By: Priyanshi Bhageria and Prachi Jain (Dr. Ram Manohar Lohiya National Law University, Lucknow)
INTRODUCTION
Tribunal secretaries, more commonly known as the ‘fourth arbitrators,’ take part in arbitration proceedings to aid and assist the arbitrators in administrative work such as conducting legal research, drafting and reviewing procedural documents, drafting parts of an award, organising procedural meetings and evidentiary hearings, etc.
There have been concerns about the role of the fourth arbitrator because of various reasons ranging from their outsized role, transparency of and consent to the process, to their appointment, etc. The debate is specifically of much concern because of the efficiency that tribunal secretaries bring with their work. They let the arbitrators deliberate on merits and enable tribunals to render awards faster. However, the framework of tribunal secretaries in India is seriously lacking. Though tribunal secretaries are becoming a recurring phenomenon in arbitrations seated in India, the foundational legal nuances attached to them are undeveloped.
The article highlights the gaps in Indian policymaking concerning tribunal secretaries along with the global framework and regulations, thereby suggesting India’s way forward.
WHAT IS THE CURRENT INDIAN FRAMEWORK?
The issues in the current framework in India are two-fold – i. question of excessive delegation, and ii. institutional lacunas.
Question of Excessive Delegation
In India, Section 6 and Section 68 of the Arbitration and Conciliation Act, 1996 (hereinafter, ‘Act’) provides for the arbitral tribunal to seek administrative assistance with the parties’ consent. However, this provision alone cannot provide a sound basis for tribunal secretaries to function. For a long time, the courts in India have struck down arbitral awards due to excessive and unnecessary delegation of work to administrative secretaries. A case in point is National Electric Supply v. State of Punjab, delivered by the Hon’ble Punjab and Haryana High Court. The case revolved around the delegation of work, specifically of ministerial character such as making calculations on behalf of one of the parties, to a third person. However, the Hon’ble court regarded such a delegation of work as ‘excessive’ as it believed the same could be done dishonestly and affect the final award.
In another judgment, delivered by the Hon’ble Allahabad High Court in Ram Chandra Brij Lal v. Manohar Das Ram Prasad, the Court held such delegation of work to be judicial misconduct. In this case, two arbitrators were appointed at first, then a third arbitrator, who was a tribunal secretary, was also brought on board after the parties signed a written agreement and the award was pronounced by the third arbitrator. Hence, the court not only found this to be ‘excessive’ as there were questions raised on the appointment of the third arbitrator as he pronounced the judgement all by himself, without the interference of the two arbitrators initially appointed for the purpose. .
Institutional Lacunas
Secondly, the system of institutional arbitration in India is highly inadequate. For example, all major institutions in India, such as the Nani Palkhivala Arbitration Centre or the Mumbai Centre for International Arbitration, have a minimal form of administrative assistance. These centres do not have the post of a tribunal secretary, and the Registrar of such institutions primarily performs the functions that a tribunal secretary performs. Registrar is a position which is general in nature as opposed to the position of tribunal secretary because when a tribunal secretary is appointed in a particular dispute, it has a better understanding of the parties, the issues involved etc. which can be more beneficial and productive for all the stakeholders involved. Only the Delhi International Arbitration Centre rules provide for such a position of secretary, under the DIAC (Internal Management) Rules, 2012, called the DIAC Counsel. The functions of the same are provided in rule 7. Hence, the existence of institutional lacunas is evident from the existing state of affairs governing arbitration in India.
WHAT CAN INDIA LEARN FROM THE GLOBAL FRAMEWORK?
Unlike India, international laws and regulations give space to tribunal secretaries. While there is broad agreement among the international arbitration community that the appointment of a tribunal secretary should never result in a tribunal’s decision-making powers being revoked, the role of tribunal secretaries is regulated differently by different international arbitration institutions.
In this context, the Young ICCA Guide on Arbitral Secretaries 2014 was the first comprehensive document that attempted to address this issue systematically. It outlines the best practices for the appointment and use of secretaries. Article 3 of the Guide contains a non-exhaustive list of the arbitral secretaries’ roles, many of which are purely administrative or organizational.
India, at this stage, has three options.
Narrow Approach: The London Court of International Arbitration confines a secretary’s activities to organizing papers for the tribunal, highlighting relevant legal authorities, maintaining factual chronologies, keeping the tribunal’s timesheets, and so forth. This is referred to as a narrower approach because it essentially restricts their remit.
Broad Approach: The other approach broadly permits a tribunal secretary to undertake some or all of the substantive tasks. The HKIAC Administered Arbitration Rules 2018 expressly permits a tribunal secretary to take on tasks that are not “organizational and administrative”, including “preparing summaries from case law and publications”, “producing memoranda summarizing the parties’ submission and evidence”, “attending the arbitral tribunal’s deliberations.” Though progressive, they tend to be controversial in cases where the secretary’s qualifications are brought into question.
Middle Ground: Since there are three broad tasks, which, if performed by a tribunal secretary, generally give rise to controversies – (1) reviewing or summarising evidence and submissions, (2) participating in the tribunal’s deliberations, and (3) drafting substantive parts of the award – the best option for India is to deliberate on a neutral approach by taking parts of both the narrow and broad approaches. The neutral approach here would be to (a) allow secretaries to offer administrative assistance to tribunals by providing logistical support and undertaking procedural case management functions, while also (b) allow the tribunals, in circumstances as they may deem fit, to explicitly direct the secretaries to draft parts of an award, organise procedural meetings and evidentiary hearings, or attend the tribunal’s deliberations.
WAY FORWARD
A brief look at the rules set out by the international arbitration institutions points out that it is high time that India makes space for ‘fourth arbitrators’ in its laws in order to advance its aims to become a hub of arbitration for the entire world.
As mentioned in earlier sections of the article, arbitration centres and institutions rarely have tribunal secretaries. Hence, these institutions must be encouraged to deploy such secretaries. One way to do this is by amending Section 43D(2)(b) of the Act. The section provides for recognition of institutions that accredit arbitrators. If it is amended to recognise institutions that accredit tribunal secretaries as well, it would incentivize the arbitration institutions to appoint secretaries.
Other measures can include amending Section 31A of the Act to include the fees for tribunal secretaries as well. This will not only add significance to their job but also enhance their value and thereby giving attention to such position. Moreover, Section 42B of the Act could be amended to include tribunal secretaries as well. Currently, the said provision grants immunity to arbitrators only for their acts and omissions done in good faith. Tribunal secretaries, who aid and assist arbitrators in the proceedings, are worthy of a similar immunity for their acts done in good faith. For example, while delivering their administrative functions, if they commit some errors in documentation or calculations. Such an immunity is essential because of the clerical nature of the work that is assigned to them. When logistical, mechanical and clerical work is being carried out by tribunal secretaries, it would be unrealistic to expect a hundred percent accuracy.
Hence, India has a lot of opportunities to proactively establish legal regulations that apply to the fundamental concerns regarding the use of tribunal secretaries and thus provide certainty to all the stakeholders. Failure to do so might jeopardise the credibility of arbitration as a dispute resolution method and undermine the integrity of its most cherished product: arbitral awards.
(Priyanshi Bhageria is a third year B.A. LL. B. (Hons.) student. Her interests lie in criminal law, arbitration and IPR. While Prachi Jain is a third year B.A. LL. B. (Hons.) student. Her interests lie in insolvency law, arbitration and corporate law.)
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