Background
Jihad Fawaz Hani opened accounts with Lebanese bank Bank Audi S.A.L under a banking agreement governed by Lebanese law. The agreement stated that Beirut courts had exclusive jurisdiction over disputes, while allowing the Bank to bring proceedings in Lebanon or abroad. Hani transferred funds from Australia that were converted into US dollars and placed in term deposits.
After Lebanon’s financial crisis began, Hani instructed the Bank in 2022 to close his accounts and transfer the funds electronically to South Australia. The Bank closed the accounts but instead delivered cheques to a Beirut notary through a tender-and-deposit process. Hani sued in South Australia for specific performance or damages. On interlocutory applications, he sought confirmation of overseas service or retrospective leave to serve, while the Bank—without submitting to the Court’s jurisdiction or filing a defence—sought a stay or dismissal in favor of Lebanon.
The Court’s Holding
Chief Justice Stein allowed Hani’s interlocutory application. Leave to serve overseas was unnecessary for the claims concerning the first and second deposit contracts, and service was valid effective 10 October 2023. To the extent leave was required for the remaining claims, the Court granted it retrospectively to that date.
The Court held that the agreement contained an express and exclusive Beirut jurisdiction clause, but that the clause was abusive under Article 26 of Lebanon’s Consumer Protection Law because it created an imbalance favoring the Bank. It was therefore completely void, although it was not an invalid potestative clause under Article 84 of Lebanon’s Code of Obligations and Contracts.
The Court dismissed the Bank’s stay application. Although Lebanese law governed and several connecting factors pointed to Lebanon, the Bank failed to establish that litigating in South Australia would be so seriously and unfairly burdensome, prejudicial, damaging, or harassing as to make the Supreme Court a clearly inappropriate forum. The ruling resolved service and forum issues, not the merits of Hani’s repayment claims.
Key Takeaways
- An asymmetrical Beirut jurisdiction clause was exclusive in form but void as an abusive consumer-contract term under Lebanese law.
- The originating process was validly served as to the first two deposit-contract claims, with retrospective leave granted insofar as necessary for the balance.
- Foreign governing law, Lebanese witnesses and documents, and related Beirut proceedings did not satisfy Australia’s demanding clearly-inappropriate-forum test.
Why It Matters
The decision shows that an Australian court may scrutinize a foreign exclusive-jurisdiction clause under the contract’s governing law before deciding whether it must defer to the selected forum. A clause that reserves broader litigation choices to a bank than to its customer may be vulnerable under applicable consumer-protection legislation.
It also illustrates the high threshold for staying Australian proceedings on forum non conveniens grounds. Strong foreign connections and parallel litigation are relevant, but they do not alone establish that continuation of the Australian case would be seriously and unfairly burdensome.