Proof Committee Hansard

Page 4 House of Representatives Monday, 10 October 2016
VASENSZKY, Ms Sophie, Senior Legal Officer, Attorney-General's Department
WALTER, Mr Andrew, Assistant Secretary, Attorney-General's Department
[11:44]
Accession to the Convention on Choice of Courts Agreements.
Although the committee does not require you to give evidence under oath, I should advise you that the hearing is
a legal proceeding of the parliament and therefore has the same standing as proceedings of the respective Houses.
The giving of false or misleading evidence is a serious matter and may be regarded as a contempt of parliament.
The evidence given today will be recorded by Hansard and attracts parliamentary privilege. I now invite you to
make a brief opening statement before we proceed to a wider discussion.
Mr Walter: Thank you, Chair, and good morning everyone. Thank you for the opportunity to provide some
evidence on Australia's proposed accession to the Convention on Choice of Courts Agreements which was
negotiated under the auspices of The Hague Conference on Private International Law. For ease of reference, I will
now just call it the choice of court convention. The objectives of the convention are quite simple: to promote
international trade and investment through enhanced judicial cooperation in civil and commercial matters. The
convention ensures that courts in contracting states exercise jurisdiction consistent with any exclusive choice of
court agreement that exists between the parties to a dispute, and creates a framework for the recognition and
enforcement of judgements arising from such agreements. The convention applies in international cases to
exclusive choice of court agreements concluded in civil and commercial matters where the parties to a contract
have concluded its dispute resolution clause which specifies that a particular court should hear and determine
disputes under the contract.
The proposed convention will impose three key obligations on Australia as a party to the convention:
specifically that an Australian court designated in a choice of court agreement must exercise jurisdiction to decide
the dispute in which the agreement applies; an Australian court not designated in a choice of court agreement
must decline to exercise jurisdiction in the dispute; and judgements given by a foreign court pursuant to a choice
of court agreement made by the parties must be recognised and enforced by an Australian court. So these are the
three core obligations.
The convention provides for certain narrow exceptions and qualifications to these three key obligations to
address situations where the desirability of giving effect to a choice of court agreement might be overridden by
other important considerations—for example, the convention contains safeguards to prevent the recognition of
contractual clauses or the enforcement of foreign judgements that would be contrary to, or incompatible with,
public policy in Australia. This approach strikes an appropriate balance between the core objective of the
convention to enhance the circulation of civil and commercial judgements, and the need for contracting states to
protect their fundamental sovereign rights.
The convention expressly excludes a range of matters from its scope. For present purposes I note that the
convention does not apply to exclusive choice of court agreements to which a consumer is a party or which relates
to a contract of employment. These exclusions recognise the potential power and resource imbalance in such
relationships. I would also like to address a further safeguard which relates to the treatment of damages. The
convention allows a court to refuse the recognition or enforcement of a judgement to the extent that it awards
damages that do not compensate a party for actual loss or harm suffered. This caveat may be relevant where
foreign judgements contain large awards that are exemplary or punitive in nature. In a similar vein the convention
would not require an Australian court to enforce relief awarded in a foreign judgement which is not known under
our domestic law—an example of that is where specific performance of some contracts is not recognised in
Australian law we would not be required to apply that remedy.
Senator BACK: Can you give us an example?
Mr Walter: The specific performance of a personal contract is typically not enforced in Australian law. You
would get damages instead.
Australia's accession to the convention is advantageous for a number of reasons: implementing the convention
will create certainty for Australian and foreign litigants in the conduct of international transactions and will
reduce the risk of unnecessary delays and costs occasioned by parallel proceedings in different jurisdictions, and
where the parties have undertaken to refer a dispute between them to a particular court, they will be held to that
agreement. A further benefit of Australia becoming a party to the convention is that more foreign judgements will
be capable of recognition and enforcement in Australia and, correspondingly, a great number of Australians
judgements will be capable of recognition and enforcement in other contracting states.
TREATIES COMMITTEE