Jurisdiction under the Hague Choice of Courts Convention: Its Likely Impact on Australian Practice

Abstract

The practice of the Australian courts in the area of enforcement of arbitration agreements has significantly changed over the course of the last several decades. Arbitration agreements are now likely to be enforced by staying Australian proceedings which are brought in breach of those agreements. The New York Convention, and a significant change in attitude of many Australian judges towards arbitration, are credited with this change. It is widely agreed that arbitration and jurisdiction agreements should be treated similarly, and that the justifications for the enforcement of arbitration agreements apply with equal force to the enforcement of jurisdiction agreements. In Australian litigation, jurisdiction agreements are not treated in the same way as arbitration agreements. Recent experience demonstrates that Australian courts are much more likely to retain jurisdiction where the parties have agreed to litigate in a foreign court, than they are to retain jurisdiction in the face of an effective agreement to arbitrate. The practice of Australian courts in the area of enforcement of jurisdiction agreements is not only in contrast to the practice of the same courts in the treatment of arbitration agreements, but also to the practice of foreign courts in the treatment of jurisdiction agreements. This article accepts as its starting point that there are compelling reasons for the enforcement of the parties' agreements. Section B outlines the justifications for enforcing party agreements in arbitration and jurisdiction, and describes the circumstances in which party agreements should yield to other concerns. In section C, I describe the current Australian law concerning the effect of an arbi-tration agreement in international litigation. This section also explains the Australian law on the effect that is given to effective foreign jurisdiction agreements in jurisdictional disputes. This section presents data on the practices of the Australian superior courts in dealing with jurisdictional disputes which involve effective arbitration and choice-of-courts agreements. Section D outlines the jurisdictional principles of the Hague Convention on Choice of Courts Agreements, focusing on the changes that those principles would make to the Australian law if the Convention were to be adopted in Australia. Section E is a conclusion, which endorses the Hague Convention as being likely to improve the enforcement of jurisdiction agreements in litigation in the Australian courts.