On 2 February 2015, the Singapore International Arbitration Centre (SIAC) released the latest guideline by an arbitral institution regarding administrative secretaries.
Secretaries of international arbitration tribunals, also referred to as “administrative secretaries”, “arbitral secretaries”, or even “assistants”, are on the front-page of the international arbitration news.
Indeed, as reported last month, the role of the arbitral assistant was at the heart of the debates in the petition made for setting aside the award rumored to be the largest ever made by an arbitral tribunal in the Yukos case, which put in light the question of the extent of administrative secretaries’ roles and duties, and their possible misuses.
In order to solve these issues, international arbitration practitioners and institutions have decided to produce guidelines and rules of conduct in order to frame administrative secretaries.
The SIAC Practice Note on administrative secretaries (“the SIAC Note”) is a one-page practice note governing the appointment of administrative secretaries by arbitral tribunals administered by the Centre. It applies to all appointments of secretaries in SIAC-administered arbitrations made on or after 2 February 2015.
Key points are as follows:
1. Parties’ consent to appoint an administrative secretary
The SIAC Note is clear and strict regarding the parties’ consent requirement to appoint a secretary: “no administrative secretary may be appointed without the consent of all parties to the arbitration.”
In this regard, the SIAC Note is more stringent than other institutions’ practices. For example, the ICC 2012 practice note indicates that the arbitral tribunal proposes the appointment of a secretary and only requires the arbitral tribunal to “make clear to the parties that they may object to such proposal and an Administrative Secretary shall not be appointed if a party has raised an objection.
2. Provision regarding the administrative secretary’s independence, impartiality and confidentiality
The SIAC Note provides that an administrative secretary “shall execute a declaration of independence, impartiality and confidentiality prior to his appointment.” It creates a minimum standard to protect the parties and the arbitral tribunal from potential misconducts and conflicts of interests of administrative secretaries.
This provision is rather similar to provisions of other institution’s guidelines regarding arbitral secretaries, such as the Hong Kong International Arbitration Centre (HKIAC) guidelines released in June 2014, which provide that “the proposed secretary shall sign a declaration confirming his or her […] impartiality and independence” and that “a tribunal secretary is under obligation to maintain the confidentiality of the arbitration, and any decisions made by the arbitral tribunal unless the parties agree otherwise.”
The requirement for the administrative secretary to execute a declaration of confidentiality is of particular note. Indeed, given the current debate in the arbitral community as to whether all arbitrations are to be confidential or not, notably in investment arbitration, not all institutions have taken the same stance. For example, the ICC does not request the arbitral secretary to make a declaration of confidentiality.
3. Administrative secretary’s fees
The SIAC Note’s provisions regarding secretaries’ fees are important to note. To our knowledge, it is the first time that an ad valorem threshold is established by an arbitral institution to determine who bears the cost of the remuneration of secretaries:
- If the amount in dispute is under S$ 15 million (i.e., approximately EUR 10 million), the fees are integrated in the arbitral tribunal’s fees;
- If the amount in dispute is above S$ 15 million, the arbitral tribunal and the parties may agree that both fees and reasonable expenses of secretaries will be borne by the parties.
The Note adds that the secretary’s fees are not to exceed S$ 250.00 (approximately EUR 170.00) per hour.
The SIAC’s practice in this regard is notable since it is, to our knowledge, the first institution to allow that the secretary’s fees be borne by the parties, if the amount in dispute exceeds the required threshold and upon agreement between the parties and the arbitral tribunal.
In contrast, most institutions, as well as the Young ICCA Guide to arbitral secretaries (commented here), insist that they should be included in the arbitral tribunal’s fees, to underline that the arbitral secretary’s actions are under the arbitrators’ responsibility. For instance, the ICC practice note indicates that:
“In no circumstances should the Arbitral Tribunal seek from the parties any form of compensation for the Administrative Secretary’s activity. Direct arrangements between the Arbitral Tribunal and the parties on the Administrative Secretary’s fees are prohibited.(…) any compensation to be paid to the Administrative Secretary is deemed to be included in the Arbitral Tribunal’s fees.”
However, it should be noted that in ad-hoc arbitration, the parties and the arbitral tribunal have discretion to agree upon the arbitral secretary’s remuneration method.
4. Duties and role of the administrative secretary
The SIAC Note does not contain any provisions regarding the secretary’s duties and role, which is one of the central questions concerning the use of arbitral secretaries, as it was illustrated by the Yukos case.
In contrast, the HKIAC and the ICC mention expressly that the arbitral tribunal may not delegate its decision-making power in any way to the administrative secretary.
Therefore, it could be recommended to users of SIAC arbitration to expressly indicate, if the arbitral tribunal intends to appoint a secretary, the limits of his duties and his role -including the fact that the arbitral tribunal is prohibited from delegating to him any power of decision-making-, as well as the amount of these fees, if any to be borne by the parties.
If questions regarding, inter alia, the mission and the responsibility of arbitral secretaries remain unanswered, one can only welcome the clear intent of most of the institutions to regulate secretaries, who are more and more present in arbitration proceedings (see our commentaries here and here).
In this regard, it is to be recalled that the topic “The Secretary to the Arbitral Tribunal: the 4th arbitrator?” will be debated during the next “Wake up (with) Arbitration!” roundtable, on 9 April 2015.
More information on the next “Wake up (with) Arbitration!” may be found here.