Fourth Chair? The controversial role of arbitral tribunal secretaries

By Alexandre-Yacine Souleye (Attorney at Law and PHD Applicant)

I – INTRODUCTION
A recurring debate among the arbitration community revolves around the extent of the usage of arbitral secretaries. The release, in 2012, of the ICC Secretariat’s Note on the Appointment, Duties, and Remuneration of Administrative Secretaries, the Young ICCA Guide on Arbitral Secretaries, and the publication of the 2012 and the 2015 International Arbitration Surveys by White & Case and Queen Mary College Survey (‘2012 W&C Survey’ and ‘2015 W&C Survey’), have been the climax of a controversial debate regarding the role and duties of arbitral secretaries.


It is not a well-kept secret in the arbitration community that arbitrators are generally people with well-filled agendas. This is easily explained by the nature of their mandate that is necessarily ephemeral. Concurrently with their ad hoc mandates, arbitrators generally perform other various additional duties: a significant number of them practise in law firms; some of them teach and are committed to knowledge sharing and capacity building; and many others are professionals working full time in eclectic sectors.
It is for those reasons that the delegation of administrative tasks performed originally by the arbitrators to arbitral secretaries has gained wide popularity over the years. Arbitrators who make an efficient and wise use of an arbitral secretary would be allowed to focus on the essentials of the case and not lose sight of the forest for the trees.
Generally, the arbitral secretary is appointed with the consent of all parties to the arbitration unless they object to such appointment, with the aim of facilitating the smooth and efficient functioning of large and complex arbitrations in a cost and time efficient manner (Part II).
Victims of their own success, arbitral secretaries are gaining importance and have seen an increase in their responsibilities, to an extent that some observers wonder if a fourth chair has not been reserved for them in the arbitral tribunal.  Debates regarding the nature and degree of assistance provided by arbitral secretaries and their involvement in the arbitral process are intensifying (Part III).

 

II – ARBITRAL SECRETARIES: A NEEDED AND DESIRABLE DEVELOPMENT

 

Being appointed as an arbitrator involves far from relaxing duties and responsibilities. Arbitrators, who must review voluminous and complex submissions, are often well served by an arbitral secretary, the primary purpose of whom is intended to assist in organizing and managing the proceedings.  An arbitral  secretary may also perform also organizational and administrative tasks. According to Article 3(2) of the Young ICCA Guide On Arbitral Secretaries, this may include:
(a) Undertaking administrative matters as necessary in the absence of an institution;
(b) Communicating with the arbitral institution and parties;
(c) Organizing meetings and hearings with the parties;
(d) Handling and organizing correspondence, submissions and evidence on behalf of the arbitral tribunal;
(e) Researching questions of law;
(f) Researching discrete questions relating to factual evidence and witness testimony; (g) Drafting procedural orders and similar documents;
(h) Reviewing the parties’ submissions and evidence, and drafting factual chronologies and memoranda summarizing the parties’ submissions and evidence;
(i) Attending the arbitral tribunal’s deliberations; and (j) Drafting appropriate parts of the award.
Given the significant time and cost savings, the use of arbitral secretaries has been praised around the world. A survey conducted as part of the 2012 ICCA in Singapore (‘2012 ICCA Survey’) revealed that that 95% of respondents approve of the use of tribunal secretaries.
In the same line of thinking, the 2015 W&C Survey, which surveyed 763 players in the field of arbitration, reports that 82% of respondents have been directly involved in cases involving a tribunal secretary and 53% have actually used an arbitral secretary.
The prevalence of arbitral secretaries has sparked a debate within the arbitration community regarding their legitimacy and their proper role.  While the administrative role of arbitral secretaries is not called into question, some concerns have been raised over the use of secretaries for more substantive tasks.

 

III – THE ROLE OF ARBITRAL SECRETARIES: A GREY AREA

 

There are no defined standards around for the role of the tribunal secretaries. Indeed, some arbitration institutions such as the International Chamber of Commerce, the London Court of International Arbitration, or the Hong Kong International Arbitration Centre  have issued recently some guidance and restrictions on the role of arbitral secretaries, while other institutions provide no guidance at all.
As a result of this legal blur, some arbitrators sail on opaque waters and delegate randomly to their secretaries without knowing with certainty which kind of duties can be transferred to them without comprising the arbitration. It may happen that arbitrators exceed the scope of reasonable delegation, abdicating core responsibilities to the secretary. Those contentious areas include notably deep legal research, attendance at deliberations and drafting procedural orders and portions of awards.  In some cases, arbitral secretaries have prepared a first draft of the award in its entirety (see: Lawrence W. Newman & David Zaslowsky, The fourth arbitrator: contrasting guidelines on use of law secretaries | (2013), http://www.lexology.com/library/detail.aspx?g=e7826e7b-0a84-409d-9ebb-af84ad6d1d3f).
The notorious Yukos v. Russia long-running saga demonstrates with some irony, that the improper involvement of an arbitral secretary can lead to intricate situations.  The question that the Russian Federation, the losing party in the USD 50 billion arbitration, submitted to the District Court of The Hague in late 2014 was whether “an arbitral award can be challenged on the basis that an arbitral secretary was substantially involved?”
The Russian Federation argued that the arbitral secretary in the Yukos case had devoted between 40% and 70% more time to the arbitrations than did any of the arbitrators. On that basis, the Russian Federation argued that “the arbitrators did not personally fulfil their mandate”. Russia’s action aiming at setting aside the award is still pending but what is clear is that the ruling of the District Court will be edifying.
The 2012 W&C Survey shows some interesting figures in this regard: 70% of the respondents state that secretaries “prepare drafts of procedural orders and non-substantive parts of awards”, and 47% that they conduct “legal research”, and 10% that they “draft substantive parts of awards“.
This gave rise to a vigorous debate between those who advocate for broad responsibilities, alleging that it benefits the arbitral process, and those who advocate for a limited role for tribunal secretaries.
Opponents to such extensive delegation argue that the selection of arbitrators is intuiti personae, as he or she has to fulfil his or her duties personally.  Consequently, delegation vitiates the spirit of such mandate.
Additionally, they allege that an arbitrator’s mandate is voluntary.  Therefore, if he or she thinks that she cannot devote sufficient time to the case, nothing hinders his or her right to simply decline the appointment.
In the same vein, some opponents express concern that any research performed or draft prepared by the arbitral secretary necessarily finds its roots in the secretary’s perspective and thus might improperly influence the arbitrator’s own evaluation.
The 2015 W&C Survey reports that nearly 68% of respondents believe that there is a need to change today’s practice with regard to the use and function of secretaries. Furthermore, an overwhelming 80% of respondents in the 2012 ICCA Survey believe that guidelines of best practices should be promulgated.

 

IV – CONCLUSION

 

The use of arbitral secretaries is undeniably desirable as evidenced by the statistics contained in the numerous surveys conducted in relation to this steady trend.  Their assistance is valuable and allows conducting arbitrations in a cost and time effective manner when used sparingly.
This efficient use relies on good judgment.  Good judgment includes the ability to distinguish between the tasks and duties that should not or cannot be delegated as it will vitiate the decision making process, and those whose delegation will enhance the efficiency of the proceedings.  That ability cannot be imposed by policy or legislation.  Guidance and practical instruments can be helpful, particularly because they provide parties and arbitrators with an idea of best and widespread standards and practices but ultimately, the arbitrator’s judgment will be the anchor.
In this regard, if the arbitrator plays the role of the anchor, parties are the sand in which he or she is anchored.  Indeed, they are the engines of the whole process and just like they trust their arbitrators not to read tealeaves in ruling on their case, they have the option of trusting (or not) the arbitrator to appoint and use a secretary responsibly.