Cars24 successfully drives home defence of a court ‘appeal’ in auDRP process

A recent Federal Court decision, Nagpal v Global Cars Aus Pty Ltd [2021] FCA 1226, demonstrates the difficulties in trying to ‘appeal’ orders made by the World Intellectual Property Organisation (WIPO) Arbitration and Mediation Centre.

Cars24

Founded in 2015, Cars24 is a global online second-hand car sales business operating through the domain name www.cars24.com. After achieving a significant presence and reputation in India, Singapore and other countries, Cars24 took steps to expand its business into the Australian market. 

WIPO Dispute

In December 2018, an unrelated Australian business registered the domain name www.cars24.com.au. 

In accordance with the .au Dispute Resolution Policy (auDRP), Cars24 filed a complaint with the WIPO Arbitration and Mediation Centre disputing the Australian business’ entitlement to the www.cars24.com.au domain name. The complaint was successful, and WIPO ordered the www.cars24.com.au domain name be transferred to Cars24. 

Australian Federal Court proceedings

Following the WIPO orders, the Australian business (which originally held the domain name) launched proceedings in the Federal Court of Australia seeking to overturn the orders made by WIPO and to stop the transfer of the domain name to Cars24. 

During the case management hearing, and in correspondence with the Australian business, Cars24 raised the concern that the Australian business’ pleading did not disclose any cause of action, particularly none which enlivened the jurisdiction of the Federal Court. Despite this, the Australian business continued with the Federal Court proceeding. 

Cars24 issued an interlocutory application seeking to strike out the Federal Court proceeding on the basis that the dispute was outside the jurisdiction of the Federal Court. The application was successful and not only was the proceeding struck out, but the Federal Court ordered that the Australian business should pay Cars24’s legal costs on an indemnity basis. 

The Federal Court decision demonstrates the significant difficulties in trying to ‘appeal’ an unsuccessful domain name dispute resolution policy procedure on its merits. This case, in which a domain name holder has attempted to overturn an order under the WIPO domain name dispute process, appears to be the first of its kind in Australia. It thus shows the value of the auDRP (and the Uniform Domain-Name Dispute-Resolution Policy) process.