Non-Party Cannot be Compelled to Give Evidence

In A & B v C, D & E [2020] EWHC 258 (Comm), the English Commercial Court ruled that it did not have the power to compel a witness located in England to give evidence in a New York-seated arbitration between partners in a Central Asian oilfield because he was not a party to the underlying arbitral agreement.

Following the arbitration hearing in New York, the tribunal gave the Claimants permission to bring an application under s.44(2)(a) of the Arbitration Act for the compulsory taking of the Third Defendant’s evidence in England. Section 44(2)(a) provides that 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 taking of the evidence of witnesses. The application was opposed on the basis that the Court had no jurisdiction under s.44 to make an order against someone other than a party to the arbitration agreement, and because, even if there was such jurisdiction, no sufficient case has been made out for exercising it.

By reference to Commerce and Industry Insurance Co of Canada v Certain Underwriters at Lloyd’s [2002] 1 WLR 1323, Cruz City I Mauritius Holdings v Unitech Limited [2014] EWHC 3704 (Comm), DTEK Trading SA v Morozov [2017] EWHC 1704 (Comm), and Trans-Oil International SA v Savoy Trading KP [2020] EWHC 57 (Comm), the Court refused the application on the following bases:

  • The language and structure of s.44, the introductory words of s.44(1), apply to all of the powers in s.44(2). In these circumstances, any attempt to distinguish Cruz City and DTEK on the basis that they were concerned with different s.44(2) sub-powers did not represent a meaningful distinction from those cases, but simply a decision not to follow their reasoning. In any event, the argument that some powers under s.44(2) can be exercised against non-parties and others cannot is not an attractive argument in the absence of some language justifying a differential treatment of the various sub-sections in this respect.
  • In so far as s.44(2)(a) is concerned with the English Court issuing letters of request to foreign courts for the taking of evidence of non-parties, these are not coercive orders directed at a non-party but requests made of a foreign court which may or may not choose to exercise its own coercive powers over a potential witness. It is, therefore, possible for s.44(2)(a) to be invoked without the court making an order directly against a non-party: either because it involves a request to a foreign court rather than an order against a non-party by the English court, or because it involves ordering the deposition to proceed, but not making a coercive order against the witness that he or she attend.
  • Applications for coercive orders against non-party witnesses under s.44(2)(a) raises additional complications over and above those which arise in relation to such applications under other sub-sections, including that if s.44(2) orders cannot generally be made against non-parties, it would be surprising if coercive orders could nonetheless be made against non-party witnesses under s.44(2)(a), when s.43 already makes specific provision for securing the attendance of witnesses.

For Hong Kong practitioners, note the following comment in the judgment [18] regarding the different position under Hong Kong law:

“It has been held in Hong Kong that the court has power to make orders against non-parties under s.45(2) of the Arbitration Ordinance (Cap 609), albeit (as the court noted), the wording of that provision differs significantly from s.44 (Company A and ors v Company D and ors [2018] HKCFI 2240 at [26]-[41])”.

In A v D, the Hong Kong High Court stated -27-28]:

“On my reading, section 45 of the Ordinance is not as confined and restricted in scope as section 44 of the Act. The specified powers of the English court under section 44 are considered in the cases of Cruz City 1 Mauritius Holdings v Unitech Ltd and DTEK Trading SA v Mr Sergey Morozov. In Cruz City, Males J referred to several indications in section 44 itself, which show that “it is intended to be limited to orders made against a party to the arbitration ‘for the purposes of and in relation to’ which the court’s powers are to be exercised”. He referred, firstly, to the opening words of subsection (1), that the section is “subject to contrary agreement between the parties”, which must mean the parties to the arbitration agreement. Males J then referred to subsections (4) to (6) of section 44, which provide that the court can only act on an application made with the permission of the tribunal or the agreement in writing of “the other parties”, except in cases of urgency; that the court shall act only if the arbitrators have no power, or are unable for the time being, to act effectively; and that the court is to hand back to the tribunal the power to act in relation to the subject matter of the order. The learned judge explained that the reference in subsection (4) to “the other parties” could only mean that the court can act with the agreement of “the other parties to the arbitration”, that subsection (5) will always apply if an order is sought against a non-party, and that subsection (6) can have no application to an order made against a non-party. Males J pointed out in his judgment that none of the indications to which he referred is conclusive, but that “together they suggest … that the section is simply not concerned with applications against non-parties”.

Significantly, section 45 of the Ordinance does not have any provision corresponding to section 44 (4) to (6) of the Act. Nor does section 45 exclude the power of the court to grant an interim measure, when “otherwise agreed by the parties”.”

About Phillip Rompotis

Phillip practices as a barrister and arbitrator in Hong Kong. He has over 25 years’ litigation and arbitration experience in commercial disputes relating to construction & engineering, financial services, joint venture & shareholders agreements, technology, trusts, property and landlord & tenant. He is a Fellow of the Chartered Institute of Arbitrators, the Hong Kong Institute of Arbitrators, the Singapore Institute of Arbitrators, the Malaysian Institute of Arbitrators, and a member of various lists/panels of arbitrators.

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