Tajik Aluminium Plant v Hydro Aluminium as
| Jurisdiction | England & Wales |
| Judge | Rix,Maurice Kay,Moore-Bick L JJ. |
| Judgment Date | 24 October 2005 |
| Date | 24 October 2005 |
| Court | Court of Appeal (Civil Division) |
[2005] EWCA Civ 1218.
Court of Appeal (Civil Division).
Rix, Maurice Kay and Moore-Bick L JJ.
Clare Reffin (instructed by Herbert Smith) for the appellant.
Paul Stanley (instructed by Byrne and Partners) for the second respondent.
Brian Doctor QC and Paul Sinclair (instructed by Clyde & Co) for the third and fifth respondents.
The following cases were referred to in the judgment of Moore-Bick LJ:
Assimina Maritime Ltd v Pakistan National Shipping Corp (The Tasman Spirit)UNK [2004] EWHC 3005 (Comm); [2005] 2 CLC 448.
BNP Paribas v Deloitte & Touche LLP [2003] EWHC 2874 (Comm); [2004] 1 CLC 530.
Harrison v Bloom Camillin (unreported, 12 May 1999, Neuberger J).
Panayiotou v Sony Music Entertainment (UK) LtdELR [1994] Ch 142.
Sedgwick Group plc v Johns-Manville Fibreboard Corp (Asbestos Insurance Coverage Cases)WLR [1985] 1 WLR 331.
South Tyneside Borough Council v Wickes Building Supplies LtdUNK [2004] EWHC 2428 (Comm).
Arbitration — Attendance of witnesses — Proceedings against witnesses and others alleging fraud, breaches of fiduciary duty and conspiracy — Documents seized pursuant to search and seizure order — Witness summonses set aside for failure to identify specific documents — Rules that applied to subpoena duces tecum continued to apply to witness summons under CPR — Civil Procedure Rules 1998, Pt. 34 — Arbitration Act 1996, s. 43.
This was an appeal by Tajik Aluminium Plant (TadAZ) against two orders made by Mann J setting aside witness summonses issued in support of arbitral proceedings under the Arbitration Act 1996 s. 43 requiring the second, third, fourth and fifth respondents (the witnesses) to attend the hearing of an arbitration and to produce the documents described in the schedules to those summonses.
TadAZ carried on business in Tajikistan as a smelter of aluminium. It had entered into a barter contract with the first respondent, Hydro Aluminium AS (Hydro), under which Hydro agreed to supply raw material in the form of alumina in exchange for aluminium metal. Those agreements were said to have been negotiated and signed on behalf of TadAZ by the second respondent, E, who at the time was the director of the plant and managing director of TadAZ. Other respondents had been involved in the supply of alumina to TadAZ and the negotiation of the barter contract.
A dispute had arisen between TadAZ and Hydro under the barter agreement which had been referred to arbitration in London under the rules of the London Court of International Arbitration. In that arbitration Hydro as claimant was seeking to enforce the agreement against TadAZ. TadAZ was resisting the claim on the grounds that the agreement formed part of a fraudulent scheme on the part of the witnesses and others, of which Hydro was aware, to divert the profits of its business into their own hands.
TadAZ had began proceedings against the witnesses and other defendants in the Chancery Division alleging fraud, breaches of fiduciary duty and conspiracy to cause damage by unlawful means in respect of which it is seeking an account, damages and other relief. In those proceedings it had obtained on a without notice application a search and seizure order and a worldwide freezing injunction. As a result of the execution of the search and seizure order a large number of documents had been seized and retained by the supervising solicitors.
TadAZ wished to call the witnesses to give evidence in the arbitration and to produce the seized documents and it obtained witness summonses to that effect. The judge held that the principles that applied to the process for compelling a person to attend court to produce documents prior to the introduction of the Civil Procedure Rules, namely, the writ of subpoena duces tecum, continued to apply to a witness summons issued under CPR, Pt. 34, including the principle that the documents to be produced must be identified individually or by a compendious description that enabled each one to be specifically identified. He held that the summonses in this case failed to comply with those requirements and therefore set them aside.
TadAZ submitted that Pt. 34 itself did not prescribe the manner in which documents had to be identified in a witness summons and that there was no reason to impose artificial constraints by reference to the rules governing the former procedure. In this case the arbitrators when giving TadAZ permission to issue witness summonses had indicated that they thought the documents were relevant to the issues they had to decide and the court should seek to support them as far as it lay within its power to do so.
TadAZ further submitted that it would be unfortunate if the court were to endorse an approach to witness summonses that effectively prevented arbitral tribunals from obtaining the assistance of the court in making available documents that were relevant to the issues before them. Through the mechanism of Pt. 34 and s. 43 of the Arbitration Act 1996 parties to arbitral proceedings should, by agreement with each other or with the consent of the tribunal, effectively be able to obtain orders for disclosure by third parties in aid of the proceedings.
Held, dismissing the appeal:
1. It was appropriate, in the absence of any explicit guidance in the rules as to the manner in which documents were to be described in a witness summons, to have regard to the earlier authorities relating to the writ of subpoena duces tecum since they provided some insights into the factors that the court needed to keep in mind when exercising that jurisdiction. Those authorities supported the conclusion that the documents to be produced had to be specifically identified, or at least described in some compendious manner that enabled the individual documents falling within the scope of the subpoena to be clearly identified.
2. The court's power to order disclosure which was formerly contained in s. 12(6)(b) of the Arbitration Act 1950 had disappeared and as a result disclosure is entirely a matter for the arbitral tribunal. Complete symmetry could not be expected between the documentary procedures that applied in arbitral proceedings and those that apply to proceedings in court. The provisions of Pt. 34 and CPR, r. 31.17 had to be construed as part of a body of rules designed to govern the procedure that applied primarily to proceedings in the courts rather than to arbitration proceedings.
3. A witness summons, unlike an order for disclosure, required the person to whom it was addressed to attend court on a specified occasion and to produce to the court the documents to which it referred. It was a requirement reinforced with a penal sanction. Justice demanded, therefore, that the person to whom it was addressed should be told clearly when and where he must attend and what he must bring with him. Anything less was unfair to the witness; it also made supervision and enforcement by the court extremely difficult. Ideally each document should be individually identified, but it was not necessary to go that far in every case, if it was otherwise possible to identify the documents to be produced with sufficient certainty to leave no real doubt in the mind of the person to whom the summons was addressed about what he was required to do. Doubts about the adequacy of the description should be resolved in favour of the witness.
4. In the present case the documents were described in the schedule to each of the witness summonses in broad terms of the kind that would be appropriate to an application for disclosure but which failed to identify the documents with sufficient certainty to enable the witness to know what was required of him. Therefore the judge was right to set aside the witness summonses.
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