Proof Committee Hansard

Page 8 House of Representatives Monday, 10 October 2016
The other thing that they are likely to have in that agreement is a choice-of-law agreement. That is saying that
the matter will be heard in Singapore using Singaporese commercial law. But sometimes you will have it in
Singapore using another law, and that often comes up, for example, in maritime contracts, where basically the law
of UK is the international law relating to maritime contracts. So you might nominate a court in Singapore to hear
using the law of London. But, if it is a maritime contract, again, you might nominate London because of their
particular expertise in resolving those disputes.
CHAIR: So Bloggs is now selling radiators into Singapore. We have both now ratified the choice of court
convention.
Mr Walter: Yes.
CHAIR: So let's work through the dispute again.
Mr Walter: A dispute arises between the two parties. Let us say Bloggs says: 'Righto, we've got our best
chance here of taking action in Australia. Let's ignore our choice-of-court agreement. We're going to get a better
outcome if we go to the Supreme Court of WA,' or Victoria or whatever. They go to take the action in that court.
Their partner from China says to the court: 'Hang on. We've got an exclusive choice-of-court agreement here.
This matter is being heard in Singapore.' In that instance the Australian court would have to say, 'No, we're not
going to hear that dispute,' or they would have to go through those exceptions and say, 'Actually, a manifest
injustice is going to occur here if the matter is heard in Singapore.'
CHAIR: With this particular dispute between Bloggs and a company in Singapore, how is it the choice of
court is actually Singapore, or was that in the agreement?
Mr Walter: It is in the contract.
CHAIR: So in the contract the two parties would say, 'If there is an issue the choice of court is X'?
Mr Walter: Yes.
CHAIR: Ipso facto, does that mean that, once this comes into play, any contract between any Australian
companies with any of companies from any of the signed nation-states in the agreement has to have a choice-ofcourt
provision?
Mr Walter: No, you do not have to have a choice-of-court agreement in your contract. They are pretty much
standard. If you have got a lawyer, they going to put a choice-of-court clause in. But if you do not have one then
you have that risk of those parallel proceedings I mentioned. You also have the risk that you will take an action in
an Australian court and the Australian court will go through its normal grounds of determining whether it has
jurisdiction and it will say, 'Actually, no, we can't hear your matter, because there is not enough nexus between
us, this court, and your dispute.' If the dispute were about a contract being executed in China—all the action was
taking place in China, for example—an Australian court might be a little reluctant to hear your matter. So at the
moment it would be a bit of a free-for-all—whichever court you could get to hear your matter. And you might
have both parties going simultaneously to try and head each other off in different courts in different countries.
Mr WALLACE: One thing that concerns me about this—and I cannot find the case—is that effectively what
this leads to is excluding the powers of the Supreme Court. I know that this is done, but have there been any
specific cases on point? The case I am trying to think of is a High Court decision which ruled that, where the
power of the Supreme Court is usurped, it is unconstitutional. If you said the name I would recognise it—perhaps
Ms Vasenszky might know it. It was a WorkCover claim. I remember the facts but I cannot remember the name
of the case. My concern is that we do not want to usurp the power of the supreme courts of Australia. Where the
parties are in agreement that the jurisdiction might be the laws of, say, Calithumpia, what happens in a situation
where an Australian party is a party to that agreement? We all know that, in some circumstances, some parties
have more leverage over others. An Australian company might find themselves having to litigate a case in the
Supreme Court of Calithumpia, whose system is perhaps not quite as robust as ours. Aren't we usurping the
Supreme Court of Queensland if a Queensland company was a defendant or a litigant?
Mr Walter: There are lots of cases on chapter III of the Constitution in relation to exactly that point of how
far you can go in restricting the discretion of a court to either deal with a matter or make a decision. The critical
point is not to go too far to get rid of that discretion. There was a case in the High Court, whose name escapes me,
that was dealing with the International Arbitration Act in that context and similar kinds of principles. It found that
it was fine and that it was well within the chapter III mandate.
There are a couple of things going on in your example. Assuming that the party tried to bring an action in
Queensland, the starting point would be that the Queensland Supreme Court would say, 'No, hang on, you've got a
TREATIES COMMITTEE