The defendant, an Australian company, faced class action litigation in California arising out of allegations that toys it had been distributing—but subsequently recalled—in the United States contained toxic substances. The claimant, an Australian company which had insured the defendant against personal injury claims, initially defended the actions on behalf of the defendant. The claimant afterwards informed the defendant that it would stop doing so on the ground that the claims pursued in the class actions did not fall within the cover of the policy. The defendant then started proceedings in California seeking a declaration that the claimant was obliged under the law of California to defend the actions. The claimant responded by taking out proceedings in New South Wales for an anti-suit injunction to prevent the defendant from continuing the Californian proceedings.

The insurance contract was made in Australia, and the critical clause was:3

Brereton J granted the anti-suit injunction on the familiar ground that the Californian action was in breach of the jurisdiction agreement in the parties’ contract, and that in any event the foreign conduct was vexatious and oppressive.4 He found that, although the parties had not expressly used the word “exclusive” in the jurisdiction clause, as a matter of construction the parties had intended the Australian court to have exclusive jurisdiction, and the defendant was therefore under a contractual obligation not to continue the proceedings in California.

The more interesting aspect of the judgment lies in the treatment of the contention of counsel for the claimant, based primarily on the suggestions of Professor Adrian Briggs,5

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