Australia: Inconsistencies in the Treatment of Optional Choice of Court Agreements

Abstract

Optional choice of court agreements, referred to in Australia as “non-exclusive jurisdiction agreements”, feature in Australian court decisions. A clear distinction is drawn between exclusive choice of court agreements, on the one hand, and optional agreements, on the other. The principles applicable to exclusive agreements and the policies informing them are, however, better developed than those applicable to optional agreements. This chapter argues that the legal treatment of optional agreements under Australian law is deficient in multiple ways. Chief among them is that optional agreements nominating forum courts and optional agreements nominating foreign courts are treated inconsistently: in only one published case in which a forum court was nominated in an optional agreement has an Australian court stayed its proceedings. In no published case in which a foreign court was nominated in an optional agreement has an Australian court stayed its proceedings. There is also a marked difference in how judges perceive parties’ intentions in concluding an optional agreement in intra-national as compared with international cases. In the former, an optional agreement is said to be “a strong indication” by the parties as to where litigation should occur; in the latter, it is said not to indicate any “preference” as to where litigation should occur.