Proactive Building Solutions v Mackenzie Keck

Proactive Building Solutions (PBS) initiated proceedings against Mackenzie Keck (MK) in the NSW Supreme Court, seeking a declaration that a contract for the construction of a residential development in Sydney was governed by the laws of the United Arab Emirates and that any disputes were to be determined by arbitration in Dubai. MK, however, argued that the choice of law and jurisdiction clauses in the contract were not binding due to the mandatory provisions of the Building and Construction Industry Security of Payment Act 1999 (NSW). The court was required to determine whether the choice of law and jurisdiction clauses were valid and enforceable, and whether they contravened the statutory requirements of the Act.

The court first examined the express terms of the contract, noting that the parties had agreed that the contract would be governed by the laws of the United Arab Emirates and that any disputes would be determined by arbitration in Dubai. The court then considered the provisions of the Act, which provide a security of payment regime for the building and construction industry, including a process for the resolution of disputes over payment. The court noted that the Act does not explicitly prohibit contracting out of its provisions, but that the legislature intended to provide a mandatory process for the resolution of payment disputes in the industry.

After weighing the competing interests, the court concluded that the choice of law and jurisdiction clauses were valid and enforceable. The court held that the parties had freely entered into the contract and had clearly expressed their intention to be bound by the choice of law and jurisdiction provisions. The court further held that the provisions did not contravene the statutory requirements of the Act, as the Act does not prohibit contracting out of its provisions and the parties had not contracted out of the mandatory process for the resolution of payment disputes. The court therefore declared that the contract was governed by the laws of the United Arab Emirates and that any disputes were to be determined by arbitration in Dubai.

The court made a declaration that the contract was governed by the laws of the United Arab Emirates and that any disputes were to be determined by arbitration in Dubai. The court further ordered that PBS pay MK's costs of the proceedings.