Evidence: Admissibility

The appellant company’s appeal succeeded, in a dispute concerning the construction of a ship. It had been alleged that a confession of bribery on the part of the appellant had been obtained by torture by the Chinese authorities. The Supreme Court held that, among other things, where there were reasonable grounds for suspecting that a statement had been obtained by torture, that was a matter which a judge could and should take into account, along with all other relevant circumstances, in assessing the reliability of a statement as evidence of the facts stated.

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In August 2008, the appellant company (Shagang), as disponent owner, and another company (Grand China) as charterer, contracted to charter a vessel from Shagang, for a period to run from when the vessel was delivered in 2010. Grand China was ultimately owned by the respondent company (HNA), which guaranteed the performance of Grand China’s obligations under the charterparty. The guarantee was governed by English law and provided that any dispute arising from it was subject to the exclusive jurisdiction of the English courts.

In April 2010, the vessel was delivered to Grand China. From September, Grand China defaulted in making payments of hire under the charterparty. Shagang commenced arbitration proceedings against Grand China and obtained a series of interim final awards for unpaid hire. In January 2012, Shagang terminated the charterparty on the basis of Grand China’s default in paying hire and consequent repudiatory breach of the charterparty.

The claim for unpaid hire was settled but Shagang pursued its claim in arbitration for damages for the loss caused by Grand China’s repudiatory breach of the charterparty. In November, the arbitral tribunal issued a partial final award for damages in a sum of US$58,375,709.

In September, Shagang commenced the present action in the Commercial Court against HNA, under its guarantee.

In its defence, HNA alleged that the charterparty had been procured by the payment of bribes by or on behalf of Shagang to senior employees of Grand China. HNA relied on confessions made during an investigation undertaken by the Chinese authorities.  Shegang contended that the confessions had been obtained by torture.

At first instance, the judge found that HNA was liable to pay damages to Shagang. HNA successfully appealed. The Court of Appeal, Civil Division, criticised the judge’s reasoning and remitted the case. Shagang appealed to the Supreme Court.

(1) Whether the judge at first instance had failed to follow the logical steps necessary to reach a proper evaluation of the admissible evidence.

The Court of Appeal’s criticism that the judge had made an error by not deciding the issue of torture first had not been justified. The approach taken had been both legitimate and consistent with the way the case had been put before him (see [65] of the judgment).

It was clear that the judge had deliberately refrained from deciding whether torture had been proved on the balance of probabilities. He had considered that he did not need to decide the issue because he had been satisfied that there had been no bribery (see [62] of the judgment).

(2) Whether the judge had adequately addressed the weight to be given to the confession evidence.

It was clear that the judge had addressed the question of the weight to be given to the confession evidence. In circumstances where that evidence had been the only evidence of bribery, in finding that there had been no bribery, the judge had necessarily been finding that the confession evidence was of little or no weight, as confirmed by his statement that ‘it will be apparent from my conclusions on bribery… that I already have insufficient confidence in the confessions to allow a finding of bribery’. Moreover, it could not be said that such a conclusion had been unreasonable or unsustainable. There had been ample grounds to support it (see [84] of the judgment).

(3) Whether the judge had failed to take all appropriate matters into account.

It would have been much more satisfactory for the judge to have addressed the confession evidence in greater detail. It was, however, apparent that those factors which had gone to the circumstances of the confessions (including, among other things, retraction of confessions, having no lawyer present and offers of leniency) had applied to all three individuals who had allegedly confessed (see [86] of the judgment).

The judge had not failed to have any regard to material evidence. He had clearly considered the confession evidence of all three individuals. The real complaint was as to the degree of depth in which he had done so and that he had not done so in a sufficiently systematic way. Such a shortcoming, whilst regrettable, had not involved an error of law or otherwise justified intervention by an appellate court (see [87] of the judgment).

(4) Whether the possibility of torture had been irrelevant. The possibility that the confessions could have been obtained by torture had provided an additional ground for the judge’s conclusion that the confession evidence could not be relied on.

It was a general principle of the law of evidence that, in assessing what weight (if any) to give to evidence, a court should have regard to any matters from which any inference could reasonably be drawn as to the reliability or otherwise of the evidence. In the case of hearsay evidence in civil proceedings, that principle was embodied in s 4 of the Civil Evidence Act 1995 (CEA 1995). Circumstances specifically listed in s 4(2) to which ‘regard may be had’ included ‘whether any person involved had any motive to conceal or misrepresent matters’. It was difficult to think of a motive which would more seriously undermine the reliability of a confession than a desire to escape intense physical pain and suffering caused by torture (see [91] of the judgment).

The judge had not had to reach any definitive conclusion on whether there had been torture. The absence of a finding on that question was not the same as a finding that torture had not been proved on the balance of probabilities (see [94] of the judgment).

If a legal rule required a fact to be proved, the law operated a binary system. So, where it was necessary to prove a fact for the purpose of a rule governing the admissibility of evidence, there were only two possibilities: either the evidence was admissible or it was not, which depended on whether the fact had been proved or not. There was no room for a finding that the fact might have happened. However, not all legal rules did require relevant facts to be proved in that binary way. In particular, the rule governing the assessment of the weight to be given to hearsay evidence in civil proceedings did not. It required the court to have regard to any circumstances from which any inference could reasonably be drawn as to the reliability or otherwise of the evidence. Such circumstances were not limited to facts which had been proved to the civil standard of proof (see [96] of the judgment).

The Court of Appeal had been wrong to have held that, if the use of torture had not been proved on the balance of probabilities, a serious possibility that a statement had been obtained by torture had to be ignored by a court in estimating the weight to be given to the statement. Such an approach was contrary to principle. The true position was that, where there were reasonable grounds for suspecting that a statement had been obtained by torture, that was a matter which a judge could and should take into account, along with all other relevant circumstances, in assessing the reliability of the statement as evidence of the facts stated. It followed that, in the present case, the judge had been entitled to rely, as he had done, on his finding that torture could not be ruled out as providing further support for the conclusion that he had already reached, that there had been no bribe paid (see [112] of the judgment).

B (children) (sexual abuse: standard of proof), Re [2008] 4 All ER 1 distinguished; A v Secretary of State for the Home Department (No 2) [2006] 1 All ER 575 considered; Simetra Global Assets Ltd and another company v Ikon Finance Ltd and others [2019] All ER (D) 60 (Aug) considered.

Appeal allowed.

Lord Pannick QC, Caroline Pounds and Tom Richards (instructed by HFW LLP) for Shagang.

Edward Brown, Jessica Boyd and Isabel Buchanan (instructed by Hogan Lovells International LLP) for HNA.

Ben Jaffey QC, George Molyneaux and Natasha Simonsen (instructed by Liberty) for Liberty, as intervener.

Toby Frost - Barrister.