Court considers scope of its powers exercisable in support of UNCITRAL arbitral proceedings

VXJ -v- FY & others [2025] EWHC 2394 (Comm)

Under s.43 of the Arbitration Act 1996, an arbitral party may, with a tribunal’s permission, ask the English Court to order that a witness should attend before a tribunal in order to give oral testimony or to produce documents or other material evidence.

The Court in this case has made it clear that its powers in this regard did not extend to ordering a non-party to make disclosure in the arbitration proceedings. This was impermissible and neither the Court nor the Tribunal had such a power.

The decision usefully clarifies how the Court may permissibly exercise some of its powers in support of arbitral proceedings.

The background facts

The underlying dispute related to an investment agreement concluded in November 2009 concerning a minerals mining project (Investment Agreement).

The mining project was a joint venture between X (which was majority owned by the second defendant, D2) and Y (a company owned by the claimant, C). The parties to the Investment Agreement were C and the first defendant, D1. D1 is a subsidiary of the third defendant, D3.

In January 2018, C issued a Penalty Notice by which it purported to impose taxes, fines and penalties on D1. D1 contended that the Investment Agreement provided for a tax stabilisation regime (which would be designed to protect an investor party from adverse changes in the host country’s laws and regulations). Nonetheless, C subsequently purported to impose further taxes and penalties on D1, with the total sum imposed amounting to several hundred million dollars.

In January 2020, D1 commenced arbitration proceedings, seated in London, under the 2013 UNCITRAL Rules as provided for in the Investment Agreement. D1 claimed the sums imposed by C as damages in the arbitration, alleging that C had breached the Investment Agreement.

In its defence and counterclaim, C alleged that a number of ex-government officials of C (and one other person) had engaged in corrupt activity at or around the time the Investment Agreement was entered into and inferred that this corruption implicated the defendants. C further alleged that D1 had breached its duty of care due to project delays caused by mismanagement of the mining project, which adversely affected the timely receipt of revenues.

In 2022, the third defendant (D3) acquired X and now accordingly indirectly holds 66% in D1. D2 is also a subsidiary of D3. D2 and D3 are English incorporated companies. C sought to join X and D2 to the arbitration, but the Tribunal refused the application.

Document production requests

Procedural Order 15 (PO15)

Pursuant to its counterclaims, C made document production requests by way of disclosure in the arbitration. In respect of documents held by C’s controlling shareholders and affiliated companies, including D2, D3 and X, the Tribunal noted that D2, D3 and X were the companies that had set up D1 as a joint operating company to perform the Investment Agreement with C. Therefore, they would be expected to have certain documents in their files that were relevant and material to the issues in dispute.

This did not mean that D1 had legal authority to direct those companies to search their files and produce documents. While a parent company might have the power to instruct its subsidiary with respect to document production, this did not mean the reverse was possible.

However, the Tribunal directed D1 to make best efforts to obtain responsive documents from D2, D3 and X and to emphasize to these shareholders the Tribunal’s request that they assist D1 diligently and in good faith in that regard. D1 was to report back in this regard. In the event that D2, D3 and X took an uncooperative stance, the Tribunal indicated this would weigh with the Tribunal i.e. that it might potentially draw an adverse inference from the non-cooperation.

The documents requested in this regard were referred to compendiously as the Corruption Investigation Documents and the US Proceedings Documents. The latter were documents submitted in certain US proceedings involving X that were not publicly available or already submitted in the English proceedings.

Procedural Order 16 (PO16)

In March 2025, C applied to the Tribunal, alleging that D1 had failed to comply with the rulings in PO15 and seeking the Tribunal’s permission to apply to the Court under ss.43 and 44 of the Arbitration Act 1996 (1996 Act).

S.43 of the 1996 Act deals with securing the attendance of witnesses. S.44 of the 1996 Act deals with the Court’s general powers exercisable in support of arbitral proceedings. Pursuant to s.43(1), C sought an order to secure the attendance of a witness to give oral testimony or to produce documents or other material evidence. Pursuant to s.44(2)(c), it sought an order for the inspection, photographing, preservation, custody or detention of property.

The Tribunal noted that D2, D3 and X had rightly stated that they were not parties to the arbitration and under no obligation to produce documents in connection with the arbitration. Nonetheless, on the advice of their lawyers, they had undertaken a confidential internal investigation with regard to the allegations made by C. In respect of the specific document requests, they contended that the documents in question were either subject to legal professional privilege and non-disclosable. Further or alternatively, they were highly confidential and contained commercially sensitive information. The documents were, therefore, withheld on either or both bases.

The Tribunal found there was force in these objections but nonetheless granted C permission to make its application to the Court. However, the Tribunal distinguished between documents which D1 had already searched for but could not find (for which its permission was withheld) and documents withheld by D2 and D3 as controlling shareholders either on grounds of legal privilege or commercial sensitivity (for which permission was granted).

The Commercial Court decision

S.43 application

The Court made it clear this was not an application for disclosure against a non-party to the arbitration because neither the Tribunal nor the Court had the power to make such an order.

Furthermore, on the authorities:

1. Each document should be individually identified in the witness summons, although a compendious description of several documents would suffice provided that the exact document in each case was clearly indicated.

2. The person to whom the witness summons was addressed should be told clearly when and where he must attend and what he must bring with him. The documents must be identified with sufficient certainty to leave no real doubt in the mind of the person to whom the summons was addressed about what he was required to do.

3. The particular documents must be actual documents, about which there was evidence which had satisfied the Court that they existed and that they were likely to be in the respondent’s possession. Actual documents were to be contrasted with conjectural documents which may or may not exist. It was sufficient to show that the specified documents were likely to exist, but it was not sufficient to show that they may or may not exist.

4. Where the applicant had not seen the documents sought and did not know what they contained, the application could be more readily characterised as a discovery exercise (and impermissible), unless the applicant could demonstrate that it was likely that specific, relevant documents existed.

5. The documents must be shown to be relevant to the proceedings and accordingly necessary for the fair disposal of the matter. The applicant was not entitled to seek production of documents with a view to ascertaining whether they may be useful rather than with a view to adducing them in evidence of proof of some fact. The fact that the material before the arbitrator might be improved by the production of the documents did not necessarily justify the conclusion that the arbitrator was unable to dispose fairly of the arbitration without them.

6. The witness must not be faced with an unnecessarily burdensome task in searching through their records to find a document or see if they had any relevant documents.

The Court found that C had not satisfied these requirements, and its s.43 application was dismissed. Among other observations, the Court found some requests were not for specific documents but for conjectural documents that may or may not exist. Some requests were effectively a fishing exercising and an attempt to see if C could find material substantiating its mismanagement allegations. And other documents requested were not necessary for the Tribunal to dispose fairly of the matter.

S.44 application

Given the failure of the s.43 application, the application under s.44(2)(c) also failed. The Court had already found that C’s documentary requests were more in the nature of an application for disclosure by a non-party; they were not sufficiently precise; and they had not been shown to be relevant and necessary for the fair disposal of the issues in the arbitration.

Consequently, this was not a case where the preservation of the contents of the documents sought for the purpose of resolving the issues in the arbitration was a consideration of such weight as to justify the exercise of the Court’s jurisdiction under section 44.

The Court also drew attention to the fact that certain requested Corruption Investigation Documents were held on an inaccessible archive maintained by a third-party law firm. The archive would have to be restored at considerable expense and then searched by key word searches. The Court’s power to order inspection or imaging of a database or archive with associated access to a third party’s computer required consideration of whether it was necessary and proportionate for the Court to make such an order.

In any event, the Court did not have jurisdiction under s.44(2)(c) in a case such as this to order the production of documents by a non-party for copying in aid of an arbitration. S.44(2)(c) concerned the making of an order relating to property which was the subject of the proceedings or as to which a question arose in the proceedings, for its inspection, photographing, preservation, custody or detention.

This provision was not concerned with an order for the disclosure of documentary evidence (that is, disclosure of the information contained within a document) but rather with inspecting, photographing, safeguarding or preserving the actual property (which could in principle be the document itself) which formed the subject matter of the proceedings or where a question arose in the proceedings in respect of that property.

Comment

While the s.43 application failed, the Court pointed out that it remained open to the non-party defendants voluntarily to provide further disclosure via D1 if they held relevant documents which were necessary to the fair disposal of the arbitration. If C were to persuade the Tribunal that that was so but the non-party defendants had chosen not to do so, it was then a matter for the Tribunal to decide what inferences, if any, it should draw in that respect, as it had already envisaged in PO15.