Wechat communications in Arbitration and its impacts on the Validity of the Arbitral Awards: Commentary on the Case of Sino Dragon Trading Ltd v Noble Resources International Pte Ltd

Dr Shu Zhang

Wechat is a popular instant communication app in China. Its use in the context of international commercial arbitration and its impacts in the validity of arbitral awards are discussed in the following case.

In September 2016, the Federal Court of Australia rejected the claim raised by Sino Dragon Trading Ltd(‘Sino Dragon’) to set aside an arbitral award rendered by an Australia tribunal. [1] One of the claims raised by Sino Dragon was in relation to the Wechat video calls used by two witnesses of Sino Dragon. Sino Dragon argued that the tribunal treated the evidences given by the Wechat video calls in a way that was unfair and partial, and violated the nature justice and the procedural public policy.

The hearing of the arbitration was held in Australia. Prior to the hearing, Sino Dragon requested the two witnesses, who were in China at that time, to attend the hearing via video call. Both the opposite party and the tribunal pointed out that using video technologies might cause uncertainties and disadvantages for Sino Dragon. The tribunal noticed Sino Dragon to test the video connections at the hearing facility in advance, and to request translation services if necessary. The opposite party noticed Sino Dragon to provide all relevant case materials to the witnesses during the hearing. However, many problems arose during the hearing: Relevant materials were not fully provided and translated to the witnesses; connection via the facility’s videoconference machine failed. Sino Dragon suggested to use Wechat video calls, which was opposed by the other party but was eventually approved by the tribunal. The tribunal, however, noticed the poor quality of that service and the difficulties caused in the cross-examination. The tribunal later recorded these facts in its final awards, and stated that, although these evidences given during the video calls were admitted, the tribunal had to take into consideration the method by which these evidences were provided, and the difficulties occurred during the cross-examination due to such method when giving weight to these evidences. Sino Dragon claimed that the evidences provided during the video calls were wrongfully translated and understood. By treating these evidences in this way, the tribunal deprived Sino Dragon’s opportunity of presenting its case and of defencing itself, and violated procedural public policy.

The Court held that, by applying Art.34(2)(a)(ii) and Art.34(2)(b)(ii) of the UNCITRAL Model Law on International Commercial Arbitration, the key questions in this case were actually two: first, whether Sino Dragon lacked reasonable opportunities to present its case; and second, whether Sino Dragon were treated unfairly. Taking into consideration the particular facts of this case, the answer to both questions should be in the negative. In particular, the court pointed out that the Sino Dragon failed to bring the issue of the lack of opportunity to present its case before the end of the hearing. The court also pointed out that no material unfairness had been found in this case regarding the translation point. [2] The application of the public policy ground should be limited to situations where there were “real unfairness or real practical injustice”, which was not found in this case. It was also held that even if there is any unfairness, the procedural unfairness caused by the party’s own behaviour, including its strategic decisions during the hearings, should not be protected by the law.

Although in this case the parties encountered technical difficulties by using Wechat video calls in the context of international commercial arbitration, the judgment illustrates that the technology itself is hardly a core issue of procedural fairness and procedural public policy. In this case, the Australian Courts emphasises that the party who claims for procedural unfairness should express their claim as soon as they have noticed it, and should bear the responsibility of their own strategic choices in arranging the hearing. It is also emphasised that the application of the public policy ground should be limited to extreme circumstances only. These statements are consistent with the Australian courts’ general attitude of favouring the speedy and efficient dispute resolution and respecting the finality of the international commercial arbitration awards.

[1] Sino Dragon Trading Ltd v Noble Resources International Pte Ltd[2016] FCA 1131

[2] SZRMQ v Minister for Immigration and Border Protection (2013) 219 FCR 212 at [66] per Robertson J.