Australia: Corrs High Vis: Episode 2 – Sydney Arbitration Week (Part 1)

Corrs High Vis tackles the issues that matter in the construction industry. The podcast series, brought to you by Corrs Construction team, offers views and analysis providing industry professionals with key insights to help them make smarter decisions.

In this second episode of Corrs High Vis, we take a special look at Sydney Arbitration week. Host Jaclyn Smith is joined by Partner Andrew Stephenson, Head of Arbitration Chambers Hong Kong, Gavin Denton and South Asia ICC Director, Abhinav Bhushan.

These podcasts do not provide legal or other advice. Obtain legal or other professional advice as required.

TEXT VERSION

CORRS HIGH VIS PODCAST

Jaclyn: Hello and Welcome to High Vis – A Corrs Construction podcast. My name is Jaclyn Smith and I am an associate in the Corrs Construction team and a Director of the Society of Construction Law Australia. Today we will be bringing you the first of our two-part series bringing you some key insights from Sydney Arbitration Week. Today we will be discussing the key theme of Sydney Arbitration Week.

Innovation and Arbitration – In the next episode we will be discussing what Australia needs to do to strengthen its position as an arbitration hub. Joining me today is Gavin Denton, the Founder and Head of Arbitration Chambers Hong Kong; Abhinav Bhushan, the Regional Director for South-Asia of the ICC and Andrew Stephenson, Partner in the Corrs Construction team. Welcome to Gavin, Abhinav and Andrew.

JACLYN: So you all attended Sydney Arbitration Week last week which focussed on the theme of Innovation in Arbitration, could you talk us through some of the key issues that came up in that space and what the principle innovations and opportunities here and internationally are?

andrew: Well one of the issues that interested me was the discussion about a role of arbitral secretaries and in particular the issue as to what extent such secretaries should be involved in the decision making process whether by way of researching points of law or ultimately writing sections of the award. The use of arbitral secretaries is on the increase and many of the international arbitrators are recommending that one be appointed ostensively for the purposes of organising the arbitration process and the arbitrator's diary with those of the party however, the recent decision between Russia and Yukos has given rise to challenges to that award on a number of bases but one of the basis is that having regard to the language used in the award and the language of the arbitral secretary an analysis has been done suggesting a very high probability that the quantum sections of the award were written by the secretary and not any of the members of the Arbitral Panel and so this raises an issue as to whether the Arbitrators have abdicated their responsibility for decision making. Now this is an issue that arose during a session on Tuesday last week where Gary Bourne spoke and he observed that this is likely to happen more often than is admitted in international arbitration and questioned whether it was appropriate in circumstances where the parties did not understand that that would be the case and he put the proposition that if it were to occur it should occur with consent of the parties but it raises a more general issue which I am sure the other panel will have comments about whether arbitral secretaries' role should be limited and in what ways they might be.

Abhinav: Yes I think the role of arbitral secretaries should be limited because it causes a fundamental question of did the parties nominate the arbitral secretary or did the parties nominate the arbitrators to resolve the dispute. I am sure the parties want their nominated arbitrator to have a hands on approach towards arbitration to work their arbitration and have the arbitrator write the award. After having administered several hundreds of arbitrations of the ICC and having worked with several administrative secretaries you do get a sense that some arbitrators use administrative secretaries more judiciously than the others but then of course there is a grey line out there where the administrative secretaries exceed their mandate on certain occasions and as far as the ICC is concerned I think we try and keep a watch and make sure that that should not happen.

GAVIN: I think there is a real place for Tribunal secretaries I think people - it provides a huge opportunity for younger practitioners to get involved and witness how arbitrations are run both procedurally prior to a hearing and through a hearing and to be involved with the Tribunal if possible when they are conferring with one another to decide what the ultimate outcomes going to be. All very valuable experience but I think there are possibly too many occasions these days where the Tribunal secretary is being asked to go beyond what I think is a reasonable remit and where do you draw that line I think recently there has been far too much procedural information contained within an Arbitral Award and so it has taken a huge amount of time and resources to be able to draft that section of an Award and so it has been useful for Arbitral Secretaries to be able to draft that section but obviously when it comes to drafting the merits or the basis of the award then that should befall the Arbitral Tribunal and in most cases I think the Tribunals would say that is what happens and we just don't have any evidence to support who is actually doing most of the work in these Tribunals so that might be an interesting thing to look at but I do think people can expect that when they appoint arbitrators to a matter that they are the ones that are going to turn their minds to the legal basis of the award and that is what should happen.

Abhinav: I think what might help is to at the time of the appointment of the administrative secretary and different institutions have different procedures to do that it might be helpful to identify and put it on record in writing what will be the precise exact scope for that administrative secretary to the parties so that there is no room for any confusion as to what the arbitral secretary may or may not do and we see that more and more now.

ANDREW: Yes I agree and it is difficult to see any reason why there should be any objection to a qualified lawyer who happens to be the secretary doing basic research on particular legal points to aid the final decision. The ultimate problem arises when the arbitral panel, one of them abdicates responsibility for the decision to the secretary now I think that total abdication would be very rare but the degree of involvement of the secretary varies quite extensively I suspect although I have no proof of that and therefore I agree that transparency is important and the parties need to speak to the arbitral panel for the purposes of identifying the limitations on the secretary's role.

GAVIN: What is also a major about who pays for these tribunal secretaries to and the ICC has introduced a rule that says that they can be used but not at the cost of the parties but at the cost of the Tribunal if they want to use them and I think that is very fair and reasonable. In other cases or other institutions I am not quite sure. Abhinav do you know how the ICC or SIAC deals with it?

Abhinav: I think the SIAC you can hire or you can hire an administrative secretary over and above a certain amount in dispute and the fee of that secretary is capped to I think $250 I am not very sure but they capped it but it does not flow from the Arbitrary Tribunal.

ANDREW: That's $250 per hour?

ABHINAV: Yes or I think $150 an hour but I'm not so sure but that's how they do it, they cap it over a certain amount in dispute. That is how they do it but from the ICC's point of view I think it is not easy for the parties to tell the Tribunal that no don't have it don't have a secretary and it is also not easy for the parties to tell the Tribunal oh you are paying this much money to the institution now fine you are going to pay this much extra to be a secretary because that is not a part of the institutional kitty that goes to the institution.

GAVIN: Well I think it is outrageous I had a case last year as counsel where a Tribunal chair was a partner in a major law firm decided the week before our hearing that he needed an arbitral secretary who happened to be one of the associates from his firm and at the end of the day we were rendered with a bill for US$60,000 and a week before the hearing we felt that we had no choice but to accept the kind invitation of the President of the Tribunal to have somebody come and assist so I like the ICC's proposal and where arbitral tribunals feel as though they can afford to pay them terrific but if not then they will get some wonderful experience and that is as far as it should go.

JACLYN: Thanks again to Gavin, Abhinav and Andrew. It has been great to hear some of the key highlights of Sydney Arbitration Week and gain some insight into the broader developments in the Asia Pacific Region. We look forward to you joining us for Part 2 of our update from Sydney Arbitration Week. My name is Jaclyn Smith, thank you for listening.

This podcast does not give legal or other professional advice and its contents should not be relied upon as such. Formal legal and other professional advice should be sought in particular matters.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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