by Bethel Chambers LLC Aircraft and equipment leasing — contract note
September 2026
Get the unit back. Keep the customer. Preserve your IRR. Keep your carry.
Start with the builder. The explainer below shows the logic behind it, and the note itself follows. Hover a red number anywhere to read the case behind that part of the clause; on a phone, tap it.
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Clause 23 — Dispute resolution
23.1 Notice of Dispute, in writing. It starts the clock.
23.2 First tier — the named office-holders meet within 15 Business Days.
23.3 Second tier — the named senior office-holders meet.
23.4 Arbitration — SIAC, seat Singapore, sole arbitrator.
23.6 Urgent relief — open at any time. The tier periods keep running.
Adjustable
Aircraft / engine / rotable
Seat & governing law
Sole or three arbitrators
Tier periods
Named office-holders
Conditions precedent
Emergency arbitrator
Cape Town & IDERA
Lien discharge
Set the deal characteristics and the clause rewrites itself. Copy it out when you are done.
A tiered SIAC clause for an aircraft, engine or rotable lease. Set the deal characteristics on the left and the clause rewrites itself. Renumber to fit your agreement, then have it settled against the governing law and the seat.
Template only, and not legal advice. The wording of the tiers, the periods, the named office-holders and the carve-out all need to be checked against the particular agreement, its governing law and the chosen seat. On the authorities behind each limb, see notes 1 to 7 above.
Two goals that usually pull against each other.
You must recover a high-value unit quickly. You must also keep the lessee, who is often a customer of your shop. Court action recovers the unit and damages the account. Patience protects the account, and the unit stays out.
Security gives you the position. The clause turns it into a settlement.
Cross-collateral means the lessee needs something back from you. The dispute resolution clause decides how fast you get the unit, at what cost, and at what price to the relationship.
The money route escalates on a clock.
Each tier is self-executing: if the meeting does not happen inside its period, the tier is exhausted and the clock moves on. A lessee cannot stall by not attending.
The unit never waits for the tiers.
Self-help recovered three SpiceJet 737s in five days and nine Jet Airways fleets in eleven. Litigating the asset took years: FitzWalter won in London and still could not export four A321s from Vietnam for over two years.
Mandatory words on the wrong limb.
Dnata Airport Services v Polar Air Cargo Worldwide [2026] NSWCA 105 — on Article 9 of the IATA standard form
Named people, fixed periods, one binding forum.
International Research Corp v Lufthansa Systems Asia Pacific [2013] SGCA 55; CEDR Tenth Mediation Audit
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How the clause works, in 45 seconds
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THE NOTE
The clause, step by step
Read the note
Day 0Notice of Dispute, in writing
Tier 1Named operating level meets
Tier 2Named senior level meets
Tier 3Arbitration, one binding forum
Urgent relief runs alongside, open at any time — court or emergency arbitrator, delivery up, repossession. The tier periods keep running.
With the case behind each step on hover: 12 authorities, English and Singaporean.
With the case behind each step on hover: 12 authorities, English and Singaporean.
Notice of Dispute
In writing. It starts the clock, and every later period runs from that date.
Operating level meets
The named office-holders on each side meet within a fixed number of business days and try in good faith to agree a result.
Senior level meets
The named senior office-holders meet within a further fixed period. Usually the managing director.
Arbitration
Once the periods have run, either party can start arbitration. Use the published clause of the LCIA, the SIAC or the ICC.
Name the people
Not “the parties shall discuss”. Named office-holders can settle.
Time-limit each tier
A tier ends when its period runs out, so a lessee cannot stall by not attending.
Keep the record
The notice, the attendees and the dates.
SELF-HELP
Getting the unit back without a court
Open the routes
IDERADe-registration and export. Five working days in India.
Buy out the lienPossessory, so it ends on payment. Then claim it back.
Test the lienWeak liens are challenged, not bought.
Beat the moratoriumTerminate and file before insolvency starts.
Six routes, with the case law on hover: Tappenden, Hatton, Bristol Airport v Powdrill, AWAS and the Go First petitions.
Six routes, with the case law on hover: Tappenden, Hatton, Bristol Airport v Powdrill, AWAS and the Go First petitions.
A tiered clause converts security into a settlement. It does not move the unit. On mobile equipment, the steps that actually recover the asset are administrative and commercial, and none of them needs a court.
File the IDERA
De-registration and export on the authority you already hold. In India the registry's duty is mandatory and runs in five working days, and the courts have enforced it twice — for six SpiceJet aircraft in 2015 and for the Go First fleet in 2024.
File on day one of the default, not after the tiers.
Buy out the lien
A repairer in lawful possession that improved the unit has a common law lien. It is possessory and secures a sum, so it ends on payment: pay the shop, take the unit, then recover the amount from the lessee under the lease indemnity.
Usually days, against months for any order.
Test the lien first
Ask whether possession was lawful and continuous, whether the work improved the unit or merely maintained it, and whether the holder has been using it. Weak liens are challenged, not bought. A statutory detention also has to be exercised by an overt act.
Price the lien before you concede it.
Watch the charges you did not incur
Airport and air navigation detention rights attach to the aircraft because the operator defaulted, not you, and in England they rank ahead of your ownership and your registered international interest. Some jurisdictions allow fleet-wide detention.
Track the operator's charges, not only its rent.
Insolvency closes the window
A moratorium constrains repossession and detention alike. Terminate, invoke the IDERA and file before an insolvency starts, and check whether aircraft objects are carved out of the moratorium in that jurisdiction.
The date you file decides the outcome.
What arbitration cannot do
Cape Town remedies sit outside the arbitral rules. In rem relief, court-assisted repossession, de-registration and export still run through national courts and registries — which is why the clause has to preserve them expressly rather than assume them.
Keep clause 23.7 in the builder switched on.
How the two halves fit. Self-help gets the unit back. The tiered clause decides what the money argument costs and whether you still have a customer at the end of it. Run them in parallel from the same Notice of Dispute, and make sure the clause says that using one does not waive the other.
EVIDENCE
Have airlines accepted multi-tier, or only arbitration?
See the evidence
Yes — the structureArticle 9 of the IATA Standard Ground Handling Agreement is already tiered, and carriers and handlers sign it worldwide.
No — the draftingIn June 2026 the NSW Court of Appeal held that same Article 9 binds nobody to arbitrate.
And when it is drafted properlyA three-committee aviation tier was enforced as a condition precedent by the Singapore Court of Appeal.
Short answer: they accepted the structure years ago. The drafting is what fails. The standard form that carriers and ground handlers sign worldwide is already tiered — talk first, then arbitrate, courts as fallback. But it makes arbitration an option the parties may elect rather than a forum they have chosen, and in June 2026 an appeal court held that this is not an agreement to arbitrate at all. The tier survived; the arbitration limb did not. That is a much better argument to put to a lessee than asking it to try something new.
The industry standard form is a tiered clause
Article 9 of the IATA Standard Ground Handling Agreement runs in three steps: the parties shall make all reasonable efforts to resolve disputes amongst themselves; failing mutual resolution, the parties may elect arbitration; failing agreement on an arbitration process, the courts named in Annex B decide. It is used globally by carriers and ground handlers.
IATA SGHA, Article 9
An election to arbitrate is not an agreement to arbitrate
In Dnata v Polar Air Cargo the NSW Court of Appeal held Article 9 is not an arbitration agreement at all: “the parties may elect” requires a joint election, and the express fallback to litigation contradicts any binding duty to arbitrate. Either side can veto after the dispute has arisen, when it already knows which forum suits it. Note what was not decided: the obligation to talk first was never impugned. The tier was not the defect. The optional arbitration limb was.
[2026] NSWCA 105, Bell CJ, Kirk and McHugh JJA
A tiered aviation clause, enforced to a final court
Lufthansa Systems' cooperation agreement for a Thai Airways IT project required a dispute to pass through three named committees before SIAC arbitration. The Singapore Court of Appeal held those steps were conditions precedent requiring strict compliance, and the tribunal lost jurisdiction because they were skipped. An aviation counterparty agreed to real tiers, and a court gave them teeth.
International Research Corp v Lufthansa Systems Asia Pacific [2013] SGCA 55
Aviation contracts already carry the neighbouring limbs
The Malé airport concession obliged both parties to continue performing all obligations while a dispute ran, with arbitration seated in Singapore. GMR argued it in the Court of Appeal. The continued-performance limb of the architecture is familiar in aviation infrastructure, even where the escalation limb is not.
Maldives Airports v GMR Malé International Airport [2013] SGCA 16
They behave this way even with no clause requiring it
On 25 August 2025 AerCap terminated 36 future deliveries and served default notices on 37 Spirit leases; Spirit disputed every notice and filed Chapter 11 four days later. Within weeks, senior-level negotiation produced US$150m to Spirit, 27 rejections, all claims resolved and 30 future deliveries. No contractual tier required that meeting. A tier would have started it before the notices went out.
ION Analytics, Sept 2025; Aviation Week, Oct 2025
An aviation forum that publishes a mediation tier
The Hague Court of Arbitration for Aviation, launched in July 2022 and administered by the Netherlands Arbitration Institute, publishes model clauses including an optional mandatory mediation step before arbitration, and is open to airlines, lessors, financiers, airports and MROs. Its caseload is not published, so this shows the option exists, not that the industry is using it.
Hague CAA model clauses; WilmerHale FAQ; King & Spalding
The drafting rule this produces. Put the mandatory words on the limb that decides who hears the case. The IATA form does the opposite: compulsory about talking, optional about arbitrating, which is exactly backwards. Select the forum outright — “shall be referred to and finally resolved by arbitration” — never “may elect”, and never with a court fallback that operates when the parties fail to agree, because that hands each side a veto it will exercise once it knows which forum favours it.
What to put to a lessee. You already sign this structure in the SGHA. We are asking for the version a court will enforce: named office-holders rather than “the parties”, fixed periods rather than “reasonable efforts”, one binding forum outright rather than an election either side can refuse, and an express carve-out so nothing in the tiers delays recovery of the unit.
What is not here. No institution publishes how many aviation contracts contain a tiered clause, the Hague CAA does not publish its caseload, and no study measures whether a tier reduces aviation litigation specifically. The claim on this page is narrower than that: the tiered structure is already accepted across the sector, and in the one reported aviation case where it was properly drafted it was enforced as a condition precedent.
DATA
Tracking framework, method, and the record 2012 to 2026
Open the data
31matters, 2012 to 2026
US$7.85bndisclosed, net of overlaps
London 8then Delhi 6, New York 4
Where they were decided
Self-help days
Negotiated weeks to months
Adjudicated three to six years
1. Volume and value over time
Bars count matters recorded in that year. Press play, or switch the bars to disclosed value.
2. Where these disputes were actually decided
Each circle is one matter, placed at the forum that decided it. Where the outcome was negotiated rather than decided, the circle sits at the airline or counterparty instead. Circle area is the disclosed figure; a dashed circle means no figure was published. Press play.
What the map is for. It shows where the decision-making sat, not where the aircraft were. Almost every adjudicated matter clusters in London, Dublin, New York and Delhi, while the aircraft were in Moscow, Hanoi, Male and Jakarta. That distance is the whole enforcement problem: FitzWalter won in London and still could not move four A321s out of Vietnam for more than two years, and GMR won in a Singapore-seated arbitration and never got the airport back. Negotiated outcomes, by contrast, happen where the counterparty is.
3. Three things worth tracking
Everything else is colour. These three are the only fields that change what you write into a clause.
What was in dispute
Money, the asset, or both. Money claims are arbitrable. Asset recovery runs through registries and national courts and cannot be arbitrated into existence.
Tells you the clause needs two separate routes, not one.
How it was actually resolved
Negotiated, adjudicated, self-help under an IDERA, or absorbed into an insolvency process.
Tells you which route to make fast and binding, and which to keep out of the way.
How long it took
From the trigger to the outcome that mattered: the unit back, or the money in.
The only number that separates the routes, and it separates them by orders of magnitude.
4. How this was researched, and how to stop it going wrong
The first version of this table showed nothing between 2012 and 2022. That was a research failure, not a quiet decade. This is the protocol that fixed it.
- Frame the space before searching. Build the grid first: every year, every known airline or lessor insolvency, every likely forum, every claim type. Then search each cell. Searching for “large aviation leasing disputes” returns whatever is famous this month, which is how a decade goes missing.
- Search by event, not by superlative. Airline failures are enumerable and dated, and disputes follow them: Kingfisher 2012, Air Berlin and Monarch 2017, Jet Airways and Thomas Cook 2019, the Covid wave 2020, Norwegian and Nordic Aviation 2021, Go First 2023, Spirit 2024 and 2025.
- Go to registers, not commentary. BAILII and the ICLR for England, eLitigation for Singapore, Indian Kanoon and the IBBI for India, PACER and CourtListener for the US, NSW Caselaw for Australia, and SEC filings for lessor-side numbers. Trade press dates the event; the register gives the citation.
- Never plot an unknown as a zero. A blank is a disclosure gap. This chart counts matters first and shows value second, and marks a year with no matter recorded as exactly that.
- Do not sum different metrics. The US$4.5bn Russian claim, the US$1.3bn of settlements and the US$1.035bn judgment are largely the same aircraft counted three times. Rows are tagged and overlapping figures are excluded from the net total.
- Log what you could not find. A named gap list is more useful than a clean-looking table, because it tells the next person where to dig.
- Grade every figure. Reported, partial, or none. Anything unsourced does not go in.
Two errors owned. The earlier version of this panel held five years of data and implied ten quiet years. Its running total also added claims, settlements and a judgment over the same asset pool, overstating the market. Both are corrected below, visibly rather than quietly.
5. The record, 2012 to 2026
Filter by type or by the quality of the figure, sort any column, tap a row for detail and sources.
| Year | Matter | Figure | In dispute | Resolved by | Time to outcome | Tiered clause |
|---|
6. The pattern, and what it says about your clause
Sort the table by “Resolved by”. The routes separate cleanly, and they separate by orders of magnitude. Read as an asset-management question rather than a legal one: a unit in a dispute is a unit off-lease, so the route you are forced down sets how long the asset stops earning. That is why this is an IRR question before it is a drafting question.
Self-help: days
DAE de-registered three SpiceJet 737s in five days. Nine lessors de-registered Jet Airways aircraft within eleven days of the first IDERA. No court, no tribunal, no clause.
Never route asset recovery through the dispute clause. Carve it out expressly.
Negotiated: weeks to months
AerCap and Spirit settled 37 leases, 36 orders and every claim between them in about six weeks. AerCap took just over US$1.3bn from Russian insurers 15 months after filing, while the same claims ran on in court for another two years.
This is what tier one and tier two are for. Name the office-holders who can do it.
Adjudicated: three to six years
Three years from filing to judgment on the Russian claims, with an appeal pending. Four-plus years for VietJet, still running. Four years for GMR, which won US$270m and never got the airport back. Three years for Sunbird to obtain an US$8m judgment that is still unpaid.
Make this the last resort, and make it binding when you get there.
The four drafting conclusions the data supports.
One: split the clause. Money goes to the tiers and then arbitration; the asset goes to the IDERA, the registry and the lien discharge, and nothing in the tiers may delay it.
Two: put the mandatory words on the right limb. The IATA standard form is compulsory about talking and optional about arbitrating, and an appeal court has just held the arbitration limb unenforceable for that reason. Invert it.
Three: size the forum to the claim. A US$8m engine claim took three years and remains unpaid; that is the case for an expedited procedure and a sole arbitrator below a stated threshold.
Four: name people with settlement authority. Every fast outcome here involved principals doing a deal. The clause cannot create that, but it can require the meeting to happen inside a fixed period, and record that it did.
And the reason any of it is worth the negotiation: a tiered clause looks like process, but what it buys is time on wing. Three to six years of adjudication on a unit that is not earning is a return the fund never books, and in GMR and VietJet the owner did not even get the asset at the end of it. Speed is the return.
How far this actually goes. Thirty-one matters is not a sample, there is no counterfactual, and the disputes that a tiered clause settled quietly are invisible because arbitration and private settlement are not reported. The route timings above are robust because they are dated events. The inference that a tier would have produced them is not proved by this table — it is the best available reading of it.
7. Known gaps
Matters that exist but which this table cannot yet quantify. Closing these needs paid data.
- Per-lessor claim values in the Covid Chapter 11s. Avianca, LATAM, Aeromexico, Virgin Australia, Interjet and Philippine Airlines all restructured or rejected leases; individual lessor claim amounts were never separately published. Where to look: bankruptcy dockets and claims registers on PACER.
- Air Berlin, Monarch and Thomas Cook lessor claims. Fleet counts are public; the amounts claimed against the estates are not. Where to look: German and English insolvency filings.
- Arbitration, almost entirely. Awards are confidential unless enforcement is contested, so tiered clauses that worked are invisible by construction. This is the single biggest distortion in the table, and it cuts against the argument on this page rather than for it.
- Quantum in redelivery and maintenance-reserve disputes. The most common lessor claim type, and almost never reported. Where to look: Cirium, Ishka and IBA subscription data.
- Cape Town registry activity. International Registry filings and IDERA counts would give a frequency baseline no court dataset can. Where to look: the International Registry and the Aviation Working Group.
- China and the Gulf. Almost nothing here originates from PRC or GCC forums, which is far more likely to reflect reporting practice than an absence of disputes.
8. Does a mediation tier actually reduce litigation?
No aviation-specific study exists. The cross-industry evidence is consistent.
of commercial mediations settle
73 per cent on the day itself, another 20 per cent shortly after. Around 17,000 civil and commercial mediations a year in the UK.
CEDR Tenth Mediation Audit, 2023 (328 mediators)
saved a year, on CEDR's estimate
In wasted management time, legal fees, lost productivity and damaged relationships, on roughly £20bn a year of mediated claims once mega-cases are excluded.
CEDR Tenth Mediation Audit, 2023
settle at the Singapore Mediation Centre
Over 90 per cent of those within one working day. More than 6,500 matters worth over S$15.6bn since 1997; largest single claim settled, S$1.06bn. Construction is about 40 per cent of the caseload.
Singapore Mediation Centre, to 31 December 2023
of NHS clinical negligence mediations resolve
On the day or within 28 days, across more than 2,000 claims referred since 2016. Different industry, same pattern.
NHS Resolution, 2023/24
settle even when a court sends them
WIPO's Shanghai service settled around 60 per cent of nearly 220 IP and technology disputes referred by Chinese courts once a mediator was appointed.
WIPO Arbitration and Mediation Center
against months for an arbitration
The consistent finding is not only that most cases settle, but that they settle at the first structured meeting. That is the argument for tier one.
CEDR; SMC; SIMC
Read the mediation figures carefully. They are self-reported by mediators and institutions and carry obvious selection bias: cases that reach mediation are cases where both sides already chose to try. None of them shows that a contractual tier causes settlement. What they support is narrower and still useful — put the right people in a room with a structured process and most commercial disputes settle, usually at the first meeting.
AUTHORITIES
The 19 cases in full
Open the authorities
Facts, holding and why it matters, for every case cited on this page. The same text you get on hover, set out for printing.
Emirates Trading v Prime Mineral [2014] EWHC 2104 (Comm)
HSBC Trust Services v Toshin [2012] SGCA 48
Sulamérica v Enesa [2012] EWCA Civ 638
Ohpen v Invesco [2019] EWHC 2246 (TCC)
IRC v Lufthansa Systems [2013] SGCA 55
Kajima v Children's Ark [2023] EWCA Civ 292
Maldives Airports v GMR [2013] SGCA 16
Tappenden v Artus [1964] 2 QB 185
Bristol Airport v Powdrill [1990] Ch 744
Dnata v Polar Air Cargo [2026] NSWCA 105
+ 9 more
Facts, holding and why it matters, for every case cited on this page. The same text you get on hover, set out for printing.
The authorities in full
English and Singapore decisions behind each part of the clause.
Tiered dispute resolution and multi-tier adoption
1The written trigger and the fixed period
Emirates Trading Agency LLC v Prime Mineral Exports Private Ltd [2014] EWHC 2104 (Comm)
Facts. A long-term iron ore supply contract. The buyer failed to lift any cargo in the second shipment year. The seller terminated in December 2009 and claimed US$45,472,800 in liquidated damages. Clause 11.1 said the parties would first seek to resolve any dispute by friendly discussion, and that if no solution was reached after a continuous period of four weeks, either party could refer the claim to ICC arbitration. The seller went to arbitration in June 2010. The buyer then challenged the tribunal's jurisdiction under s 67 of the Arbitration Act 1996, saying the four-week discussion requirement had not been met.
Held. Teare J held that a time-limited obligation to seek to resolve a dispute by friendly discussion in good faith is enforceable as a condition precedent to arbitration. The parties were commercial entities, the standard of conduct was identifiable, and the period ran from a fixed point. He declined to follow the older line of cases treating such duties as bare agreements to negotiate. On the facts the discussions had taken place and the four weeks had run, so the tribunal had jurisdiction and the challenge was dismissed.
Why it matters. The written notice and the stated period are what made the tier enforceable, and also what allowed the claimant to prove it had complied. Without a defined starting point, neither party can show that a period expired or that a step was taken. A claim of US$45.47m turned on that machinery.
2Good faith is enforceable in Singapore
HSBC Institutional Trust Services (Singapore) Ltd v Toshin Development Singapore Pte Ltd [2012] SGCA 48
Facts. A long lease of retail space at Ngee Ann City. The rent review clause required the landlord and tenant to endeavour in good faith to agree the new rent, with a fallback appointment of three valuers if they could not. The landlord discovered that the tenant had quietly obtained its own valuations before the negotiation meeting and had not disclosed them, and argued that the review mechanism had been rendered inoperable.
Held. The Court of Appeal held that an express agreement to negotiate in good faith is valid and enforceable in Singapore, departing from the English position in Walford v Miles. Such clauses are in the public interest because they promote the consensual disposal of disputes. Good faith requires honesty and observance of accepted commercial standards of fair dealing, including not taking advantage of the other side's known ignorance. The concealment was a breach, but it was remedied by later disclosure, so the review exercise stood.
Why it matters. Under Singapore law a duty to meet and seek in good faith to resolve a dispute has real content. Both sides owe obligations inside the meeting, and an unremedied breach can make the outcome voidable. This is the authority that makes a first-tier negotiation obligation worth writing.
3An undefined process is not a tier
Sulamérica CIA Nacional de Seguros SA v Enesa Engenharia SA [2012] EWCA Civ 638
Facts. Insurance policies covering a large Brazilian hydroelectric project. The condition immediately before the arbitration clause said the parties undertook that, before any reference to arbitration, they would seek to have the dispute resolved amicably by mediation. The insurers commenced arbitration without attempting mediation, and the insured argued that the mediation step was a condition precedent that had not been satisfied.
Held. The Court of Appeal held the mediation undertaking unenforceable. It set out no defined mediation process and referred to no mediation provider's procedure, so it contained no unequivocal commitment capable of being enforced. As the condition was not defined with sufficient certainty, it could not operate as a legally effective precondition to arbitration.
Why it matters. This is the failure mode to draft against. A clause that says the parties will try to settle amicably, without saying how, with whom or by when, will not stop the other side going straight to arbitration. If you want the tier to bite, borrow an institution's published procedure or specify the steps yourself.
4A named panel is not enough if the process is nebulous
Wah (Alan Tang) v Grant Thornton International Ltd [2012] EWHC 3198 (Ch)
Facts. The Grant Thornton network membership agreement governed the expulsion of the Hong Kong member firm. Its dispute clause required conciliation in two stages: first by the chief executive, and then by a panel of three board members appointed by the board. No arbitration could be commenced until the panel determined that it could not resolve the dispute, or one month after referral, whichever came first. The expelled firm challenged the resulting award under s 67, saying the conciliation procedure had not been properly carried out.
Held. Hildyard J held the scheme too nebulous to be given legal effect. Although it identified who was to conciliate and set a time limit, it did not define the process itself with sufficient certainty, and the consequences of the steps were unclear. The clause therefore did not operate as an enforceable condition precedent, and the jurisdiction challenge failed.
Why it matters. Naming people is necessary but not sufficient. Say what the named office-holders must actually do, within what period, and what happens when the period expires. Note the contrast with Emirates Trading two years later, where a shorter clause with a hard four-week period was upheld.
5The four requirements, and a stay to enforce them
Ohpen Operations UK Ltd v Invesco Fund Managers Ltd [2019] EWHC 2246 (TCC)
Facts. A framework agreement for the development of a digital investment platform. Clause 11 required the parties to use reasonable efforts to resolve any dispute by an escalation procedure and then mediation, and made compliance an express condition precedent to commencing court proceedings. After the agreement was terminated and a without prejudice meeting failed, Ohpen issued court proceedings. Invesco applied for a declaration that the court would not exercise jurisdiction, and for a stay pending compliance.
Held. O'Farrell J held the clause applied notwithstanding termination and was enforceable, and set out the requirements: the process must be a binding obligation; the obligation must be expressed clearly as a condition precedent to court proceedings or arbitration; the process must be sufficiently clear and certain by reference to objective criteria, including machinery to appoint the mediator or take any other necessary step without further agreement by the parties; and the court then has a discretion to stay proceedings brought in breach. She stayed the claim for a defined window to allow the mediation to take place.
Why it matters. This is the checklist to draft to. It is also the practical answer to what happens when someone jumps the queue: not the end of the claim, but a stay, delay and a costs argument.
6Strict compliance, not substantial compliance
International Research Corp PLC v Lufthansa Systems Asia Pacific Pte Ltd [2013] SGCA 55
Facts. An aviation IT project for Thai Airways. The cooperation agreement between Lufthansa and Datamat contained a tiered clause requiring a dispute to be referred consecutively through three committees drawn from the parties' own staff before SIAC arbitration. When Datamat ran into financial trouble, supplemental agreements made IRCP the payment conduit. Lufthansa commenced SIAC arbitration against both Datamat and IRCP over unpaid invoices, and IRCP challenged jurisdiction.
Held. The Court of Appeal held the escalation steps were conditions precedent to any reference to arbitration and required strict compliance; substantial compliance was not enough to discharge the obligation. Lufthansa had not taken the dispute through the committees as the clause required, so the tribunal had no jurisdiction over IRCP, and the appeal was allowed. The Court also relaxed the strict rule on incorporating an arbitration clause from one contract into a related one.
Why it matters. The leading Singapore authority on tiered clauses, and the reason the record matters. A tribunal will not treat general commercial discussions as satisfying tiers that specified particular committees or people. The incorporation point has its own sting: a tiered clause in a head agreement may bind you under a supplemental one you signed later.
7A missed tier can put the whole claim at risk
Kajima Construction Europe (UK) Ltd v Children's Ark Partnership Ltd [2023] EWCA Civ 292
Facts. A PFI project for a children's hospital in Brighton produced claims over cladding and fire safety defects. After a standstill agreement expired, the employer issued its claim about a week before limitation ran out, without first referring the dispute to the contractual Liaison Committee as the dispute resolution procedure required. Kajima applied to strike the claim out rather than merely stay it, because a fresh claim would then have been statute-barred.
Held. The Court of Appeal accepted the procedure was a condition precedent to proceedings, but held it was not sufficiently clear and certain to be enforceable: among other defects, Kajima was not a member of the Liaison Committee, was not obliged to take part, and could not be bound by the outcome, and no value could be ascribed to the referral on its own. The usual remedy for breach of such a procedure is a stay rather than strike out, and the claim survived.
Why it matters. The employer was saved by the weakness of the clause, not by its own conduct. Read the other way, a clause drafted to the Ohpen standard would have destroyed a claim worth the whole cost of the remedial works. Draft the clause well, then comply with it, and never leave the first tier until the week limitation expires.
8Non-compliance is for the tribunal, not the court
Republic of Sierra Leone v SL Mining Ltd [2021] EWHC 286 (Comm)
Facts. A mining licence was suspended and then cancelled. The clause required the parties to attempt in good faith to reach an amicable settlement, and provided for arbitration if the dispute was not settled within three months. SL Mining sought emergency arbitrator relief and filed its ICC request for arbitration before the three months had run. The tribunal held it had jurisdiction, and Sierra Leone challenged that partial award under s 67 of the Arbitration Act 1996.
Held. Sir Michael Burton dismissed the challenge. Whether a pre-arbitration step has been complied with is a question of admissibility, for the tribunal, not of substantive jurisdiction under s 30, so s 67 was not available. A negotiation or cooling-off period is not an absolute bar to commencing arbitration. In any event Sierra Leone had waived the point. Emirates Trading, which had assumed the issue went to jurisdiction, was not binding on this question.
Why it matters. In England, jumping the tiers usually costs time and money rather than the claim itself, and the tribunal decides. Two consequences for drafting: say expressly whether the tiers are conditions precedent, so nobody argues about it, and note that invoking the emergency arbitrator during a cooling-off period was not fatal here.
9One clause, one arbitration agreement
Heartronics Corporation v EPI Life Pte Ltd [2017] SGHCR 17
Facts. Licence and distribution agreements for medical devices provided for mediation and then arbitration under the SMC–SIAC med-arb procedure. The plaintiff invited the defendants to mediate; they would not take part, but nonetheless applied to stay the plaintiff's court action on the strength of the arbitration half of the clause, arguing that the two obligations were separate and that the arbitration agreement stood alone.
Held. The court held the mediation and arbitration obligations were closely intertwined and not severable, so the clause was a single unitary arbitration agreement for the purposes of the International Arbitration Act. To stay the action would force the plaintiff into a procedure materially different from the one it had agreed. The defendants' refusal to mediate was a repudiatory breach of that integrated procedure, which rendered the arbitration agreement inoperative, and the stay applications were dismissed.
Why it matters. A counterparty cannot take the arbitration half of the clause and skip the meeting. If a lessee refuses to attend, that refusal has consequences, but only if the clause required the attendance and you can show you asked.
10So you cannot litigate while the tiers are open
Ling Kong Henry v Tanglin Club [2018] 5 SLR 871
Facts. A member of a club commenced court proceedings while the earlier tiers of a multi-tier dispute resolution clause were still live, and before the obligation to arbitrate had been invoked.
Held. The High Court treated the multi-tier clause not as a series of separate agreements but as part of a unitary arbitration agreement. The parties were therefore bound to arbitrate even though the obligation to arbitrate had not yet been triggered and the preconditions were still running. The attempt to litigate was a breach of the clause, and the proceedings were stayed.
Why it matters. The mirror image of Heartronics. The tiers protect the counterparty as much as you. Once a Notice of Dispute is out, going to court on the merits while the tiers run is itself a breach — which is exactly why the urgent relief carve-out has to be express.
11Interim relief is discretionary, and damages may be held adequate
Maldives Airports Co Ltd v GMR Malé International Airport Pte Ltd [2013] SGCA 16
Facts. GMR held a 25-year concession to redevelop and operate Malé airport. The government gave seven days' notice to vacate and commenced arbitration seeking a declaration that the concession was void. Before the tribunal was constituted, GMR obtained an injunction from the Singapore High Court restraining interference with its performance of the concession. The concession also contained a clause requiring both parties to continue performing all obligations during any dispute.
Held. The Court of Appeal confirmed the court's power under s 12A(4) of the International Arbitration Act to make orders preserving assets pending arbitration, and accepted that GMR's sublease interest in the airport site was an asset for that purpose. But the balance of convenience did not favour the injunction: GMR could not show that a breach, even a repudiatory one, could not be adequately remedied in damages, and the continued performance clause did not change that. The injunction was set aside.
Why it matters. The court has the power. Getting it exercised is the hard part, and a continue-to-perform clause will not do the work on its own. GMR was left to the merits and in 2016 recovered about US$270m in the Singapore-seated arbitration: compensation, not the airport. For a rotable out on lease, plan to show why money is not enough, and plan for the possibility that the tribunal disagrees.
12Name the emergency arbitrator, or the court may not help
Gerald Metals SA v Timis [2016] EWHC 2327 (Ch)
Facts. A commodities trader with an LCIA arbitration agreement applied to the LCIA for an emergency arbitrator and for expedited formation of the tribunal, to stop trust assets being dissipated. The trustees gave undertakings about disposals, and on the strength of those the LCIA refused the application. The trader then went to the Commercial Court for a freezing order under s 44 of the Arbitration Act 1996, arguing that the statutory test of urgency was lower than the LCIA's test of exceptional urgency.
Held. Leggatt J refused relief. Section 44(3) allows the court to act only to the extent the tribunal has no power or cannot act effectively, and where the institutional rules provide for an emergency arbitrator or expedited formation, the court's power is correspondingly limited. A similar functional reading had to be given to the LCIA articles and to s 44(3). The LCIA had considered the matter and had not found that relief could not wait.
Why it matters. An emergency arbitrator route is not a spare wheel; its existence can subtract from what a court will do. Write both routes into the clause expressly, and decide which one you are going to use before the unit moves.
19An election to arbitrate is not an agreement to arbitrate
Dnata Airport Services Pty Ltd v Polar Air Cargo Worldwide, Inc [2026] NSWCA 105
Facts. A Dnata employee was injured unloading cargo from a Polar Air Boeing 747 freighter at Sydney Airport in March 2021. He sued the airline in negligence, and the airline cross-claimed against the ground handler for contractual indemnity under the IATA Standard Ground Handling Agreement. Dnata applied to stay those cross-claims in favour of arbitration under Article 9 of the SGHA, the standard form used globally by carriers and ground handlers. Article 9 provides that the parties shall make all reasonable efforts to resolve disputes amongst themselves; that failing mutual resolution, the parties may elect to resolve the dispute through arbitration; and that if the parties fail to agree an arbitration process, the dispute goes to the courts named in Annex B.
Held. The New South Wales Court of Appeal unanimously dismissed the appeal (Bell CJ, with Kirk and McHugh JJA agreeing). Article 9 was not an arbitration agreement within the International Arbitration Act 1974 (Cth). The words 'the parties may elect' required a joint election by both parties, not a unilateral choice by one, and the following sentence, which contemplates the parties failing to agree an arbitration process and sends the dispute to court, was inconsistent with any binding obligation to arbitrate. The clause was in substance an agreement to agree, so either party could veto arbitration. The stay was refused and the cross-claims remain in court.
Why it matters. Read carefully, this decision is not hostile to tiered clauses. The obligation to make reasonable efforts to resolve the dispute first was never impugned; what failed was the arbitration limb, because it was drafted as an election rather than a selection. A clause that lets a party choose its forum after the dispute has arisen gives it a veto it will exercise once it knows which forum suits it, and a court will read that as an agreement to agree. The industry has already accepted the structure at scale. What it has not done is draft the binding half properly: select the forum outright, say the tiers are conditions precedent, name the office-holders, fix the periods, and do not write in a court fallback that operates whenever the parties fail to agree.
Self-help and repossession
13IDERA: the registry must act, and a court will make it
AWAS 39423 Ireland Ltd v Directorate General of Civil Aviation, Delhi High Court, 19 March 2015 (2015 SCC OnLine Del 12792)
Facts. SpiceJet defaulted in 2014 under leases of six Boeing 737 aircraft. The lessors terminated and invoked the irrevocable de-registration and export request authorisations, then applied to the DGCA for de-registration under Article XIII of the Aircraft Protocol and Rule 30 of the Aircraft Rules 1937. The lessors produced the documents the DGCA asked for, but no de-registration followed, and the airline continued to operate the aircraft. The lessors petitioned the High Court under Article 226.
Held. The Delhi High Court ordered de-registration of the six aircraft, and export, giving effect to India's declarations under the Cape Town Convention and the Aircraft Protocol. Historically the DGCA had treated de-registration as discretionary, writing to the operator and to anyone named on the certificate of registration, and could decline where revenue, customs, airport authorities or other lien holders objected — which is how operators bought time and stopped paying rent.
Why it matters. The self-help route is administrative, not judicial: you file the IDERA and the registry deregisters. This is the case that made it real in India, and the reason a well-advised lessor files the IDERA on day one rather than waiting for a tribunal. Note what used to defeat it: third-party lien holders.
14Five working days, and what an insolvency does to that
ACG Aircraft Leasing Ireland Ltd v Union of India, Delhi High Court, 26 April 2024 (with the connected Go First lessor petitions)
Facts. Go First stopped flying in May 2023 and entered insolvency. Lessors had terminated the leases and filed de-registration applications before the moratorium took effect, but the DGCA did not act, treating the outcome as subject to the proceedings before the NCLT and the High Court. Lessors sought de-registration of a total of 54 aircraft.
Held. The lessors argued, and the Court accepted, that the contrast between 'may' in Rule 30(6) and 'shall' in Rule 30(7) of the Aircraft Rules makes de-registration within five working days of a valid application a mandatory obligation of the DGCA, and that continued inaction breached India's obligations under the Cape Town Convention and the Protocol. Terminations and applications made before the moratorium were not caught by it. AWAS was applied. De-registration followed and the fleet was released.
Why it matters. Two lessons. Timing is everything: terminate and file before an insolvency, not after. And the framework keeps hardening in the lessor's favour — India excluded aircraft from the insolvency moratorium in October 2023 and has since legislated specifically for aircraft objects. Check the position in the operator's jurisdiction before you agree the seat.
15The repairer's lien, and why paying it out works
Tappenden v Artus [1964] 2 QB 185
Facts. The owner of a van let it to another person, who took it to a garage for repairs and did not pay. The owner claimed the vehicle back from the garage. The question was whether a repairer who had done work at the request of someone who was not the owner could assert a lien against the owner.
Held. The Court of Appeal confirmed the nature of the artificer's lien: a person who, in lawful possession of a chattel, does work that improves it has a common law right to retain it until paid. The lien binds the owner where the person who ordered the work had the owner's authority, express or implied, to have it done. It is a possessory right, and it is a right of retention only — it ends when the debt is paid, and it carries no power of sale.
Why it matters. This is the legal basis of the fastest route to a stranded unit. Because the lien is possessory and secures a defined sum, discharging it puts you back in possession without any order from anyone. And because a lessee that is contractually obliged to maintain the unit almost always has your implied authority to have the work done, expect the lien to be good against you. Price it, pay it, and recover it from the lessee under the lease indemnity.
16The lien holder cannot use the asset
Hatton v Car Maintenance Co Ltd [1915] 1 Ch 621
Facts. A company maintained and garaged a car under a maintenance agreement and claimed a lien for its charges. The car had been used during the period in question.
Held. The claim to a repairer's lien failed. A possessory lien depends on continuous possession for the purpose of the work, and on work that improves the chattel; ordinary maintenance and garaging did not qualify, and use of the chattel was inconsistent with holding it under a lien.
Why it matters. The limits of the lien are the lessor's leverage. Ask three questions of anyone asserting one: was the possession lawful and continuous, did the work improve the unit rather than merely maintain it, and has the holder been using or moving it. A weak lien can be challenged instead of bought, and a lien holder who flies or ships the unit may lose it.
17Airport detention is security, and it catches your aircraft
Bristol Airport plc v Powdrill [1990] Ch 744 (CA)
Facts. Paramount Airways went into administration. The airport detained two aircraft that the airline held under leases, exercising the statutory right of detention for unpaid airport charges under s 88 of the Civil Aviation Act 1982. The administrators said the aircraft were property of the company that could not be seized without their consent or the leave of the court.
Held. The Court of Appeal held that the definition of property was wide enough to include the company's leasehold interest in the aircraft, and that the statutory right of detention was a security — a lien or other security — for the purposes of the administration moratorium. Refusing to hand the aircraft back was therefore a step to enforce security, and the airport could not simply continue to detain them without consent or the leave of the court.
Why it matters. Two points for an owner. First, statutory detention rights for airport and navigation charges attach to the aircraft because of the operator's default, not yours, and in England they rank ahead of your ownership or registered interest. Second, once an insolvency process starts, the moratorium constrains the detaining party as well as you, which changes who has to ask permission from whom.
18A detention has to be actually exercised
Havelet Leasing Ltd v Cardiff-Wales Airport Ltd (1988)
Facts. An airport asserted the statutory power to detain an aircraft for unpaid charges. The question was what the airport had to do for the power to be effective.
Held. To exercise the statutory power of detention, the airport had to do some overt act evidencing the detention. An intention or an assertion was not enough.
Why it matters. Test the assertion before you pay it. Ask what overt act was done, when, over which aircraft, and for whose charges. A lien or detention that was never properly exercised is an invoice, not an obstacle — and this is the kind of question worth answering before a redelivery team is standing on the ramp.