Arbitration of Cross-Border Consumer Transactions in Australia: A Way Forward?

Abstract

As Australian consumers increasingly engage in electronic transactions with foreign suppliers, they are often subjected to clauses that require foreign arbitration for the resolution of disputes. This article examines the status and enforceability under Australian law of such clauses. While a clear trend in favour of international arbitration of commercial disputes now exists in Australia and elsewhere, it is arguable that such an approach should not be applied in the consumer context. Not only is there an imbalance of power between the parties, but an Australian consumer will often lose substantial protections under Australian law in a foreign arbitration. Reference is made to the divergent treatment of consumer arbitration in other jurisdictions, before discussion on whether an online system of dispute resolution may be the best path forward.

Keywords: arbitration, international arbitration

JEL Classification: K00, K19