Dnata Airport Services Pty Ltd v Polar Air Cargo Worldwide, Inc

[2026] NSWCA 105

NSW Court of Appeal

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Catchwords

1. INTERNATIONAL ARBITRATION — arbitration agreement — stay of proceedings under s 7(2) of the International Arbitration Act 1974 (Cth) — interpretation of tiered dispute resolution clause in IATA Standard Group Handling Agreement — whether an agreement to agree — whether “the dispute” referred to substantive dispute or dispute as to arbitral process — no mandatory referral to arbitration

Quick Take

The Court of Appeal held that Article 9 of the IATA Standard Group Handling Agreement, which provides that 'the parties may elect to resolve the dispute through arbitration' failing mutual resolution, is not an arbitration agreement within the meaning of the International Arbitration Act 1974 (Cth) but rather an agreement to agree to arbitrate, requiring both parties' consent before arbitration becomes binding. The phrase 'the parties' in the second sentence means both parties, not either party, a construction reinforced by the third sentence directing disputes to litigation if the parties fail to agree on an arbitration process, and by the drafter's deliberate differentiation between 'the parties' and 'either party' elsewhere in the Main Agreement. The Court also held that 'the dispute' in the third sentence refers to the substantive dispute, not a procedural dispute about the arbitration process, and that the second sentence is not rendered redundant because it serves the legal purpose of signalling that the exclusive jurisdiction clause does not bar consensual arbitration and the commercial purpose of indicating IATA's openness to arbitration.