While the involvement of arbitral secretaries has become common practice, a number of practitioners have, over the past few years, voiced concerns regarding their precise role and functions. There is a fear that arbitral secretaries may, in some cases, essentially become a “fourth arbitrator” by taking over tasks that must necessarily be assumed by arbitrators.
In reaction to these concerns, the Australian Centre for International Commercial Arbitration (ACICA), the International Chamber of Commerce (ICC), the London Court of International Arbitration (LCIA), and the Stockholm Chamber of Commerce (SCC) have provided new guidance on the appointment of arbitral secretaries, the scope of their involvement and duties, as well as their remuneration.
Let’s turn first to the LCIA Notes for Arbitrators. Those Notes, updated on 26 October 2017, follow the decision, rendered on 9 February 2017 by Popplewell J of the High Court of England and Wales, in P v Q and others. In that case, the claimant applied to remove two members of the arbitral tribunal on the basis of improper delegation of their functions to the arbitral secretary. The trigger for that application was an email sent by the chairman to his secretary, asking for: “Your [the secretary] reaction to the latest from [the claimant]?”
Although the application was ultimately dismissed, Popplewell J considered that:
“… the use of a tribunal secretary must not involve any member of the tribunal abrogating or impairing his non-delegable and personal decision-making function”.
He added that:
“… [t]hat function requires each member of the tribunal to bring his own personal and independent judgment to bear on the decision in question, taking account of the rival submissions of the parties; and to exercise reasonable diligence in going about discharging that function.”
In its 2017 updated Notes for Arbitrators, the LCIA has put great emphasis on ensuring that the decision-making process remains firmly in the arbitrators’ hands. According to the Notes, an arbitral secretary may only be appointed if the parties agree on:
- The person proposed by the arbitral tribunal.
- The scope of the tasks to be carried out by the arbitral secretary.
- The confidentiality requirements and the relevant limitation of liability.
- The applicable hourly rate (if relevant).
The parties can, for instance, agree that the arbitral secretary will only carry out administrative tasks or, on the contrary, that he or she will be allowed to carry out substantive tasks:
“… such as summarising submissions, reviewing authorities, and preparing first drafts of awards, or sections of awards, and procedural orders”.
Similarly, the ACICA Guidance on the Use of Tribunal Secretaries provides that:
“… [t]he arbitral tribunal shall only proceed with the appointment of the proposed secretary upon the agreement of the parties”.
However, the parties’ agreement is not in itself required with regard to the scope of the tasks to be carried out by the secretary: although it is specified that “[t]he tribunal secretary must not perform any decision-making function”, the tribunal secretary is entitled, unless the parties agree otherwise, to:
- Provide administrative assistance to the tribunal.
- Summarise and research factual and legal issues on the record.
- Prepare drafts of procedural orders and non-substantive parts of awards.
For its part, the Note to Parties and Arbitral Tribunals on the Conduct of the Arbitration under the ICC Rules of Arbitration, released on 30 October 2017, provides that:
“… [t]he arbitral tribunal shall make clear to the parties that they may object to such proposal and an Administrative Secretary shall not be appointed if a party has raised an objection”.
The Note further indicates that a tribunal secretary can “perform organisational and administrative tasks”, but that, “[u]nder no circumstances may the arbitral tribunal delegate decision-making functions to an Administrative Secretary… [n]or should the arbitral tribunal rely on the Administrative Secretary to perform any essential duties of an arbitrator”.
Finally, the SCC Arbitrator’s Guidelines, which also require the agreement of the parties on the appointment of an arbitral secretary, provide that:
“… [s]ubject to any agreement of the parties to the contrary, the administrative secretary’s duties shall be limited to organisational, clerical and administrative functions”.
They further provide that “[t]he arbitral tribunal may not delegate any decision-making functions to the administrative secretary”.
Guidelines such as those presented above (or those adopted by other institutions, such as the Singapore International Arbitration Centre (SIAC)) are a welcome development. They help clarify the role of arbitral secretaries and promote communication between the parties and the arbitral tribunal.
That being said, although an increasing number of arbitral institutions have decided to regulate this issue, they have not adopted a uniform standard. To give only one example, under the ACICA Guidelines on the Use of Tribunal Secretaries, a tribunal secretary is entitled to draft different sections of an award, whether factual or legal. By contrast, the SCC Arbitrator’s Guidelines limit the secretary’s role to administrative matters.
From a purely practical perspective, it is worth recalling that appointing a tribunal secretary usually allows the parties to enhance (or at least preserve) the efficiency of the arbitral proceedings, by allowing arbitrators to focus on the decision-making process, while leaving other, more time-consuming, tasks to an arbitral secretary. Appointing a tribunal secretary is therefore in the interest of cost and time efficiency.
As pointed out in the Queen Mary/White & Case 2015 International Arbitration Survey, the cost factor “is seen as arbitration’s worst feature” (page 2). In that context, it is reasonable to believe that the increased demand to reduce costs may lead parties to agree to delegate a number of more or less substantive tasks to arbitral secretaries, while maintaining the arbitrators in their decision-making function (and that is crucial). At least by putting general emphasis on greater transparency regarding the role and function of arbitral secretaries, the guidelines adopted by arbitration institutions have the advantage of allowing the parties to make informed decisions in this regard.
To conclude, most arbitral institutions have paved the way for the parties and arbitral tribunals in seeking to provide comprehensive guidelines on the role and function of arbitral secretaries. It now remains to be seen which tasks parties will agree to entrust to secretaries and, most importantly, whether the adoption of those guidelines will put to rest some of the criticisms made regarding the role of arbitral secretaries.