Dialogue Consulting Pty Ltd v Instagram, Inc [2020] FCA 1846

Dialogue Consulting Pty Ltd v Instagram, Inc [2020] FCA 1846

Although a valid arbitration agreement existed and was formed between Dialogue and Instagram, LLC covering relevant disputes, respondents waived their right to arbitrate the claims by participating in litigation for over a year without invoking the arbitration agreement, causing delay and prejudice to Dialogue; as a result, s 7(5) of the International Arbitration Act barred a stay, and the application for stay was refused.

Parties
Applicant: Dialogue Consulting Pty Ltd; First Respondent: Instagram, Inc; Second Respondent: Facebook Inc; Third Respondent: Facebook Ireland Limited; Fourth Respondent: Instagram, LLC
Jurisdiction
Australia
Judgment Date
22 December 2020
Procedural Posture
Interlocutory Applications in a Commercial Proceeding / Orders and Reasons on Interlocutory Applications: Application for Stay of Proceedings Under S 7(2) International Arbitration Act, and Cross Application
Outcome
Respondents' application for a stay under s 7(2) International Arbitration Act dismissed; applicant's cross-application also dismissed; interlocutory costs to be costs in the cause.
Legal Topics
Stay of Proceedings Under S 7 International Arbitration Act, Arbitration Agreement Formation, Internet Contract Formation, Unfair Contract Terms, Statutory Unconscionability, Choice of Law, Waiver of Right to Arbitrate
Arbitration Contracts Consumer Protection Competition Law Procedural Law Stay of Proceedings Under S 7 International Arbitration Act Arbitration Agreement Formation Internet Contract Formation +4 more

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Parties

Dialogue Consulting Pty Ltd

Applicant

Instagram, Inc

First Respondent

Facebook Inc

Second Respondent

Facebook Ireland Limited

Third Respondent

Instagram, LLC

Fourth Respondent

Procedural Posture

Interlocutory Applications in a Commercial Proceeding / Orders and Reasons on Interlocutory Applications: Application for Stay of Proceedings Under S 7(2) International Arbitration Act, and Cross Application

Legal Issues

  1. 1 Whether proceedings should be stayed and referred to arbitration under s 7(2) of the International Arbitration Act 1974 (Cth)
  2. 2 Whether arbitration agreement was validly formed between Dialogue and Instagram, LLC
  3. 3 Whether arbitration clause is void under unfair contract terms or statutory unconscionability under the Australian Consumer Law

Ratio Decidendi

Although a valid arbitration agreement existed and was formed between Dialogue and Instagram, LLC covering relevant disputes, respondents waived their right to arbitrate the claims by participating in litigation for over a year without invoking the arbitration agreement, causing delay and prejudice to Dialogue; as a result, s 7(5) of the International Arbitration Act barred a stay, and the application for stay was refused.

Court Disposition

Respondents' application for a stay under s 7(2) International Arbitration Act dismissed; applicant's cross-application also dismissed; interlocutory costs to be costs in the cause.

Orders

  • The respondents' interlocutory application seeking a stay of the proceeding under s 7(2) International Arbitration Act 1974 (Cth) be dismissed.
  • The applicant's cross application seeking declarations and other relief be dismissed.