In a further demonstration of the English courts’ strong support for international arbitration, the Court of Appeal has confirmed that it can exercise powers to compel a non-party to an arbitration to provide evidence in relation to a foreign-seated arbitration.
A and B v C, D and E [2020] EWCA Civ 409 arose in the context of a New York arbitration and an application to the English court under section 44 of the English Arbitration Act 1996 to take the evidence of an English resident (non-party to the arbitration) by deposition for the purposes of those arbitral proceedings.
Background
The underlying dispute arose in the context of two settlement agreements related to the exploration and development of an oil field off the coast of Central Asia. The relevant issue in the arbitration was whether certain payments made by the respondents amounted to bribery. The third respondent in the court proceedings, who was not a party to the arbitration and was resident in England, was the lead negotiator for both the other respondents in connection with the payments, but was unwilling to give evidence to the tribunal in the arbitration proceedings initiated in New York.
The tribunal granted the appellants permission to apply to the English court in order to compel the third respondent´s testimony by deposition under section 44(2)(a) of the 1996 Act. Foxton J reluctantly dismissed the application at first instance, following previous High Court decisions which restricted the English courts’ powers under section 44 to make orders against non-parties to foreign-seated arbitrations.
Decision
The Court of Appeal reversed the first instance decision and held that section 44(2)(a) does give the courts power to make an order for the taking of evidence from a non-party witness in aid of a foreign arbitration. However, the Court of Appeal did not go as far as to reverse the other High Court decisions that limit the courts’ powers over third parties under other aspects of section 44 (e.g. the granting of an interim injunction or appointment of a receiver).
Comment
While focused on s. 44(2)(a), this decision represents a step forward in terms of clarifying the powers of the English courts in support of arbitral proceedings, inasmuch as it suggests that a broader interpretation may well be extended to section 44 as a whole in the future.
The authors would like to acknowledge the assistance of Carolina Roque, intern at CMS London, in preparing this article.
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