From online shopping to international adoption, music downloads to accidents overseas, clear private international law rules are essential to many aspects of modern living.
Private international law comes into play when transactions, relationships and disputes cross jurisdictional borders. The rules of private international law establish which courts will determine a dispute, which system of law will govern a relationship or transaction with a cross-border element and when one country will enforce a judgment by the courts of another country. Each country has its own private international rules.
While private international law is clearly relevant to businesses engaged in international trade and commerce, it also has practical significance to everyday transactions by individuals whether they be ordering bicycle parts online from an overseas supplier or downloading music from the cloud. Private international law also applies to the marriage and divorce of nationals from different states, inter-country adoption of children and the abduction of children across state borders. In a federation such as Australia, private international law rules resolve conflicts between the legal systems of different states and territories. Therefore private international law can apply both to an accident while travelling interstate and to an accident during overseas travel.
Clear and coherent rules of private international law allow businesses and individuals to assess the risks of international transactions and relationships and to take steps to manage those risks where possible. Such steps may include specific contractual provisions identifying the law that governs a contract and the dispute resolution procedure or courts that will determine any dispute between parties to a contract. Where the rules are not clear, predictability in international transactions and relationships is reduced and the likelihood of protracted and costly disputes about threshold issues such as jurisdiction and applicable law is increased.
Sources of private international law
Unfortunately private international law rules in Australia are derived from different sources which often do not sit well together. Many rules of private international law are found in the common (or judge made) law which has developed over many years and often draws on judicial decisions made in a very different social environment.
For example, under the common law choice of court agreements are not consistently enforced by Australian courts. One of the grounds on which an Australian court may hear a dispute in the face of contractual provisions referring disputes to the courts of another country is where the foreign court would not apply mandatory Australian legislation, such as certain provisions of the Competition and Consumer Act 2010 (Cth) and the Insurance Contracts Act 1984 (Cth). There is a degree of parochialism in this approach which introduces uncertainty for contracting parties.
Private international law rules are also contained in federal and state legislation (including court rules), which in some cases implement Australia’s treaty obligations. Australia is party to a number of bilateral treaties for the reciprocal enforcement of foreign judgments. Federal legislation implements Australia’s treaty obligations by providing a streamlined procedure for enforcing judgments from 28 jurisdictions. Judgments from other jurisdictions (including all states in the United States of America) can be enforced under the common law which is slower, more complicated and has more exceptions to enforcement.
Challenge of the internet
Widespread use of the internet presents challenges to Australia’s private international law rules, which determine whether a court has jurisdiction over a dispute and which system of laws applies to a dispute by looking at where the transaction the subject of the dispute occurred or with which country the transaction was most closely connected. For example, a claim in negligence is governed by the laws of the place where the negligent act occurred. Defamation is governed by the laws of the place of publication. But what is the location of publication when potentially defamatory material is published on Twitter? Indeed that place may well be every place where an article is viewed on the internet, potentially exposing the publisher to claims in multiple jurisdictions and the possibility of inconsistent judgments.
The development and implementation of multilateral treaties is an important tool in improving consistency in private international law rules in different countries. The Hague Conference on Private International Law is an intergovernmental organisation with 78 members including Australia, which develops multilateral conventions in order to create global private international law rules. Hague conventions that have been implemented in Australia address issues such as the recognition of divorce, international abduction of children and service of judicial documents abroad in civil and commercial matters. The Hague Conference is currently working on a number of conventions including on recognition of foreign judgments and inter-country adoption of children. It has also developed a convention on the choice of court agreements which has not yet entered into force.
Improving private international law in Australia
The process of reaching international consensus particularly on a multi-lateral level is slow. Negotiations for a Hague convention on recognition of foreign judgments commenced in 1992, went into abeyance in 2002 and were revived in 2011. Nor will international conventions eliminate all of the idiosyncrasies and inconsistencies that have developed over time in Australian private international law. Domestic review and reform of Australian private international law rules is required. The Australian government has established a working group to identify areas where more coherent and clearer private international law rules on jurisdiction, applicable law and choice of court would deliver microeconomic benefits and improve access to justice. This process must necessarily be outward-looking, examining best practice overseas and considering the merits or otherwise of multi-lateral conventions that have not yet been implemented by Australia.
Nicola Nygh is special counsel in the commercial litigation and dispute resolution practice at Allens.
The Peter Nygh Hague Conference Internship is awarded annually by the Australian Institute of International Affairs and the International Law Association (Australian Branch). The 10th Peter Nygh Hague Conference Intern, Derek Bayley, is currently working at the Hague Conference on Private International Law.