Your honour, help! We need a non party to give evidence in a foreign based arbitral proceeding

Aug 2020

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With consent being the cornerstone of arbitration, obtaining evidence from non‑parties to foreign arbitral proceedings can cause headaches!  The arbitral tribunal may not have the power to issue subpoenas to non‑parties and the domestic courts may not have the power to assist in relation to persons located in a foreign jurisdiction.  Parties may therefore need to seek assistance from foreign courts instead.

Parties can apply directly to the court where the non-party is located, if such a direct application is permitted by the laws of that country.  While this approach may be relatively efficient and cost-effective, the level of judicial assistance available differs between jurisdictions.  This article examines the question of whether courts in Australia, Hong Kong, Singapore and the United Kingdom will assist in obtaining evidence from non‑parties for foreign‑based arbitral proceedings.  The table at the end of this article provides a quick snapshot of the current position in these jurisdictions.

If parties cannot obtain judicial assistance from courts in certain jurisdictions to compel a non‑party to give evidence in a foreign‑based arbitral proceedings, this may affect where parties choose to have an arbitral proceeding, particularly when crucial evidence from non‑parties is required.

Unfortunately, the position in some jurisdictions remain unsettled – parties should be aware of the potential gap in the law in relation to obtaining evidence from non‑parties in support of foreign‑based arbitral proceedings.

What is the position in Australia?

In Re Samsung C&T Corporation [2017] FCA 1169, Samsung C&T Corporation (Samsung) applied to the Federal Court of Australia for leave under section 23 of the International Arbitration Act 1974 (Cth) to issue subpoenas to non‑parties located in Australia in support of an arbitration seated in Singapore.  Justice Gilmour held that the Act does not provide Australian courts with the power to issue subpoenas in support of foreign arbitral proceedings.

In reaching that conclusion, Justice Gilmour noted the following:

  • Section 22A defines ‘court’ by reference to the geographical location of the arbitral proceedings, being arbitral proceedings in a State or Territory of Australia or ‘in any case’.  His Honour considered that the words ‘in any case’ should be construed narrowly and restricted to the geographical references in that section.
  • The power to grant subpoenas under section 23 did not expressly refer to foreign arbitrations unlike other sections of the Act.
  • The legislature’s intention in relation to Act was to promote arbitrations being held in Australia.
  • Article 1(2) of the Model Law only applies to international arbitrations seated in the state in which the Model Law has been adopted.

This decision has been criticised by practitioners and commentators and it remains to be seen whether it will be followed by other Australian courts.  Notably, it has been reported that the Supreme Court of Western Australia subsequently granted the subpoenas under the Supreme Court (Arbitration) Rules 2016 (WA), though no reasons for the decision was published.

Interestingly, Justice Gilmour noted that Singapore and Australia are both contracting parties to the Hague Convention on the Taking of Evidence Abroad in Civil or Commercial Matters of 18 March 1970 (Hague Evidence Convention) and under article 1 of the Convention, the central authority of one contracting state may send a letter of request to the central authority of another contracting state for the taking of evidence.  As such, His Honour noted that Samsung could apply to the Supreme Court of Western Australia for assistance.

Accordingly, parties seeking evidence by way of subpoenas in support of a foreign-based arbitral proceedings may need to consider alternative avenues such as the Hague Evidence Convention.  This process is likely to be slower and more complicated than an application to the court.  It is also questionable whether the Hague Evidence Convention applies to arbitral proceedings given that the Convention is directed to “judicial proceedings”.  The arbitral tribunal may have to apply to the domestic court to request that the court issue a letter of request pursuant to the Hague Evidence Convention.[1]

What is the position in Hong Kong?

In Hong Kong, parties can apply to the court, with the approval of the tribunal, for an order to compel non‑parties to produce documents or evidence in support of an arbitral proceedings under section 55 of the Arbitration Ordinance (Cap. 609).  However, section 5(2) of the Ordinance makes it clear that this power does not apply to foreign‑based arbitral proceedings.  Accordingly, parties are unlikely to be able to rely on section 55 to obtain evidence from non‑parties in support of a foreign‑based arbitral proceeding.

What is the position in Singapore?

The power to compel the attendance of witnesses and the production of documents by subpoena is covered under section 13 of the International Arbitration Act 1994 (SG).  Notably, unlike other sections in the Act, section 13 does not expressly state that it applies in relation to foreign‑based arbitral proceedings.

The High Court of Singapore issued subpoenas in Lao People’s Democratic Republic v Sanum Investments Ltd [2013] SGHC 183 and noted that section 13 is a power that the court may exercise in support of international arbitration proceedings.  However, the arbitral proceeding in that case was heard in Singapore.  Therefore, it remains uncertain whether Singaporean courts will be willing to issue a subpoena under section 13 in support of foreign‑based arbitral proceedings.

Given Singapore’s stance as an international arbitration friendly jurisdiction, it is likely that section 13 can be relied on in aid of a foreign‑based arbitration provided that the witness is located in Singapore.

What is the position in the United Kingdom?

In A and B v C, D and E [2020] EWCA Civ 409, the English Court of Appeal held that the courts have the power to issue orders compelling non‑parties to an arbitration agreement to give evidence in foreign arbitral proceedings under section 44(2)(a) of the Arbitration Act 1996 (UK).  This marks a shift away from a series of first instance English decisions that held that the courts do not have powers against non‑parties in relation to other subsections of section 44(2).  While this case is only binding in England and Wales, the courts in Scotland and Northern Ireland are likely to follow the Court of Appeal’s approach on this issue.

In A and B v C, D and E, the appellants sought to adduce evidence from the third respondent, an English resident, in support of arbitral proceedings seated in New York.  The arbitral tribunal allowed the appellants to apply to the English courts to compel the third respondent’s testimony.

The Court of Appeal noted the following:

  • Section 44(1), when read with other sections of the Act, made it clear that if the other limitations in section 44 are satisfied, the court has the same powers under section 44(2)(a) in relation to arbitrations that the court has in relation to civil proceedings. This includes the power to order that evidence be given by deposition.
  • The words “the taking of the evidence of witnesses” in section 44(2)(a) would have no utility if it was limited to only the taking of evidence from parties to the arbitration.
  • The power to order a deposition results in the court having more extensive powers to support a foreign-seated arbitration than foreign court proceedings because the court can only make such orders for foreign court proceedings if it has an incoming letter of request. Despite this, the court was willing to make the order, noting that section 44 provides sufficient safeguards against the misuse of the court’s powers.
  • Securing the attendance of a witness to give evidence before the tribunal is a matter addressed by section 43, not section 44(2)(a). Section 43 allow parties to use court procedures (eg subpoenas) to secure the attendance of witnesses or the production of materials where the witness is in the UK and the arbitral proceedings are in England, Wales and Northern Ireland.  Accordingly, English courts will only grant subpoenas where the arbitration, even if seated in a foreign jurisdiction, takes place in England, Wales and Northern Ireland.

Importantly however, the court did not address the issue of whether DTEK Trading SA v Morozov and Cruz City Mauritius Holdings v Unitech Limited were correctly decided.  Notably, the bench of the Court of Appeal included Males LJ, who was one of the judges who decided the Cruz City case.  Those cases held that section 44(c) and (e) (regarding orders for the preservation and inspection of documents and interim orders against non‑parties respectively) did not allow the court to grant orders against non‑parties.

Accordingly, the issue of whether the matters contained in the other subsections of section 44 can be relied on to obtained orders against non‑parties remains unsettled.  Parties should exercise caution when seeking orders against non‑parties.

Where to from here?

The issue of obtaining judicial assistance in relation to non‑parties in support of foreign‑based arbitral proceedings remains a live issue across jurisdictions.  Following A and B v C, D and E, it is possible that courts in other jurisdictions will adopt more expansive views of their powers to provide judicial assistance for foreign‑based arbitral proceedings.

Until then however, parties seeking orders against non‑parties located overseas where the law on the issue is not settled may need to consider alternative methods instead of a direct application to the courts in that jurisdiction.

Jurisdiction Relevant legislation Power to issue subpoenas against non‑parties to foreign arbitrations Power to make interim orders against non‑parties to foreign arbitrations Contracting party to the Hague Evidence Convention Comments
Australia International Arbitration Act 1974 (Cth) χ

Article 17J of the UNCITRAL Model Law

 

Following Re Samsung C&T Corporation [2017] FCA 1169, the current legal position is that Australian courts do not have the power to issue subpoenas or compel non‑party witnesses to provide evidence in support of a foreign‑based arbitral proceeding.  Parties may however, have more luck obtaining subpoenas from the State Supreme Courts.

The Federal Court of Australia has noted that parties seeking evidence from non‑parties located in Australia may need to consider alternative avenues such as a letter of request under the Hague Evidence Convention.  However, it is questionable whether the Convention applies to arbitral proceedings.

The UNCITRAL Model Law, which has force of law under the International Arbitration Act, expressly provides Australian courts with the power to make interim orders in support of foreign‑based arbitrations.

Hong Kong Arbitration Ordinance (Cap. 609) (HK) χ

Sections 5(2) and 55

Sections 45 and 60

χ The Hong Kong courts’ power to issue subpoenas to non‑parties in support of an arbitral proceedings does not apply to arbitrations outside of Hong Kong.  Parties can however, seek interim orders against non‑parties in support of a foreign‑based arbitral proceedings.
Singapore International Arbitration Act 1994 (SG) Likely

Section 13

Sections 12 and 12A

 

The legislation does not specify whether the power to issue subpoenas to compel non‑party witnesses apply to foreign‑based arbitral proceedings.  However, given Singapore’s stance as a progressive international arbitration hub, it is likely that Singaporean courts will provide judicial assistance in relation to non‑party witnesses located in Singapore.
United Kingdom

 

Arbitration Act 1996 (UK) χ

Sections 43

Section 44(2) though this is potentially limited

English courts can only issue subpoenas in support of foreign‑seated arbitrations where the arbitration takes place in England, Wales or Northern Ireland.  Earlier this year, in A and B v C, D and E [2020] EWCA Civ 409, the English Court of Appeal confirmed that English courts have the power to compel non‑parties to provide evidence by deposition in support of a foreign arbitral proceedings.

However, their Honours did not comment on the correctness of previous English decisions that held otherwise in relation to other interim measures.  As such, the position in the UK remains uncertain.  Given the Court of Appeal’s decision however, it is likely that the UK courts will provide judicial assistance in relation to making interim orders against non‑parties in support of foreign arbitral proceedings going forward.  While the case is only binding in England and Wales, it is likely that courts in Scotland and Northern Ireland will follow the Court of Appeal’s approach.

[1] See Gary Born, International commercial arbitration (2014), 2422-2423.

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