International arbitration partner Lucy Winnington-Ingram explores the increasingly significant role of tribunal secretaries in international arbitration. Lucy unpacks the legal and procedural challenges that can arise when tribunal secretaries move beyond their traditional administrative functions and become involved in substantive aspects of decision-making. She then offers practical guidance on how to avoid common pitfalls that could jeopardize the integrity of arbitral proceedings. ----more---- Transcript: Intro: Welcome to Arbitral Insights, a podcast series brought to you by our International Arbitration Practice lawyers here at Reed Smith. I'm Peter Rosher, Global Head of Reed Smith's International Arbitration Practice. I hope you enjoy the industry commentary, insights and anecdotes we share with you in the course of this series, wherever in the world you are. If you have any questions about any of the topics discussed, please do contact our speakers. And with that, let's get started. Lucy: Welcome to another episode of Arbitral Insights. I'm Lucy Winnington-Ingram. I'm a partner in Reed Smith's London office in our international arbitration team. I'm going to be running through some very high-level takeaways, discussing challenges based on the misuse of tribunal secretaries in international arbitration. So I think the starting point when thinking about this issue is recognizing that arbitration is a method of dispute resolution, which is premised on the consent of the parties. And the persons determining the dispute, i.e. the tribunal, are typically party appointed. And that's really a central tenet of international arbitration. So it's against that background that challenges to arbitral awards based on the alleged misuse of tribunal secretaries have increased. And this issue really goes to the heart of the legitimacy and enforceability of arbitration as a dispute resolution mechanism. And it's one that's generated significant academic debate, challenges to awards and institutional reform in recent years. So the arbitrator's mandate is strictly personal, and that means that their decision-making function cannot be delegated. However, as arbitrations have become more complex and document-heavy, the increased use of tribunal secretaries, sometimes called administrative secretaries or assistants, has become widespread, and their intended role is to support the tribunal, primarily with administrative and organizational tasks. But increasingly, there's a growing concern that tribunal secretaries may overstep their intended role, moving from administrative support into substantive decision-making. And this has given rise to the so-called fourth arbitrator problem. And that's a term that was coined as early as 2002 to describe the fear that a tribunal secretary might, in effect, become an unappointed and unauthorized decision-maker in the arbitration. And very understandably, there are concerns this will damage the legitimacy of the arbitral process. So the use and potential misuse of tribunal secretaries has therefore come under increasing scrutiny, both in academic commentary and in the challenges to arbitration awards that we're seeing, and also in terms of challenges to arbitrators themselves. So one of the first known challenges to an award, based at least in part on the actions of a tribunal secretary, was a Paris Court of Appeal case from 1990. And in that case, the appellant, Honeywell, sought to set aside an ICC award, alleging that the tribunal secretary had interfered during the hearing. Now, the Paris Court of Appeal dismissed the challenge, noting that the appointment of a secretary was permitted and that Honeywell had not demonstrated how the secretary would have interfered. So this case sets a sort of early precedent that mere involvement of a secretary without evidence of improper influence would not suffice to overturn an award. The next case we can look at then is Sonatrach and Statoil. And this came over two decades later in 2014. Now, in that case, the parties had expressly agreed that the tribunal secretary's role would be limited to administrative tasks and the Tribunal Secretary would have no right to participate in the decision-making process. Sonatrach later argued that the Secretary had exceeded this remit by preparing substantive notes for the Tribunal and therefore challenged the ICC award under Section 68 of the Arbitration Act. When considering this, the English High Court found no improper delegation emphasizing that the arbitrators had not abdicated their decision-making function as the Secretary's notes had only formed part of the Tribunal's deliberations. In that sense, then, the Tribunal Secretary himself had had no substantive decision-making role. A more fully articulated challenge came not long after this in 2015, and this is perhaps one of the better known challenges, and it arose in the Yukos set-aside proceedings in The Hague. So there, Russia argued that the tribunal's assistant had effectively drafted large portions of the award, and they pointed to the time records in the fee notes that showed that the tribunal secretary's hours were between 40 to 70 percent higher than those of any tribunal member. And Russia actually went so far as to submit a report from a linguistics expert, which concluded that it was extremely likely that the tribunal secretary had written significant sections of the award himself. So when it came to setting aside the awards, these were actually set aside on alternative grounds. And therefore, the relevant district court did not address Russia's complaints relating to the involvement of the tribunal secretary in the proceedings. However, in 2020, the Court of Appeal in The Hague overturned the district court decision and in doing so, it addressed Russia's arguments in relation to the Tribunal Secretary. And there, the Court of Appeal ultimately held that unless the parties had agreed otherwise, a tribunal may use a secretary to assist with drafting parts of an arbitral award as it sees fit, provided that it's the arbitrators themselves who assume responsibility for the final decision. So in effect the finding was that the mere drafting of parts of an award by an Arbitral Secretary did not automatically amount to a violation of the Tribunal's mandate. So whilst the Court of Appeal conceded that the Tribunal had failed to fully inform the parties of the nature and extent of the Tribunal Secretary's work, this did not amount to a major procedural violation. So turning then to the most recent challenge to an arbitral award on the alleged misuse of a tribunal secretary, this was brought before the Belgian Supreme Court in 2023 in Emek and WTE and the European Commission. And there, the applicants alleged that the tribunal secretary had drafted non-factual sections of a partial award. However, the Belgian Supreme Court affirmed that a secretary may draft an award completely or in part as long as the tribunal reviews and validates the work. So the Supreme Court felt that this understanding of the tribunal's mandate aligned with the ICC's guidance, which I'm going to talk about in a little bit more detail later, which explicitly allows for secretaries to prepare notes and memoranda, which could conceivably then form part of any final award. So I think one point to note is that challenges relating to the use of tribunal secretaries are not limited to challenges to arbitral awards. A number of challenges have also been brought in relation to arbitrators themselves. So, for example, in P&Q, a 2017 English High Court case, the claimant there applied for the removal of all three arbitrators appointed in an LCIA arbitration, alleging improper delegation of tasks to the Tribunal Secretary. And there, the claimant relied on time records, again, as in Yukos, and also an email from the chairman seeking the secretary's views on a procedural issue. Now, in that case, the court dismissed the application, again distinguishing between permissible support and impermissible delegation, reaffirming that the core adjudicative function must remain with the arbitrators. The judge did, however, note that whilst receiving input from a secretary does not automatically preclude independent decision-making, best practice is to avoid involving secretaries in anything that could be seen as expressing a view on the substance of the dispute. So taking all of this together then, these cases all reveal a number of key themes. First, the strictly personal nature of an arbitrator's mandate to determine the dispute. So it's clear that an arbitrator's decision-making function is strictly personal and cannot be delegated. And this is closely related to the central feature of arbitration, a party's ability to select its arbitrators. Parties choose their arbitrators for their judgment and expertise, and this is central to the legitimacy of the process. Secondly, in a number of cases, issues arise regarding the proper role of a tribunal secretary in the arbitral process. So there's a spectrum of tasks that secretaries may perform, ranging from purely administrative, so things like organizing hearings, managing documents, etc., to more substantive, conducting research, drafting procedural orders, even drafting sections of what may become the final award. Now, the further a secretary's tasks move towards analysis and decision-making, the greater the risk of challenge. The question then is what tasks and responsibilities can be safely delegated to a tribunal secretary for reasons of procedural efficiency before their role risks trespassing on that of the arbitrators. Third and finally, many challenges arise from a lack of clarity or agreement about the secretary's role. And this links back to what I was just talking about, about what tasks and responsibilities can be delegated. So early and explicit agreement on the scope of the secretary's task is crucial to avoid disputes later on.
