A highly educated business analyst with a PhD in artificial intelligence, thought he had discovered a way to profit from the fast-moving world of online trading.
Ali Aghaeirad signed up in August 2020 to the trading platform operated by global fintech group Plus500.
The platform allowed retail investors to trade Contracts for Difference (CFDs), financial instruments that mirror the price movements of underlying assets such as shares, commodities or cryptocurrencies.
A user could deposit as little as $100 and begin trading almost immediately. Around 80 percent of non-professional investors using the platform ultimately lost money.
Ali registered for an account by completing a short online process. During that process he encountered a standard digital form that required him to tick a box confirming that he had “read, understood and agree[d] to” a series of hyperlinked documents, including the platform’s lengthy User Agreement. Like many consumers navigating digital contracts, Ali never opened the document. Nevertheless, by ticking the box he was permitted to access the trading platform and begin speculating on price movements in financial markets.
Within ten months Ali had deposited and traded substantial sums. By June 2021 he had lost $111,948 through trading on the platform.
Believing that the company’s marketing practices and trading environment had encouraged risky behaviour and misrepresented the nature of CFD trading, he commenced court proceedings in the Federal Court as the lead applicant in a class action.
The action alleged against Plus 500 misleading or deceptive conduct, unconscionable conduct, and breach of contract under legislation including the Australian Securities and Investments Commission Act and the Corporations Act.
Clause 23.3 of the User Agreement provided that if disputes could not be resolved through negotiation or mediation, they must be referred to arbitration under the Resolution Institute Arbitration Rules.
Plus500 argued that this clause prevented Ali from pursuing his claims in court. They applied for a stay of the proceedings under the Commercial Arbitration Act, arguing that the dispute had to be referred to arbitration instead. In effect, they contended that Ali had contractually agreed to resolve disputes privately through arbitration rather than through public litigation.
The first issue confronting Justice Tom Thawley in the Federal Court was whether the arbitration clause had actually become part of the contract between Ali and Plus500.
Ali argued that he never read the User Agreement and therefore could not have genuinely agreed to its terms. The court rejected that argument. Modern online contracts often use “clickwrap” mechanisms, where users must click a box confirming acceptance before proceeding. By ticking the box indicating that he had read and agreed to the terms, Ali objectively manifested assent to the entire User Agreement, even though he had not opened or read it.
In legal terms, his subjective ignorance did not prevent the clause from becoming part of the contract. A person who signs or electronically accepts a contract is generally bound by its terms, whether or not they actually read them.
However, that was not the end of the story. Even though the arbitration clause formed part of the contract, the court had to decide whether the clause was enforceable.
Ali advanced several arguments. First, he argued that the dispute involved consumer claims and therefore fell outside the concept of “commercial arbitration.” Justice Thawley also rejected that submission. The dispute arose from investment activity rather than ordinary consumer purchases, giving it a commercial character.
The critical issue instead became whether the arbitration clause was void as an unfair contract term under s 12BF of the ASIC Act.
That section and its analogue in the Australian Consumer Law allows courts to declare certain terms in standard form consumer contracts void if they are unfair.
The statute requires the court to examine three factors: whether the term creates a significant imbalance in the parties’ rights, whether the term is reasonably necessary to protect legitimate business interests, and whether the term would cause detriment if relied upon.
The court found that the arbitration clause produced a significant imbalance for several reasons. First, it effectively prevented the party most likely to bring proceedings—the consumer—from accessing a court. Second, arbitration would impose costs that were realistically prohibitive for an individual trader. Third, the clause prevented the consumer from bringing or participating in a class action.
These consequences were particularly serious in the context of a standard-form online contract that users could not negotiate.
The court then examined whether the clause was reasonably necessary to protect Plus500’s legitimate interests. The company argued that arbitration provided an efficient mechanism for dispute resolution and helped maintain consistent processes across its global operations. The judge rejected this justification on evidentiary grounds. There was no evidence that arbitration had ever actually been used by the company to resolve disputes, nor that such a clause was necessary to comply with regulatory obligations or to ensure efficient dispute resolution.
Because the clause was neither necessary nor balanced, it was declared void as an unfair contract term. This meant the arbitration agreement was “inoperative or incapable of being performed” within the meaning of the arbitration legislation.
The judge also held that attempting to enforce the clause in these circumstances would amount to statutory unconscionable conduct. The clause effectively denied access to justice in circumstances where consumers lacked bargaining power and understanding of the clause’s legal effect.
As a result, the defendants’ application to stay the court proceedings and compel arbitration was dismissed.
Ali now has a bigger hurdle to clear namely to prove that the company’s marketing practices and trading environment had encouraged risky behaviour and misrepresented the nature of CFD trading.
AghaeiRad v Plus500AU Pty Ltd (Stay Application) [2025] FCA 1602 Thawley J, 16 December 2025
