Snapshot
- When a party wants to set aside a contract for invalidity and the contract contains an arbitration clause, ordinary principles of contractual interpretation dictate whether the dispute will remain private.
- Parties should not rely on a presumption that the existence of an arbitration clause will prevent a dispute about validity being heard by a court in every case.
- If arbitration is the parties’ desired form of dispute resolution, the importance of confidentiality and the intention of the parties to avoid litigation before the courts (by referring disputes to arbitration) should be made clear in the terms of the contract.
- That said, in cases of uncertainty, it is now more likely than not that a court will find that all disputes between the parties to a contract containing an arbitration clause should be determined at arbitration.
- This article was first published in Gilbert + Tobin ‘Insights’ on 9 May 2019.
On 8 May 2019, the High Court handed down its judgment in the ongoing five-year Rinehart/Hancock arbitration and litigation dispute (Rinehart v Hancock Prospecting Pty Ltd; Rinehart v Rinehart [2019] HCA 13 (8 May 2019)). The judgment highlights the importance of drafting clear arbitration clauses if they are to be effective in keeping disputes between the parties out of the public eye. This is also the first time the High Court has had the opportunity to clarify the correct approach to determining whether a dispute as to the validity or enforceability of a deed is a dispute arising ‘under’ the deed or ‘hereunder’ within the meaning of an arbitration clause in the deed.
