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Jurisdiction

Jurisdiction

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This precedent has been authored by Ilija Vickovich, Lecturer, Macquarie Law School and updated by Dr. Gordon Hughes, Principal, Davies Collison Cave Law

. Introductory note

Jurisdiction clauses often accompany choice of law provisions in contracts. These clauses are designed to specify the jurisdiction in which the parties agree disputes will be adjudicated. They may be determinative of jurisdiction, but this will ultimately depend on whether a mandatory domestic law will dictate jurisdiction (see Transfield Philippines Inc v Pacific Hydro Ltd [2006] VSC 175; BC200609991). One matter that will require resolution is whether the jurisdiction is exclusive or non-exclusive.

If there is no alternative jurisdiction involved in the contract, clauses to confirm the jurisdiction may be redundant.

Exclusive jurisdiction

In the case of exclusive jurisdiction, the parties are limiting the possibility of forum shopping by naming the jurisdiction to the exclusion of all others. They may even choose to name the place in which the dispute is to be heard. This enables a party to petition the court for an anti-suit injunction or to seek a stay of proceedings where they are initiated contrary to the clause. It adds to certainty by limiting the scope for conflict between jurisdictions.

Non-exclusive jurisdiction

Where the parties agree to submit to a non-exclusive jurisdiction, they are providing some certainty to the dispute resolution mechanism of the contract by nominating at least one jurisdiction. Unless a court determines it has no jurisdiction to entertain the dispute, it may be heard in the chosen jurisdiction. Such a clause also gives the parties some freedom in choosing an alternative jurisdiction if permitted by the applicable law of the contract.

The sample clause below can be modified for use as either an exclusive jurisdiction clause or non-exclusive jurisdiction clause.