A v C
| Jurisdiction | England & Wales |
| Judge | Mr Justice Foxton |
| Judgment Date | 12 February 2020 |
| Neutral Citation | [2020] EWHC 258 (Comm) |
| Docket Number | Case No: CL-2019-00740 |
| Court | Queen's Bench Division (Commercial Court) |
| Date | 12 February 2020 |
[2020] EWHC 258 (Comm)
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS
OF ENGLAND AND WALES
COMMERCIAL COURT (QBD)
IN THE MATTER OF AN ARBITRATION CLAIM
The Rolls Building
Fetter Lane, London
EC4A 1NL
Mr Justice Foxton
Case No: CL-2019-00740
Teresa Rosen Peacocke (instructed by Cooke, Young & Keidan LLP) for the Claimants
Matthew Weiniger QC of Linklaters LLP for the First and Second Defendants
Angeline Welsh (instructed by Bryan Cave Leighton Paisner LLP) for the Third Defendant
Hearing date: 29 th January 2020
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
The Honourable
This is the hearing of the Claimants' application for an order under s.44(2)(a) of the Arbitration Act 1996 for an order for the taking of the evidence of the Third Defendant (“E”) in England, so that it might be adduced in an arbitration being conducted in New York between the Claimants and the First and Second Defendants (“the New York Arbitration”).
The Claimants and the First and Second Defendants are co-venturers in an oil field in Central Asia. An issue has arisen in the New York Arbitration as to the nature of certain payments made by the First and Second Defendants known as “Signature Bonuses”, and whether those amounts are properly deductible when working out how much is due to the Claimants in respect of their 15% interest in the field.
The evidential hearing in the New York Arbitration has taken place. However, the Claimants have been given permission by the arbitration tribunal to bring this application for the compulsory taking of the Third Defendant's evidence in England. That application is opposed by Ms Welsh for the Third Defendant on the basis that the Court has no jurisdiction under s.44 of the Arbitration Act 1996 to make an order against someone other than a party to the arbitration agreement, and because, even if there is such jurisdiction, no sufficient case has been made out for exercising it (and certainly not in the terms of the draft order sought). Mr Weiniger QC did not make submissions on the issue of whether the Court has power to make such an order, but he supports Ms Welsh's submissions that no proper case for the exercise of any power has been made out (essentially making the same submissions which the First and Second Defendants had made in the arbitration when opposing the Claimants' application to the arbitration tribunal for permission to seek such an order).
I am very grateful to all the advocates for their submissions. In this judgment, I shall follow the same course as the parties, and deal with the issue of jurisdiction first, followed by the issue of discretion.
The relevant statutory and procedural provisions
It is necessary to begin with ss.43 and 44 of the Arbitration Act 1996. S.43 provides: “Securing the attendance of witnesses.
(1) A party to arbitral proceedings may use the same court procedures as are available in relation to legal proceedings to secure the attendance before the tribunal of a witness in order to give oral testimony or to produce documents or other material evidence.
(2) This may only be done with the permission of the tribunal or the agreement of the other parties.
(3) The court procedures may only be used if—
(a) the witness is in the United Kingdom, and
(b) the arbitral proceedings are being conducted in England and Wales or, as the case may be, Northern Ireland.
(4) A person shall not be compelled by virtue of this section to produce any document or other material evidence which he could not be compelled to produce in legal proceedings.”
S.44 provides:
“Court powers exercisable in support of arbitral proceedings.
(1) Unless otherwise agreed by the parties, the court has for the purposes of and in relation to arbitral proceedings the same power of making orders about the matters listed below as it has for the purposes of and in relation to legal proceedings.
(2) Those matters are—
(a) the taking of the evidence of witnesses;
(b) the preservation of evidence;
(c) making orders relating to property which is the subject of the proceedings or as to which any question arises in the proceedings—
(i) for the inspection, photographing, preservation, custody or detention of the property, or
(ii) ordering that samples be taken from, or any observation be made of or experiment conducted upon, the property;
and for that purpose authorising any person to enter any premises in the possession or control of a party to the arbitration;
(d) the sale of any goods the subject of the proceedings;
(e) the granting of an interim injunction or the appointment of a receiver.
(3) If the case is one of urgency, the court may, on the application of a party or proposed party to the arbitral proceedings, make such orders as it thinks necessary for the purpose of preserving evidence or assets.
(4) If the case is not one of urgency, the court shall act only on the application of a party to the arbitral proceedings (upon notice to the other parties and to the tribunal) made with the permission of the tribunal or the agreement in writing of the other parties.
(5) In any case the court shall act only if or to the extent that the arbitral tribunal, and any arbitral or other institution or person vested by the parties with power in that regard, has no power or is unable for the time being to act effectively.
(6) If the court so orders, an order made by it under this section shall cease to have effect in whole or in part on the order of the tribunal or of any such arbitral or other institution or person having power to act in relation to the subject-matter of the order.
(7) The leave of the court is required for any appeal from a decision of the court under this section.”
S.2(3) of the Act makes it clear that ss.43 and 44 apply to arbitrations with a seat outside England and Wales (such as the New York Arbitration), albeit the court “may refuse to exercise any such power if, in the opinion of the court, the fact that the seat of the arbitration is outside England and Wales or Northern Ireland, or that when designated or determined the seat is likely to be outside England and Wales or Northern Ireland, makes it inappropriate to do so”.
CPR 62.5(1) makes provision for service of arbitration claims out of the jurisdiction. CPR 62.5(1)(a) addresses applications to challenge arbitration awards brought under ss.67, 68 and 69 of the Arbitration Act 1996. CPR 62.5(1)(b) provides for service out where:
“the claim is for an order under section 44 of the 1996 Act”.
CPR 62.5(1)(c) applies where the claimant seeks some other right or remedy from the court affecting an arbitration, arbitration agreement or arbitration award and either (i) the seat of the arbitration is or will be within England and Wales or (ii) where no seat of the arbitration has been designated or determined and, by reason of a connection with this jurisdiction, the court is satisfied that it is appropriate to exercise its powers for the purpose of supporting the arbitral process.
It will be apparent (as one would expect) that there is no power to serve an application for relief under s.43 of the Arbitration Act 1996 out of the jurisdiction, and that the power to serve applications under CPR 62.5(1)(a) and (c) is essentially concerned with arbitrations with an English seat (or at least no other seat). However, for applications for relief under s.44 of the Arbitration Act 1996, there is no required nexus with this jurisdiction at the gateway stage before service out can be effected, beyond the fact that the application in question is for relief under s.44.
The authorities on the application of s.44 to persons other than the arbitrating parties
At first blush, the language of s.44 lends some support to the Claimants' argument that orders can be made against non-parties. The language of s.44(1) — providing the court has same power in relation to the matters mentioned as it has for the purposes of and in relation to legal proceedings — would suggest that, in the provisions which follow, the Court has the same power to make orders against non-parties to the arbitration as it would in legal proceedings to make orders against non-parties to the litigation. Further, s.44(2)(a), the provision specifically in issue here, refers to “the taking of evidence of witnesses”, which might suggest that it is principally concerned with securing evidence from witnesses who are not in the control of the arbitrating parties. However, on analysis, the position is more complex, as becomes clear from a review of the authorities.
It is not necessary in this judgment to consider all of the authorities which have considered, or at least touched upon, this issue, because they were reviewed extensively in two judgments of this Court which I consider in more detail below: Cruz City I Mauritius Holdings v Unitech Limited [2014] EWHC 3704 (Comm), a decision of Males J, and DTEK Trading SA v Morozov [2017] EWHC 1704 (Comm), a decision of the-then Sara Cockerill QC.
However, any discussion of this issue must begin with Commerce and Industry Insurance Co of Canada v Certain Underwriters at Lloyd's [2002] 1 WLR 1323. As Ms Rosen Peacocke pointed out, this is the only case which was specifically concerned with an application under s.44(2)(a) for the taking of evidence of a witness for the purposes of an arbitration with a seat outside England and Wales. In that case the arbitration tribunal (which was sitting in New York) had issued a letter of request for the taking of evidence in this jurisdiction of certain Lloyd's brokers. Armed with that “letter of request” from the arbitration...
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