Lessons in exclusive jurisdiction clauses
A catwalk fight between lingerie purveyors has delivered a lesson about enforcing exclusive jurisdiction clauses in contracts.
Simone Perele, Paris, and high end lingerie. Sounds like the setting for a romantic novella, n’est-ce pas?
Not so when the key characters are fighting it out in the courts of France and Victoria over the appropriate jurisdiction to hear breach of contract claims, as in the recent case of Steadmark Pty Ltd (t/a The Lingerie Company of Australia (LCA) v Bogart Lingerie Limited (Bogart).
LCA is a subsidiary of the French lingerie house, Simone Perele. Bogart is an Australian lingerie manufacturer. Bogart sued LCA in Victoria to recover unpaid debts, and 10 months later Simone Perele sued Bogart in the Nanterre Court in Paris over the quality of some of its smalls.
The contracts between Simone Perele/LCA and Bogart said that the Nanterre Court was ‘solely competent to settle disputes’. After Simone Perele started the Nanterre proceedings, LCA argued that the Victorian proceedings should be stayed so that all disputes could be heard in Nanterre
Had LCA submitted to the jurisdiction of Victoria?
Mais oui. The Victorian Supreme Court held that LCA had submitted to the court’s jurisdiction, and had waived its right to rely on the contractual jurisdiction clause. Key to this were that LCA had filed a counterclaim (instead of just defending the claim) and successfully sought security for costs from Bogart. LCA’s 10 month delay in raising the jurisdiction clause also figured.
The moral of the story? If you would prefer to defend a claim in Paris and not Melbourne, consider your contractual rights early on. Participating in even the early stages of litigation could be enough to submit your dispute to that court’s jurisdiction.