we-do-IT Pty Ltd v we-do-IT-Inc [Delaware] [2023] VSC 611

Andrew Orford  |  Isobel Carmody  |  Aria Saffar

Key takeout

In deciding whether to issue a subpoena to aid arbitral proceedings, a court will not merely ‘rubber stamp’ an arbitrator’s decision that a subpoena is appropriate. Instead it will give a degree of deference to the arbitrator’s position and will typically not ‘second guess’ the arbitrator’s decision as to:

• the relevance of the documents the subject of the proposed subpoena to the issues in the proceeding; and

• whether the subpoena serves a legitimate forensic purpose.

The court needs to satisfy itself that the issue of the subpoena is reasonable in all the circumstances.

Facts

Section 23 of the International Arbitration Act 1974 (Cth) permits a court to issue a subpoena requiring a person to attend for examination before an arbitral tribunal or to produce to the arbitral tribunal specified documents for the purposes the arbitral proceedings.  In deciding whether or not to do so, the court is specifically required by subsection 23(5) to be satisfied that it is ‘reasonable in all the circumstances‘ to issue the subpoena to the relevant person.

we-do-IT Pty Ltd (WDI Australia) and we-do-IT-Inc (WDI USA) were parties to a contract for the provision of various services and human resources.  WDI Australia and WDI USA ended up in dispute regarding alleged breaches of that contract, and that dispute was referred to arbitration with the ‘seat’ (or legal location) of the arbitration in Melbourne.

While WDI USA had provided discovery during the course of the arbitration, WDI Australia sought the provision of further documents from other people who it considered would be able to provide relevant evidence not answered by the WDI USA discovery.

The arbitrator made a ruling in which he gave permission to WDI Australia to make the application for the subpoenas and concluded that the documents sought by WDI Australia:

• were relevant to the issues in the arbitration;
• served a legitimate forensic purpose; and
• were not available to WDI Australia other than pursuant to a subpoena.

WDI Australia relied on this ruling of the arbitrator in making its application to the Victorian Supreme Court for the subpoena.

Decision

The court held that:

• in determining an application for the issue of a subpoena in aid of arbitration proceedings under the International Arbitration Act 1974 (Cth), the court must be satisfied that it is reasonable in all the circumstances for the subpoena to be issued; and

• in this case it was reasonable for the subpoenas to be issued.

Key comments made were:

• The court does not act as a mere ‘rubber stamp’ for an arbitrator’s decision in issuing subpoenas in support of arbitral proceedings, but will not seek to duplicate the role of the arbitral tribunal or ‘second guess’ the arbitral tribunal beyond what it is required to do to meet the requirements of the International Arbitration Act 1974 (Cth) (particularly subsection 23(5) which require the court to be satisfied that ‘it is reasonable in all the circumstances to issue‘ the subpoena to the person).

• It is important to balance a cost effective and efficient arbitral process against the seriousness associated with subpoenas and their possible breach.

• It will usually be appropriate for the court to determine an application for leave to issue a subpoena in these circumstances ex parte on the papers, but the court could require that notice of the application be given.