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robbie-stern-photoOn 5 August 2020, the UK Supreme Court handed down judgment in Shagang Shipping Company Ltd (in liquidation) v HNA Group Company Ltd [2020] UKSC 34; [2020] 1 W.L.R. 3549. Against the background of a commercial charterparty dispute, this appeal raised important questions about the admissibility of evidence potentially obtained through torture.

The Facts

In 2008, Grand China Shipping Company (“Grand China”) agreed to charter a vessel from Shagang Shipping Company Ltd (“Shagang”), the claimant. HNA Group Company Ltd (“HNA”), the respondent, is Grand China’s parent company. The various parties are based in China; the contract was governed by English law.

The original dispute arose when Grand China defaulted on payments under the contract. However,  HNA later alleged that the charterparty had been procured by the payment of bribes by Shagang to senior employees of Grand China. In support of this allegation, HNA relied on confessions made during an investigation undertaken by Chinese Public Security Bureau (the “PSB”).

In February 2014, Shagang made a formal complaint alleging that the confessions of two of its employees had in fact been procured by torture. It claimed that HNA had wrongly co-opted the PSB to manufacture false charges as a means of disrupting the economic dispute.

The Commercial Court

The trial of Shagang’s claim against HNA took place in 2016 before Robin Knowles J. By the time of trial, it was common ground that, unless HNA succeeded in its defence that the charterparty was procured by bribery, Shagang was entitled to judgment on its claim in the sum of US$68,647,712.

Knowles J concluded that torture could not be ruled out as a reason for the confessions. In any event, the allegations of bribery had not been proved. He therefore found that the contract was enforceable and awarded Shagang damages.

Court of Appeal

On appeal, the Court of Appeal made four main criticisms of the judge’s reasoning. The judge had:

  1. failed to follow the logical steps necessary to reach a proper evaluation of the admissible evidence;
  2. failed to ask and answer the correct legal question as to what weight should be accorded to the confession evidence;
  3. fallen into legal error in failing to take all the appropriate matters into account in deciding the bribery issue; and
  4. fallen into legal error in failing to exclude irrelevant matters, including what the Court of Appeal described as his “lingering doubt” as to whether the confessions were procured by torture, in considering whether the alleged bribe was paid.

Knowles J’s judgment was consequently overturned in favour of the respondent.

Supreme Court

Reinstating the decision at first instance, the Supreme Court (in a joint judgment by Lords Hamblen and Leggat) addressed each of the Court of Appeal’s criticisms in turn:

      1. Alleged failure to address issues in the logical order:

The Court of Appeal had ruled that the proper approach is first to decide whether torture is disproved, and thus confession evidence admissible, only then turning to the weight given to that hearsay evidence. The Supreme Court held that: “how and in what order questions concerning the admissibility and weight of evidence are dealt with is very much a manner for the trial judge. There is no ‘one size fits all approach’”[59].

The judge was entitled to consider the confession evidence de bene esse (provisionally) without deciding that torture had been proved on the balance of probabilities [62].

      2. Alleged failure to assess the weight of the confession evidence

The Supreme Court did not accept the Court of Appeal’s ruling that the judge at first instance had failed to address the question of what weight should be given to the confession evidence.

The judge had outlined “nine factors” and used these to reach his conclusion on bribery. Several of these factors went to weight and reliability (including the fact that confessions were made without a lawyer present and that no PSB witnesses were called). Ultimately, “the more implausible it was that a bribe had been paid, the less likely the confessions were to be true and therefore the less weight he should give to that evidence” [77].

      3.  Alleged failure to take all appropriate matters into account

The Supreme Court agreed that it would have been more satisfactory for the judge to have addressed the confession evidence in greater detail. However, he had not failed to take all appropriate matters into account. Several of his chosen “factors” relating to the circumstances of the confessions (including the fact that they were retracted and that there was no lawyer present when they were made) applied to all three individuals alleging torture [86].

      4. Whether the possibility of torture was irrelevant

The respondent had sought to rely on the “binary rule” in In re B (Children) (Care Proceedings: Standard of Proof) (CAFCASS intervening) [2008] UKHL 35; [2009] AC 11 QQ: “facts in issue either happened or did not happen”.

However, the Court made clear that: “In Re B does not establish any general principle that failure to prove that a fact happened for the purpose of a particular legal rule has the legal consequence that the fact must be treated as not having happened for all other purposes in the litigation.” [97]

A finding on torture in relation to the admissibility of the confession evidence (a preliminary fact) therefore did not dictate a finding on torture for the purpose of assessing the reliability of the confessions (a fact in issue).

The appeal was allowed and the judgment in favour of Shagang restored.

Discussion

The judgment provides a welcome clarification on the principles of admissibility of civil evidence. Particularly notable is the statement of principle regarding evidence obtained through torture. Citing Lord Hope’s ruling In re A (No 2) [2005] UKHL 71 , the Court stressed that:

“total exclusion of evidence shown to have been obtained by torture is not justified on grounds of relevance alone …  the exclusion is founded also on reasons of public policy and morality”.

Consequently, a rule that required a court, in assessing the reliability of a confession, to disregard entirely evidence which discloses a serious possibility that the confession was made as a result of torture would not only be irrational; it would also be inconsistent with the moral principles which underpin the exclusionary rule. [107]-[8].

This is particularly important given that, as pointed out in third party submissions by Liberty, torture is often inherently difficult to prove – frequently involving techniques which leave no lasting marks in circumstances where recording does not take place.

Further, while the Supreme Court restored the ruling of the judge at first instance, it did not do so without criticism. Although the judge had not fallen into legal error, his “judgment contains no sustained analysis of the main evidence and arguments” [117]. The comments at the close of the Supreme Court judgment highlight that courts must navigate carefully the borderline between rulings that are succinct and those that are merely sparse.

Robbie Stern is a trainee at Matrix Chambers