KB-2025-001929 - [2025] EWHC 2966 (KB)

As correctly noted by the defendant, Bill’s ostensible authority may be constructed or inferred from conduct and the test is objective. There must be a representation from the principal. The principal is Orange; neither the SA nor supplementary agreement has IT Way as a contracting party. Without at this point making a definitive finding about the question, I can see a reasonable argument that if it is true that Orange placed Bill in a position to extensively deal with the defendant, the defendant can argue with force that Orange has the requisite conduct.

However, the defendant also recognises with legal accuracy that such conduct is insufficient. There must be reasonable reliance by the third party (Shein) on the representation. Presently there is no direct evidence before the court from the defendant about how and why it relied on Bill’s conduct and thus the representation of his alleged principal, Orange. What is striking is that the defendant has put no correspondence whatsoever before the court to illustrate how the SA it so fundamentally relies on came to be negotiated, settled and signed. When asked about this, the defendant informed the court that none of the correspondence from autumn 2021 has been kept. As indicated, this is a surprising suggestion. This is paired with the defendant telling the court that the people who were involved in negotiating and entering into the SA are “not accessible”. Therefore, there is no evidential account from the defendant from anyone involved in the creation and signing of the SA. This raises obvious questions it would be of use to explore in oral evidence with a suitably authorised representation of Shein.

This is especially so since the claimants point to the difference between the concluding of the SA and that of the power of attorney appointing IT Way as direct representative of Shein dated 25 January 2022 (Bundle 810). The claimants told the court that there is a “paper trail” of correspondence as one might expect leading to the concluding of this document which has important legal effect. However, when asked to take the court to the supporting correspondence, the claimants said the correspondence record was not entered into evidence for the hearing but is available. Here is another gap in the evidence. It is entirely conceivable that the way in which a legal document was negotiated between the second claimant and the defendant in January 2022 would assist in understanding what is likely to have taken place to conclude another purported contract (the SA) between the first claimant and the defendant in October 2021. But there is no evidence before the court.

Next, the defendant’s assertion in its skeleton argument that there is no evidence about Bill’s authority is wrong. It is beyond doubt that Mr Du, a designated member of Orange, has filed evidence flatly disputing that Bill had any authority whatsoever in respect of Orange and particularly in respect of entering into the SA, which Orange says never was authorised by it. Bill is not a designated member of Orange or indeed IT Way (the designated members of the latter being corporate entities). In various communications, the person (assuming it was one person) using the Bill IT Way email account is described or self-describes as a “partner” of IT Way. It is unclear what this term means, and there is no evidence to explain it. Questions remain about when Bill became a partner, of what, and with what authority over what company and which functions within it. There is no evidence that Bill has purported to be a “partner” of Orange. Bill’s signature does not appear on the 27 January 2025 email in contrast to his earlier emails, for example the change of settlement centre to Hong Kong email dated July 2022 with what appears to be an automatically generated footer significant of “Jing Su, Bill”.

There is no evidence about who applied the Orange stamp to the SA and on whose authority. There is no evidence about who had access to the stamp or stamps and with what authority, all questions that can be legitimately explored in evidence. The reference in the particulars of claim appears, according to the defendant, to “be a reference to the management team”. This can be put to Mr Du or anyone testifying on behalf of Orange and tested. Based on these particulars, the defendant submits that the management team can be taken to operate both entities, at least in relation to the dealings with Shein. The defendant further argues that Bill is clearly a member of the top-level management team at IT Way, and Orange and IT Way have the same management team. This is also a matter that can be properly explored with any representative of Orange who testifies on its behalf.

My firm view is that the parties have placed the court in an invidious position. It will not do for the court on so central a question to speculate or make a finding based on a plainly incomplete, defective and unsatisfactory evidential record. There is a significant evidential vacuum at the heart of the dispute about Bill’s authority. It can be readily and swiftly cured. While the court may try to draw inferences, I am not confident that they would be safe or reliable inferences given the inadequate state of the evidence. The overriding objective requires that the case is dealt with fairly and justly, an aspect of which is that the court makes the right decision. This is not a collateral, secondary or tertiary issue. It is at the heart of the dispute about arbitral jurisdiction. If Bill has no authority, actual or ostensible, there are serious questions about the existence and validity of the arbitration contract and thus arbitral proceedings. However, the state of the evidence before the court on both sides is replete with obvious gaps and uncertainties. As the parties informed the court, these could be remedied by the filing of witness evidence. While I express some surprise that this has not already been done, that is where we are. I note the observations of Chadwick LJ in Al-Naimi at 654:

“I agree with Waller LJ that it would be a rare case in which it could be appropriate for the court to resolve issues of fact on written evidence alone unless invited to take that course by both parties; although I would not rule out the possibility that such a case might arise. I agree, also, that the court must be entitled to decline an invitation (although made with the support of both parties) to embark on the task of resolving issues of fact without the advantage of oral evidence in a case where it thinks oral evidence is necessary. But, where both parties ask the court to decide the issue in a summary way, the court should, I think, meet that request if it properly can.”

I am not able to properly meet the request of the parties. I do not regard this as one of the “rare” cases where the matter can be resolved on the papers when there is such a stark conflict of evidence and so many unanswered questions resulting from the evidential void. There is a clear triable issue. As Waller LJ said in Al-Naimi, if such an issue needs to be decided, “directions should be given for trying that issue”. The question becomes which forum will provide the most expeditious and effective venue for the decision.