On 29 December 2016, the Executive Vice-President of the Supreme People’s Court and the Secretary for Justice of the Government of the HKSAR signed in duplicate in Shenzhen the Arrangement on Mutual Taking of Evidence in Civil and Commercial Matters between the Courts of the Mainland and the HKSAR(“the Arrangement”), which came into force on 1 March 2017.
The aim of the Arrangement is to assist litigants of the Mainland and the HKSAR to obtain evidence in civil and commercial matters with enhanced efficiency and greater certainty.
Under the Arrangement, the requests for the taking of evidence must be made through the respective designated liaison authorities, namely, the Higher People’s Courts of the Mainland and the Administration Wing of the Chief Secretary for the Administration’s Office of the HKSAR Government. The Supreme People’s Court may request the taking of evidence directly through the designated liaison authority of the HKSAR (see Article 2 of the Arrangement).
Upon receipt of a letter of request (which should be in Chinese language), the liaison authority of the requested party shall promptly transfer the letter of request and all relevant material attached to the relevant court or other authorities for processing, or carry out the processing itself (see Article 3 of the Arrangement).
The scope of assistance that may be requested by the courts in the Mainland and Hong Kong is different (see Article 6 of the Arrangement).
The scope of assistance that may be requested by a People’s Court of the Mainland includes (1) examination of witnesses; (2) obtaining of documents; (3) inspection, photographing, preservation, custody or detention of any property; (4) taking of samples of any property or carrying out of any experiments on any property; and (5) medical examination of any person.
On the other hand, the scope of assistance that may be requested by a Hong Kong Court includes (1) obtaining of statements from parties concerned and testimonies from witnesses; (2) provision of documentary evidence, real evidence, audio-visual information and electronic data; and (3) conduct of site examination and authentication.
The requested party shall arrange the taking of evidence in accordance with the provisions of the law of its own jurisdiction.
The procedural rules for the Hong Kong courts to issue letters of request to seek assistance from courts outside Hong Kong are set out in Order 39, Rules 1 to 3A of the Rules of the High Court (“RHC”), whereas the procedural rules for giving effect to letters of request from outside Hong Kong are set out in Order 70 of the RHC.
Song v Lee
In the recent decision of Song Lihua v Lee Chee Hon HKCFI 1954 (“Song v Lee”), the Hong Kong court (“the Court”) was engaged to consider an application made pursuant to the Arrangement.
On 12 January 2023, the Court granted leave (“the Enforcement Order”) to the Applicant (“Song”) to enforce in Hong Kong an arbitral award of the Chengdu Arbitration Commission, under which the Respondent (“Lee”) was ordered to pay a sum to Song.
On 26 January 2023, Lee applied to set aside the Enforcement Order (“the Setting Aside Application”). Subsequently, Lee applied to the Court under the Arrangement for a letter of request to be issued to the Mainland court (“the Request”) to obtain statements from the arbitrator and from the secretary of the tribunal on matters relevant to the arbitral hearing subject to the Setting Aside Application.
The Court held that it was erroneous for Lee to rely simply on PRC law or authorities on the power of the Mainland court on the question of whether an arbitrator can be compelled to give evidence on a challenge to the award. The fact that the Mainland court may have power to direct an arbitrator or the secretary of the tribunal to provide evidence to the Mainland court in the Mainland proceedings does not mean that the Hong Kong court has similar power regarding the Setting Aside Application.
The Court observed that while the parties’ underlying contract was governed by PRC law, which may also govern the parties’ arbitration agreement and the procedure of the arbitration itself, the hearing of the Setting Aside Application in Hong Kong was governed by Hong Kong law so far as it related to the procedure and the admissibility of evidence. Hence the parties’ PRC law experts had no qualification to express any opinion.
Importantly, the Court held that:
“18. The fact that the Arrangement does not set out the circumstances when the Hong Kong Court may request assistance from the Mainland Court does not mean that the Hong Kong Court can or should make the request for assistance in any case without consideration of the relevance or admissibility of the evidence. It is against common sense, and a waste of costs and resources, for the Court to issue a request to obtain evidence, simply because the request can be made on or within the terms of the Arrangement, if the evidence is not admissible in the Setting Aside Application to be determined by the Hong Kong Court.” (emphasis added)
As Lee failed to demonstrate that the evidence sought was relevant to and admissible in the Setting Aside Application, the Court accordingly dismissed Lee’s application.
The Court also confirmed that arbitrators should be entitled to judicial immunity. Such immunity protects the arbitrators from being compelled to testify as a witness in relation to the exercise of their judicial functions in the arbitrations:
- The competence of an arbitrator to give evidence does not mean that he can be compelled to give evidence.
- Arbitrators should be entitled to the same immunity available to judges in respect of their decision-making process of arbitration, absent fraud or bad faith. The purpose and rationale for such immunity is the protection of the discretionary and independent decision-making process of the arbitrator who performs a judicial function.
- It is also in line with the public policy and the court’s interest in encouraging private dispute arbitration and to protect the autonomy of the arbitral process.
- It was not open to Lee to compel the arbitrator to justify or explain or to give evidence on his conduct of the process of the arbitral hearing or of how and why he exercised his power and discretion to proceed with it in the manner in which it was held.
Insofar as the request for evidence from the secretary of the tribunal is concerned, the Court made clear that it should be, but was not, satisfied, as to the relevance, necessity and probative value of the evidence sought. On the facts of the case, including the fact that similar evidence could be given by Lee himself or those advising or assisting him, the Court held that it would be totally disproportionate to issue the Request for the limited evidence which the secretary to the tribunal might provide and the interests of justice would not be defeated by the court declining such application.
To wrap up, the decision in Song v Leeserves as an important reminder to the practitioners of the following matters.
First, it is pertinent that an application made to the Hong Kong court to refuse enforcement of the Mainland award on the grounds set out under section 95 of the Arbitration Ordinance(Cap. 609) is to be determined by the Hong Kong court according to Hong Kong law. The Hong Kong court would not issue request to obtain evidence from the Mainland court made by a party simply because the request can be made within the terms of the Arrangement if the evidence is not relevant or admissible for the purpose of the setting aside application under Hong Kong law before the Hong Kong court.
Second, the entitlement of arbitrators to judicial immunity in respect of their decision-making process of arbitration is confirmed, absent fraud and bad faith. Such immunity is rightly an essential foundation for judicial and arbitral integrity and independence, as it ensures that arbitrators and judges can make their decisions and come to the right results without fear or distractions as to whether they could be subject to and made liable for claims of any party.