Samsung C&T Corporation, in the matter of Samsung C&T Corporation [2017] FCA 1169: The limits of the Court's jurisdiction to issue subpoenas under section 23 of the IAA.
Section 23 of the International Arbitration Act 1974 (Cth) (IAA) provides that a party to arbitral proceedings commenced pursuant to an arbitration agreement may apply to a court to issue a subpoena. Thus Samsung C&T Corporation (Samsung) filed an application on 5 September 2017 to the Federal Court seeking leave to issue subpoenas to third parties in Australia for documents that it considered were relevant to its arbitration with Duro Felguera Australia Pty Ltd in the Singapore International Arbitration Centre (SIAC).
That Gilmour J had granted an application under section 23 by Samsung earlier on 21 March 2017, in similar circumstances where there was no opposition nor real contradictor, was likely to reassure its advisors that the application on this occasion would too be granted.
However, Gilmour J made an order to the contrary1. At [2] his Honour stated that the "decision to grant leave [on the previous occasion] was not only wrong, but was clearly wrong". The threshold question as to whether the Court had jurisdiction to make the orders sought under section 23 was not in substance addressed in the initial application but was erroneously assumed.
Upon a textual, purposive and contextual reading of section 22A and 23 of the IAA, his Honour determined that the Court had no such jurisdiction.
The application turned on the whether the meaning of "court" in section 23 and defined by 22A(c) to include "in any case - the Federal Court of Australia", extended to foreign-seated arbitral proceedings.
Samsung contended for a broad construction of the phrase. It submitted that to impose a territorial limit to the Court's jurisdiction to issue subpoenas under section 23 would involve unnecessarily reading words into the section. Moreover, it would be contrary to the underlying legislative intent of the section that is to encourage international arbitration taking place in Australia.
His Honour rejected Samsung's submissions in preference of a narrow construction. As the term "court" is defined in the remaining paragraphs of section 22A by reference to the geographical location of the arbitral proceedings as being in Australia it was appropriate to apply a restrictive interpretation to section 23 and the jurisdiction it so enlivened.
Gilmour J observed that this narrow approach was supported by the absence words expressly conferring jurisdiction to the Court to make orders relating to domestic as well as international arbitral proceedings, which are present elsewhere in the IAA, in particular the Model Law in Schedule 2.
On the basis that the Court had no jurisdiction to grant leave to issue subpoenas under section 23 of the IAA insofar as they related to foreign-seated arbitral proceedings in SIAC, Samsung's application was dismissed.
The judgment of Gilmour J, at first glance, may appear to pose a substantial, practical impediment for those involved in foreign arbitration proceedings who wish to obtain documents in Australia for evidence. Yet his Honour was careful to state in obiter at [51], that there are alternative avenues to obtaining evidence for arbitration. In that case, Samsung could refer to the Hague Evidence Convention as both Australia and Singapore were contracting parties to it2. Under the Convention a central authority of the requesting state could send a letter of the central authority of another state for the taking of evidence.
Footnotes
1Samsung C&T Corporation, in the matter of Samsung C&T Corporation [2017] FCA 1169
2 Hague Convention on the Taking of Evidence Abroad in Civil or Commercial Matters, opened for signature on 18 March 1970, 847 UNTS 241 (entered into force on 7 October 1972).
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