A Journey of Discovery:
Obtaining and Preventing Discovery
From Non-Parties in the United
Kingdom and Bermuda
By Mark Chudleigh1
“It is our duty and our pleasure to do all we can to
assist the United States Courts”2
A.
INTRODUCTION
In the great majority of cases where evidence is obtained from non-parties based in the
United Kingdom or Bermuda for use in US court or arbitration proceedings, it is obtained
on a voluntary basis. This will always be the preferred means of obtaining evidence from
foreign non-parties. Wherever possible, parties to US disputes should endeavour to obtain
evidence by consent and without recourse to the convoluted and often restrictive evidencegathering mechanisms afforded under international laws.
For example, in US federal court proceedings, depositions of “willing” deponents residing
outside the US may be conducted in a manner to be agreed by the parties pursuant to Rule
29 of the Federal Rules of Civil Procedure. This Rule provides that, unless the court
otherwise orders, the parties may, by written stipulation, “provide that depositions may be taken
before any person, at any time or place, upon any notice and in any manner and when so taken may be used
like other depositions”.
This paper is concerned with circumstances where a US litigating party seeks to compel nonparties based in the UK or Bermuda to produce documents or to provide oral testimony.
1
The author is a partner in Sedgwick, Detert, Moran & Arnold’s London office. He is a member of the Law
Society of England & Wales (solicitor), a barrister called to the Bar of Bermuda and an attorney called to
the Bar of California
2
Lord Denning, Master of the Rolls, Rio Tinto Zinc Corporation and others v Westinghouse Electric
Corporation and others [1978] A.C. 547.
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B.
1.
UNITED STATES COURT PROCEEDINGS
The Starting Point for the US litigant
The ability of parties to US court proceedings to obtain evidence – including the production
of documents or deposition testimony – from third parties based in the UK or Bermuda, is
ultimately dependant on the laws of these jurisdictions. While attempts by US courts and
litigants to compel discovery from foreign non-parties without the assistance of the local
authorities are not unknown, third parties based outside the jurisdiction of the United States
are entitled to ignore any request for evidence that has not been sanctioned by the local
courts3.
However, the parties themselves are generally not able to call upon the powers of the UK or
Bermuda Courts without the express sanction of the US court in which the proceedings are
pending4. In commercial disputes, where compulsion is necessary, by far the most common
method of obtaining evidence from foreign non-parties is through the issuance by the US
court of a letter of request or “letter rogatory”.
For example, Rule 28(b) of the Federal Rules of Civil Procedure provides a mechanism for
the taking of depositions by parties to US proceedings of individuals based in foreign
countries:
“Depositions may be taken in a foreign country (1) pursuant to any applicable treaty or convention, or (2)
pursuant to a letter of request (whether or not captioned a letter rogatory) … a letter of request shall be issued
on application and notice and on terms that are just and appropriate. It is not requisite to the issuance of …
a letter of request that the taking of the deposition in any other manner is impracticable or inconvenient … a
letter of request may be issued in proper cases …”
The Advisory Committee Notes to Rule 28 suggest that, where available, the use of a “letter
of request” is the preferred means of facilitating depositions in foreign countries and can be
employed even when the witness has stated that she or he is willing to testify voluntarily (it
may sometimes be desirable to have the backing of a court order to hedge against the
possibility of the witness changing his or her mind!).
Most US States authorize the taking of depositions in a foreign country. Usually the
language of the applicable statute or rule is identical, or substantially similar, to Rule 28(b) of
the Federal Rules. In addition, Title 28 of the United States Code (Judiciary and Judicial
Procedure), paragraph 1783, provides US courts with the power to order the issuance of a
subpoena requiring the appearance before it of a national or resident of the United States
who is in a foreign country.
3
This is not to suggest that such third parties will be free from the risk of sanctions if and when they come within
the jurisdiction of the US courts.
4
Section 1(a) UK Evidence (Proceedings in Other Jurisdictions) Act 1975; Section 27P(a) Bermuda
Evidence Act 1905 (as amended).
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For the uninitiated (or uninformed) party to US federal proceedings, it may be tempting to
believe that a successful petition under Rule 28 (b) will pave the way to obtaining the
evidence sought from the non-party. While a Rule 28(b) order is a prerequisite to the issue
of a letter of request, it is of cardinal importance for the applying litigant to recognise that
the US judge is under no obligation to consider whether the letter of request will be
enforceable in the jurisdictions of UK or Bermuda.
Accordingly, an understanding is required prior to applying to the US court for a letter of
request of the approach that the UK or Bermuda court is likely to take when presented with
the letter or when faced with a challenge to any order made pursuant to the letter. Too
often, an appreciation of the rules applied by the UK or Bermuda courts is first gained by
the US litigant when the US court’s request is declined by the UK or Bermuda court or when
any order made by the local court is successfully challenged by the proposed witness. By this
time, it may be too late to remedy the situation or to make a fresh petition to the US court.
To avoid unpleasant surprises, wherever possible US counsel should consult a UK or
Bermuda lawyer before seeking to obtain evidence in these jurisdictions.
2.
The Hague Convention
(a)
Introduction
The United Kingdom and the United States are among the signatories (“Contracting States”)
to the Convention on the Taking of Evidence Abroad in Civil or Commercial Matters
(concluded March 18, 1970), more commonly known as the “Hague Convention”.
Although it has the power to do so, the UK Government has not extended its agreement to
the Hague Convention to the territory of Bermuda.
(b)
Letters of Request
Under the Hague Convention, a “judicial authority” in one Contracting State may by means
of a letter of request (or “letter rogatory”) to the competent authority of another Contracting
State request such state to obtain evidence on its behalf. A letter of request must include the
following:
(i)
Details of the authority issuing the letter and the authority requested to execute it;
(ii)
Names and addresses of parties to the proceedings and their attorneys;
(iii)
The nature of the proceedings for which the evidence is required;
(iv)
Details of the evidence to be obtained;
(v)
Names and addresses of persons to be examined;
(vi)
Details of any questions to be put to persons to be examined or a statement about
the subject matter about which they are to be examined;
(vii)
Details of any documents or other property to be inspected.
(Article 3)
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(c)
Extends to non-parties as well as parties
The Hague Convention applies equally to evidence from non-parties as well as evidence
from the litigating parties themselves. However, it is more often utilised in relation to the
former. The United States Supreme Court has confirmed that the Hague Convention
constitutes one method, but not the exclusive method, for seeking documents or deposition
testimony from foreign parties over which a U.S. Court has jurisdiction5. Given the
availability under the Federal Rules of Civil Procedure (as well as under equivalent State
rules) of strict sanctions for non-compliance with discovery orders against parties to
proceedings and certain practical difficulties associated with obtaining evidence under the
Hague Convention (discussed below), it is suggested that wherever possible applications for
evidence from foreign parties should be pursued under the federal or applicable State
procedural rules.
(d)
Powers of executing state
The Convention provides that the state which executes the letter of request shall apply its
own law as to the methods and procedures to be followed. However, the requested court is
obliged to follow any request of the requesting authority, save where this is incompatible
with the law of the state of execution or by reason of “practical difficulties”. (Article 9).
In an effort to allay the concerns of civil and other jurisdictions as regards the scope of pretrial discovery in some common law countries (particularly the United States), Article 23 of
the Convention provides signatories with the following opt-out:
“A Contracting State may at the time of signature, ratification or accession, declare that it will not execute
Letters of Request executed for the purpose of obtaining pre-trial discovery of documents as known in
Common Law countries.”
The Government of the United Kingdom has made such a declaration in accordance with
Article 23.
3.
(a)
Application of Hague Convention in the United Kingdom
The 1975 Act
The Hague Convention has been implemented in the United Kingdom by the Evidence
(Proceedings in Other Jurisdictions) Act 1975 (“the 1975 Act”).
The 1975 Act applies where:
(i)
The application is made in pursuance of a request issued by or on behalf of a court
or tribunal (“the requesting court”) exercising jurisdiction in a country or territory outside
the United Kingdom; and
5
Societe Nationale Industrielle Aerospatiale v United States District Court, 107 S. Ct. 2542 (1987)
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(ii)
The evidence to which the application relates is to be obtained for the purposes of
civil proceedings which either have been instituted before the requesting court or whose
institution before that court is contemplated.
(Section 1)
In addition, the 1975 Act is subject to the following limitations:
(i)
The court may not require any particular steps to be taken unless they are steps that
can be required to be taken by way of obtaining evidence for the purposes of civil
proceedings in the court making the order (Section 2(3));
(ii)
Any order shall not require a person to state what documents relevant to the
proceedings to which the application relates are or have been in his possession, custody or
power or to produce any documents other than particular documents specified in the order
as being documents appearing to the court to be, or likely to be, in his possession, custody
or power (Section 2(4)).
Any US litigant intending to apply for a letter of request in respect of the evidence of a
person based in the UK is strongly advised to be mindful of these particular provisions.
Given the nature of the first cited limitation, it is generally advisable for the US litigant to
consult a UK lawyer to ensure that the steps that it wishes to be taken, “are steps that can be
required to be taken by way of obtaining evidence for the purposes of civil proceedings in the court making the
order”.
(b)
Procedure in England and Wales
For applications involving third parties located in England and Wales6, the procedure to be
followed is set out in Part 34 of the Civil Procedure Rules 1998. This provides that an
application for an order under the 1975 Act for evidence must be made to the High Court,
supported by written evidence and accompanied by the letter of request. Such applications
are invariably made ex parte.
If satisfied that the request is in accordance with the 1975 Act, the High Court will produce
an order:
6
(i)
requiring the witness to attend before an “examiner” at the place and time specified;
(ii)
setting out the subject matter on which the witness is to be examined;
(iii)
requiring the witness to produce such documents as may be specified;
(iv)
making any other directions as may be required.
Separate procedures apply in respect of witnesses based in Scotland or Northern Ireland. These territories are
beyond the scope of this paper. For applications involving these territories, it is advisable to consult counsel in
these jurisdictions. Hereafter, references to “England” should be read as referring also to Wales.
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Once served, it is open to the witness or other parties to the proceedings to apply to the
High Court to have the order discharged or varied. Advance applications to the court may
also be appropriate where it is likely that questions will be asked of the witness to which
substantive objection will be made. This may include, for example, questions that risk
invading a witness’s privilege.
(c)
Key limitations of the 1975 Act
A detailed recitation of the procedure to be followed in obtaining evidence from witnesses in
the UK is perhaps of little interest to the US reader, who will invariably appoint local counsel
to ensure compliance with the UK court’s order and to arrange for any evidence obtained to
be returned to the requesting US court. However, there are two fundamental features of the
1975 Act that are often misunderstood by US counsel and their clients. First, the power of
the UK courts to order the production of documents from third parties should not be construed
as a power to order discovery of documents from third parties. Second, the power of the UK
court to make provision for the oral examination of third parties should not be construed as a
power to order that such parties be deposed (as such term is understood in the US).
(d)
No document discovery against third parties
As noted, the UK Government has exercised its right under Article 23 of the Convention to
declare that it will not assist foreign courts in relation to the obtaining of “pre-trial
discovery”. This is reinforced by Section 2(4) of the 1975 Act which limits the English
court’s power to ordering the production of “particular documents specified in the order as being
documents appearing to the court to be, or likely to be, in [the third party’s] possession, custody or power”.
In the leading authority interpreting the 1975 Act, Rio Tinto Zinc Corporation and others v
Westinghouse Electric Corporation and others [1978] A.C. 547, Lord Wilberforce commented that
the UK Government’s declaration in relation to Article 23 and Section 2(4) of the 1975 Act
suggested, “that a strict attitude is to be taken by English courts in giving effect to foreign requests for the
production of documents by non-party witnesses”.
The Rio Tinto case involved a letter of request issued by the United States Court for the
Eastern District of Virginia. The letter sought the production of documents as set out in a
“lengthy schedule” to the letter which documents were alleged to be in the possession of certain
companies domiciled in the UK. Although the House of Lords regarded the letters of
request as going beyond the powers conferred on the UK courts, they acknowledged that
the letters ought to be given effect so far as possible, “subject to a severe reduction in the documents
to be produced”. Thus, the Court was prepared to consider ordering the production of
“particular documents” (i.e. “individual documents separately described”) but it was not prepared to
make orders for the production of classes of documents, for example in response to the type
of general request commonly found in US litigation for “any memoranda, correspondence,
or other documents” relevant to a particular subject or event.
Thus UK law does not permit the discovery of documents from non-parties. If parties to
US proceedings wish to obtain documents from a UK-based third party, then, in addition to
satisfying the other requirements of the 1975 Act and associated procedural rules, they must
target and identify particular, individual documents. The limitations of this are obvious as,
often, the party seeking production will have only a “hunch” as to the existence and type of
documents in the third party’s possession. Examples of the type of requests that are likely to
be permissible (assuming the request is otherwise compliant) are:
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“Proposal form completed by X for general liability insurance with Y completed on or about
August 2004”
“Policy wording and endorsements for general liability insurance of X incepting 1 August
2004”
“Telephone records showing details of calls made from the UK telephone number “123”
during the month of August 2004”
(e)
Depositions for evidence but not for discovery
The 1975 Act empowers UK courts to make provision for “the examination of witnesses, either
orally or in writing”. However, this does not mean that UK courts have the power to order
that witnesses be deposed in the manner of US proceedings.
In contrast to the position in most US jurisdictions, English court procedures do not permit
the discovery of information by witness testimony and the courts have no jurisdiction to
require a person to submit to examination merely for the purposes of enabling the
interrogator to find out whether the person has information which may assist him in
advancing his case. As the 1975 Act limits the court’s powers to “steps that can be required to be
taken by way of obtaining evidence for the purposes of civil proceedings” in the UK, it follows that
foreign litigants can be in no better position than UK litigants when it comes to obtaining
oral testimony.
Although little used, there is a procedure in England for requiring persons to be examined in
the form of a deposition (Part 34, Civil Procedure Rules 1998). However, this procedure
differs from a deposition as it is generally understood in the US in that it is available only
when the witness cannot attend the trial and is intended to elicit admissible evidence and not
discovery7. Thus, as with evidence by video link, depositions in England are simply an
alternative (where appropriate) to live witness evidence at the trial itself.
In the Rio Tinto case, the House of Lords approved the following passage in Radio Corporation
of America v Rauland Corporation and another [1956] 1 All ER 549 at 552 as explaining the
distinction between evidence and discovery in the context of the 1975 Act:
“Testimony which is in the nature of proof for the purposes of trial is permissible. Testimony, if it can be
called “testimony”, which is mere answers to questions on the discovery proceedings designed to lead to a train
of inquiry, is not permissible.”
English courts will always be wary of providing assistance to foreign litigants where they
suspect that the applicant’s intent is to obtain discovery and not evidence. As Lord Goddard
said of the application at issue in the Rio Tinto case:
7
By contrast, Rule 26(b)(1) of the Federal Rules of Civil Procedure provides that discovery (including discovery
by deposition) is permitted of relevant information and that this information, “need not be admissible at the
trial if the discovery appears reasonably calculated to lead to the discovery of admissible evidence”.
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“… the device, if I may use that expression without offence to anybody, of saying that the director [of the nonparty company] is to be called and can be examined with regard to these documents seems to me only to be
trying in another way to get discovery which cannot be ordered under the Act … It is an endeavour to get in
evidence by examining people who may be able to put the parties in the way of getting evidence. That is what
we should call mainly a fishing proceeding, which is never allowed in the English courts. I think that that of
itself would be a complete objection and ought to justify this court in refusing to make the order.”
4. Obtaining Evidence from Non-parties Based in Bermuda
(a)
The 1905 Act
As noted, the Hague Convention does not extend to Bermuda. However, the Bermuda
Government has enacted legislation empowering Bermuda’s courts to provide assistance to
foreign courts in a manner similar to that afforded under the Hague Convention. The
relevant statutory provisions are contained in Part II C of the Bermuda Evidence Act 1905
(as amended) (“the 1905 Act”).
The 1905 Act is in many respects similar to the UK 1975 Act and empowers the Bermuda
Supreme Court to, “make such provision for obtaining evidence in Bermuda as may appear to the Court
to be appropriate for the purpose of giving effect to the request in pursuance of which the application is made;
and any such order may require a person specified therein to take such steps as the Court may consider
appropriate for that purpose.” (Section 27Q(1))
As with the UK 1975 Act, the 1905 Act limits the powers of the Bermuda court to, “steps
which can be required to be taken by way of obtaining evidence for the purposes of civil proceedings” in the
Bermuda Supreme Court (Section 27Q(3)). For this reason in particular, parties to US
proceedings wishing to obtain evidence from third parties based in Bermuda are advised to
consult with Bermuda counsel before obtaining a letter of request from a US court.
(b)
Procedure in Bermuda
For applications involving third parties located in Bermuda, the procedure to be followed is
set out in Order 70 of the Bermuda Rules of the Supreme Court 1985. This provides that an
application for an order under the 1905 Act may be made to the Registrar of the Bermuda
Supreme Court. The application must be supported by an affidavit and accompanied by the
letter of request. Applications are made ex parte.
Parties to US proceedings will appoint Bermuda counsel to process applications through the
Bermuda court and arrange for the execution of any order.
(c)
Limitations to obtaining evidence in Bermuda
Section 27(4)(a) of the 1905 Act provides that, in making an order under the Act, the
Bermuda court shall not require a person, “to produce any documents other than particular documents
specified in the order as being documents appearing to the Court to be, or likely to be, in his possession,
custody or power”. This provision is in almost identical terms to that in Section 2(4) of the UK
1975 Act.
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Although the writer is unaware of any decisions of the Bermuda court interpreting the 1905
Act8, decisions of the English courts constitute persuasive authority in Bermuda and
decisions of the House of Lords are de facto binding on the Bermuda courts9. As such, it is
likely that the English House of Lords’ decision in the Rio Tinto case (see paragraph 3(d)
above) would be followed in Bermuda and that the Bermuda court would limit disclosure of
documents to the production of “particular documents” (i.e. “individual documents separately
described”).
Order 39 of the Bermuda Rules of the Supreme Court 1985 sets out a procedure for the
taking of evidence by deposition. Although the language of Order 39 differs in certain
respects from the corresponding provision in the English procedural rules, it is clear that the
Bermudian rules are directed at the taking of evidence and not discovery. In addition, as in
England, the Bermuda courts do not permit the discovery of information by witness
testimony. In the circumstances, it is likely that the Bermuda courts would follow the
English House of Lords decision in Rio Tinto and, as with the English courts, take a
restrictive approach to permitting deposition testimony (see paragraph 3(e) above).
C.
1.
UNITED STATES ARBITRATIONS
The Starting Point for the US Arbitrating Party
Section 7 of the Federal Arbitration Act provides that arbitrators may summon in writing
any person to attend before them or any of them as a witness and in a proper case to bring
with him or them any book, record, document, or paper which may be deemed material as
evidence in the case. If any person so summoned fails to comply with the summons, an
application can be made to the United States district court for an order compelling the
attendance of such person before the arbitrator or arbitrators.
While the power and judicial support conferred by Section 7 may be of assistance in
compelling witness testimony and obtaining documentary evidence from non-parties based
in the US, it is unlikely to be of any assistance in obtaining evidence from non-parties based
in the UK or Bermuda who are beyond the jurisdiction of the US courts.
For the reasons explained below, applications by US arbitrating parties to compel evidence
from non-parties based in England should be made directly to the English court by an
arbitrating party, either with the support of all other arbitrating parties or with the
permission of the arbitration panel. As also discussed below, it is thought unlikely that US
arbitrating parties are able to compel evidence from non-parties based in Bermuda.
As with applications arising out of US court proceedings, a US arbitrating party intending to
seek evidence from a non-party based outside the jurisdiction of the US courts, is advised to
consult local counsel before making any application to the US arbitration panel for
permission to seek such evidence.
8
At this time, there is no formal system of law reporting or cataloging in place in Bermuda.
9
The ultimate appeal court for Bermuda is the Privy Council in London. The committee members that sit on the
Privy Council are English “Law Lords” (i.e. the same persons who sit on the Judicial Committee of the English
House of Lords).
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2.
The Hague Convention
It is widely accepted that the Hague Convention does not apply to arbitrations and that
Contracting States are not obliged under the Convention to respond to Letters of Request
issued by or on behalf of arbitration tribunals. This view is reflected in the provisions of
Article 1 of the Hague Convention:
“A Letter [of Request] shall not be used to obtain evidence which is not intended for use in judicial
proceedings, commenced or contemplated.”
The Hague Convention does not in any event extend to Bermuda.
3.
Obtaining Evidence from Non-parties Based in the UK
(a)
The 1975 Act
As discussed, applications for evidence for use in US court proceedings from non-parties
based in the UK are governed by the Evidence (Proceedings in Other Jurisdictions) Act
1975 (“the 1975 Act”).
The language of the 1975 Act is arguably wider than the Hague Convention, and arguably
covers requests in relation to arbitrations, in that it relates to applications:
“made in pursuance of a request issued by or on behalf of a court or tribunal (‘the requesting court’) exercising
jurisdiction in … a country or territory outside the United Kingdom” (Section 1 (a) of the 1975 Act)
(emphasis supplied)
Indeed, Lord Diplock, one of the UK’s most distinguished “Law Lords” (broadly the
equivalent of a US Supreme Court judge) remarked in the leading authority interpreting the
1975 Act10:
“The 1975 Act applies to civil proceedings pending or contemplated in courts and tribunals of all countries in
the world. It is not confined to countries that are parties to the Hague Convention of 18th March 1970; nor
is it limited to courts of law. It extends to tribunals. These courts and tribunals make use of a wide variety
of different systems of procedure and rules of evidence in civil matters” (emphasis supplied)
Lord Diplock’s comments did not form part of the decision in the Rio Tinto Zinc case and
thus do not constitute binding authority.
In Commerce & Industry Co of Canada and another v Certain Underwriters at Lloyd’s [2002] 2 All ER,
the English Commercial Court was asked to consider an application under the 1975 Act
arising from a letter of request issued by an arbitration panel conducting proceedings in New
York. An issue arose in the New York arbitration as to whether London insurance brokers
were agents of the claimant insurer or the respondent reinsurers in connection with an
automobile warranty insurance programme. In an effort to resolve the issue, all parties to
the arbitration wished to obtain evidence from two former employees of the London broker
but neither was willing to be called as a witness or to be deposed.
10
Rio Tinto Zinc Corporation and others v Westinghouse Electric Corporation and others [1978] AC 547
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The application was considered ex parte by a Commercial Court judge who made an order
requiring the former employees to attend before an examiner to give evidence on various
issues. The former employees then applied to set aside the order on various grounds,
including that the court lacked jurisdiction under the 1975 Act to make an order at the
request of an arbitration tribunal.
Mr Justice Moore-Bick, who heard the application, held that the 1975 Act did not empower
the English court to make orders in support of arbitration tribunals. Although he
acknowledged that the word “tribunal” was the expression normally used (at least in
England) when referring to a private arbitral body, he ruled that the words in Section 1 of
the 1975 Act - “exercising jurisdiction in a country or territory outside the United Kingdom” - denoted
the exercise of a jurisdiction of a public not a private nature and thus the reference to
“tribunals” was to public and not to private tribunals.
Nevertheless, the judge held that the English courts did have the power to assist arbitration
tribunals (including foreign arbitration tribunals) under the English Arbitration Act 1996.
This aspect of Moore-Bick J’s decision is considered below.
(b)
The 1996 Act
The English Arbitration Act 1996 (“the 1996 Act”) confers jurisdiction on the English
courts to assist foreign arbitrations in relation to the production of documents, the
compelling of witness testimony and the taking of oral evidence. However, the 1996 Act also
confers on the English courts a discretion to refuse to exercise any such power, “if, in the
opinion of the court, the fact that the seat of the arbitration is outside England … makes it inappropriate to
do so” (Section 2(3)).
(c)
Production of documents
Section 44 of the 1996 Act provides that the English court has for the purposes of arbitral
proceedings the same power in relation to the taking of evidence from witnesses as it has for
the purposes of court proceedings. Section 2(3) of the 1996 Act provides that the powers
conferred by Section 43 apply even if the “seat” of the arbitration is outside England.
The court’s powers under Section 44 are limited to circumstances where a party has obtained
the tribunal’s permission to seek documents from a third party or where all parties to the
arbitration have given their agreement.
The court’s powers under Section 44 to compel the production of documents for use in a
foreign arbitration will be exercised in a manner similar to applications to compel evidence
for foreign court proceedings. In this regard reference is made to Section B3 above. In
essence, if the court is satisfied that it has jurisdiction and should make an order, it will
produce an order requiring the witness to attend before an “examiner” at a designated time
and place to produce the specified documents. As with applications under the 1975 Act, the
court will not make an order for discovery against a non-party and will limit any order to the
production of particular documents.
In addition, Section 43 of the 1996 Act provides that a party to arbitral proceedings may use
the same court procedures as are available in relation to legal proceedings to secure the
attendance before the tribunal of a witness to “produce documents”. This provision enables
an arbitrating party to apply to the court (with the permission of the tribunal or all other
parties) for the issue of subpoena duces tecum against a non-party.
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By virtue of Section 2(3) of the 1996 Act, the powers conferred by Section 43 apply even if
the “seat” of the arbitration is outside England. However, this is tempered by Section
43(3)(b), which provides that the procedure may be used only if the arbitral proceedings are
being “conducted” in England. At first sight, there might appear to be an inconsistency
between extending the 1996 Act to arbitrations with their “seat” outside England and then
limiting the court’s powers to arbitrations being “conducted” in England. In fact, there is no
inconsistency. The stipulation that the arbitration be “conducted” in England simply
requires the foreign arbitration panel to reconvene in England, on a temporary basis, for the
purpose of obtaining evidence. In the case of a panel of more than one arbitrator, it is likely
that the function of obtaining evidence in England could be delegated to a single arbitrator
to avoid the expense and inconvenience of the entire panel travelling to England.
In most circumstances, it is likely that an arbitrating party will use the procedure afforded by
Section 44 to avoid the need for the arbitration panel to reconvene in England. However, in
exceptional circumstances, such as an arbitration where there are several non-party witnesses
based in England from whom evidence is required, it may be preferable to adopt the Section
43 procedure.
The decision in BNP Paribas v Deloitte and Touche LLP [2003] EWHC 2874 illustrates the
restrictive approach that English courts take in relation to the production of documents
from non-parties for use in arbitration proceedings. In the BNP Paribas case, the English
Commercial Court was asked to consider a request pursuant to Section 43 of the 1996 Act
for the production of documents from a third party11. The application was supported by a
letter from the panel expressing their belief that the requested documents “are or may be
relevant to the issues in dispute in this arbitration and gives its permission to request their production …”.
The categories of documents sought were wide and included requests for “notes memoranda
and/or other documents relating to the preparation of accounts” etc. In dismissing the
application, Mr Justice Morison stated that, however the application was “dressed up”, it was
clear that the application was for “disclosure” (the modern English term for “discovery”)
rather than for the production in evidence of documents as permitted under English law.
He said:
“… there is an important distinction between requiring documents to be produced as evidence of some fact, as
with a subpoena duces tecum, and asking for [discovery] to trawl through documents to see if they support the
applicant’s case directly or by undermining the value of a witness’ testimony.”
(d)
Witness testimony
The 1996 Act also provides the English court with power to secure the attendance before
the panel of a witness in order to give oral testimony (Section 43) and to make orders for the
taking of evidence of witnesses in the form of a deposition (Section 44). By virtue of
Section 2(3) of the 1996 Act, the powers conferred by Sections 43 and 44 apply even if the
seat of the arbitration is outside England.
As with applications for the production of documents, applications under Sections 43 and 44
must be made with the permission of the panel or the agreement of the other parties.
11
The arbitration was being held in London under the Arbitration Act 1996 and governed by the ICC Rules
(which perhaps explains why the Section 43 procedure was being used in preference to Section 44) but the BNP
Paribas decision applies equally to applications relating to foreign arbitrations.
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Where an application is to be made under Section 43 for the issue of a subpoena ad
testificandum to compel a witness to give testimony, it will be necessary for the arbitration
proceedings to be conducted in England, at least temporarily. This will require the
arbitration tribunal to reconvene in England to hear the relevant testimony.
If an order is made under Section 44, the English deposition procedure will be followed. As
discussed at B3(e) above, the purpose of an English deposition is different to that of a US
deposition.
In Commerce & Industry Co of Canada and another v Certain Underwriters at Lloyd’s [2002] 2 All ER
(discussed at C3(a) above in relation to the 1975 Act), Mr Justice Moore-Bick considered a
request by parties to a US arbitration to depose two former employees of an insurance
broker based in England. Although the judge ruled that he had no jurisdiction under the
1975 Act to make an order for the examination of a witness in relation to arbitration
proceedings, he ruled that he did have such power under Section 44 of the 1996 Act. He
also ruled that the court had jurisdiction even though the seat of the arbitration was New
York and that the curial law of the arbitration was the law of New York.
Nevertheless, Moore-Bick J declined to make any order under Section 44 as he considered
that the purpose for which depositions were being sought from the English witnesses (i.e. to
obtain discovery) differed from the purpose for which depositions were permitted under
English law (i.e to provide evidence). The judge was particularly influenced by the US
arbitrators’ procedural award which stipulated that only those witnesses who had been
deposed would be eligible to give oral testimony at the hearing. He said:
“When [an English] court orders a witness to be examined, it is for the purposes of making his oral evidence
available in the form of a deposition rather than in person. It is not the intention of the [US] tribunal in the
present case, as I understand it, to allow witnesses to be called to give evidence who have not previously been
deposed. [The proposed witnesses] could not be called to give oral evidence viva voce at the hearing without that
step having first been taken, but the only purpose of an order under s 44 of the 1996 Act for their
examination would be to provide that very evidence in documentary rather than oral form. The procedure
adopted under the curial law differs in this respect from that which applies under our law in a way which, on
this ground alone, makes it inappropriate in my view to make the order now being sought.”
The judge indicated that he would in any event have declined to make the order sought as he
considered the evidence before him to be insufficient to satisfy the court that it was
appropriate to make the order. He said that the supporting evidence should normally
include an explanation of the nature of the proceedings, identification of the issues to which
they give rise and the grounds for thinking that the person to be examined can give relevant
evidence which justifies requiring his attendance for that purpose. In addition, he stated that
the greater the likely inconvenience to the witness, the greater the need to satisfy the court
that he could give evidence which is necessary for the just determination of the dispute.
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A Journey of Discovery | July 2005 | Mark Chudleigh
4.
(a)
Obtaining evidence from non-parties based in Bermuda
The 1905 Act
If there were any doubt as to whether the English 1975 Act provides jurisdiction for an
English court to aid foreign arbitrations with respect to obtaining evidence, there could be
none as regards the equivalent statute in Bermuda, the Evidence Act 1905 (as amended)
(“the 1905 Act”). The 1905 Act is clear in that it applies to requests issued by or on behalf
of “a court or tribunal … exercising jurisdiction similar to that of the [Bermuda] Supreme Court in a
country or territory outside Bermuda” (Section 27P(a)). It is difficult to see how the jurisdiction of
an arbitration tribunal could possibly be equated with that of a court exercising wide
jurisdiction over an entire territory as does the Bermuda Supreme Court. Accordingly, the
Bermuda courts do not have jurisdiction under the 1905 Act to assist foreign arbitration
tribunals.
(b)
Bermuda Arbitration Acts
Bermuda has two separate arbitration statutes: the Arbitration Act 1986 (“the 1986 Act”),
which applies to domestic arbitrations (i.e. arbitrations between Bermuda resident individuals
or non-exempted companies); the Bermuda International Conciliation and Arbitration Act
1993 (“the 1993 Act”), which enacts the UNCITRAL Model Law on International
Commercial Arbitration (“the Model Law”) and applies to any “international commercial
arbitration” held in Bermuda.
Although the 1986 Act does not expressly exclude applications arising out of arbitrations
with a seat outside of Bermuda, it is clearly intended to apply only to arbitrations within
Bermuda. It is therefore unlikely that parties to a US arbitration could avail themselves of
the powers conferred on the Bermuda court to issue subpoenas on persons located in
Bermuda or to make orders in respect of discovery of documents or the taking of oral
evidence in relation to domestic arbitrations.
The 1993 Act incorporates the Model Law, including Article 27 which provides:
“The arbitral tribunal or a party with the approval of the arbitral tribunal may request from a competent
court of this State assistance in taking evidence. The court may execute the request within its competence and
according to its rules on taking evidence.”
Thus Article 27 applies only to arbitration proceedings subject to the 1993 Act. Accordingly,
the Bermuda court also lacks jurisdiction under the 1993 Act to assist foreign arbitrations.
This is confirmed by the United Nations Commission on International Trade Law Working
Group which, in its Fifth Working Group Report (A/CN 9/246, paras 90-91 and 95-96),
stated:
“… article 27 is limited essentially to arbitrations taking place in “this State”; unlike earlier draft
provisions, it envisages neither assistance to foreign arbitrations nor requests to foreign courts in arbitral
proceedings held under the model law. This limitation is the result of a compromise between those in favor of
international court assistance and those opposed to any provision on court assistance.”
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D.
CONCLUSION
Despite the welcoming words of Lord Denning quoted at the beginning of this paper, in
reality, the jurisdiction of the UK and Bermuda courts to assist US courts in obtaining
evidence is limited. The jurisdiction of the UK and Bermuda courts to assist US arbitrating
parties in obtaining evidence is even more restrictive and is probably non-existent as regards
Bermuda.
Wherever possible, evidence from non-parties based in the UK or Bermuda should be
obtained by consent. Whenever this is not possible, consideration should be given to
whether the evidence is really necessary. If it is thought unnecessary, consideration should
then be given to whether the expense, limitations and risks of compelling evidence from
non-parties can be justified. If a decision is taken to attempt to compel evidence from a
non-party, local counsel should be consulted at the earliest opportunity.
Mark Chudleigh
Sedgwick Detert Moran & Arnold LLP
120 Cannon Street
London EC4N 6LR
Tel: + 44 20 7929 1829
Fax: + 44 20 7929 1808
Email: [email protected]
Note:
To extent that opinions are expressed in this paper, they are those of the author and not of Sedgwick Detert
Moran & Arnold LLP or its clients. The obtaining of evidence under international laws is a complex
process and it will generally be appropriate to obtain the advice of counsel in the target jurisdiction. This
paper is not intended as a substitute for such advice.
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