Court Refuses Parallel Claim in Favour of Arbitration

Court Refuses Parallel Claim in Favour of Arbitration

SPH Private Limited (“SPH”) had terminated a hotel management agreement with Jumeirah Management Services (Maldives) Pvt Ltd (“Jumeirah”). Jumeirah commenced arbitration proceedings at the Singapore International Arbitration Centre (“SIAC”) for unlawful termination.

SPH subsequently filed parallel proceedings at the Civil Court in Maldives on the same subject matter arguing that Maldives’ Courts ought to have exclusive jurisdiction.

Jumeirah filed a procedural objection at the Civil Court noting that proceedings had already commenced at SIAC. It was put forward that if SPH considers that the arbitral tribunal does not have jurisdiction to hear the matter, this objection should be filed with the tribunal itself. The arbitral tribunal pursuant to the doctrine of kompetenz-kompetenz can then decide on their own jurisdiction.

The Civil Court observed that arbitration proceedings had already commenced at SIAC, and therefore refused to exercise jurisdiction over the claim as there is an ongoing arbitration on the same subject matter.

This is a positive decision and correctly recognises the doctrine of kompetenz-kompetenz. It sends the correct message that Maldives’ Courts will not entertain parties trying to get out of agreements to arbitrate after matters have been referred to arbitration by commencing parallel local court proceedings.

Jumeirah were represented by Mohamed Shahdy Anwar, Zain Shaheed, and Juni Latheef of S&A Lawyers.