Urgent interlocutory and declaratory relief

Many IP agreements contain a clause referring disputes about the subject matter to mediation and/or arbitration instead of reliance on court action. There is often, however, an exception permitting court action in the case of “urgent interlocutory and declaratory relief”.

So, when one party to the agreement rushes off to Court to enforce some position instead of arbitration, the court case often becomes as much about whether the Court has jurisdiction or the action should be stayed while the parties go off to mediation and/or arbitration. Correspondingly, before you rush off to Court, it is important to know whether the expense will be wasted because you should have gone to mediation/arbitration.

In a case concerning a dispute about the terms of a charter party (and not IP), the Victorian Court of Appeal has ruled that the word “urgent” in such a clause applies to both “interlocutory relief” and “declaratory relief” distributively. That is, a party cannot apply to the courts for a declaration, the declaration must “urgent”.

The Court endorsed the view of Lord Woolf LCJ that “interim declarations” can be granted, and continued:

[24] Even if it were accepted that an interlocutory or interim declaration is not available in Australia, this would not, in our opinion, exclude the possibility of a declaration of rights in the course of interlocutory proceedings where the declaration finally determines an aspect of matters in dispute and does not operate only as a declaration for the interim.9 In our opinion a declaration of this type could sensibly be described as “urgent”.

[25] In the context of an arbitration agreement this is likely to be the type of urgent declaratory relief contemplated, as the authorities indicate difficulty in enforcing awards that do not finally determine a matter in dispute, even though the award may only be a partial award with respect to the totality of matters in dispute.10

Apparently, whether or not the matter is urgent is to be determined objectively and the party seeking relief must have formed a reasonable opinion that the relief (ie., the declaration) was necessary for the protection of its rights.

AED Oil Limited & Anor v Puffin FPSO Limited [2010] VSCA 37

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