Incitec Ltd v Alkimos Shipping Corporation and Another (2004) 138 FCR 496

Facts: An Australian government agency refused discharge of a cargo of fertilisers in Newcastle. The ship owner (Liberian) and time charterer (Korean) were sued by owners of the cargo. The ship owner cross-claimed the time charterer for contribution (i.e. to share potential liability). The ship owner and the time charterer were initially parties to an agreement providing “any dispute arising out of or in connection with” the time charter should be referred to arbitration in London. Later, they replaced arbitration in London with proceedings in EWHC (High Court of England and Wales).

Issue: Should the cross-claims be stayed? Should it all be heard in Australia or all in London or split the claims?

Held: Cross-claim fell within the scope of the exclusive jurisdiction clause. However, it was not stayed because of inconvenience to the Pl (force them to go to London to litigate) as Pls were third parties to the agreement with the EJC between the ship owner & the time charterer, as well as concerns over due administration of justice.

Held (Allsop J at [47], [49): ‘[T]wo powerful considerations in international litigation: first, the desire of courts to hold commercial parties to their bargain in terms of exclusive jurisdiction clauses; secondly, the desire of courts to avoid disruption and multiplicity of litigation, in particular a desire to avoid parallel proceedings and the risk of inconsistent findings, and to avoid the causing of inconvenience to third parties.”

“To the extent that the operation of the exclusive jurisdiction clause causes financial or forensic inconvenience to the party which bound itself to the clause, that, of itself, is to be seen as only the direct consequence of the bargain entered and, generally, can be set to one side.

What really are of importance in weighing against the operation of the exclusive jurisdiction clause are:

(a) the inconvenience, if any, whether financial or other, caused to third parties;

(b) the effect, if any, upon the due administration of justice; and

(c) any other appropriate public policy consideration that can be discerned in

all the circumstances.”