HONG KONG COURT CONFIRMS JUDICIAL IMMUNITY TO ARBITRATORS WHEN COMPELLED TO GIVE EVIDENCE

In Song Lihua v Lee Chee Hong [2023] HKCFI 1954, the Court of First Instance considered whether arbitrators can be compelled to give evidence in proceedings to challenge their awards, in this case an application to set aside an order granting leave to enforce in Hong Kong an arbitral award of the Chengdu Arbitration Commission.

The Court recognised the quasi-judicial function of arbitrators and held that arbitrators should be entitled to the same immunity available to judges in respect of their decision-making in an arbitration, except in situations of fraud or bad faith, and that such immunity included in this context immunity from being compelled to give evidence as witnesses in relation to the exercise of their quasi-judicial functions.

Background

In January 2023, the Court had granted leave to the Applicant, Song to enforce in Hong Kong an arbitral award of the Chengdu Arbitration Commission.  The Respondent applied to set aside that order on the grounds that: (i) the arbitration agreement was not valid; (ii) the Respondent was unable to present his case; (iii) the composition of the Tribunal or arbitral procedure was not in accordance with the parties' agreement; and/or (iv) it would be contrary to the public policy to enforce the award.

In support of his application, the Respondent made a number of complaints about the arbitration process.  This included the fact that one of the arbitrators, QF, was not physically present at one of the arbitration hearings, but attended remotely, and in public, moving from place to place and using his mobile phone without earphones.  The Respondent argued that these facts were relevant to his setting aside application on the grounds that it would be contrary to public policy to enforce the award, when the proceedings were conducted in such a manner.

The Respondent accordingly issued a Summons under the Arrangement on Mutual Taking of Evidence in Civil and Commercial matters between the Courts of the Mainland and the HKSAR ("Arrangement"), to seek assistance from the Mainland Court to obtain testimonies from QF, and the Tribunal Secretary, which he intended be used as evidence in and for the purpose of his application.  This decision was the Court's ruling on the Summons.

Decision

The Summons was rejected by the Court

As a starting point, even though the Summons was made under the Arrangement and required the assistance of the Mainland Courts, the Court clarified that Hong Kong law – not PRC law – would govern the procedure and admissibility of evidence for the purposes of the Summons, given the underlying set aside application was made to a Hong Kong Court (and was governed by Hong Kong law).

In particular, the Court pointed out that while the Arrangement does not set out the circumstances when assistance from the Mainland Court may be requested, it is necessary for the Court to consider the relevance or admissibility of the evidence before requesting assistance.  Seeking assistance under the Arrangement for evidence that would later be determined as inadmissible by a Hong Kong Court would otherwise be a waste of costs and resources.

In considering the Summons, the Court therefore had to decide whether the evidence requested by the Respondent would be admissible under Hong Kong law.

The Court noted in this respect that the authorities cited before the Court were not directly relevant as they focused on the competence of arbitrators to give evidence.  Mimmie Chan J commented that an arbitrator's competence to give evidence as a witness did not mean that he or she can be compelled to do so.

In considering whether an arbitrator can be compelled to give evidence in a set aside application, the Court referred to the following:

1. the substantial growth in the popularity of arbitrations and the increase in parties' choice of arbitration over the last three decades (in lieu of having the matter litigated);
2. the general pro-arbitration approach and policy in the context of recognition and enforcement of arbitration agreements and arbitral awards as judgments of the court;
3. the recognition that arbitrators perform a judicial or quasi-judicial function, where there is a need to protect their independent judgments from threats of suits and collateral attacks; and
4. the Court's policy of encouraging and aiding arbitration, without interference unless expressly provided for in the Arbitration Ordinance.

Based on its observations and having regard to a line of Canadian case law, where the concept of arbitral immunity had been considered and applied, the Court held that arbitrators should be entitled to the same immunity available to judges in respect of their decision-making in the process of arbitration, absent fraud or bad faith. Further, that the extension of judicial immunity to arbitrators means that an arbitrator is likewise immune from being compelled to testify in relation to how he or she exercised his/her functions in the arbitration. Relevantly, the Court held that such immunity is essential to judicial and arbitral integrity and independence, to ensure that arbitrators can make their decisions without fear or distractions as to whether they could be liable for claims by any party.

The Court commented that arbitral immunity and autonomy would become illusory if parties were able to compel arbitrators to give evidence on their decision-making, such as on their exercise of power and discretion in the arbitral process.  Similarly, a party's ability to compel an arbitrator to give evidence would not be conducive to the policy of arbitral autonomy and would be contrary to the objectives of procedural and costs economy.

On the facts of the case, the judge decided that the conduct of the hearing, including the manner in which QF attended the hearing, was part of the Tribunal's decision-making process and within its control.  Despite recognising the Respondent's right to challenge the arbitration award under the Arbitration Ordinance, the Court made clear that it was not open to the Respondent to compel QF, as the arbitrator, to give evidence generally on his conduct and how he exercised his power and discretion with respect to the hearing during the arbitration.  The Court found that these were matters which anyway could be ascertained from the documents served in the arbitration, and from the award itself, and so it was unnecessary to call evidence from the arbitrator. Accordingly, the application to compel QF to give evidence was rejected.

The request in respect of the Tribunal Secretary was also rejected.  In this regard, although immunity was not extended to the Secretary, the Court approached the issue by considering the relevance, necessity and probative value of the evidence sought from the Tribunal Secretary.  In circumstances where similar evidence could be given by the Respondent or those advising or assisting him, the Court held it would be totally disproportionate to grant the order against the Tribunal Secretary for the limited evidence that may be provided.

The Summons was therefore dismissed and costs against the Respondent was ordered.

Commentary

This decision is an important case for arbitration in Hong Kong, especially for arbitrators.

This issue on arbitral immunity is not commonly raised before supervisory courts, so this case serves as helpful confirmation on the position under Hong Kong law that, save for instances concerning fraud or bad faith, arbitrators benefit from 'judicial immunity', which means that they are likewise immune from being compelled to give evidence in connection with any challenge to their awards.  Notably, this position is reflected in Article 46 of the HKIAC Rules, which expressly excludes liability for any act or omission of arbitrators - and tribunal secretaries - in connection with any arbitration under the HKIAC Rules.