In circumstances where business agreements between companies cross international (or even state) borders, there are issues that can arise from any dispute that are often not thought about in times of growth and prosperity. In the event of a dispute, companies are often placed in a position where they rely upon proceedings being commenced in their local jurisdiction. Otherwise the proceedings, and sometimes even the Company itself, may not be viable.

Such a situation was heard by the Court of Appeal of the Supreme Court of Western Australia in the matter of Bombardier Inc (Bombardier) v Avwest Aircraft Pty Ltd (Avwest) [2020] WASCA 2.

Bombardier and Avwest engaged in extensive commercial dealings between 2009 and 2015, until the relationship between them broke down due to an alleged breach of contract. Bombardier is listed on the Toronto stock exchange and its head office is in Quebec Canada, while Avwest has its registered office in Perth, Australia.

Avwest commenced proceedings against Bombardier in the Supreme Court of Western Australia. Avwest was required to seek leave to issue a writ of summons against Bombardier and leave to serve the writ outside Australia. Bombardier contested the application for leave and subsequently sought to appeal the decision to grant leave.

Bombardier v Avwest reaffirmed the tests used by the High Court of Australia in the matters of:

  1. Voth v Manildra Flour Mills Pty lTd (1990) 171 CLR 538;
  2. Agar v Hyde (2000) 201 CLR 552; and
  3. Oceanic Sun Line Special Shipping Co Inc v Fay (1998) 165 CLR 197;

in relation to the question as to whether or not the Court in which leave is sought is a clearly inappropriate forum.

Whether or not a Court is a clearly inappropriate forum turns on:

  1. The oppressiveness of the proceedings;
  2. The burden of the proceedings on the objective party;
  3. The availability of relief in a foreign Court or tribunal; and
  4. Any personal or judicial advantage that may be gained by a party by the proceedings being undertaken in the chosen Court;

amongst other factors, as all circumstances of the matter are relevant to the determination.

In this matter, the Court of Appeal was eager to outline that the submitted argument that another Court may be a more appropriate forum has little bearing on whether the Court in which the application for leave was filed is a clearly inappropriate forum.

Ultimately in this matter, the Court dismissed Bombardier’s appeal, as the Court was critical of Bombardier’s reliance on Canadian and American Courts and legal principles being generally better than the Supreme Court of Western Australia and Australia’s legal principles.

The practical takeaway from this matter should be to seek legal advice before entering into cross-border contracts. Failure to do so could result in any disputes that arise being undertaken in disadvantageous and inconvenient jurisdictions.