Shagang Shipping Company Ltd v HNA Group Company Ltd

When weighing hearsay evidence in civil proceedings, a court must consider every circumstance from which a reasonable inference may be drawn about reliability. Evidential circumstances need not themselves be proved on the balance of probabilities.

A statement proved on that standard to have resulted from torture is inadmissible. If torture is not proved but there are reasonable grounds for suspecting it, the possibility remains relevant to the statement’s weight. The binary approach to proof applies where a legal rule requires a fact to be established. It does not require uncertainty about subsidiary evidential facts to be ignored.

A shipowner claimed under a guarantee after the charterer repudiated a charterparty. The guarantor alleged that the charterparty had been procured by bribery, relying solely on confessions obtained during a Chinese police investigation. The shipowner contended that the confessions were unreliable and had been procured by torture.

The Commercial Court found that bribery had not been proved. The judge treated the confessions as admissible without finally deciding whether torture had occurred, but found that torture could not be ruled out and gave the confessions little or no weight. The Court of Appeal, in [2018] EWCA Civ 1732, held that this approach involved legal error and ordered a retrial.

The central issues were whether the trial judge had lawfully evaluated the confessions and whether a serious possibility of torture could affect their weight when torture had not been proved on the balance of probabilities.

1. Appeal allowed unanimously. Lord Hamblen and Lord Leggatt delivered the joint judgment, with which Lord Hodge, Lord Briggs and Lord Burrows agreed. The order for a retrial was set aside and the Commercial Court judgment for the shipowner was restored.

2. A trial judge has discretion over the order in which admissibility, weight and substantive factual issues are addressed. Evidence may be admitted de bene esse, on an assumption of admissibility, where the admissibility question need not ultimately be decided. Read as a whole, the trial judgment had taken that legitimate course. The judge was not required to decide whether torture occurred after finding that bribery was unproved.

3. The judge had evaluated the weight of the confessions despite not doing so as a separately labelled stage or expressly referring to section 4 of the Civil Evidence Act 1995. Retractions, the absence of lawyers, the absence of testable evidence from the interrogating officers, offers of leniency, the commercial implausibility of bribery and the lack of corroborative documents all bore on reliability. Since the confessions were the only evidence of bribery, finding no bribery necessarily meant assigning them little or no weight.

4. The binary principle discussed in In re B (Children) (Care Proceedings: Standard of Proof) did not require the possibility of torture to be disregarded. A legal burden operating on the balance of probabilities applies to facts in issue and to any preliminary facts which a particular rule requires to be proved. It does not apply in the same manner to every circumstance that makes a fact in issue more or less probable. The rule governing the weight of civil hearsay requires consideration of all circumstances supporting a reasonable inference about reliability.

5. Under article 15 of the United Nations Convention Against Torture 1984 and the common law rule recognised in A v Secretary of State for the Home Department (No 2) [2005] UKHL 71, a statement proved on the balance of probabilities to have resulted from torture is inadmissible. If that threshold is not met, evidence showing a serious possibility of torture remains relevant to weight. Where reasonable grounds exist for suspecting torture, the judge can and should take that possibility into account when assessing reliability.

6. Although the trial judgment was regrettably sparse, its reasons were sufficient. No error of law or factual conclusion unavailable to a reasonable judge had been shown. The Court of Appeal therefore had no proper basis for intervention.

1. United Kingdom Supreme Court: Allowed the appeal unanimously and restored the Commercial Court judgment: [2020] UKSC 34 .
2. Court of Appeal: Allowed the guarantor’s appeal and remitted the bribery issue for redetermination by a different Commercial Court judge: [2018] EWCA Civ 1732 .
3. Commercial Court: Held that bribery had not been proved and entered judgment for the shipowner under the guarantee. No citation is stated in the judgment.