Global Partners Fund Ltd v Babcock & Brown Ltd (in liq)

Global Partners Fund Ltd (the applicant) sought leave to appeal a decision of the Supreme Court of New South Wales concerning an exclusive jurisdiction clause in a contract. The respondent was Babcock & Brown Ltd (in liq). The dispute arose from proceedings instituted by Global Partners Fund Ltd in New South Wales, which Babcock & Brown Ltd argued were in breach of an exclusive jurisdiction clause contained within their contractual agreement.

The primary legal issues before the Court of Appeal were whether the applicant had demonstrated strong reasons to refuse a stay of proceedings despite the existence of an exclusive jurisdiction clause, and whether the principles applicable to a *forum non conveniens* application were relevant to the determination of a stay based on an exclusive jurisdiction clause. Additionally, the court considered whether non-parties to a contract containing an exclusive jurisdiction clause could rely on that clause to seek a stay of proceedings. The court also had to consider the implications of Babcock & Brown Ltd being in liquidation on the application for leave to proceed.

The Court of Appeal held that the existence of an exclusive jurisdiction clause creates a strong presumption in favour of enforcing that clause. The court found that the applicant had failed to identify any compelling reasons to depart from this presumption. It was also determined that the principles of *forum non conveniens* were not directly applicable to the interpretation and enforcement of exclusive jurisdiction clauses, which are contractual agreements to be construed according to their terms. The court further held that a party could rely on an exclusive jurisdiction clause to seek a stay of proceedings even if they were not a direct party to the contract, provided the proceedings were brought in breach of that clause. The court also noted that the financial capacity of a company in liquidation to conduct litigation was not a relevant consideration when determining whether to grant leave to proceed against it.

The appeal was dismissed with costs.