What you need to know
- The nature of international arbitrations means that it is often necessary to obtain evidence from outside the jurisdiction in which the arbitral proceeding is seated, which can be challenging for legal and practical reasons.
- The Federal Court of Australia has recently held that it does not have jurisdiction to issue subpoenas for foreign-seated arbitral proceedings under the International Arbitration Act 1974 (Cth).
- However, the Court indicated that evidence in Australia could be obtained by application under the Hague Evidence Convention as an alternative to issuing a subpoena.
The use of subpoenas in arbitration
Subpoenas are a powerful tool in litigation and arbitration. They can be used to compel the attendance of parties or the production of documents. Courts, both in Australia and overseas, have long recognised their importance in the administration of justice.
In arbitration proceedings, though, arbitral tribunals do not have the power to compel a third party to produce documents. They ordinarily require the assistance of a court that exercises jurisdiction over the third party to issue a subpoena against them.
This was the case in Samsung C&T Corporation, Re Samsung C&T Corporation [2017] FCA 1169, although the path to obtaining court assistance was not what the parties had thought. The case demonstrates that parties to arbitral proceedings need to fully understand the options available to them to compel the production of evidence, and ensure they select the appropriate option to avoid incurring unnecessary costs and delay.
An international arbitration
Samsung and Duro are parties to an international arbitration concerning the construction of the Roy Hill iron ore mine in Western Australia. The arbitration is:
1. seated in Singapore;
2. governed by the UNCITRAL Arbitration Rules 2013;
3. administered by the Singapore International Arbitration Centre; and
4. subject to the governing law of Western Australia.
Samsung was granted permission by the arbitral tribunal in Singapore to apply to the Federal Court of Australia for the issuing of subpoenas under section 23 of the International Arbitration Act 1974 (Cth) (the Act).
Section 23 of the Act provides that a party may apply for, and a court a may issue, a subpoena requiring a person to produce documents to an arbitral tribunal, provided that the tribunal gives permission.
Section 22A of the Act defines a "court" to include a court in a State or Territory and "in any case – the Federal Court of Australia": s 22A(c).
On 21 March 2017, Gilmour J of the Federal Court made orders granting Samsung leave to issue subpoenas.
Samsung subsequently made another application under section 23 of the Act which was also heard by Gilmour J.
No jurisdiction
Despite granting Samsung's first application, his Honour refused to grant the second application.
His Honour considered that his own decision to grant leave in respect of the first application was "clearly wrong" and that the Federal Court did not have jurisdiction to issue subpoenas in a foreign-seated arbitration.
In coming to this conclusion, his Honour considered that:
1. the proper interpretation of sections 22A and 23 support the construction that the power to issue subpoenas under the Act only applies to arbitral proceedings commenced in a State or Territory of Australia; and
2. allowing for foreign arbitral proceedings to be included within the scope of section 23, in the absence of clear words to that effect, would be inconsistent with the purpose of the Act.
The Court rejected Samsung's contention that the phrase "in any case" in section 22A(c) of the Act extends the jurisdiction of the Federal Court to include foreign-seated arbitral proceedings. His Honour instead held that such an interpretation was too broad and that it would read words of significance into section 22A(c), where in contrast Parliament has expressly expanded jurisdiction based on geographical location elsewhere in the Act.
Accordingly, the Court dismissed the second application, holding that it had no jurisdiction to grant leave to issue subpoenas relating to an arbitration commenced in Singapore.
The Hague Evidence Convention
Nonetheless, his Honour observed that Samsung could issue a letter of request for the documents that it sought under the Hague Convention on the Taking of Evidence Abroad in Civil or Commercial Matters of 18 March 1970.
His Honour noted that Singapore and Australia are both contracting parties to The Hague Evidence Convention and that under article 1 of that Convention, the central authority of the requesting state may send a letter of request to the central authority of another contracting state for the taking of evidence. Under article 2, the letter must be executed by a judicial authority of the requested state that is competent to do so under its own law, which in this case would be the Western Australian Supreme Court.
Lessons learned
Samsung C&T Corporation shows that parties to a foreign-seated arbitration cannot rely on section 23 of the Act to obtain documents by subpoena in Australia.
As the Court pointed out, there may be alternative avenues for the parties to obtain such documents, including under the Hague Evidence Convention. However, it is likely that proceeding under the Hague Evidence Convention would involve greater time and complexity than applying directly to an Australian court.
It remains to be seen whether the decision will be appealed, or whether the Act might be amended to clarify that subpoenas can be issued for foreign-seated arbitrations. In the meantime, parties to arbitral proceedings need to fully understand the options available to them to compel the production of evidence, and ensure they select the appropriate option to avoid incurring unnecessary costs and delay.
Authors: Georgia Quick, Partner; James Clarke, Senior Associate; Luke Carbon, Lawyer; Prajesh Shrestha, Lawyer.
