Helice Leasing S.A.S v PT Garuda Indonesia (Persero) TbK (Rev 1)

The claimant, a lessor under a novated operating lease, sued for unpaid Basic and Additional Rent and an indemnity. The defendant applied to set aside service, to stay proceedings in favour of arbitration under the lease and, alternatively, to stay on forum non conveniens grounds. The court held that service effected at the defendant's address as shown on the Companies House register was valid and that, in any event, any defect could properly have been remedied retrospectively under CPR r.6.15 or r.7.6 (and, in the exceptional alternative, under r.6.16). On construction of the lease, the court held that the arbitration clause (cl.15.2) covers disputes arising out of or in connection with the lease, including questions of existence, validity or termination, and that clause 13.2 does not carve out a right for the lessor to litigate such disputes in court; accordingly a stay under s.9 of the Arbitration Act 1996 was granted. The defendant's forum non conveniens application failed because it did not identify particular issues which made Indonesia clearly or distinctly more appropriate, and the lease is governed by English law and the seat of arbitration is London.

The claimant (C) became lessor under an amended operating lease by novation and alleges persistent non-payment by the defendant (D) of monthly rent and related sums from January 2020, seeking arrears, interest and an indemnity. The defendant challenged jurisdictional matters only: (1) that service of the claim form at D's Hammersmith address was invalid; (2) that the parties' arbitration agreement required a stay under s.9 of the Arbitration Act 1996; and (3) that Indonesia was the clearly more appropriate forum.

Issues framed by the court:

• Whether service at the address published on Companies House was effective under the CPR (notably r.6.9 and r.6.26) and, if not, whether the court should exercise its powers under r.6.15, r.7.6 or r.6.16 to cure any defect.
• How clauses 13.2 and 15.2 of the Lease are to be construed and whether the substantive disputes fall to be referred to arbitration such that a stay under s.9 of the Arbitration Act 1996 must be granted.
• Whether Indonesia is clearly or distinctly the more appropriate forum for trial.

Reasoning on service: the court accepted that the claimant relied on the defendant's publicly filed Companies House address. It held that a company is held to its published representation until the register is updated; the risk of the short interim period falls on the company which had filed the change but not yet had it published. The court also noted the defendant had acknowledged the claim form within the relevant period and had not objected until after the claim form's validity period had expired. Accordingly service at the Hammersmith address was valid; alternatively the court would have made retrospective orders under r.6.15 or r.7.6 (and, in the exceptional alternative, under r.6.16) to rectify any defect.

Reasoning on arbitration: clause 15.2 provides for LCIA arbitration in London, expressly covering disputes as to existence, validity or termination. Clause 13.2 sets out remedies available to the lessor on an Event of Default but does not and was not intended to exclude the arbitration agreement. Giving business common sense to the contract, the court held that disputes (including whether an Event of Default had occurred) fall within clause 15.2 and must be determined in arbitration. The court applied authorities on the meaning of a "dispute" in arbitration clauses, concluding that the defendant's refusal to pay and its expressed intention to defend gave rise to a dispute for arbitration. The claimant's separate claim for an indemnity was also within the scope of the arbitration clause.

Reasoning on forum non conveniens: the defendant failed to identify specific issues that would make Indonesia clearly or distinctly more appropriate. Factors favoured England: governing law is English, the lease and correspondence are in English, the defendant has a UK establishment and the seat of arbitration is London. The stay on forum non conveniens grounds was refused.

The court therefore granted a stay under s.9 of the Arbitration Act 1996 in favour of arbitration, found service valid (and would have remedied any defect), and dismissed the forum non conveniens application.

First instance: The court granted the defendant's application in part by staying the proceedings under section 9 of the Arbitration Act 1996 in favour of arbitration under clause 15.2 of the Lease, on the basis that disputes arising out of or in connection with the Lease (including questions as to existence, validity or termination and the claimant's indemnity claim) fall within the arbitration agreement. The court held service at the Companies House published Hammersmith address was valid, and in any event would have exercised its powers under CPR r.6.15 and r.7.6 (and, in the alternative, r.6.16) to remedy any defect. The defendant's forum non conveniens application was dismissed for failure to show another forum was clearly or distinctly more appropriate.