Obtaining Information in Arbitration: The Power of Tribunals

Without sounding too much like the legal version of a Marvel film, the powers of an arbitral tribunal are very well-established in many jurisdictions.

In the course of evaluating whether to refer a dispute to arbitration, parties might also take the opportunity of weighing up any benefits of going through the courts.

One suggestion might be that key information would be harder to procure in arbitration, particularly if it is anticipated that certain parties (or third parties), might be unwilling to cooperate.

This article will look at whether the suggestion above is fair, or whether the power of the tribunal, in ensuring the production of a prompt and fair award, should be regarded as being on a par with that of the English courts (“the Courts).

The power of the arbitral tribunal

The Arbitration Act 1996 (“the Act”) allows a tribunal to decide all procedural and evidential matters (S. 34) of the arbitration, subject to the right of the parties to agree any matter.

In addition to this, any institutional arbitration rules that are applied, such as those of the LCIA, will act as a supplement to the Act, where the Act permits it, often filling in the gaps of a tribunal’s powers to ensure cooperation between parties.

What information might need to be obtained in an arbitration?

Depending on the dispute at hand, and certainly the complexity, parties may need to find and submit a range of documents as evidence.

In some cases, parties might require the tribunal to make an order to disclose or source certain types of evidence, including against those who are not parties to the arbitration. Such circumstances might include:

• Obtaining records of financial transactions
• Analysis of financial documents as necessary
• Identifying witnesses
• Ensuring witnesses attend evidentiary hearings as necessary
• Sourcing documents from different jurisdictions
• Sourcing documents from uncooperative parties or third parties
• Identifying owners of assets

How can this information be obtained?

To obtain the information necessary for a party’s case, a tribunal can order parties to:

1. Disclose documents
2. Preserve evidence
3. Preserve assets
4. Ensure the correct format of evidence is adhered to
5. Summon witnesses to attend an evidentiary hearing

The consensual and private nature of arbitration (indeed, one of its main draws, particularly in high-profile cases, such as arbitrations involving States) means that tribunals usually lack the authority to compel third parties to disclose information.

If a third party is not subject to the tribunal’s jurisdiction, judicial assistance may be required from the Courts in order to obtain the information required.

Non-compliance with the orders of the tribunal

Section 41 of the Act can be applied in more serious situations of non-compliance. This, in short, enables a tribunal to completely dismiss a non-compliant party’s claims or to proceed to make an award on only the evidence before it.

It might be applied if breaches cause a significant delay in getting to the final award. Unwillingness to cooperate with the parties’ respective obligations could mean the tribunal makes an adverse inference.

Essentially, the tribunal may draw its own conclusions as to why a party may be unwilling to disclose a particular piece of information.

Supportive powers of the Courts

To further assist the tribunal and the arbitration, the Court can help to fill some gaps in the tribunal’s abilities.

The Court might be able to assist when:

• Compliance with a peremptory order is required by the tribunal
• The tribunal cannot make the order required, such as against non-parties to the arbitration
• The tribunal cannot act effectively, for any reason
• The tribunal has not yet been formed, such as in the early stages of the arbitration
• Preserving assets or evidence through an interim injunction

Limitations of the Courts in arbitration

Part of the reason why English law is such a desirable governing law in many international disputes, is that the Courts only have limited powers to intervene. This greatly improves the perceived (or actual) neutrality, and by extension, the fairness of the arbitration.

The rules surrounding the Courts’ intervention in arbitration are designed to support rather than to displace. As a general principle, the Court can only intervene when any other arbitral process has been exhausted.

Summary

Whilst the powers of an arbitral tribunal are not as extensive as that of the Courts (even Superman has a kryptonite), a fair and swift resolution can still be achieved through arbitration.

In practice, involvement of the Courts is rarely needed in most commercial arbitrations seated in England and Wales (i.e. London). A more pressing concern to the parties is usually having a practical, time-sensitive resolution to the dispute at hand, with a view to saving both parties time and the cost of litigation.

In jurisdictions that may have a less well-established relationship between its courts and arbitral institutions than that enjoyed in England and Wales, the full powers of a tribunal may not always be properly deployed, causing a greater threat to the perceived neutrality of the proceedings.

As such, arbitration remains an excellent choice to resolve disputes, particularly for cross-border or international cases, that is only improved by the (English) Courts’ non- interventionalist approach to arbitration.

For legal advice regarding dispute resolution in the UK or internationally, get in touch with the expert team at Carlsons Solicitors.