A & Anor v C & Ors (Rev 1)

Section 44 of the Arbitration Act 1996 does not confer jurisdiction to make orders directly against a non-party to the arbitration agreement. That conclusion applies equally to applications under section 44(2)(a) for the taking of evidence and where the non-party is within the jurisdiction, so that service out is unnecessary.

Where jurisdiction exists, an applicant seeking evidence from a reluctant witness must show that the witness can give relevant evidence which justifies attendance. The greater the inconvenience, the stronger the justification required. The court should focus the proposed questioning on relevant issues and should not use section 44(2)(a) to conduct a broad United States-style deposition exercise.

The claimants and the first and second defendants were co-venturers in an oil field and were parties to a New York-seated arbitration concerning the deductibility of signature bonuses. The evidential hearing had taken place, but the tribunal permitted the claimants to apply in England for an order requiring the third defendant, a non-party to the arbitration agreement, to give evidence.

The application was made under section 44(2)(a) of the Arbitration Act 1996. The principal issues were whether the court had jurisdiction to order a non-party resident in England to give evidence and, if so, whether the order should be made and in what terms.

1. Jurisdiction. The application was dismissed because section 44 did not give the court jurisdiction to make an order directly against a non-party to the arbitration agreement. The court followed the reasoning in Cruz City I Mauritius Holdings v Unitech Limited [2014] EWHC 3704 (Comm) and DTEK Trading SA v Morozov [2017] EWHC 1704 (Comm).
2. The language and structure of section 44 applied across the powers in section 44(2). Sections 44(4), (5), (6) and (7) were difficult to reconcile with direct orders against non-parties. The fact that section 44(2)(a) referred to witnesses did not justify treating it differently from the other powers.
3. The absence of any need to serve the application out of the jurisdiction did not distinguish the case. The issue was the substantive scope of section 44, not the procedural availability of service out. The fact that the arbitration had its seat in New York also did not alter that conclusion.
4. Alternative discretion. If jurisdiction had existed, the claimants would have shown sufficient justification for obtaining the third defendant’s evidence. The importance of the signature-bonus issue, his role in negotiating the relevant agreement, the prospect of relevant recollection assisted by documents, and the difference between his commercial role and another witness’s legal role were sufficient. The court would not assess the relative weight of evidence already heard, which was primarily for the tribunal.
5. Any order would have required the proposed topics to be narrowed to the signature-bonus issue. Section 44(2)(a) could not be used for a broad deposition exercise aimed at discovering what the witness might say. Evidence given directly to the arbitral tribunal by video link was preferable where possible.

The application arose from a New York-seated arbitration. The arbitral tribunal had permitted the claimants to seek compulsory evidence from the third defendant in England. The Commercial Court dismissed the application.