Key takeaway

For parties engaged in arbitration, securing critical evidence controlled by third parties can present a significant strategic risk, as arbitral tribunals lack the authority to compel them to disclose documents. In this article, we discuss the High Court’s recent decision in VXJ v FY & Ors [2025] EWHC 2394, examining the strict threshold of “necessity” for court intervention and the practical challenges of obtaining third-party disclosure under the Arbitration Act 1996.

What are the limits of an arbitrator’s power to compel evidence?

Arbitrations in England and Wales are largely free to operate as agreed by the parties. Consequently, the powers of an arbitral tribunal are limited not only to the parties to the arbitration, but also to the powers that the parties agree to grant it. This means that arbitrators have limited powers to compel any party to act or produce information. In the Arbitration Act 1996 (the “Act”), as amended, Parliament has provided for parties to an arbitration to apply to the Courts to use the power of the Courts to fill the gaps in the powers of arbitrators.

This issue was at the heart of the case of VXJ v FY & Ors [2025] EWHC 2394, where the High Court considered an application for document production against non-parties to an arbitration. For more on the framework and limits of arbitral tribunals, read our article on the formalities of arbitration in England & Wales.

What were the key facts of VXY v FY & Ors?

The original dispute lay between VXJ, a holding company owning a mining subsidiary, and FY, another company who had contracted with VXJ to form an investment agreement. The facts of the dispute itself were not material to the dispute.

Crucially, the second and third Defendants (“RH” and “XL” respectively) were beneficial owners of FY, and each Defendant had other subsidiaries who held a commercial relationship with VXJ.

Accordingly, during the course of the arbitration between VXJ and FY, VXJ sought the disclosure of documents under the control of the second and third Defendants, who were not parties to the arbitration. This, of course, was not expressly possible, but the arbitrator still required for FY to use “best efforts” to obtain the documentation. After this failed, VXJ obtained the permission of the Tribunal to apply for relief under the relevant terms of the Act, those being Section 43 and Section 44.

What are the requirements for document production in arbitral proceedings?

Sections 43 of the Act enables the Court to order the attendance of witnesses to an arbitration. This section of the Act therefore grants the Court the power to order witness summonses to arbitral proceedings. The High Court considered this point, and Mr Justice Calver set out the following requirements:

1.    The witness summons should identify each individual document;

2.    Each individual document must be identified with enough certainty that the recipient of the Order has no real doubt what documents to produce;

3.    Each document must be known to the applicant to exist, or at the very least likely to exist and in the respondent’s possession; and

4.    Each document must be relevant to the arbitration and necessary for its disposal.

This new limb of “necessary” creates a higher threshold for applicants to reach than the usual test for standard disclosure in Court litigation. There, the only requirement is that a document supports the position of any party or is detrimental to the position of the party producing the document.

VXJ’s application failed because of these higher parameters. Mr Justice Calver stated that the documents VXJ requested, whilst supportive of their position in the arbitration, did not meet the threshold of “necessary” for the fair disposal of the matter. Accordingly, the application was dismissed.

Section 44 of the Act enables the Court to order that the applying party may inspect or preserve tangible property that belongs to the respondent. The threshold for this, in the view of Mr Justice Calver, was the same as an application under section 43.

The Court, therefore, did not grant the relief sought as the application was insufficiently precise and did not seek documents that were necessary for deciding the claim.

What are the implications for arbitrations?

At first glance, this decision seems to fly in the face of long-standing policy that the Courts will support arbitrations wherever possible. It is setting a higher threshold for the production of documents in arbitrations as opposed to disclosure in commercial litigation.

However, the decision does line up with this principle. The policy of the Courts is to support arbitration wherever possible, but to only intervene where necessary. Consequently, the Court imposing a threshold that applications for Court intervention are only successful if the intervention is necessary to fair disposal corresponds with policy.

There are wider justifications for this line of thinking. If applications to Court were permitted and successful at any occasion, the advantages of arbitration (those being confidentiality, speed, and cost-consciousness) would be reduced, as there would be increased applications to Court. One of the primary reasons parties choose arbitration over traditional litigation is to keep sensitive commercial operations private. For more on this topic, read our article on what increased transparency means for commercial litigation and the case for ADR.

What are the lessons for parties in arbitration?

This case creates two lessons.

·       Firstly, parties to arbitrations should feel reassured that the Courts are unwilling to permit the excess cost incurred by frequent applications. Furthermore, arbitrations are more likely to remain confidential and permitted to carry on at the speed permitted by the arbitral agreement and seat of arbitration.

·       Secondly, parties should be careful about signing arbitration agreements where relevant documents may be controlled by third parties. As shown by VXJ v FY & Ors, it can be very difficult to recover these documents and put them in front of the arbitrator. In these circumstances, parties should consider adding third parties to the arbitration agreement itself, should they agree to be bound.

For more information on structuring these agreements, read our article on when an arbitration clause can bind a party without express consent. Alternatively, in the face of dispute, parties should take care to draft their pleadings in such a way that documents critical to their success are not outside of reach for themselves or the arbitrator.

Please contact the Arbitration team at Barnes Law for advice on drafting arbitration agreements.

Written by Barnes Law Managing Partner Yulia Barnes.