SIAC issues Practice Note on the appointment of administrative secretaries

The Singapore International Arbitration Centre (SIAC) has issued a Practice Note on the appointment of administrative secretaries. The brief practice note provides guidance on when a secretary may be appointed and the basis on which a secretary can be remunerated. The note does not cover the scope of a secretary's duties in SIAC arbitrations, leaving this instead to be agreed between the parties. The issuance of the note is timely given the increased use of administrative secretaries in international arbitration.

Selection of secretary 

The SIAC Practice Note provides that an administrative secretary may only be appointed with the consent of all parties. However, unlike the ICC's equivalent guidance note, the SIAC Practice Note does not provide any further guidance on the selection of the secretary. Under the ICC guidance note, the parties will at least get to review a CV of the proposed secretary and the Tribunal should make it clear to the parties that they may object to an appointment. In practice, therefore, it is likely that parties may seek to make their consent to the appointment of a secretary conditional upon the ability to vet the proposed candidate. 

A further issue which may arise in practice is that, where a Tribunal has suggested or even requested the appointment of a secretary, the parties may feel pressured not to voice any objection, for fear of leaving an adverse impression on the Tribunal. It is possible, therefore, that the requirement for consent may – in certain circumstances – be illusory. 

Remuneration of the secretary  

The SIAC Practice Note provides two possible approaches to remuneration, depending on the amount in dispute. For cases where the amount in dispute is less than SG$15 million, the parties are not required to pay any fees to the secretary. In other words, the secretary's fees will be paid out of the Tribunal's remuneration in accordance with the SIAC rules. This position is the same as that under the ICC guidance note. However, in cases where the value of the dispute is over SG$15 million, the Tribunal may agree with the parties that fees will be borne and paid directly by the parties and the hourly rate of the secretary's hourly fee is limited to SG$250 per hour. This novel approach to large cases differs from that of the ICC. 

While this specific guidance is extremely welcome, it is not clear how SIAC has arrived at the cut-off point of SG$15 million. Given that the objective of having an administrative secretary is to reduce the administrative burden on a tribunal and therefore assist the parties in keeping costs to a minimum, it is therefore possible that agreement to paying a secretary separately in larger cases may actually increase, rather than reduce, the costs of a large arbitration. 

Finally, regardless of the value of the case, parties should keep in mind that they are required to pay the expenses of the secretary. This is the case both under the SIAC Practice Note and the ICC guidance note. Where the secretary may be required to travel from a great distance to the location where the arbitral hearing takes place and stay for the duration of what can often be lengthy hearings, this can result in not insignificant expenses being incurred. 

Duties & scope of role 

As mentioned above, the SIAC Practice Note does not provide specific guidance on the duties of a secretary. By way of comparison, the equivalent ICC guidance provides a clear boundary and explicitly lists examples of 'organizational and administrative' tasks that may be delegated to a secretary. The ICC note also provides certainty that no decision-making functions may be passed to a secretary under any circumstances and that any legal work or research (for example, written notes or memoranda) prepared by the secretary must be reviewed the by Tribunal. 

Recent cases, such as the Yukos v Russia case, have shone a spotlight on the importance of ensuring that a secretary's duties are strictly limited and that a tribunal does not delegate any decision making authority to the secretary and, in particular, the potential impact that the so-called 'fourth arbitrator' issue can have on the enforcement of awards. For this reason, it is interesting that the SIAC has chosen to leave the important issue of the secretary's duties and role to the parties to agree with the Tribunal. 

Impact 

The SIAC Note is helpful, in that it goes some way to acknowledging the increased use of secretaries in international arbitration and seeks to establish some of the basic parameters in terms of appointment and remuneration. However, as it does not provide any guidance on limiting the scope and duties of a secretary and defining how the position of secretary should be regulated and monitored, this will be left to the parties to agree. In practice, therefore, parties should be careful to ensure that if a secretary is going to be appointed in a SIAC arbitration, then the appropriate limits on the scope of the secretary's duties and responsibilities should be provided for in the terms of appointment. 

For further information, please contact Alastair Henderson, Partner, Daniel Waldek, Senior Associate or another member of the Herbert Smith Freehills International Arbitration team.