Admissibility
Burden of proof
Standards of proof
Documentary evidence and privilege
Production of documents
Witnesses
Experts
This article is part of a series on conducting arbitration in Malaysia.(1)
Admissibility
Section 2 of the Evidence Act 1950 stipulates that the Act itself does not apply to arbitration proceedings. The High Court has further recognised that a departure from the rules set out in the Evidence Act does not amount to misconduct in itself, unless there is a violation of natural justice.(2)
The arbitral tribunal normally decides on the issues of relevance, admissibility and the weight to be attached to the evidence tendered at the hearing. Section 21(3)(a) of the Arbitration Act 2005 (the 2005 Act)(3) reinforces this position.(4)
Following its inception in 2010, the International Bar Association Rules on Taking of Evidence in International Arbitration are adopted by the parties as a guideline.(5)
As the tribunal is not bound by the general rules of evidence, most tribunals, in practice, adopt a flexible approach to the admissibility of evidence that may genuinely assist them in determining the dispute.(6) Nevertheless, tribunals will consider the weight to be assigned to evidence of a questionable nature, such as hearsay evidence.(7)
Where a party comes into possession of fresh evidence (that it considers beneficial to its case during a late stage of the evidentiary hearing), that party should apply for leave to introduce said evidence without delay. If the party concerned was unable to obtain the evidence prior to the conclusion of the hearing, it should request that the proceedings be adjourned until the evidence is available, substantiating the request appropriately. If the evidence comes to light after the conclusion of the hearing, but before the final award is delivered, the party should make an application to the tribunal to withhold the issuance of the award pending a further hearing on the matter of the new evidence.(8)
In considering a party's request for an adjournment or further hearing, the arbitrator must decide whether the evidence will be of real value – namely, admissible, material and relevant to the case. An award can be challenged on the ground that a tribunal had wrongly excluded relevant evidence.(9)
If further evidence surfaced after the publication of the award, the arbitrator has no power to take any action as the proceedings are terminated.(10) Arguably, a party in such circumstances may seek recourse from the High Court for an order that the award be remitted for a further hearing as a measure of last resort, but the availability of such a discourse is yet to be conclusively determined by the High Court.(11)
The burden of proving any fact is on the person who wishes to adduce such evidence.(12)
The adversarial approach, as opposed to the inquisitorial approach, is preferred for conducting arbitration proceedings. Mustill and Boyd state as follows:
certain types of dispute, such as those arising out of engineering and building contract, are commonly conducted in a manner comparable to proceeding in the High Court; and an arbitrator seized of such a dispute could not properly apply an informal procedure of the type recognized in shipping and commodity arbitrations, without first warning, and obtaining the consent of, the parties.
In fact, an arbitrator who takes the initiative and conducts an "inquisitorial" arbitration, rather than an "adversarial" arbitration (eg, conducting the examination of witness themselves), runs the risk of being challenged on the basis of misconduct. The authors Redfern and Hunter express an alternate view. They state that the parties, in submitting to arbitrating under arbitration rules that give the arbitrator discretion to determine the procedure to be followed, confer power on the arbitrator to adopt either adversarial or inquisitorial procedures or a mixture as they think fit.
To a large extent, the parties are free to agree in the arbitration agreement what procedure should be adopted and what powers the arbitrator should have in the event of an arbitration taking place. Different conditions apply where the parties choose a high degree of informality based on the arbitrator's experience in a particular trade and are prepared to abjure some of the opportunities to put their case across.
The standard of proof is set on a balance of probabilities. The arbitrator decides judicially based on proven facts and legitimate inferences. In Malaysia, fraud must be proved beyond reasonable doubt.
Documentary evidence and privilege
Form and kind of documents to be presented to arbitral tribunal
1952 Act
Section 13(1) of the Arbitration Act 1952 (the 1952 Act) provides that unless a contrary intention is expressed and subject to any legal objection, every arbitration agreement shall be deemed to contain a provision that the parties to the reference shall produce all documents within their possession or power, respectively, that may be required or called for, before the arbitrator or umpire.
2005 Act
Section 21(3)(f) of the 2005 Act empowers the arbitral tribunal to decide on disclosure of documents. In practice, the arbitral tribunal may decide whether, which, and at what stage documents or classes of documents should be disclosed.(13)
Privilege
The extent of the discovery process in arbitration will largely depend on its nature and the wishes of the parties.(14) Discovery is restricted where the right to privacy and interest of the state, as contained in privileged materials, outweighs the general interest in disclosure. Privileged materials fall into three categories:
- privilege in respect of affairs of state;
- legal professional privilege; and
- communications for the compromise of a dispute.
Bernstein, Tackaberry and Marriott state that, in this regard, the rules in litigation are also applicable to arbitration.(15)
1952 Act
There are no provisions under the 1952 Act giving powers to the arbitral tribunal to compel a party to produce any document which it could not be compelled to produce on the trial of an action (section 13(4)). Under sections 13(4) and 13(5), the power is on the High Court to make such orders in respect of discovery of documents and interrogatories.
2005 Act
Section 21(3)(i) of the 2005 Act provides that the power conferred upon the arbitral tribunal shall include the power to make such orders as the arbitral tribunal considers appropriate. This is a general power of the arbitral tribunal to decide all procedural and evidential matters, subject to the right of the parties to agree on any matter. Section 21(3)(i) makes it clear that arbitrators have the power to give directions at any time, on any matter, concerning the conduct of the arbitration and the fact that the arbitration will be conducted on this basis.
Further, section 27I codifies the arbitral tribunal's power to proceed in the absence of the defaulting party, where any party fails to appear or produce documentary evidence. Such failure or non-production of documentary evidence does not sabotage the arbitral proceedings. In these circumstances, the arbitral tribunal may continue with the proceedings and, consequently, make the award on the evidence before it. This section presupposes that the party has been requested to produce documentary evidence within a specified reasonable time, according to rules of procedure determined under section 21.
Ability of person to act as witness
All persons should be competent to testify, except those who are unable to:
- understand the questions put to them; or
- give rational answers to those questions due to
- young age;
- extreme old age;
- disease, whether in mind or body; or
- any other cause of the same kind.
Experience has shown that choosing a witness is vital. An assessment of the chosen witness in terms of credibility, memory and coherency is desired.
Preparation of witnesses and limits thereof
The hearing is not unlike proceedings in court. The witness should be briefed on:
- the various stages of witness examination and their purposes;
- the issues in the case;
- how questions will be asked;
- how exhibits will be tendered; and
- the rules and procedure applicable.
However, a witness must not be told what evidence they should give; nor can a witness be asked to change elements of their testimony as this would amount to procuring false testimony. However, suggestions may be made to the witness so that they are able to communicate the facts more effectively. For example:
- the use of different phrases or words so that the witness may be able to express themselves more clearly; or
- that certain items of the testimony which are fundamental to the case should be given more emphasis.
Admissibility of written witness statements
It is common practice for the primary evidence of witnesses to be given in the form of affidavits, sworn witness statements or statements simply signed by the witness. It is for the arbitrator to determine the timetable and procedure for the completion and exchange of witness statements. Section 21(3)(h) of the 2005 Act empowers the arbitral tribunal to direct that a party or witness be examined under oath or affirmation.
Entitlement of party to have hearing or cross-examination of witnesses
The witness will attend the hearing to be examined. If the witness fails to attend to give oral testimony, this will affect the weight of their written evidence or, in extreme cases, may result in it being excluded.(16) Normally, if there is already a written witness statement, a witness is asked a few questions by the party calling them, so as to establish their identity and, possibly, their involvement in the matter of relevant expertise. Following the initial questioning of the witness by the party calling them, the witness will be tendered for cross-examination by the other parties and thereafter re-examined. The evidence is given under oath or affirmation.
Appointment and presentation of experts by party or arbitral tribunal
The arbitrator must follow any agreement by the parties as to the procedure to appoint an expert. The usual practice is to let each party, as opposed to the arbitrator, adduce their own expert evidence if required and to allow examination of the expert witness after exchange of reports. The parties may determine whether they need to appoint an expert and provide them with oral or documentary information. The parties may adopt the rules provided in standard agreements generally used in a trade. Alternatively, the parties can authorise the arbitrator to appoint experts.
Sections 26 and 28 of the 2005 Act empower the arbitral tribunal to appoint independent experts and to determine the manner in which experts and their evidence are to be introduced before the tribunal. This is similarly reflected in the Rules of Arbitration for the Regional Arbitration Centre for Kuala Lumpur.(17) Section 26(5) of the 2005 Act deals with expert witnesses presented by each party either in support of its case, or to attack the arbitral tribunal or the other party's experts. The section provides that any expert report or evidentiary document upon which the arbitral tribunal intends to rely in its award is also communicated to all the parties.
Section 28(1)(a) of the 2005 Act states that the arbitral tribunal may appoint one or more experts in order to report on specific issues, unless otherwise agreed by the parties.
Admissibility and role of expert witnesses
If the subject matter of the arbitration is one where the arbitrator can make up their own mind, expert evidence is not required. There may be situations in which an arbitrator is not able to form a correct judgment and may require help of a specialist from another field on technical or scientific matters in order to understand issues which are outside their own experience and knowledge. This may include investigations as regards the evidence, specific questions of law, engineering or commodity trade. In this way, the arbitrator may direct a party to give relevant information to experts, or to produce any relevant documents, goods or other properties for the experts' inspection or access (if physical possession is not possible). Such evidence is admitted to enable the arbitrator to come to a proper decision.
The arbitral tribunal is empowered by section 29(1) of the 2005 Act to appoint an expert witness to report on specific issues determined by the arbitral tribunal unless the parties agree otherwise. It would be appropriate for the arbitral tribunal to consult with the parties, providing them with the particulars of the intended appointee(s).
As a matter of practice, the expert(s) should submit a description of their qualifications and a statement of impartiality and independence to the tribunal and parties.(18) Parties should be given both a reasonable period to enquire about the intended appointment and an opportunity to raise any objections on the expert's qualification, impartiality or independence after the appointment of the proposed expert where they become aware of the reasons for such objections after the appointment. However, the arbitral tribunal does not need express authorisation from the parties to make such appointments.(19)
Section 28(1)(b) sets out the parties' duty to submit any relevant information to the expert or to provide them access to the relevant documents, goods, or other property for inspection. However, the expert themselves has no power to request such information from the parties. It is the arbitral tribunal which requests that the parties submit the relevant evidence. This may be done at the time of finalising the expert's term of reference. The default rules of section 27(c) of the 2005 Act apply if a party fails to adhere to the arbitral tribunal's direction to produce such evidence. The arbitral tribunal may continue regardless and make the award based on the evidence before it.
Influence of parties upon selection of questions to be submitted to expert
Expert evidence is the opinion of an expert on any question or issue on which they are qualified. An expert is chosen not only based on their paper qualifications, but also for their practical familiarity with the subject matter. They may also be chosen by the parties for their fluency in presenting their opinion and on their ability to stand cross-examination in arbitration. Expert opinion evidence must be related to the facts and a factual foundation should be laid, upon which the expert will base their opinion.
Independence and impartiality of expert and right to reject proposed/appointed expert
It is expected that the expert will not compromise their professional integrity and independence but state their opinion based on facts which either they have personally verified, or for which there is credible evidence before the arbitrator.
The expert is appointed merely for their technical assistance or expert advice, which helps to understand complex technical matters in order to arrive at a proper decision. The expert is not a part of the arbitral tribunal, which must exercise its own judgment about the advice given to it by the expert. The expert's function is confined to giving impartial advice to the arbitrator on matters within their expertise.
Oral examination of expert in hearing
There is some flexibility regarding how experts are examined. The first approach is for the experts to be heard after the witnesses of facts for each party have testified. Another approach is for the experts to be heard simultaneously on an agenda basis with each expert being asked to comment and respond to the opinions of the other experts.
Section 28(2) of the 2005 Act further deals with experts appointed by the arbitral tribunal. It allows for the possibility of participation by the expert in the hearing and for the parties to put questions to them during the proceedings. The arbitral tribunal is obligated to hold such hearings if any party so requests, or can themselves call for one on their own motion if they consider it necessary. The parties are at liberty to present their own expert witnesses at this hearing. Alternatively, the parties can also agree that no such hearings be held. The procedure set out in section 28(2) of the 2005 Act requires the expert to deliver their report either in a written or oral form. Thereafter, the expert presents themselves at the hearing, where the parties are allowed to interrogate them. The parties can present their own expert witnesses to testify on the same points. However, the arbitral tribunal must arrive at its own decision and cannot delegate this to the expert.
While there is no explicit challenge procedure set out in either the 1952 Act or the 2005 Act against a biased arbitral-tribunal-appointed expert, it is possible, under the 2005 Act, for parties to utilise the challenge procedure specified for the arbitrators themselves under sections 14 and 15 of the 2005 Act.
In Malaysia, witness conferencing for experts has been used.
For further information on this topic please contact Tan Sri Dato' Cecil Abraham, Dato' Sunil Abraham, Aniz Ahmad Amirudin or Syukran Syafiq at Cecil Abraham & Partners by telephone (+60 3 2726 3700) or email ([email protected], [email protected], [email protected] or [email protected]). The Cecil Abraham & Partners website can be accessed at cecilabraham.com.
Endnotes
(1) For earlier articles in the series, see:
- "Conducting arbitration in Malaysia: doctrine of separability, jurisdiction and arbitrability";
- "Conducting arbitration in Malaysia: arbitral tribunals";
- "Conducting arbitration in Malaysia: law governing conduct"; and
- "Conducting arbitration in Malaysia: procedure".
(2) Jeuro Development Sdn Bhd v Teo Teck Huat (M) Sdn Bhd [1998] 6 MLJ 545, HC at 552-553.
(3) For details of the current arbitration legislation in Malaysia, see "Introduction to arbitration in Malaysia: history and current legislation".
(4) See also the United Nations Commission on International Trade Law (UNCITRAL) Rules, article 27(4).
(5) Dato' Malik Imtiaz Sarwar, Chan Wei June and Surendra Ananth, "The Proceedings" in Rajoo and Koh, Arbitration in Malaysia: A Practical Guide (n 51) page 204.
(6) Alan Redfern and Martin Hunter, Redfern and Hunter on International Arbitration (fifth edition, 2009, Oxford University Press) pages 378-379.
(8) Dato' Malik Imtiaz Sarwar, Chan Wei June and Surendra Ananth, "The Proceedings" (n 71) page 205.
(9) See also section 37(2)(b) of the 2005 Act, where a breach of natural justice is a basis for setting aside an arbitral award.
(10) Section 34(1) of the 2005 Act.
(11) Dato' Malik Imtiaz Sarwar, Chan Wei June and Surendra Ananth, "The Proceedings" (n 71) page 205.
(12) See also article 27(1) of the UNCITRAL Rules.
(13) See Kirkawa Corp v Gatoil Overseas Inc, The Peter Kirk (No. 2) [1990] 1 Lloyd's Rep 158.
(14) See Edward (inspector of Taxes) v Bairstow [1956] AC 14 at 36, per Lord Radcliffe; Pioneer Shipping Ltd v BTP Tioxide Ltd, The Nema [1981] 2 Lloyd's Rep 239; [1982] AC 724, per Lord Roskill.
(15) Bernstein Tackaberry and Marriot, Handbook of Arbitration Practice, third edition, 1998, paragraph 2.459, page 139.
(16) Redfern and Hunter, Law and Practice of International Commercial Arbitration, third edition, 1999, Sweet & Maxwell at page 322.
(17) Asian International Arbitration Centre UNCITRAL Arbitration Rules (Revised 2010), article 17 read with article 29.
(18) Article 29(2) of the UNCITRAL Rules.
(19) Sundra Rajoo and WSW Davidson, The Arbitration Act 2005: UNCITRAL Model Law as Applied in Malaysia (Sweet & Maxwell Asia, 2007) page 128.