Seminar Young Arbitrators Copenhagen, 18 November 2016
Attorney Jimmy Skjold Hansen (Plesner) started by presenting the framework of the discussion, i.e. the role of the Secretary to the Arbitral Tribunal.
The Secretary to the Arbitral Tribunal (hereafter “Secretary”) is usually a lawyer who works with the President of the Arbitral Tribunal. He or she assists the arbitral tribunal in order to minimize the time that the arbitrators should spent on the case. According to the Queen Mary University’ studies, 35% of arbitration cases have a Secretary and the practice is generally accepted.
The problem lies in the definition of tasks. Everybody agrees that the Secretary should do administrative tasks. But what does “administrative” mean? Can the Secretary summarize the parties’ opinions or write memos on point of laws? Does it extend to writing a first draft of the final arbitral award? Does it involve attending or maybe even participating to the deliberations of the arbitral tribunal?
In arbitration, the Parties appoint the arbitrators for their qualifications. That mandate is personal and carries a duty of confidentiality. It gives the personally-nominated arbitrators competence to decide the case and allows transparency in the arbitral proceedings.
The problem is that the Secretary is not appointed by the Parties but proposed by the President of the Arbitral Tribunal. What rules apply to this function?
There are usually not any provisions in the arbitration clauses or the applicable arbitration act. Arbitral institutions sometimes have adopted guidelines or a declaration of impartiality and independence like at the Danish Institute of Arbitration. Associations like the Young ICCA drafted the “Best Practices for the Appointment and Use of Arbitral Secretaries”. All the documents that exist are lists of Dos and Don’t.
In case of problem or doubt regarding the work performed by a Secretary, who is competent to judge on it? The Parties, the arbitrators, the national judge or the arbitral institutions? There is a need for a clear answer and there is none at the moment.
Attorney Thomas Stouten (Houthoff Buruma) is a lawyer based in the Netherlands. He is a member of the team of attorneys representing the Russian State before the Dutch courts regarding the annulment of the arbitral award in the Yukos case. The Dutch courts have annulled the award based on jurisdiction but another argument advanced by the Russian State regarded the role of the Secretary.
As a preliminary and according to Dutch case law, the arbitrator’s mandate is strictly personal, the number of arbitrators must be an odd number and all arbitrators must participate in the rendering of the award and sign it.
In the Yukos case, the Parties first accepted to appoint a Secretary from the PCA. The President of the Arbitral Tribunal then asked whether the Parties could accept that he is assisted by a younger colleague from his law firm; which the Parties accepted. There was therefore a second Secretary appointed. According to the rules applicable to the case, all of the involved were paid by the hour.
Upon the rendering of the arbitral award, the Russian State realized that the two secretaries had worked a substantial amount of hours on the case and therefore requested a detailed specification of their time sheets. The PCA was not authorized to disclose such information but the second Secretary, as a lawyer, was. It showed that he had performed extensive tasks. Moreover, a linguistic study indicated that he had drafted almost the whole arbitral award, including the reasons.
The Russian State argued therefore that the Arbitral Tribunal had breached its personal mandate and that the second Secretary had overstepped his competence.
The other party argued that the claim was based on conjecture only and that both parties had given their consent to the secretaries’ work in the case. They moreover argued that the claim was forfeit since, even if valid, it should have been raised during the proceedings and not after.
The Dutch courts have not rendered any decision on the matter but it gives an illustration of the question about the extent of the role of the Secretary to the Arbitral Tribunal.
The speakers proceeded then to a debate.
As pointed out by Attorney Jimmy Skjold Hansen in his presentation, there are no clear legal-binding rules on the question of the role of a Secretary.
One could ask whether the role of the Secretary could be compared to the role of the clerks of a national court. The nature of the two systems is, however different. A national judge handles a case as representative of the state whereas the arbitrators are appointed directly and personally by the parties for their expertise. Moreover, when the arbitrators accept a case, they commit themselves to be available and they are paid directly by the parties for their work.
The speakers compared therefore several studies as to whether different tasks where accepted to be performed by a Secretary. The answers to the different questions were quite different depending on the studies and on their date. Some examples follow:
- Legal research: perceived by most as a task performed by junior lawyers or even an intern, the answers from the polls were not as unanimous as one could expect.
- Attend the deliberation: the polls were positive which is understandable if the Secretary to the Arbitral Tribunal only is there to observe.
- Participate to the deliberation: the polls were negative since the mandate to decide the case is given personally to the arbitrators.
- Write substantive part of the award: the polls were negative since the mandate to judge the case is given personally to the arbitrators. However, some in the audience were of the opinion that there would be no harm if the Secretary were to follow the decision reached personally between the arbitrators during the deliberation.
- Write non substantive parts: perceived by most as an administrative task since it only involves recapitulating the dates and acts performed during the proceedings, the answers from the polls were not as unanimous as one could expect.
The conclusion of the speakers was again that a reform was highly needed to establish clear rules on the role of the Secretary to the Arbitral Tribunal.