Chronology of events
136 Before analysing the various legal questions and the proper characterisation of what occurred, it is necessary to set out some relevant aspects of the chronology of events.
137 By email dated 25 November 2015, Noble Resources informed Sino Dragon that it required Mr Dan Li and Mr Xiaochun Wang to be available for cross-examination in the arbitration hearing commencing 7 December 2015. It may be said that this request was predictable and should have been anticipated by Sino Dragon given the significance of their evidence.
138 On 30 November 2015, a pre-trial conference was held between the arbitral tribunal, Noble Resources and Sino Dragon. During that pre-trial conference, counsel for Noble Resources submitted that Sino Dragon's witnesses ought to appear at the arbitral hearing in person and stated that Noble Resources would be put at a "forensic disadvantage" if those witnesses were permitted to give evidence by video-link, particularly if giving evidence via an interpreter. Sino Dragon opposed this submission and in fact requested that the arbitral tribunal permit its witnesses to give evidence by video-link.
139 The arbitral tribunal acceded to Sino Dragon's request, but stated that to the extent the presentation of Sino Dragon's evidence involved any difficulties caused by video-link, this would be at Sino Dragon's risk. This was not "pre-ordaining" anything and in any event the arbitral tribunal did not make any determination about the risk when it later eventuated because Sino Dragon made no complaint to it during or after the arbitration hearing. I accept of course that although the arbitral tribunal's statement, and indeed Sino Dragon's casual role in the events that occurred, are relevant, they do not foreclose Sino Dragon's present challenge. The arbitral tribunal also instructed Sino Dragon to inform it and Noble Resources with respect to the procedures for the giving of evidence by video-link.
140 By email dated 1 December 2015, the arbitral tribunal provided the parties with an annotated agenda of the pre-trial conference, which summarised the outcomes of the conference of 30 November 2015. The annotated agenda confirmed that Sino Dragon was to be responsible for arranging the attendance of the witnesses by video-link.
141 By email dated 1 December 2015, Mr Jeh Coutinho on behalf of the arbitral tribunal informed the parties that the hearing venue management required Sino Dragon to provide the following details:
(a) the proposed date and time of the video-link;
(b) the dial in details; and
(c) the name and contact details of the person organising the video-link.
Mr Coutinho further requested that the above details be provided as soon as practicable, to provide the staff at the hearing venue an opportunity to test the video-link.
142 By email dated 4 December 2015, Mr Coutinho repeated his request to Sino Dragon to provide, as soon as possible, the following information:
(a) the proposed date and time of the video-link;
(b) the dial in details; and
(c) the name and contact details of the person organising the video-link in China.
143 By email dated 6 December 2015, Noble Resources requested Sino Dragon to confirm the time at which the video-conference appearances of Messrs Li and Wang had been scheduled for 7 December 2015.
144 By email of the same date, Sino Dragon stated that "video/wechat-conference appearances Messrs Li and Wang [sic] have been scheduled for tomorrow, from 2pm to 4pm 7 December"; it is interesting to note that Sino Dragon mentioned "wechat" in advance of the hearing. By a further email of the same date, Sino Dragon informed the arbitral tribunal that Ms Ma Zhao, a qualified interpreter, would attend the arbitration hearing.
145 I should note that at the pre-trial conference of 30 November 2015, the arbitral tribunal stated that, if any interpreter was required, Sino Dragon would need to arrange for the attendance of a qualified interpreter. In response, counsel for Sino Dragon stated that Sino Dragon would advise the arbitral tribunal and Noble Resources of the identity and qualifications of the interpreter. The annotated agenda of the pre-trial conference, provided to the parties by email dated 1 December 2015, recorded that Sino Dragon was to be responsible for the provision of an appropriately qualified, registered interpreter.
146 Further, I note that on 6 December 2015 Noble Resources requested Sino Dragon to ensure that Messrs Li and Wang had before them during their appearance at the arbitration hearing by video-link on 7 December 2015, copies of the following documents, which Noble Resources attached to its email:
(a) the Contract of Sale;
(b) email from Noble Resources to Sino Dragon dated 23 January 2014;
(c) email from Sino Dragon to Noble Resources dated 23 January 2014;
(d) letter from Noble Resources to Sino Dragon dated 24 January 2014;
(e) letter from Noble Resources to Sino Dragon dated 14 February 2014;
(f) letter from Noble Resources to Sino Dragon dated 17 February 2014
(g) letter from Noble Resources to Sino Dragon dated 24 February 2014;
(h) letter from Sino Dragon to Noble Resources dated 24 February 2014;
(i) letter from Noble Resources to Sino Dragon dated 26 February 2014;
(j) letter from Sino Dragon to Noble Resources dated 26 February 2014; and
(k) letter from Noble Resources to Sino Dragon dated 7 March 2014.
147 Further, by email dated 7 December 2015, Noble Resources requested Sino Dragon to arrange for Messrs Li and Wang to have before them, during their appearance at the arbitration hearing by video-link, copies of Sino Dragon's Statement of Response dated 17 February 2015 and Rejoinder dated 3 March 2015, each of which was attached to Noble Resources' email. According to the evidence filed before me, Messrs Li and Wang only had some of this material. Moreover, some of this had not been translated for them. This created difficulties for the witnesses when they were cross-examined (and also counsel for Noble Resources who was cross-examining). I should say that such difficulties were partly attributable to Sino Dragon and its lawyers.
148 The arbitration hearing occurred on 7 and 8 December 2015.
149 Mr Dan Li gave his evidence on 7 December 2015 and Mr Xiaochun Wang gave his evidence on 8 December 2015. There were considerable technical difficulties in the mode of communication and the quality of the interpretation. The arbitral tribunal was aware of this and took it into account. See its reasons at [130], [131] and [174] to [178] which it is convenient to set out:
[130] Two other matters about the course of the hearing need to be noted. First, the Claimant, in an e-mail dated 25 November 2015, notified the Respondent that it required Mr Li and Mr Wang to be available for cross-examination by the Claimant. The Respondent stated that due to the inability of the witnesses to secure visas in time that neither Mr Li nor Mr Wang could attend the hearing in person but that both could be made available by videoconference. On the first day of the hearing, the Respondent endeavoured to facilitate Mr Li giving evidence by video-conference; however, for reasons that were not clear, the relevant links failed and the video-conferencing facility could not be used. At this stage, the Respondent suggested an alternative method of taking Mr Li's evidence by using Skype with the assistance of a computer. The Claimant objected to this, arguing that it was unsatisfactory to have to cross-examine witnesses about credit (based on contemporaneous documents) conducted by "Chinese Skype with poor quality" when the question of video-conferencing had been raised at the pre-hearing conference. The Claimant submitted that in these circumstances that the evidence should be excluded or that steps be taken by the Respondent to ensure that an appropriate video-link facility be made available. The Tribunal decided to proceed with the evidence, although noting the constraints, which counsel for the Claimant was under in conducting his cross-examination. Those constraints were increased when, due to further technical difficulties, the evidence of Mr Li had to be given in a split format: his picture being transmitted by the screen but his voice being heard by a telephone link. On the second day, the evidence of Mr Wang was given in a similar fashion although without the need for a separate telephone link. There were further difficulties when it became clear that neither witness had been provided with copies of the documents that the Claimant wished to cross-examine on. Given the highly unusual circumstances in which the evidence was given, the Tribunal, although admitting the evidence, has weighed the circumstances in which it was given and the difficulties that the Claimant encountered in cross-examination of the Respondent's witnesses.
[131] Secondly, on the second day it became clear to the Tribunal and the parties that the interpreter who was undertaking the task of interpreting Mr Wang's evidence was struggling with interpreting his evidence into English. In order to resolve these difficulties, and in the absence of another accredited interpreter, the Tribunal suggested that Ms Wu, solicitor for the Respondent, interpret. Simultaneously, an interpreter engaged by the Claimant who was present at the hearing would follow the interpreting and identify any areas of disagreement with Ms Wu's interpreting. The parties agreed to proceed to deal with Mr Wang's evidence on this basis.
[…]
[174] At the hearing, as noted above, Mr Li gave evidence in highly unusual circumstances. The result was that the examination and cross-examination of Mr Li was carried out in a way that was quite unsatisfactory. It was often unclear whether Mr Li had heard or understood the question that was being put to him and he did not appear to have some of the documents about which the Claimant wished to cross-examine him. At one stage, it appeared to be the case that Mr Wang, the other witness relied on by the Respondent, was present in the same room as Mr Li whilst Mr Li was giving evidence. The other witness was asked to leave the room where Mr Li was giving evidence and did so. The Tribunal has taken these circumstances into account in considering the probative value of Mr Li's evidence.
[175] In response to questions from counsel for the Respondent, Mr Li stated that he was present when Mr Wang had the conversation with Mr Li Ming on 24 January 2014. In cross-examination that evidence was challenged on the basis that he had not mentioned this in his written statement and it was suggested to him that his knowledge of the conversation was based purely on what Mr Wang had told him. Mr Li denied this. The Tribunal is sceptical about this aspect of Mr Li's evidence: no explanation was provided for why he only raised this aspect of his evidence at the hearing. Furthermore, Mr Wang made no reference in either his written statement or his evidence to the fact that Mr Li was with him when the conversation occurred. Nor did Mr Wang give evidence that he had the conversation with Mr Li Ming on "speaker" (as Mr Li had done in order to explain how he had heard what Mr Li Ming was saying).
[176] The Tribunal weighed whether it was prepared to accept Mr Li's evidence on this point. However, it was not necessary to decide the point because counsel for the Claimant then questioned Mr Li on the basis that the conversation had occurred but not in the terms Mr Li gave evidence about. Mr Li's evidence was the same as Mr Wang's as to the contents of the conversation on 24 January 2014. During cross-examination, it was put to Mr Li that the conversation included reference to the three additional shipments. Mr Li could not recall this. He also denied that there had been discussion about the need for an L/C to be opened by 28 January 2014. However, he accepted that there was to be further discussion on 27 January 2014.
[177] As noted above, Mr Wang was also cross-examined in somewhat unusual circumstances. After Mr Wang finished giving his evidence, the Claimant confirmed that it had no difficulty with the interpreting of Mr Wang's evidence. It was put to Mr Wang by counsel for the Claimant that no agreement was reached with Mr Li Ming on 24 January. Mr Wang's evidence was that the price reduction had "almost been settled" and the letter of credit issue was also "almost settled". Mr Wang denied that there had been any discussion about three further shipments although he accepted that he was aware at the time of the conversation with Mr Li Ming that the offer of a price reduction from the Claimant was "with two conditions". Mr Wang denied the suggestion that the Claimant "was only prepared to give you that price reduction if you were to pay back that reduced price over time through further shipments"; Mr Wang's evidence was that the only discussion was about the terms of the letter of credit. Mr Wang also appeared to accept that any agreement would have to be put in writing when he stated that "we have the agreement that we will further execute this matter on 27 January 2014".
[178] In cross-examination the Claimant did not contest that a conversation took place between Mr Wang and Mr Li Ming on the afternoon of 24 January 2014. The Tribunal finds that such a conversation did take place. The substance of the conversation as described by Mr Wang was left undisturbed in cross-examination. For that reason, the Tribunal accepts that Mr Wang and Mr Li Ming talked about a reduction in the price of the goods and the letter of credit. As to the other aspects of Mr Wang's evidence of the conversation, the Tribunal does not accept that there was a concluded agreement to vary the Contract on the terms suggested in Mr Wang's evidence. These findings are of some importance in relation to the Respondent's case about waiver and estoppel. Given this, the reasons for these findings are set out in more detail in the dispositive section of the award dealing with the Respondent's case on the legal significance of the conversation.
(footnotes omitted)
150 At the time of the arbitration hearing, Sino Dragon took no objection to the procedure which had been adopted, nor did it seek an adjournment or to deal with the evidence of its witnesses in any other way. It acquiesced in the procedure that was adopted. Indeed, its acts and omissions were principally its cause.
151 Before me, Sino Dragon has now filed and relies upon a plethora of affidavit material in an attempt to demonstrate that the procedure adopted was unfair, that its witnesses, Mr Dan Li and Mr Xiaochun Wang (who were in China) were mistranslated and misunderstood and that it did not have a proper opportunity to present its case. Before proceeding further, I should say that the arbitral tribunal's recitation of the events set out above concerning the procedure adopted was not contradicted by Sino Dragon's evidence.
152 It is necessary to refer to some of this evidence:
(a) The solicitor for Sino Dragon, Shijing Zhang, gave evidence of the breakdown of the video-link facility. He gave evidence that at the arbitration hearing, the witnesses at Sino Dragon's office in China were unable to connect via video-link with the hearing room. An alternative mode was then used to examine the witnesses, which was "to use an Ipad connected through Wechat [sic], a video call method equivalent to Skype". But apparently WeChat's sound settings were not working. So Mr Wang and Mr Li were then examined and cross-examined through use of a telephone, with the WeChat video facilities turned on. But as a result, two different media were used to communicate. I accept that this led to some level of dislocation between sound and sight. He also gave evidence that the interpreter organised by Sino Dragon was only a level 2 registered interpreter. On the second day of the arbitration hearing Ms Xiqiong "Carol" Wu, a paralegal employed by him, took over as an interpreter.
(b) Mr Zhang also deposed in [14] of his affidavit affirmed 23 August 2016:
I spoke with the witnesses shortly after the hearing dates in 7 and 8 December 2015:
(a) Witness Mr Dan Li said to me: "I was extremely confused during the taking of the evidence. I could not see the arbitrators nor the lawyer asking me questions. I also could not hear the questions properly, and some questions I answered what I understood had been asked. I am not sure my evidence was fully received".
(b) Witness Mr Xiaochun Wang said to me: "I was confused by the interpreter at first and later during the taking of evidence. I could not see the arbitrators nor the lawyer asking me questions. I also could not hear all the questions properly. I don't know if my evidence was received properly as I attempted my best to give it."
(c) Stopping at this point, I would note that none of these problems raised by the witnesses with Mr Zhang were raised with the arbitral tribunal at any stage after they had given their evidence, even though Mr Zhang had, apparently, been put on notice. Moreover, Sino Dragon had the transcript of the evidence given but raised no problems with the arbitral tribunal at any time concerning any mistranslation. Sino Dragon also knew that the arbitral tribunal was acting upon the transcript and its assumed accuracy that it had before them. But nothing was said. These issues were only raised for the first time after the Final Award had been handed down against Sino Dragon. I am left to speculate why it was that Sino Dragon only raised these issues for the first time after the Final Award was handed down. I did not find Mr King's purported justification to have any substance. Indeed during closing address, Mr King said to the arbitral tribunal (at T165 lines 33 to 42):
In contrast, we would say, respectfully, gentlemen, that Mr Li Dan and Mr Wang gave their evidence clearly. Allowing for the difficulties of communication, both of them nonetheless answered questions, some of which were not easy for my learned friend, clearly.
And in essence each of them supported their own statements. In my respectful submission, you would accept their evidence, particularly in circumstances where either Mr Li Ming nor Mr Dar nor Ms Chung were called to contradict the case of Sino on the facts.
What am I to make of this statement? Sino Dragon's own counsel perceived and said to the arbitral tribunal that, notwithstanding the technical difficulties, the evidence of his witnesses had come out clearly and consistently with their evidence in chief. Sino Dragon's present challenge and its assertions of substantial injustice because of misunderstanding or mistranslation are puzzling to say the least. The perception and submission at the time seems to be to the opposite effect. Let me continue with the evidence before me.
(d) Mr Dan Li and Mr Xiaochun Wang provided affidavits setting out their position. Both of them said that they could not organise visas in time to come to Australia, but no detailed evidence was given as to the steps taken or why visas could not be expedited. Further, each of them deposed to problems in giving evidence. Mr Li said he was confused by a number of questions and could not hear clearly, there were other problems and he didn't have all documents before him that he was cross-examined on. Mr Wang gave similar evidence. I should say that in the hearing before me I received some of their evidence only provisionally, but I am prepared to accept it absolutely as evidence of the version of events that they would have given. Mr Wang at [25] of his affidavit affirmed 31 August 2016 also deposed to the following which I will return to later:
At one stage I recall that I was asked a question during my evidence about the agreement on 24 January 2014 with Mr Ming Li to vary the contract for sale. I am informed that the Tribunal understood my answer describing what happened as meaning that there was no agreement between myself and Mr Ming Li on that day, because I said that there was 'almost' an agreement between Mr Ming Li and I. This is incorrect. Ming Li called me on Friday 24 January 2014. We reached an agreement as to a variation as I stated in my evidence. I informed the Tribunal, as was the fact according to my evidence of events which occurred on 24 January 2014, that Ming Li and I had reached an agreement to vary the contract as to the price and that we had almost finalised that varied price ie $114 or $115 per tonne, which was to be decided finally between us on Monday 27 January 2014. I relied on our conversation in assuming that Noble would pursue this agreement and that no termination of the contract would occur before a finalisation of the price on 27 January 2014.
(e) Mr Zhengqing Liu, described as "the director of the Legal Department" of Sino Dragon, was in attendance at the arbitration hearing. In his affidavit affirmed 31 August 2016, he deposed to problems with the interpreter that Sino Dragon had retained. At [7] to [13] he deposed as follows:
On 7 December 2015, an interpreter interpreted for the examination of Mr Li.
Mr Li appeared to have difficulty hearing and understanding what was being asked during the examination and was unsure of the documents that were being referred to during the examination.
Shortly after the hearing, I called Mr Li. Shijing Zhang was also present as I put the phone on loudspeaker. Mr Li said to Terry [ie Shijing Zhang] and me that: "I was extremely confused while presenting my evidence. I could not see either the arbitrators or the lawyer who was asking the questions and could not hear the questions clearly. I answered what I understood had been asked but I am not sure my evidence was understood correctly".
On 8 December 2015, the same Wechat and phone setup was used for the examination of Mr Xiaochun Wang. As with the previous day, there was also difficulty with the connection, affecting the sound and video reception and affecting the evidence that was presented to the tribunal.
A different interpreter to the one from the previous day interpreted for the examination of Mr Xiaochun Wang. However, the interpreter had to stop interpreting because she could not understand the questions being asked and therefore could not adequately interpret for Mr Wang.
Ms Carol Wu was used instead to interpret for the tribunal and Mr Wang. However I understand that she was not a qualified interpreter.
After the hearing, I gave Mr Wang a phone call. Terry was also present and the conversation was again conducted with the loudspeaker on. Mr Wang told us that: "I could not hear properly and could not see who was talking. I could only see the interpreter, so I didn't know who was speaking at all time. I was confused and did not understand what was being asked so I am concerned that my evidence may have been misunderstood."
(f) Ms Xiqiong Wu, at the time a paralegal employed by Sino Dragon's solicitors, was in attendance during the arbitration hearing. She deposed to the difficulties with the technology and explained how she took over as an interpreter on 8 December 2015. At [6] of her affidavit affirmed on 30 August 2016, she said the following:
During the Examination and Cross-examination, Mr Xiaochun Wang never said, according to his evidence which I interpreted, that there was no agreement on the reduction of the price.
(g) In addition to the foregoing evidence, on 9 September 2016, Sino Dragon filed and served an affidavit of Jiajia Chen affirmed 6 September 2016. She was a nationally accredited translator who was only very recently given the tapes of the arbitration hearing and asked to "check the interpretation of the testimonies of Dan Li and Xiaochun Wang" against the original transcript. As she said, the "instruction was to transcribe the Chinese of the parts of the interpretation that I did not agree with or considered incorrect and to offer my translation". The affidavit was filed and served late; I had allowed for reply affidavits to be filed and served by 7 September 2016 and there is no good reason why Ms Chen's affidavit could not have been filed and served on 6 September 2016. Noble Resources did not have time to engage its own expert. But more underwhelming was the fact that Ms Chen was not available for cross-examination before me. Indeed, Sino Dragon had not even seen fit to allow for that possibility. At one stage it was even suggested that she had left for China. At the time of the hearing I was unclear as to where she was. Ms Chen's affidavit was unclear as to which parts of the original translation were said to be in error and which parts were said to involve a different but reasonably open interpretation. I received her evidence in these unsatisfactory circumstances, but made a direction under s 136 of the Evidence Act 1995 (Cth) to the effect that such an assessment was to be made on the face of the marked up transcript without the need for cross-examination. It is appropriate to make some observations on the marked up transcript annexed to Ms Chen's affidavit. First, there were few changes, which gives me confidence in the translation/interpretation task that was originally engaged in before the arbitral tribunal. Indeed Mr King's statement to the arbitral tribunal in closing address, that I have set out earlier, also fortifies my confidence. Moreover, some of the changes shown on the marked up transcript seem to be more matters of nuanced interpretation. Second, there is little if any change to the substance of Mr Dan Li's evidence in relation to relevant events on 23 and 24 January 2014 in terms of how that was translated originally before the arbitral tribunal. Third, in relation to Mr Xiaochun Wang's evidence, similar observations can be made. But there are more changes in terms of whether the parties "agreed" or "almost agreed" on a position as at 24 January 2014. If one considers pages 11 to 15 of annexure "JC-02" to the affidavit of Ms Chen, Mr Wang, taking into account Ms Chen's changes, vacillates between "agreed" and "almost agreed" in terms of what was discussed between the parties on 24 January 2014. The passages at pages 14 and 15 are illuminating. The witness fluctuates between "agreed" and "almost agreed", and also accepts that details of shipments had not been settled or discussed and that the price had not been finalised. In the circumstances, let it be assumed that the marked up transcript had been before the arbitral tribunal. I do not consider there to have been any realistic possibility that the arbitral tribunal's findings and conclusions would have been different. I will elaborate on this later. Generally, the original transcript of Mr Li's and Mr Wang's evidence is not shown to be unreliable. Whilst initially there were difficulties with the witnesses' understanding of questions and access to documents, those difficulties were substantially resolved and the evidence was received.