The Arbitration Act, 1996 (the "Act") provides a number of bases on which
awards may be challenged, including section 67 (substantive jurisdiction, i.e. whether
an arbitration agreement was in place underpinning the tribunal’s actions),
section 68 (“serious irregularity”, i.e. where a tribunal “has gone so wrong in its conduct of the
arbitration that justice calls out for it to be corrected”[1]) section 33 (general duties to be impartiality and expeditiousness),
and points of law in section 69. However, in Lesotho Highlands, the House of Lords made it clear that errors of
law and adjudication are not generally grounds for setting aside awards,[2] i.e.
a court will generally not be willing to overturn an award on the basis of the
merits of the case.
Section 34 of the Act gives arbitration tribunals
broad discretion to decide on document disclosure, questions to parties,
evidentiary rules and approaches to fact-finding. If a tribunal operates outside the explicit
restrictions of an arbitration agreement, enforcement of the resulting award
may be challenged based on an excess of jurisdiction (Article V(1)(c) ,
subsection 103(2)(d)).
The court in Perusahaan described two situations where this can happen: a) where
a tribunal deals with matters not submitted to it and b) where it deals with
matters not covered by the arbitration agreement.[3]
In that
case an arbitral award was overturned because the dispute the tribunal
ruled on had not been previously referred to a dispute resolution board, which
was a precondition specified in the arbitration clause.[4]
Therefore if the tribunal chose to adopt an
inquisitorial approach, to attack its award, it should have strayed outside any
explicit restrictions in the arbitration agreement, or if it chose to review
irrelevant information not submitted by the parties, its award should have been
based on such information.[5]
Privilege
Arbitration tribunals will generally respect
parties’ assertion of privilege over requested documents. The ICC Rules are
silent on the issue of privilege.[6] Section 43(4) of the Act disallows
the compelling of production of documents that could not be compelled in legal
proceedings. If the privilege claimed by the client is the same as can be
claimed in English proceedings then this section will be operative.
However, to understand the ability to
challenge the award based on the disclosure order, it is important to know whether
the client contested the order on the basis of its claim of privilege, either with
the tribunal or in court and, if the tribunal issued an order, whether the
other party then approached the court, resulting in the client contesting the
issue.[7] If
the client, faced with an order to disclose privileged information, refused to
disclose, the tribunal has the discretion to draw an adverse inference.[8] On
the other hand, if faced with the order, the client chose not to challenge it in
any manner and to continue participating in the proceedings it may be seen to
have waived its privilege. Any non-disclosure on account of privilege may
however form the basis of a challenge from the opposing party.
Equal treatment
Section 33 of the Act sets out the duties
of the tribunal to treat the parties fairly and equally and give each the
opportunity to place its own case forward and deal with that of its opponent.
However it also empowers the tribunal, in addition to powers defined elsewhere,
to adopt procedures that avoid unnecessary delay or expense.
According to Jeff Waincymer, this enshrines
“elements of fundamental due
process, being an entitlement to hear the case as put by one's opponent and the
entitlement to respond. The right to be aware of one's opponent's case and
attempt to rebut it.” However he goes on to point to a case where:[9]
Thus an English Court of Appeal
concluded that a Swiss arbitrator who refused to hear oral testimony did not
lead to a breach of natural justice. … it is not necessarily
the case that the principle … comes with a right to be heard orally … if the
procedure includes oral witness testimony, the principle suggests a right to
cross-examination.
Based on the foregoing analysis, arbitration
tribunals have considerable leeway in deciding what evidence is germane, and
refusing to hear the testimony of a witness.[10]
Conclusions
On the issues raised by the client, and
assuming no special procedural restrictions in the arbitration agreement, I
would therefore advise the client along the following lines.
Questioning a witness on other aspects of a
party’s business
Under the Act, on the basis of unequal
treatment of the parties, serious irregularity, or points of law it is not
likely that a party can challenge a tribunal’s inquisitorial fact-finding
approach. Neither is there likely to be a successful Article V challenge
against enforcement.
Order to disclose of
documents under privilege
As discussed above the impact of the order
to disclose privileged information will a) result in an adjudication of the
issue at the time of the order either through an interim order or court challenge or
be neutralised if privilege is seen to have been waived or b) potentially result
in a possible adverse inference (which is unlikely to be challenged on the
merits) if information is not disclosed. In either case, the issue will
probably settled before the final award is rendered.
No ability to cross examine
A challenge based on a tribunal’s
curtailing cross examinations on ancillary issues, may be based on subsections 33
and 103(2) of the Act and for enforcement, on Article V.1(b) of the Convention.
However, the only situation where this may come about is if a tribunal curtails
cross-examination on issues characterising them as an ancillary but then turns
around and gives those issues pride of place in its final award. Otherwise, the
tribunal’s procedural autonomy under s. 34 will probably be respected.
[1] Abuja
International Hotels Limited v Meridien SAS, High Court of Justice Queen's Bench Division Commercial Court, [2011] EWHC 87 (Comm), 2012 WL 14868 at para
49.
[2] Lesotho Highlands
Development Authority v Impregilo SpA and others, [2006] 1 A.C. 221 [Lesotho Highlands] at para 34.
[3] Karaha Bodas Co. v.
Perusahaan Pertambangan Minyak Dan Gas Bumi Negara, United States Court
of Appeals for the Fifth Circuit, at para 26. [Perusahaan]
[4] In Tiong Huat Rubber Factory
(SDN) BHD v. Wah-Chang International Company Limited, Wah- Chang International
Corporation Limited, Court of Appeal, 19 January 1991, an arbitral award
was overturned because the tribunal was ruling on a dispute that the
arbitration agreement did not contemplate (the agreement restricted contractual
disputes subject to arbitration to certain product characteristics.
[5] In Sugar Australia Pty Limited v Mackay Sugar Ltd [2012] QSC 38, an award was overturned because the critical aspect of the reasoning
underpinning the award was based on a point raised by neither party.
[6] Rules of Arbitration
of the ICC (in force as of 1 January
2012). Although the IBA Rules on the Taking of Evidence in International Arbitration
(adopted by a resolution of the IBA
Council) provide some guidance for such situations.
[7] In Dolling-Baker v Merrett and Another, Court of Appeal, 21
March 1990, [1990] 1 W.L.R. 1205, a
party successfully challenged the disclosure of documents to an arbitration
proceeding on the basis of privilege.
[8] In a Singapore case, Dongwoo Mann+Hummel Co Ltd v Mann+Hummel GmbH
[2008] SGHC 67, the tribunal chose not
to draw an adverse inference in response to a refusal to disclose, and decided
on the basis of other evidence. and that was an important basis for not
refusing enforcement. In the event of a refusal to disclose by the
client, the ability to mount a challenge to enforceability will lie with the
other party
[9] Part I: Policy and Principles, Chapter 2: Powers, Rights and Duties of
Arbitrators in Jeff Waincymer, Procedure and Evidence in International
Arbitration, Volume (Kluwer Law International 2012), at pg 84.
[10] See Julian D M Lew, Loukas A Mistelis, Stefan M Kröll. (2003). Comparative
International Commercial Arbitration. The Hague, Kluwer Law International. [Lew], sections 22-16 and 22-62
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