Government's dispute with Club Med to arbitration.

Lawyers for Government and the hotel company made arguments yesterday before Puisne Judge the Hon. Mr. Justice Meerabux. The hearing was closed to the public.

Club Med Inc., represented by lawyer Mr. Saul Froomkin, applied for a stay of Government's court proceedings, as well as an arbitration order.

Government, represented by Mr. Philip Storr of the Attorney General's Chambers, argued against both requests.

The St. George's hotel, which has more than 400 rooms, has been closed since 1988. Government, which says Club Med is in violation of its lease, has gone to court to reclaim the publicly-owned property on which it sits.

Club Med, which is trying to sell the hotel for $13.5 million, has sought permission to re-open 100 rooms while it looks for a buyer. But Government has not agreed.