The Respondent’s application for a letter of request to be issued to “obtain statements” from the Arbitrator and the tribunal’s secretary (Letter of Request Application)

In support of the Setting Aside Application (particularly the Hearing Complaint), the Respondent applied, under the Arrangement on Mutual Taking of Evidence in Civil and Commercial Matters between the Courts of the Mainland and the HKSAR (Arrangement), for a letter of request to be issued to “obtain statements” from the Arbitrator and the tribunal’s secretary on, among others, the following matters:

1. The Arbitrator’s locations and movements at the time of the Hearing;
2. The duration of the Arbitrator’s stay at each location;
3. The identities of the people around the Arbitrator at the Hearing;
4. Whether the Arbitrator had participated in the questioning and examination at the Hearing;
5. The electronic equipment or facility utilised by the Arbitrator at the Hearing; and
6. Whether there were any security measures in place in respect of the communication facilities at the time the Arbitrator was electronically linked to the Hearing.

The legal principles applicable to the Setting Aside Application and the Letter of Request Application

The Judge held that, as the Setting Aside Application was made to the Hong Kong court to refuse enforcement of the Mainland Award, it should be determined by the Hong Kong court pursuant to Hong Kong law. It was therefore wrong for the Respondent to simply rely on

PRC law or authorities to argue that the mainland court might have power to direct an arbitrator or the tribunal’s secretary to provide evidence to the mainland court in proceedings in mainland China.

Further, the Judge held that the Hong Kong court would not issue a letter of request if the evidence to be obtained would not be admissible for the determination of the Setting Aside Application in Hong Kong in any event.

The Hong Kong court’s decision not to issue a letter of request and reasoning

In declining to issue a letter of request for evidence to be obtained from the Arbitrator and deciding that the Arbitrator should not be compelled to give evidence in relation to the Settling Aside Application, the Judge held that:

1. The competence of arbitrators to give evidence did not mean that they could be compelled to give evidence. Arbitrators should be entitled to the same judicial immunity available to judges in respect of their decision-making in the process of arbitration, absent fraud or bad faith, which meant that arbitrators should be immune from being compelled to testify in relation to how they exercised their arbitral functions in arbitration.
2. Arbitrators performed and exercised a judicial or quasi-judicial function comparable in nature and process to that of judges. As such, there was a need to protect the course of their independent judgment from threats of suit as well as from collateral attacks.
3. The Hong Kong court’s policy of encouraging and aiding arbitrations and of upholding parties’ choice of arbitration as the manner of final resolution of their disputes was reflected in the Ordinance. This referred to the facilitation of the fair and speedy resolution of disputes by arbitration without unnecessary expense and the Hong Kong court’s non‑interference in arbitrations save as expressly provided for in the Ordinance.
4. It was not conducive to the policy of arbitral autonomy and contrary to the objectives of procedural and costs economy to define areas or matters on which an arbitrator might be compelled to give evidence. It was unnecessary to call evidence from the Arbitrator when evidence such as matters which had been included in the submission to arbitration or as to what had taken place before the arbitrator could be ascertained from the documents served in the arbitration and from the award itself.
5. Judicial immunity safeguarded judicial independence and was invoked to defeat liability claims against judges. Judges were immune for any act committed in the exercise of their judicial functions and such immunity protected a judge from being compelled to testify as a witness in relation to the exercise of their judicial functions. Such immunity was an essential foundation for judicial and arbitral integrity and independence, to ensure that arbitrators and judges would be able to make their decisions on the right result without fear or distractions as to whether they could be made liable for claims of any party.
6. As it was within the power and discretion of the tribunal, including the Arbitrator, to decide whether to allow the Hearing to take place remotely and how it should be conducted, it was open for the Respondent to make the proper objection to the tribunal at the relevant time or to challenge the Award on the grounds set out in section 95 of the Ordinance. However, it was not open to the Respondent to compel the Arbitrator to justify or explain, or give evidence generally on, his conduct of the process of the Hearing or how and why he exercised his power and discretion to proceed with the Hearing in the manner in which it was held.

Conclusion

This is an important case for arbitrators in Hong Kong and beyond. It confirms that arbitrators are generally immune from suits or being compelled to give evidence in relation to their exercise of the arbitral functions. As highlighted in the judgment, such arbitral immunity is essential to ensure that arbitrators, like judges, are able to perform their functions as arbitrators and decide arbitral cases without fear that they will be sued or compelled to give evidence by any party. This decision highlights the pro-arbitration stance of the Hong Kong court and illustrates why Hong Kong is widely regarded as one of the most popular arbitral seats for international arbitration.

Client Alert 2023-187