When parties to a contract include an arbitration clause in
their agreement, they usually expect to be able to stay out of the
courtroom and take advantage of the relative informality,
flexibility and confidentiality of arbitration in the event that a
dispute arises under the contract.
However if the effectiveness or applicability of an arbitration
clause is disputed by one of the parties, complicated issues of
jurisdiction arise which may have to be resolved by a court before
an arbitral tribunal can start doing its job.
A recent decision of the WA Supreme Court gives an important
indication of the role Australian courts might play in dealing with
these jurisdictional issues, in the context of international
arbitrations arising in Australia. The decision needs to be
carefully considered by businesses which might find their dispute
resolution clauses under scrutiny in Australian courts.
