There exists a thin line between appropriate delegation and excessive delegation of arbitral functions to the tribunal secretary. Typically, a challenge to the arbitral award arises when substantive functions which may include participating in the arbitral tribunal’s deliberations and discussions on the awards, drafting parts or a majority of the arbitral award and giving opinions or view on the controversy in question in the arbitration are undertaken by the tribunal secretary by express delegation by the arbitral tribunal or otherwise. In the past, arbitral awards have been challenged on grounds relating to the participation of tribunal secretaries in the arbitral process, particularly adjudicative functions.
Domestic courts in foreign jurisdictions have looked at such questions of excessive delegation more progressively and in effect, held that a tribunal secretary can draft the arbitral award so as long as (i) the arbitral tribunal takes responsibility for the draft prepared by the tribunal secretary and reviews it before finalizing; and (ii) there is no agreement between the parties that explicitly bars a tribunal secretary from drafting the award. The sine qua non for any challenge to delegation of functions to the tribunal secretary to succeed, must reflect that arbitrator delegated their personal and independent decision-making responsibilities. Decisions of the Brussels Supreme Court in Emek Insaat STI Ltd. v. European Union, the Court of Appeal in Hague in Yukos Universal Limited (Isle of Man) v. Russia, and the UK High Court in P v. Q are some landmark decisions in this regard which have extensively discussed on retention of powers by arbitral tribunal and role of tribunal secretaries. The present article does not revisit these cases and instead aims to shift focus to and juxtapose the judicial treatment on the question of engagement of tribunal secretaries and delegation of adjudicative functions in India.
Contrary to the progressive approach as seen internationally, courts in India have generally taken a conservative position while interpreting what constitutes as a permissible delegation of arbitral functions by the arbitral tribunal. Section 6 of the Arbitration and Conciliation Act, 1996 (“the Act”) empowers the arbitral tribunal to arrange for administrative assistance by a third party or institution with the consent of the parties, to facilitate the conduct of the arbitration proceedings. Further, Section 26 of the Act empowers the arbitral tribunal to appoint an expert to assist it on specific issues. In the context of Section 26 of the Act, courts have viewed the involvement of experts, irrespective of the form, which may have a bearing on the merits or outcome of the case, with scepticism. In 2022, the Calcutta High Court in Usha Martin v. Eastern Gases held that while the arbitrator could seek assistance from a third party under Section 26, in that case a chartered account, to quantify the damages, it could not leave the entire calculation of damages to the chartered accountant and simply direct the debtor to pay the amount arrived at by the chartered accountant.
Further, the Andhra Pradesh High Court in Gurucharan Singh Sahney and Others v. Harpreet Singh Chabbra and Others, held that the arbitrator could only delegate tasks of ‘ministerial’ nature to third parties and must exercise his/her own judgement in decision-making and discharge of arbitral functions otherwise. The arbitrator in this case had involved an advocate as an expert who would attend and assist the arbitrator during each proceeding, sign the minutes of the proceedings, ask questions, and even dictate orders. Such involvement was deemed to be excessive under Section 26 of the Act. Similarly, in Municipal Corporation of Delhi v. Fruit and Vegetable Merchants Union Regd., the Lieutenant Governor in his capacity as an arbitrator had accepted the report on findings prepared by the judicial secretary in toto and perused the same to draft his award with only stylistic modifications. The High Court of Delhi deemed the same as delegation of non-ministerial and decision-making arbitral functions, thereby amounting to arbitral misconduct.
Encouraging appointment of tribunal secretaries in no manner should be perceived as providing unbridled powers such as finalization of quantum of damages or awards without proper supervision and involvement of the tribunal. The interpretation of what constitutes as adjudicative functions should be consistent with the international practices; the roles and responsibilities of tribunal secretaries should be carved out clearly, empowering them under the watchful eye of the Arbitral Tribunal.
Source: Barandbench
