Malaysian High Court considers the legal test for obtaining subpoenas in aid of arbitration

In Coneff Corporation Sdn Bhd v Vivocom Enterprise (Originating Summons No. WA-24C(ARB)-26-06/2019) the Malaysian High Court for the first time considered the test for an application to subpoena a witness to produce documents for the purpose of an arbitration and give evidence in arbitration proceedings.

Background

The plaintiff (“Coneff”) appointed the defendant (“Vivocom”) to construct and complete a mixed commercial and residential development project in Kuala Lumpur. Disputes arose concerning the adequacy of piling works done by Vivocom’s piling sub-contractor, the latter having appointed Geonamics (M) Sdn Bhd (“Geonamics”), to conduct Pile Driving Analyser (“PDA”) tests to ascertain the integrity of a number of the constructed bored piles.

As a result of expert opinion obtained in the course of the arbitration which cast doubt on the integrity of the PDA test results, Coneff obtained a High Court subpoena against an employee of Geonomics (“Applicant”) to produce the PDA raw data to Coneff, and to give evidence in the arbitration.  On an application by the Applicant, the High Court set aside the subpoena to give evidence in the arbitration, but upheld the subpoena to produce documents. Given that the decision is currently under appeal, the High Court produced written grounds for its decision, being the first written judgment addressing the principles relating to the exercise of a Malaysian court’s power to assist in the taking of evidence for arbitration proceedings under the Arbitration Act 2005.

Analysis of the High Court

The High Court considered the validity of the subpoenas by reference to three criteria: (a) their relevance and materiality to the issues in the arbitration; (b) the precision in which the documents were identified; and (c) whether the subpoena was sought for a non-legitimate purpose or was oppressive (in other words, whether they were necessary for the fair disposal of the arbitration).

In upholding the subpoena to produce documents, the High Court appeared mindful to consider its relevance and materiality by any “pivotal issue in the arbitration proceedings as disclosed from the pleadings or statements of case of the parties”, and refrained from making any analysis as to the cogency or effect of the evidence on the issue of whether the bore piles were constructed adequately. The court did not consider the subpoena to be a fishing expedition, given the degree of specificity in the identification of the documents. In view of these, the High Court was of the view that it is fair and just that all relevant evidence must be made available before the arbitrator.

However, the High Court did set aside the subpoena to give evidence in the arbitration. The Applicant was not a material witness given the disconnect between his period of employment and the time the PDA testing was carried out, which meant that the Applicant would not have personal knowledge on how the PDA raw data was derived. It would be oppressive and embarrassing for him to therefore appear in the arbitration as a witness.

Comment

In what appears to be the first written judgment addressing section 29 of Malaysia’s Arbitration Act,  the principles set out by the High Court appear somewhat in line with the position taken by leading arbitration jurisdictions such as London and Singapore in court proceedings for the taking of evidence in aid of arbitration.

Section 29 of Malaysia’s Arbitration Act 2005 is modelled after Article 27 of the UNCITRAL Model Law on International Commercial Arbitration 1985, albeit with slightly different language.

Section 29 reads:

• Any party may with the approval of the arbitral tribunal apply to the High Court for assistance in taking evidence
• The High Court may order the attendance of a witness to give evidence or, where applicable, produce documents on oath or affirmation before an officer of the High Court or any other person, including the arbitral tribunal.

whereas Article 27 of the Model Law reads:

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.

Notably, section 29 of the Arbitration Act differs from Article 27 of the UNCITRAL Model Law, in that the Malaysian provision omits any reference to the second sentence of Article 27. It is not apparent whether the difference in wording is meant to be of any significance. However, a number of potential differences could spell the need for further judicial guidance on the intended scope of court intervention envisaged by section 29.

It is unclear whether the court’s discretion in section 29(2) relates to the types of assistance it may render, such as the form of subpoena and to whom such documents or witness evidence is to be produced, or whether it relates to a discretion to refuse (and set aside where appropriate) a subpoena by reference to its competence and rules on taking evidence. Given the legislative departure from the second sentence of Article 27, should a Malaysian court be guided by its rules of court and evidence when issuing a subpoena? Factually, it is not apparent whether approval of the arbitrator was obtained (and if so, in what form), but it did not appear to be in issue. A pivotal question raised by this is whether a Malaysian court is entitled to refuse a subpoena in the event an arbitral tribunal approves that a subpoena be sought from a Malaysian court.

The decision is currently under appeal in the Court of Appeal, and it remains to be seen whether there will be further clarity on a Malaysian court’s power and discretion under section 29.

The judgment of the High Court is available in English here.

For further information, please contact Peter Godwin, Regional Head of Practice – Dispute Resolution, Asia and Managing Partner, Kuala Lumpur, Daniel Chua, Associate, or your usual Herbert Smith Freehills contact.

Disclaimer

Herbert Smith Freehills LLP is licensed to operate as a Qualified Foreign Law Firm in Malaysia. Where advice on Malaysian law is required, we will refer the matter to and work with licensed Malaysian law practices where necessary.