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

2026/00013902

PROCEDURE – Dnata Airport Services (the applicant) seeks leave to appeal from a decision of Sweeney J, dismissing a notice of motion seeking to enforce an arbitration agreement by staying contractual claims brought against it by Polar Air (the respondent). The proceedings arise out of an incident on 22 March 2021 in which an employee of Dnata, Mr Joseph losefa, was injured while unloading cargo from a Polar Air aircraft at Sydney Airport. Mr losefa sued Polar Air in negligence, and Polar Air cross-claimed against Dnata seeking contractual indemnity and damages for breach of contract under the Standard Ground Handling Agreement between the parties. The present application relates to Dnata's attempt to stay that cross-claim on the basis that Article 9 of the Agreement constituted a binding arbitration clause requiring the indemnity dispute to be arbitrated. The critical issue was whether Article 9 was an enforceable arbitration agreement within the meaning of s 7 of the International Arbitration Act 1974 (Cth). Sweeney J held that Article 9 of the Agreement was not an arbitration agreement, but a multi-tiered dispute resolution clause that required negotiation and permitted, but did not mandate, arbitration only if both parties agree. Her Honour considered that the wording of "the parties may elect" and the structure of the clause demonstrated that arbitration required mutual agreement, and that otherwise, the dispute was to be resolved by litigation. Thus, Article 9 did not amount to an agreement to "submit" disputes to arbitration and therefore failed to satisfy the definition of an arbitration agreement under s 7 of the International Arbitration Act. The sole ground of appeal is whether the primary judge erred in finding that Article 9 of the Agreement contains no more than an "agreement to agree" and therefore cannot come within the meaning of an "arbitration agreement". The crux of the argument is that if Article 9 is merely an "agreement to agree", then any party which disfavoured arbitration would be permitted to refuse to agree to the arbitral process for whatever reasons it saw fit, and in doing so veto any right to arbitrate.

Joseph Iosefa v Polar Air Cargo Worldwide, Inc; Polar Air Cargo Worldwide, Inc v Dnata Airport Services Pty Ltd [2025] NSWSC 1500