[This guest post is authored by Pranav Tanwar, LL.M. (Business Laws) student at National Law University, Delhi, India ]
Regulation Gaps on Tribunal Secretaries under Indian Arbitration Framework
Matters referred to arbitration are getting more complex and voluminous. The procedure associated with arbitration is also growing, and the tribunals are [over]burdened with documents, claims, counterclaims, expert opinions, interim applications, third-party intervention, etc. This is where the task of tribunal secretaries comes into being. Traditionally, they were administrative assistants, but with time, their role has expanded to one of legal assistance and ensuring overall efficiency. The issue of tribunal secretaries is not merely an administrative procedural step, but there are various legal issues with regards to their qualifications, rights and responsibilities, and limitations over their power.
A mere glance at the Indian arbitration law framework will highlight the lack of such detailed regulations. Though administrative secretaries are becoming an increasingly recurring phenomenon in arbitrations seated in India, the foundational legal nuances attached to them are still undeveloped.
Though the issue of secretaries may not seem relevant, it can present certain practical problems as was seen in the Yukos Universal Limited (Isle of Man) v. The Russian Federation. In Yukos Oil Arbitration, the Russian Federation while challenging the award of the tribunal at the Court of Appeals, Hague argued that the assistant/secretary to the tribunal had played a critical role in determining the award and thereby the award was not valid. The Russian federation stated that the decision was made by three appointed tribunal members and one non-appointed member (the secretary) and hence, was subject to be quashed. The reliance was placed on:
- The hours billed by the secretary (2,625) were substantially more than that of even the arbitrators (1,661).
- The functions of the assistant were never fully disclosed.
- The report of linguistic experts found that based on previous writings of the secretary, more than fifty percent of the award by two arbitral tribunal members were written by the secretary only.
The Court of Appeal rejected such arguments on the basis that unless there was evidence to show direct involvement of the secretary, it could not be accepted that he directly influenced the arbitrators. Further, the court opined that in mammoth cases like these, the administrative work could involve long hours of work.
Thus, Yukos Oil arbitration provides a strong precedent for impetus on defining the qualifications, specific role, and limitations on the power of tribunal secretaries.
In India, there exists no specific mention of the tribunal or administrative secretaries. However, Section 6 of the Arbitration and Conciliation Act, 1996 provides for the arbitral tribunal to seek administrative assistance with the consent of the parties. Sometimes such assistance is also called ministerial acts. However, it is to be understood that there is a fine difference between what has been discussed till now on the role of the secretary, and administrative help/ministerial acts in India. In the latter cases, it may involve more broad and specialized functions. The legal authorities available on administrative assistance pertain to cases either before the 1996 Act or from foreign jurisdictions. These indicate that when administrative assistance is sought only after consent of the parties, it becomes less contentious of an affair.
Administrative work has been interpreted to include measurement of land and preparation of maps, mathematical calculations, drafting of the award on the dictation of the arbitrator, etc. The courts have been cognizant of limitations on assistance and have struck down awards due to delegation of essential functions such as transfer of the case itself or non-consent of the parties. Such improper delegation forms part of judicial misconduct.
Coming to institutional arbitration in India, all major institutions such as the International Council of Arbitration, Nani Palkhivala Arbitration Centre, the erstwhile Indian chapter of London Court of International Arbitration (Rule 13) and Mumbai Centre for International Arbitration rely upon a centralised and limited form of administrative assistance. These particular centers provide that the secretariat headed by the Registrar shall receive all the communication from the parties and act as the point of communication between the tribunal and the parties. These Registrars are generally given the power to delegate their affairs and thereby, they have particular staff allocated to different tribunals to assist them in administrative work. It is pertinent to observe that though ICC has such a secretariat, and functions almost in a similar way under the leadership of the Secretary-General, yet there are separate specific notes on Administrative Secretaries. Thus, the presence of such a secretariat in these centers does not necessarily mean the presence of the tribunal secretary in the technical sense. These centers have positions of interns or researchers, but that again does not comprehensively fall in the concept of “Tribunal Secretary” due to limitation of their qualification, procedure of appointment and roles allotted to them. The Construction Industry Arbitration Council of India makes no mention of even a secretariat and strangely has no provision for administrative assistance at all.
Only the rules of Delhi International Arbitration Centre provide for such a position of secretary (called DIAC Counsel) under DIAC (Internal Management) Rules, 2012. Part III, Rule 7 mentions qualification of the counsel to be appointed by the Chief Justice of Delhi High Court. Rule 8 mentions duties and responsibilities of the DIAC Counsel which includes, inter alia, processing of records of arbitration, calling upon parties to file appropriate claims, counter claims and documents, compilation of documents received and assisting the tribunal in legal research.
The Indian statutory framework does not provide much light on secretaries. However, substantive arbitration laws of most of the countries are in a similar state and the concept of secretary is much limited to institutional arbitration only.
As to institutional arbitration, where the ICC or for that matter many other foreign institutions provide for the parties to consent before involvement of the secretary, DIAC Rule 8 mandates the presence of DIAC Counsel for the proper functioning of the centre and moreover leaves it up to the tribunal to involve the counsel in legal assistance. Thus, the role of parties finds no mention in the rules.
DIAC stipulates direct involvement of the counsel with the tribunal. Such direct involvement will generally be looked at with skepticism in international institutional arbitrations. For instance, to ensure their impartiality and independence, ICC bars their own administrative staff from acting as secretaries. In contrast, UNCITRAL does not propose any particular position for the secretary as it clarifies that such functions can be carried out by registrar or clerks as well.
The parties choose their arbitrator with proper care and diligence to ensure that the odds are in their favor. The involvement of the secretary may create, if not much, but at least some, influence on the arbitral tribunal. How the secretary is going to draft legal briefs, summarize facts of the case or important judgments for the tribunal member plays an important role on how the member is going to perceive the claims or counterclaims. Thus, the qualifications of the secretaries are critical for eliminating any bias. For instance, a secretary cannot be a very experienced lawyer because a lawyer may have his/her own perceptions of the case but a young lawyer with educational qualifications can be a clean slate with better clerical skills.
The fundamental challenge to the position of secretary is the personal service contract of the arbitrator. Since it is the personal responsibility of the arbitrator to look after administrative work or legal work, the parties are skeptical in involving a third party. For instance, the DIAC Rules can be put in the category of over delegation where the Counsels have been given functions to the extent of assessment of costs for award.
Lastly, as per the ICC Notes, remuneration to the secretary is paid by the tribunal only from their own fee, subject to the condition that such payment shall not increase expenses for the parties. There is no specific clarification in the Arbitration Act on charges under Section 6 and the DIAC Rules stipulates payment of salary per month by itself to the counsels.
Thus, there are certain silences and differences between the Indian legal framework and the normalization of the international framework on tribunal secretaries.
The legislature/institutional bodies need to take the following into consideration for the regulation of the Tribunal Secretary in India:
- Consent of the parties to the arbitration ought to be indispensable.
- Transparency should be ensured in the role allotted to the secretary.
- Full disclosure of the secretary’s background and conflict of interest, if any.
- The role of the secretary should not encroach on the decision-making power of the arbitral tribunal.
- If possible, an undertaking should be allowed to be submitted by the parties allowing the tribunal to engage secretaries and detailing the delegation allowed for such secretaries.
- The cost of the secretary should be chargeable on the arbitrator’s fee only, unless in the form of disbursement.
- The appointment of the secretary should be finalized before the proceedings start.
- The secretary should be bound by the same regulations as the arbitral tribunal with respect to confidentiality and trust.
The inclusion of these considerations will put the Indian legal framework in a globally conducive arbitration law.