18 It seems to me that that is a correct description of the matter raised for determination in this proceeding, save that reference must be added to the Distributorship Agreement and to the alleged Preceding Agreement, in addition to the reference to the Further Agreement.
19 The sole distributorship referred to in La Donna's submissions is created by the Distributorship Agreement. That agreement contains the arbitration provision. Subparagraph (1) of the arbitration provision regulates all disputes "arising out of this Agreement". It also regulates all disputes "related to" the Agreement's "violation, termination or nullity".
20 Applying Australian law, all of the claims made in this proceeding fall within the arbitration provision. There are now many cases addressing clauses of this width and claims of this character.[2] Such clauses should not be read narrowly. The terms of the clause in question here encompass all of La Donna's claims. I have reached this conclusion subject to a matter raised by La Donna's submissions concerning the relevance of Austrian law, to which I refer below.
21 The right to apply for a stay under s 7(2) is a private right and as such it may be waived.[3] The issue of whether such a waiver occurs by virtue of a party's conduct in litigation was considered in some detail by Austin J in ACD Tridon Inc v Tridon Australia Pty Ltd.[4] His Honour considered the various characterisations of such conduct by a party in litigation, being estoppel, election and waiver. His Honour concluded that there were two forms of waiver which might arise. One he referred to as "waiver in the stronger sense", arising where a party makes an unequivocal final choice between alternative procedures so that it could be said that the party had abandoned the right, if the right was thereafter asserted.
22 The second form of waiver, which he referred to as "waiver in the weaker sense", was conduct which might preclude a successful application based upon the exercise of the Court's discretion.
23 In this application, La Donna submitted that Wolford had abandoned its right to a stay by its failure to reserve its position or to foreshadow a stay application, by its conduct in contesting the injunction, by its conduct in acquiescing or agreeing to the directions, and by its participation in the mediation. It seems to me that this conduct was all relevantly similar to the kind of conduct considered by Austin J in Tridon, which he found to be insufficient to constitute an unequivocal abandonment. I am conscious of the distinction between Tridon and this case, in that in Tridon the relevant party had expressly reserved its position on a number of occasions, but I do not think that that circumstance alone makes a difference.
24 If all that was relied upon here were the steps taken on the interlocutory injunction, the directions and the mediation, I would find, as Austin J did, that there had been no abandonment, as a party could rationally take the view that it was desirable to participate in those steps even though one believed, and intended to persuade the Court at an appropriate time, that the dispute should be arbitrated.
25 The application for security for costs falls into an entirely different category, however. That application was based on the explicit premise that the litigation would proceed to trial in the absence of a settlement, and that the matters the subject of the proceeding would be determined by the Court.
26 Wolford sought an advantage, or at least sought to impose upon La Donna a burden, which was based upon the proposition that the litigation would proceed in this Court, that the defendant would take steps, and that the defendant would incur costs in taking those steps, in that litigation in this Court. This step was an unequivocal abandonment of the alternative course, being an application for a stay and a consequent arbitration.
27 To allow Wolford to rely on the arbitration provision now would be to permit it to approbate and reprobate. In my view, it has waived the provisions and thereby rendered them inoperative.
28 There were a number of other matters put on La Donna's behalf which I do not need to deal with, given my finding on the waiver issue. Included among those matters were a submission that the arbitration provision is void for, in substance, the reason adverted to by Emmett J in Hi-Fert Pty Ltd v Kiukiang Maritime Carriers Inc,[5] and a submission that my conclusion, based upon the application of Australian law to which I referred above, is not a sufficient foundation for a stay, it being incumbent upon Wolford to prove the content of Austrian law given the terms of subparagraph (2) of the arbitration provision.
29 Wolford also sought a stay pursuant to the Commercial Arbitration Act 1984, and under the inherent jurisdiction of the Court. For the reason given concerning the security for costs application, I reject those applications.
30 The application by summons filed 4 August 2005 should be dismissed for the reason that I have found, pursuant to s 7(5) of the International Arbitration Act 1974 (Cth), that the arbitration agreement is inoperative, the right to insist upon arbitration having been waived by the unequivocal choice to pursue litigation, and the consequent abandonment of arbitration, which was necessarily involved in the application for security for costs.