Today’s forecast: showers in Paris, jurisdiction in Singapore

it is sometimes said that there is no limit to the ingenuity of lawyers, which may go some way to explaining why a plaintiff complaining of a slip and fall in a Paris hotel shower was suing a Singapore company in the Supreme Court of New South Wales last month. However, the plaintiff did not succeed; unlimited ingenuity, it turns out, is no match for contractually limited jurisdiction. The case contains some important lessons for the drafting and interpretation of contracts with an international dimension, particular where (as occurred in this case) the contract was made via the Internet.

The plaintiff lived in Sydney, but to book her hotel stay in Paris, she used the website of a Singaporean company called Agoda.  To complete the booking, it was necessary to click a button marked “Book Now”.  Directly above that button were the words “I agree with the booking conditions and general terms by booking this room”.  Amongst the terms and conditions was a term which provided that disputes arising out of Agoda’s services “would exclusively be committed to the competent courts in Singapore”.  There was also an exclusion clause which excluded Agoda’s liability for, amongst other things, personal injury.

Whilst staying at the hotel, the plaintiff had fractured her knee after slipping on soapy water on the bathroom floor. It was alleged that this was because the shower screen was not properly fitted, so that water was able to get onto the floor.  “Providing” a hotel room with a defective screen was said to be a breach of Agoda’s statutory warranties of skill and care under the Australian Consumer Law (the ACL) and also a breach of contract.

Agoda moved to have the claim permanently stayed (or, alternatively, struck out). In relation to stay, Agoda argued that the exclusive jurisdiction clause should be upheld, so that any claim to which Agoda was subject should be heard in Singapore courts, not the Supreme Court of New South Wales.  On the strike-out application, Agoda argued that the ACL warranties were inapplicable because Agoda was a provider of booking services, not a provider of accommodation.  On the breach of contract claim, Agoda argued that its exclusion clause trumped this claim.

The plaintiff argued that the exclusive jurisdiction clause had not been incorporated into the contract, and that even if it had been incorporated, it was an “unfair term” within the meaning of the ACL (there are those limits of ingenuity being pressed again). This argument was primarily based upon the fact that there was no button or checkbox which said “I agree” which had to be clicked in order to book the room and make the contract.

The Court found that the general terms were incorporated into the contract between the plaintiff and Agoda (and it was not necessary, in doing so, for the Court to answer the specific question of whether, “I have read and agree with the terms” is, or is not, The Most Frequently Told Lie on the Internet). Once the Court found that the exclusive jurisdiction clause formed part of the contract, the onus then moved to the plaintiff to establish why, having agreed in the contract to sue only in Singapore, she should not be held to that bargain.

The Court held that the plaintiff could not discharge this onus so that, accordingly, the claim was permanently stayed. Agoda’s back-up claim for a strike-out did not, however, succeed; despite the Court finding that Agoda’s submissions about the exclusion clause had “a great deal of force” (and despite the Court “strongly tending” to the view that Agoda was correct in relation to the ACL) the Court would not have struck out the claims if it had not ordered a stay. This is a useful reminder of the stringency of the test to be applied to strike–out applications brought in response to ingenious claims.

The case emphasises the importance of selecting the correct choice of law and choice of forum clauses (and in particular, where there is an opportunity to negotiate such clauses, ensuring that the opportunity for negotiation is taken). Where there is agreement to resolve disputes in a particular place, contractual parties cannot assume that they can simply ask their “home jurisdiction” to give them a hearing because it is convenient to do so.

Finally, the case emphasises the importance of ensuring that contractual terms (particularly in relation to online contracts) are appropriately incorporated into the agreement which is ultimately “signed”, whether that signature occurs in an orthodox way, or takes the form of electronic acceptance.  The lack of the requirement for the plaintiff to “tick a box” in this case was held to be “significant but not determinative”, so if your online terms do not include a check box, the case suggests that you would be well advised to add one.

All of this indicates the importance of understanding the specific issues which arise in cross-jurisdictional contracting (and in particular, in thinking about what disputes are likely to arise when the contract is made). Like Bogart and Bergman in Casablanca, you may wish your contracts to confirm that “we’ll always have Paris” – but unlike Casablanca, you may wish to then say, “but we cannot be sued there”.  What could be more ingenious than that?

For more on our international dispute resolution capabilities, contact Dennis Vuaran or Angus Macinnis or Grace Hur

For more on our international trade law  capabilities, contact Philip Stevens or Angus Macinnis

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September 10
International dispute resolution International trade law