Buying French lingerie from Hong Kong would clearly have its own
unique problems and not just problems associated with shape and
size! As an example, one such problem would be a dispute over the
exclusive jurisdiction clause and the place where such a dispute is
to be resolved. This issue was examined in the recent Steadmark
Pty Ltd v Bogart Lingerie Limited  VSC 402 (9 August
This case arose from three contracts made between Steadmark Pty
Ltd (Steadmark) and Bogart Lingerie Ltd
(Bogart). Bogart, which was operating in France,
was to deliver lingerie to Steadmark in Melbourne, Australia.
When the lingerie arrived, Steadmark deemed the goods to be of
poor quality and refused to pay for them.
All three contracts between Steadmark and Bogart had an
exclusive jurisdiction clause. This clause stated that the
applicable law for a dispute arising from these contracts was
French law, and the applicable court for the resolution of the
dispute was the District Court of Nanterre (being a city west of
Paris). Despite this exclusive jurisdiction clause, Bogart
commenced proceedings to recover payment from Steadmark in the
Supreme Court of Victoria.
In this unique case, Steadmark, the defendant, an Australian
company, sought to argue that the appropriate jurisdiction for the
resolution of the dispute was in France, rather than in the Supreme
Court of Victoria.
What is an exclusive jurisdiction clause?
An "exclusive jurisdiction" clause in a contract
addresses where disputes arising under the contract are dealt with,
and in which court. Other similar clauses include the governing law
for such a dispute, and the dispute resolution mechanism that you
prefer (such as mediation, arbitration, or court proceedings). A
"non-exclusive" jurisdiction clause would permit
initiating a dispute resolution mechanism in other jurisdictions as
When you agree to a particular exclusive jurisdiction clause to
resolve any disputes arising from an international contract,
helps avoid arguments over where a dispute should be
helps avoid litigation in multiple jurisdictions;
allows parties to choose a jurisdiction before tensions emerge;
allows parties to choose a jurisdiction which has effective
mechanisms for enforcing any arbitral award or court judgment.
In drafting an exclusive jurisdiction clause, you should
consider amongst other things:
convenience, cost, appropriateness of local laws, and
experiences within that jurisdiction for similar disputes;
what dispute mechanisms you have agreed to in the contract;
the relevance of the jurisdiction with the transaction, as the
less relevant it is, the greater the chance the clause could be
considered invalid. For example, if an Australian company and a
German company are transacting in Australia, a clause applying
French law could be found to be invalid.
Steadmark took a positive step in the proceedings by filing a
cross-claim in the proceedings, rather than challenging the
court's jurisdiction at the start of the proceedings.
The court held that the filing of the cross-claim meant that
Steadmark had accepted the court's jurisdiction.
Had Steadmark only challenged the court's jurisdiction and
not filed a cross-claim, then it appears it would have succeeded in
the application, as the court found Steadmark had waived its right
to rely on the clause by way of its conduct.
If you're entering into an international contract, it's
important to draft an exclusive jurisdiction clause into the
Having a litigation taking place outside of your own or a
familiar jurisdiction can result in uncertainty of outcome and also
have significant cost implications.
As can be seen, in addition to having drafted in an appropriate
exclusive jurisdiction clause, to ensure a dispute is resolved in
the jurisdiction of choice, parties should not act contrary to it.
If you do, you may well lose your rights to appeal under this
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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