COMMODITY ARBITRATION CLUB
Note of the lunch held at Davies Arnold Cooper. Monday 3 Oct 2005
There were two topics:
1. Evidence A scenario was posed, the buyers in an arbitration ask for disclosure of certain documents. They say that they are important to the arbitration. The sellers say that the documents are with an ex employee who will not give them up.
Initially many were sceptical of the sellers’ motives in so much that in this electronic age a copy of some sort was not available. If the seller confirms that the documents were in their possession and control but are no longer due to the actions of the ex employee there is not much more the Tribunal can do. The Tribunal though should be careful in making any adverse inference based on the sellers simple statement, it is for the buyer to disprove to the Tribunal that the seller is perhaps being economical with the truth before the Tribunal can come to an adverse view. The situation may be unfortunate but that is as far as it goes. Having made an order for the production of documents, and this order has not been complied with then it is incumbent on the Tribunal to warn the parties that they may possibly draw an adverse opinion because of the lack of production i.e. the parties should be warned.
Is it necessary for the Tribunal to probe as to why the seller no longer has possession of the documents or does the Tribunal take the sellers statement at face value?
Possibly the tribunal could ask for a copy of the employment contract, depending upon what this says the tribunal may be able to draw adverse inference from the employers actions (or inaction). Mention was made of the pre Woolf reforms order 24 when in such circumstances it was necessary for a party to swear an affidavit as to when the party last had the documents, what became of them and when they ceased to be in their power. This may go some way to show who was “at fault” as to why the documents are now missing. Whilst a Tribunal is unlikely to require an affidavit such a statement from the seller would probably assist a Tribunal.
The majority view was that the Tribunal having made the order for production had acted as far as it needed to.
A Tribunal should also be alert to the fact that the seller now having discovered there is a problem in obtaining documents now makes such an issue out of the non disclosure to try and put the buyer on the “back foot”, even though the documents themselves may not add very much to the case.
The buyer could then approach the courts under Section 44 for an order but this can only be done if the party is within the jurisdiction, and with the permission of the Tribunal or the seller.
An interesting point was raised in so much that the ex employee’s new employer may have some sort of passing interest in the case and they may be bringing pressure to bear on their new employee not to co operate.
A comment was made that it is disappointing that tribunals cannot subpoena European Nationals to appear before English tribunals.
2. Fees An arbitrator has agreed his fee with the seller; the buyer says the fee is too high. The arbitrator now fears that if the seller wins he might not get paid.
It was felt that an arbitrator should not agree fees just with one party. Whilst many of those present had more experience of institutional schemes the point was made that it not unusual for fees to escalate when the dispute itself becomes wider ranging that was originally envisaged.
Parties are jointly and severally liable under the law of contract arbitrator is entitled to fees that have been agreed. If A has agreed unreasonably high fees A must pay the fees B is only liable for fees and expenses up to the limit of what is fair and reasonable. If the arbitrator were to sue A the arbitrator would recover the whole of his fees. A could only then recover from B fees that were fair and reasonable. If the arbitrator sued B he could only recover "such reasonable fees and expenses as are appropriate in the circumstances "For the excess above this limit the arbitrator must sue A” Section 28 I covers this area. An arbitrator is entitled though to refuse to deliver his award except upon full payment (Section 56.)
The meeting closed with thanks to the hosts Davies Arnold Cooper.