AB International (HK) Holdings Plc Ltd & Anor v AB Clearing Corporation Ltd & Ors

Relief under section 44(3) of the Arbitration Act 1996 is confined to orders necessary to preserve evidence or assets in an urgent case. The court must also be satisfied that the arbitral tribunal has no power, or is temporarily unable to act effectively. The provision does not permit the court to accelerate an arbitration by ordering advance disclosure where urgency and necessity are unproved. Speculative future applications to trace or freeze assets do not satisfy the statutory test. The court may refuse relief in its discretion where the application would improperly interfere with the arbitral process.

The claimants sought urgent interim relief under section 44 of the Arbitration Act 1996 in support of an LCIA arbitration commenced against companies connected with a joint venture dispute. Several forms of relief were abandoned or adjourned. The only application pursued was for disclosure of documents concerning trading profits and hedging transactions. The claimants argued that disclosure was necessary to preserve the joint venture business and to support anticipated applications in the arbitration. The central issue was whether the proposed disclosure order satisfied the urgency, necessity and tribunal-inability requirements of section 44(3).

1. The application for disclosure was refused. The claimants failed to establish real urgency or necessity. Their case amounted to a request for expedition of the arbitration by advance disclosure, without showing that the order would materially affect the timetable or prevent collapse of the business.

2. Section 44(3) permits orders necessary for the preservation of evidence or assets. As explained in Cetelem SA v Roust Holdings Ltd [2005] 1 WLR 3568, the court’s powers may include orders otherwise available under section 44(1), and “assets” may include choses in action and contractual rights. That jurisdiction remains limited by the statutory requirements of urgency, preservation and necessity.

3. Once constituted and able to act, the arbitral tribunal could order the requested disclosure if appropriate. The claimants therefore failed to show that the tribunal lacked power or was unable for the time being to act effectively, as required by section 44(5).

4. The claimants’ substantive claim for trading profits was being pursued in separate Commercial Court proceedings under a standby letter of credit, rather than in the arbitration. The proposed use of disclosure to support speculative future tracing and freezing applications took the application further from the statutory concepts of urgency and necessity.

5. Even if the statutory requirements had been met, relief would have been refused in the court’s discretion because the application represented an unjustified interference with the arbitral process and was, in substance, a hopeless attempt to salvage the remaining part of an abandoned application.