Maldives Airports Co Ltd and another v GMR Malé International Airport Pte Ltd

• Jurisdiction: Singapore
• Judge: Sundaresh Menon CJ
• Judgment Date: 13 February 2013
• Neutral Citation: [2013] SGCA 16
• Plaintiff Counsel: Christopher Anand Daniel, Kenneth Pereira, Ganga d/o Avadiar and Foo Li Chuan Arlene (Advocatus Law LLP)
• Date: 13 February 2013
• Docket Number: Civil Appeal No 160 of 2012
• Hearing Date: 06 December 2012
• Subject Matter: Courts and Jurisdiction,Jurisdiction,Civil Procedure,Interlocutory order,Arbitration,Injunctions
• Year: 2013
• Citation: [2013] SGCA 16
• Defendant Counsel: Mohan Reviendran Pillay, Linda Esther Foo Hui Ling and Tong Wai Yan Josephine (MPillay)
• Court: Court of Appeal (Singapore)
• Published date: 25 February 2013

Sundaresh Menon CJ (delivering the grounds of decision of the court): Introduction

This is an appeal from the decision of the High Court judge (“the Judge”) in Originating Summons No 1128 of 2012 (“OS 1128”) By her decision, the Judge granted an interim injunction (“the Injunction”) to restrain the appellants, Maldives Airports Company Limited (“MACL”) and the Republic of the Maldives (“the Maldives” or “the Maldives Government”) and their respective officers (collectively, “the Appellants”), from interfering with the performance by the respondent, GMR Malé International Airport Private Limited (“the Respondent”), of its obligations under a concession agreement entered into on 28 June 2010 (“the Concession Agreement”). MACL is a company which is wholly owned by the Maldives Government.

At the close of the hearing, we allowed the appeal and set aside the Injunction. We delivered a brief oral judgment setting out our view that the balance of convenience did not lie in favour of the Injunction being granted or upheld. As we indicated we would, we now set out the full grounds for our decision.

Facts Background

The Concession Agreement was entered into between the Appellants and a consortium under which the latter was granted a concession of 25 years to rehabilitate, expand, modernise and maintain the Malé International Airport (“the Airport”). The consortium then incorporated the Respondent, and assigned and novated all its rights and obligations under the Concession Agreement to the Respondent.

A series of events took place after the Concession Agreement was entered into. First, an action was brought by one Mr Imad Salih before the Malé Civil Court (“the Maldives Court”) for a declaration that cll 2(a) and 2(b) of Annex 10 of the Concession Agreement,¹ which allowed the Respondent to impose a fee on departing passengers, was contrary to a piece of Maldivian legislation, Act No 71/78. Having heard the matter, on 8 December 2011, the Maldives Court held that cll 2(a) and 2(b) were indeed inconsistent with Act No 71/78 (“the Maldives Judgment”).² Following this, negotiations were held, and the Appellants subsequently each issued a letter dated 5 January 2012 consenting to a variation of the fees payable by the Respondent to MACL under the Concession Agreement to take into account the Respondent’s expected loss of revenue arising from the Maldives Judgment.³

The arbitrations

Shortly after this, on 7 February 2012, there was a change of government in the Maldives. On 19 April 2012, MACL issued a letter to the Respondent (copied to the Maldives Government) stating that its (ie, MACL’s) earlier letter of 5 January 2012 had been issued by its former chairman without authority.⁴ The earlier letter was the one by which the parties were said to have agreed to a variation of the fees payable by the Respondent to MACL to offset the consequences of the Maldives Judgment. By a letter dated 26 April 2012, the Maldives Government also purported to withdraw the consent to the arrangements that it had ostensibly given by its earlier letter of 5 January 2012. Notwithstanding these developments, the Respondent continued to operate the Concession Agreement on the basis that it was entitled to take into account the loss of income arising from the Maldives Judgment in calculating the fees that it had to pay to MACL.

Nonetheless, on 5 July 2012, the Respondent commenced arbitration proceedings against the Appellants pursuant to the arbitration agreement that is contained in cl 21.4 of the Concession Agreement. By this arbitration, the Respondent sought, among other things, a declaration that it was entitled to adjust the fees payable to MACL (“the 1st Arbitration”). The Appellants filed their response in the arbitration on 4 September 2012. The arbitral tribunal for the 1st Arbitration has been nominated, although no terms of appointment have yet been agreed.⁵

On 27 November 2012, the Appellants each informed the Respondent, albeit in almost identical letters (“the November Notices”), that following the Maldives Judgment, the Concession Agreement was void ab initio or, in the alternative, that the Concession Agreement had been frustrated. The Respondent was given seven days’ notice to vacate the Airport, whereupon, it was intimated, the Appellants would take over the Airport. Shortly after this, on 29 November 2012, the Appellants commenced arbitration proceedings against the Respondent pursuant to cl 21.4 of the Concession Agreement, seeking, among other things, a declaration that the Concession Agreement was void and of no effect (“the 2nd Arbitration”).⁶ As cl 21.4 provides that the seat of the arbitration is Singapore, the lex arbitri for both arbitrations is Singapore law.

The present proceedings

It is evident that the relationship between the parties has deteriorated severely and rapidly. Faced with the prospect of the Concession Agreement being terminated prematurely and the Airport being taken over by the Appellants imminently, the Respondent commenced OS 1128 on 30 November 2012 seeking an injunction from the Singapore High Court to restrain the Appellants and their directors, officers, servants or agents from taking any step to: interfere either directly or indirectly with the performance by the Respondent of its obligations under the Concession Agreement; and take possession and/or control of the Airport or its facilities pending further order by the Singapore court or an arbitral tribunal constituted to resolve the dispute.

The Judge granted the Injunction on 3 December 2012, but only in the terms sought in relation to (a) above. No order was made in the terms of (b) above. Thus, the Appellants and their employees were only restrained from interfering with the performance of the Respondent’s obligations under the Concession Agreement (“the Restrained Acts”), although it might well be said that it would not have been possible for the Appellants to do any of the acts under (b) without thereby also doing the acts under (a), contrary to the terms of the Injunction.

The Appellants appealed against the Judge’s decision and the matter came before us three days later on 6 December 2012.

The issue in dispute

The main issue in the appeal was whether an interim injunction to restrain the Appellants from interfering with the Respondent’s performance of its obligations under the Concession Agreement should be granted until such time as the arbitral tribunal in the 2nd Arbitration was in a position to determine the matter and make a ruling on the orders sought.

This presents two questions: whether a Singapore court has the power to grant the Injunction, particularly against the government of a foreign sovereign State; and if it has such power, whether the Injunction should be granted or upheld in all the circumstances.

For the avoidance of doubt, it bears emphasising at the outset that the Singapore court has no jurisdiction to resolve the substantive dispute. The validity of the Concession Agreement is a matter to be determined in the 2nd Arbitration. The Singapore court in these proceedings is concerned primarily with the exercise of the powers that are vested in it under the International Arbitration Act (Cap 143A, 2002 Rev Ed) (“the IAA”), that being the law governing the two arbitrations.

Analysis Jurisdictional issues Whether the Court of Appeal has jurisdiction to hear the appeal

The Respondent raised a preliminary objection to the jurisdiction of this court. Counsel for the Respondent, Mr Mohan Reviendran Pillay (“Mr Pillay”), submitted that the Judge’s decision to grant the Injunction was a decision made on an interlocutory application and so, leave to appeal was required pursuant to s 34(2)(d) of the Supreme Court of Judicature Act (Cap 322, 2007 Rev Ed) (“the SCJA”).⁷ As the Appellants had not sought leave from the High Court, Mr Pillay argued, the Court of Appeal therefore had no jurisdiction to hear the appeal. In support of the argument that the Judge’s decision was given pursuant to an interlocutory application, Mr Pillay referred⁸ to PT Pukuafu Indah and others v Newmont Indonesia Ltd and another [2012] 4 SLR 1157 (“PT Pukuafu”), where Lee Seiu Kin J observed (at [20]) that an interim order which sought to preserve the legal rights and obligations of the parties before the dispute was completely disposed of was an interlocutory order. Lee J defined (likewise at [20]) an interlocutory order as “an order that [did] not decide the substance of the dispute or an order under s 12 of the IAA during the pendency of arbitration proceedings”.

The Respondent’s jurisdictional objection is without merit. First, it is incorrect to characterise the Judge’s decision as one made on an interlocutory application. The application for the Injunction was made by OS 1128; the sole purpose of OS 1128 was to seek the Injunction. It would be odd if OS 1128 were characterised as an interlocutory application when there was nothing further for the court to deal with once the Injunction had been either granted or refused. This was not a case where an interlocutory injunction was sought pending the resolution of a substantive dispute before the court. The sole and entire purpose of the originating process in this case was to obtain the Injunction. Once that application had been determined, the entire subject matter of that proceeding would have been spent.

Second, the attempt to draw a link between interim orders under s 12 of the IAA and decisions on interlocutory applications for which leave of the High Court is required to bring an appeal under s 34(2) of the SCJA is tenuous at best. PT Pukuafu does not assist Mr Pillay’s argument. Lee J was not addressing the issue of whether an interim order was a decision arising out of an interlocutory application. He was concerned, rather, with whether the court had the power to set aside interim orders made in an arbitration. In...