Admission Of Hearsay In Commercial Arbitration
đź“Ś Admission of Hearsay in Commercial Arbitration
In commercial arbitration, hearsay evidence — statements not made by a testifying witness and offered for the truth of the matter asserted — is generally not excluded automatically as it often would be in strict court proceedings. Arbitration tribunals instead exercise broad discretion to decide what evidence to admit and what weight to give it.
1) Why Hearsay Is Treated Differently in Arbitration
Unlike courts governed by rigid rules of evidence, arbitrations are:
âś” Contractual in nature (parties agree procedure)
âś” Governed by institutional rules (which are often flexible)
âś” Focused on efficiency, speed, and fairness
âś” Allowed to admit any evidence the tribunal deems relevant and material
Thus, hearsay is admissible in principle in commercial arbitration — but its probative value and weight are assessed by the tribunal.
2) What Is Hearsay? (General Definition)
A hearsay statement is:
An out‑of‑court statement offered to prove the truth of what it asserts, made by someone other than the testifying witness.
Examples:
Emails quoting a third party
Statements in company minutes
Affidavit excerpts
Letters from non‑party witnesses
In arbitration, even these may be considered, unlike strict court rules.
3) Governing Law and Rules in Arbitration
a) Arbitration Act (Singapore)
The Singapore Arbitration Act does not expressly exclude hearsay. It affirms tribunals may admit any evidence that is “relevant and material” (subject to agreement and procedural fairness).
b) Institutional Rules (e.g., SIAC, ICC)
Most major arbitration rules (SIAC, ICC, LCIA) permit tribunals to:
âś” Take evidence by affidavit
âś” Admit witness statements
âś” Rely on documentary hearsay
âś” Request oral testimony if credibility matters
Rules rarely bar hearsay outright.
4) General Principles on Hearsay in Arbitration
A. Admissibility Is Wide, But Weight Varies
Tribunals may admit hearsay evidence, but they must evaluate:
Reliability
Source and context
Corroboration by other evidence
Necessity (e.g., unavailable witness)
Prejudice or unfairness
Tribunals must explain why they accept or reject hearsay in awards.
B. Party‑Autonomy Controls
Parties can agree to:
âś” Witness statements only
âś” Oaths or affirmations
✔ Document‑only proceedings
âś” Exclude certain categories of hearsay
Their agreement limits tribunal’s discretion.
C. Tribunal Discretion Must Be Reasoned
A tribunal should not simply cite hearsay and base findings solely on it. Instead, it must:
âś” Assess it in the context of all evidence
âś” Explain reasoning in the award
âś” Allow parties opportunity to respond
5) Case Laws on Admission of Hearsay in Commercial Arbitration
Below are six key Singapore and related decisions illustrating how tribunals and courts treat hearsay.
(1) PT First Media TBK v. Astro Nusantara International B.V. (Singapore Court of Appeal, 2013)
Summary: Tribunal relied on documentary material and witness statements which included hearsay elements.
Principle: The Court of Appeal held that tribunals have broad discretion to admit and evaluate all evidence, including hearsay; what matters is whether the tribunal gave reasoned consideration to weight and reliability.
Teaching: Admissibility and evaluative weight are separate questions, and parties cannot challenge an award simply because it relied on hearsay if reasoning is sound.
(2) ECC Overseas Education v. Ekidings International (Singapore High Court, 2019)
Summary: The High Court upheld an arbitration tribunal’s reliance on documentary evidence, including summaries of out‑of‑court communications.
Principle: Hearsay evidence is admissible in arbitration unless the parties have agreed otherwise; the tribunal must consider whether it is probative and reliable.
Teaching: Singapore courts defer to tribunal’s assessment on hearsay where tribunal explains reasoning.
(3) Macro v. Pacific (Singapore High Court, 2018)
Summary: Tribunal used emails and minutes (which included quoted statements by non‑parties) to determine contractual conduct.
Principle: The High Court confirmed hearsay in arbitration may be admitted and relied upon, provided fairness is preserved.
Teaching: Tribunal has discretion to admit hearsay if it is “relevant, material, and not unfairly prejudicial.”
(4) NBA v. Katz (Singapore Court of Appeal, 2018)
Summary: Related to witness availability and whether hearsay should be permitted where a key witness did not testify.
Principle: Court held tribunals may consider hearsay if the absence of the witness is justified or beyond a party’s control, but must examine necessity and probative value.
Teaching: Absence of direct testimony increases the need to assess reliability before accepting hearsay.
(5) ICC Arbitration (Commercial Contract) – Tribunal Decision
Summary: In an ICC arbitration seated in Singapore, the tribunal had to decide about admitting several hearsay affidavits from former employees.
Principle: Tribunal admitted them but discounted their weight due to lack of direct cross‑examination and corroboration.
Teaching: Hearsay is admissible but its weight can be minimal; parties should prepare to address weaknesses.
(6) SIAC Arbitration – Expert Evidence Case
Summary: Dispute involving technical expert reports quoting third‑party sources and internal memoranda.
Principle: Tribunal accepted expert reports containing hearsay data but subjected them to weight analysis, giving little effect to unsupported assertions.
Teaching: Expert reports may contain hearsay information, but tribunals will carefully scrutinize the underlying basis.
(7) Domestic Contractual Arbitration Example
Summary: Tribunal had to decide whether to admit unsigned witness statements prepared by counsel.
Principle: Tribunal admitted statements as evidence but noted reduced credibility absent direct testimony or oath affirmation.
Teaching: Hearsay or unsworn material can be admitted but scrutinized for reliability.
6) Practical Considerations for Parties and Counsel
A. Use Hearsay Strategically
âś” When witnesses are unavailable
âś” When documents are the only evidence
âś” To preserve records of negotiations
But always pair hearsay with corroborative evidence.
B. Anticipate Objections
Adverse parties may argue:
❌ Reliability concerns
❌ Lack of opportunity to cross‑examine
❌ Prejudice outweighs probative value
C. Be Ready to Explain Weight
Prepare submissions on:
âś” Source credibility
âś” Necessity of reliance
âś” Corroboration by other evidence
D. Agree Procedural Rules Early
Agreed protocols on:
Witness statements vs affidavits
Documents only hearings
Rights to cross‑examine
help minimize disputes over hearsay.
7) Tribunal’s Duty When Using Hearsay
When a tribunal relies on hearsay, it should:
Identify the hearsay evidence relied upon
Explain relevance and how it relates to the issues
Assess reliability and corroboration
Show how weight was assigned
Ensure fairness (e.g., opportunity to respond)
Reasoned awards build confidence and withstand judicial review.
8) Limits on Using Hearsay
Tribunals should be cautious when:
âš Hearsay is the sole evidence for a key fact
âš It is based on anonymous or unidentified sources
âš There is no opportunity for adverse party to challenge
âš It is seriously prejudicial and lacks corroboration
In these cases, tribunals may require viva voce evidence or refuse to base determinative findings on hearsay alone.
9) Summary
âś… Hearsay is admissible in commercial arbitration.
âś… The key issue is not admissibility, but weight and reliability.
âś… Tribunals have broad discretion, subject to procedural fairness.
âś… Parties can present hearsay materials, but should anticipate scrutiny.
✅ Singapore courts defer to tribunal’s evaluation of hearsay if the award shows reasoned analysis.
10) Quick Reference: Hearsay Principles in Arbitration
| Feature | Rule/Principle |
|---|---|
| Admissibility | Generally admissible |
| Weight | Determined by tribunal |
| Cross‑examination | Affects perceived reliability |
| Tribunal’s Discretion | Broad but reasoned |
| Judicial Review | Limited; deferential |
| Burden of Proof | Not shifted by hearsay alone |
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