AghaeiRad v Plus500AU Pty Ltd (Stay Application)

AghaeiRad v Plus500AU Pty Ltd (Stay Application) [2025] FCA 1602 is a Federal Court decision about an online trading platform, a standard form User Agreement, and an attempt to force a court case into private arbitration.

Plus500AU operated an online platform for trading Contracts for Difference, or CFDs. The Court's overview describes Plus500AU as part of a global fintech group and says the platform was advertised broadly to non-professional investors. Consumers could deposit as little as AUD100, and the judgment notes that about 80% of non-professional investors lose money.

Mr Ali AghaeiRad signed up online. As part of the registration process, he ticked a box saying that he had read, understood and agreed to various hyperlinked documents, including a User Agreement. The Court records that he had not actually opened or read those documents. He later traded on the platform and, by 17 June 2021, had lost all of the money he had deposited, being $111,948.

He then brought representative proceedings in the Federal Court. The allegations described in the judgment were broad. They included alleged misleading or deceptive conduct, unconscionable conduct and breach of contract connected with the marketing and provision of CFDs, the use of inducements and notifications to encourage trading, an affiliate referral program, platform design and choice architecture, a demo account, suitability assessment, and contractual settings such as margin calls, automatic close out and fees.

Plus500 did not respond to the stay application by saying only that the claims lacked merit. Instead, it relied on the dispute resolution machinery in clause 23 of the User Agreement. That clause required reasonable endeavours to resolve disputes, then mediation, and if the dispute did not settle, arbitration under the Resolution Institute Arbitration Rules. Plus500 asked the Court to permanently stay the representative proceeding and refer the parties to arbitration under section 8(1) of the Commercial Arbitration Act 2010 (NSW).

Section 8(1) of the Commercial Arbitration Act 2010 (NSW) says that if court proceedings are brought in a matter that is the subject of an arbitration agreement, the court must refer the parties to arbitration unless it finds that the agreement is null and void, inoperative or incapable of being performed.

That meant the Court had to work through several separate questions.

First, was there an arbitration agreement between the parties at all? Mr AghaeiRad argued that he had not agreed to the arbitration term because he had not read the User Agreement. Plus500 argued that the online sign-up process gave him notice of the hyperlinked documents and that his ticking of the acceptance box objectively manifested consent.

Secondly, if there was an arbitration agreement, did it cover the claims actually brought in the representative proceeding? The clause used broad wording, referring to disputes arising in connection with the User Agreement or transactions under it. The Court had to decide whether that wording was wide enough to capture the pleaded claims.

Thirdly, would any arbitration be a domestic commercial arbitration for the purposes of the NSW Act? Mr AghaeiRad argued that this was a consumer claim rather than a commercial arbitration. The Court accepted there may be some kinds of ordinary consumer claims that fall outside the concept of commercial arbitration, but still had to decide whether this particular dispute did so.

Fourthly, even if those threshold points were satisfied, was the clause nevertheless null and void, inoperative or incapable of being performed? The applicant argued yes, for three reasons: the matters were not arbitrable, the arbitration term was void as an unfair contract term under the ASIC Act, and Plus500's attempt to enforce it was unconscionable under the ASIC Act.

That structure matters for businesses. It shows that a stay application can succeed on some threshold issues and still fail because the clause itself is legally defective.

The Court dismissed both stay applications with costs.

Importantly, Plus500 did win some threshold points. The Court held that if the dispute were arbitrated, it would still be a commercial arbitration for the purposes of the Commercial Arbitration Act 2010 (NSW), even though Mr AghaeiRad was a consumer and many of the claims involved consumer protection legislation. The Court also held that the arbitration term had been incorporated into the contract. The reported reasoning was that Mr AghaeiRad had been given notice of the relevant documents by hyperlinks and had objectively manifested consent by ticking the box stating that he had read, understood and agreed to them. The Court further held that the claim fell within the scope of the broad relational wording of the arbitration clause.

But those findings did not produce a stay. The Court accepted the applicant's third broad basis for resisting section 8(1). It held that clause 23.3 was null and void, inoperative or incapable of being performed for two reasons that matter greatly to businesses using standard form consumer terms.

First, the arbitration term was void as an unfair contract term under section 12BF of the ASIC Act. The catchwords and overview report that all requirements of section 12BG(1) were met. In particular, the Court found a significant imbalance because the clause: effectively prevented the only party realistically likely to bring proceedings to vindicate rights from having recourse to a court, required arbitration in circumstances where the cost would be prohibitive, and prevented the applicant from bringing or participating in a class action. The Court also found the term was not reasonably necessary to protect Plus500's legitimate interests. The catchwords note that the Court rejected arguments that the term was reasonably necessary to comply with AFSL obligations, to resolve disputes finally, fairly, efficiently and cost-effectively, or to ensure a common procedure and forum. The catchwords also note that no arbitration had been shown ever to have occurred.

Secondly, the Court held that enforcement of the arbitration term would be unconscionable within the statutory concept in section 12CB of the ASIC Act. The reported reasons include that enforcement would deny or limit access to justice, the contract was standard form and not negotiable, the applicant lacked understanding of the arbitration term, and the term was not reasonably necessary for the protection of legitimate interests. The Court also held that the exclusion in section 12CB(2)(b) did not apply.

The result was that the representative proceeding stayed in court rather than being diverted to arbitration.

One of the most commercially useful parts of the decision is the Court's treatment of the online contracting process. Businesses often worry that a customer will later say, 'I never read the terms', and that this alone will defeat incorporation. This case does not support that concern.

The Court held that the arbitration term was incorporated even though the applicant had not actually opened or read the User Agreement. The key points reported in the judgment are that the sign-up process provided notice of the relevant documents by hyperlink and that the applicant objectively manifested consent by ticking a box indicating that he had read, understood and agreed to those documents.

That is consistent with the practical reality of digital contracting. Courts generally look at what a reasonable person in the position of the parties would understand from the sign-up process and the user's outward conduct. If the process clearly presents the terms and requires an affirmative step of acceptance, a business may be able to show incorporation without proving the customer actually read every clause.

But this case also shows the limit of that comfort. Incorporation is not the same thing as enforceability. A business can successfully prove that a term became part of the contract and still fail when it tries to rely on that term. That is exactly what happened here. Plus500 cleared the incorporation hurdle but lost on unfair contract terms and unconscionability.

For businesses, that means the legal review of online terms should happen in two stages. Stage one is contract formation: are the terms presented clearly, are hyperlinks obvious, is assent recorded, and can the business prove what version of the terms was accepted? Stage two is substantive risk: is the clause fair, transparent, reasonably necessary to protect legitimate interests, and workable in practice for the customer cohort using the product?

The case also highlights that dispute clauses should be reviewed in their real commercial setting. A clause may look balanced on paper because it refers to mediation first and arbitration later, or because it says either party can invoke the process. But if, in reality, only one side is likely to sue and the process is too expensive for that side to use, the practical effect may still be one-sided.

Businesses should read this decision as a warning against treating dispute resolution clauses as harmless boilerplate. In many customer terms, the dispute clause is copied from older templates or from business-to-business contracts without much thought about how it will operate for consumers. This case shows that approach can be risky.

The Court's reported findings on significant imbalance are especially practical. The clause was problematic because it effectively prevented the party realistically likely to bring proceedings from going to court, required arbitration where the cost would be prohibitive, and prevented class action participation. Those are not abstract drafting points. They go directly to whether a customer can realistically enforce rights at all.

That matters most where the business uses standard form, non-negotiable terms and deals with individuals or other customers who are unlikely to have the resources to fund private dispute processes. A clause that channels every dispute into mediation and then arbitration may sound efficient from the business side, but if the process is too expensive or too fragmented for customers to use, a court may see it as operating unfairly.

The case is also important for financial services and fintech businesses because the Court rejected the idea that the clause was reasonably necessary simply because of AFSL obligations or a general desire for final, fair, efficient and cost-effective dispute resolution. The reported reasoning suggests a business needs more than broad assertions. It needs a real explanation of the legitimate interests the clause protects and why a less restrictive alternative would not do the job.

Another practical point is class action exposure. The Court treated the prevention of bringing or participating in a class action as part of the significant imbalance analysis. Businesses that face cohort-based claims should therefore be cautious about clauses that, in substance, isolate customers into individual private processes.

None of this means businesses must remove all dispute resolution machinery from their terms. It means the machinery should be proportionate and fair. Internal complaint handling, optional mediation, preservation of statutory rights, and pathways that do not impose prohibitive cost may be easier to defend than a rigid mandatory arbitration model.

If your business uses online standard terms, this case is a prompt to review dispute clauses before a dispute arises. The review should not be limited to wording. It should also look at customer profile, likely claim size, cost of the proposed process, and whether the clause would be seen as shutting off practical access to justice.

Start with customer type. A clause that may be acceptable in a negotiated business-to-business contract can be much harder to defend in a standard form consumer contract. Then look at process design. If the clause requires mediation and then arbitration under institutional rules, estimate the likely filing fees, mediator or arbitrator costs, legal costs, and the practical burden on an ordinary customer. If those costs are likely to deter claims, that is a serious warning sign.

Next, identify the legitimate interests the clause is meant to protect. It is not enough to say that private dispute resolution is generally efficient. The business should be able to explain why the clause is reasonably necessary in its own setting. If the same interests could be protected by a less restrictive mechanism, that weakens the clause.

Also consider collective redress. If the clause effectively prevents customers from bringing or participating in representative proceedings, that may increase unfairness risk. Finally, make sure the sign-up process itself is strong. This case supports clickwrap incorporation, but only where the user is given notice of the terms and objectively manifests assent.

The judgment is a stay application decision in a representative proceeding, not the final determination of the underlying substantive claims. The Court decided whether the proceeding should be diverted to arbitration, and it refused to do so.

The orders recorded that both respondents' interlocutory applications dated 11 December 2024 were dismissed with costs. The hearing took place on 19 and 20 August 2025, and judgment was delivered on 16 December 2025.

The available judgment text reports the Court's key conclusions on commercial arbitration, incorporation, scope, arbitrability, unfair contract terms and unconscionability. Because the available text is truncated part-way through the reasons, readers should check the full judgment if they need the complete reasoning or want to rely on the case in detail.