3.12. The presently material instance is in sub-para 1.3.12:21

pursuant to the provisions of Paragraph 1.8 of Attachment “A” to Resolution 818g, and of Paragraph 1.8 of Resolution 832, the Agency Administrator receives written information which leads him to the belief that Members’ or Airlines’ ability to collect monies from the Agent for Standard Traffic Documents may be prejudiced.

Paragraphs 1.1 and 1.3 in Section 1 of Resolution 820e are not the only provisions in the Handbook which provide for review by the TAC. Other such provisions are sprinkled throughout the Handbook. For example, sub-para 14.3.5 in Resolution 818g by which provides that an Agent may “invoke the procedures set out in Resolution 820e for review” of a decision by the Agency Administrator to terminate an Agent’s services due to the latter’s failure to pay the annual agency fee.22 The parties’ submissions, however, rested on the provisions I have set out plus, through sub-para 1.3.12 of Resolution 820e, para 1.8 in Attachment A to Resolution 818g: see later at [66].

Review of TAC’s decision by arbitration

Section 4 of Resolution 820e is the link with Resolution 818g:23

Section 4 – Review by Arbitration

an Agent or applicant which considers itself aggrieved by a decision of the Commissioner taken under the provisions of this Resolution, shall have the right to have such decision reviewed by arbitration, in accordance with the procedures set out in the Passenger Sales Agency Rules; where a decision of or an action by the Agency Administrator or the Agency Services Manager has been the object of an Agent’s action before the Commissioner taken under the provisions of this Resolution and the Agency Administrator, or the Agency Services Manager, contest the Commissioner’s decision, the Agency Administrator or the Agency Services Manager shall have the right to have such decision reviewed by arbitration, in accordance with the procedures set out in the Passenger Sales Agency Rules.

The provisions for review by arbitration in the Rules are found in Section 12 of Resolution 818g. It provides in para 12.1, under the heading “Right to Arbitration”:24 Any party to a dispute settled in accordance with Resolution 820e shall have the right to submit the Travel Agency Commissioner’s decision to de novo review by arbitration in accordance with this Section.

Sub-paragraph 12.2.1 of the same Resolution then provides, under the heading “Agreement to Arbitrate”, that: All disputes arising out of or in connection with a decision rendered by a Commissioner shall be finally settled under the...

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT