By Nihit Nagpal
Arbitration has emerged as one of the preferred modes of dispute resolution for a variety of reasons. It is time-bound, and expeditious and gives autonomy to parties to agree upon the procedure and the curial law. While party autonomy is the brooding and guiding spirit of arbitration, however, the same also gives rise to a debate pertaining to legal representation in arbitration. In various jurisdictions, the right to have a legal representative in arbitration proceedings has been recognised, however, there is no uniformity in practice regarding the same. The law relating to legal representation Therefore, the most significant question is whether the right to have legal representation is mandatory or discretionary. The same can be understood by referring to Institutional Rules of Arbitration existing in different jurisdictions.
Legal Representation in Arbitration- UNCITRAL
The UNCITRAL Arbitration Rules have been adopted vide General Assembly resolution 68/109. These Rules act as Model Law in various jurisdictions and many arbitration institutions take a cue from these Rules and chalk down their provisions. Article 5 of the Rules provides for legal representation and assistance in arbitration proceedings. Article 5 states the following:
“Article 5
Each party may be represented or assisted by persons chosen by it. The names and addresses of such persons must be communicated to all parties and to the arbitral tribunal. Such communication must specify whether the appointment is being made for purposes of representation or assistance. Where a person is to act as a representative of a party, the arbitral tribunal, on its own initiative or at the request of any party, may at any time require proof of authority granted to the representative in such a form as the arbitral tribunal may determine.”
In the above-mentioned provision, the expression “may be represented or assisted” implies that legal representation is not mandatory and it leaves a window open for cases where parties may agree not to be legally represented. In order to make the arbitration proceedings cost-effective, sometimes the parties agree not to be presented by an advocate.
Legal Representation in Arbitration in India
In various civil and criminal cases, the parties claim a right to be represented through a legal representative before the courts. It is because of this reason, the Legal Services Authority was set up to facilitate those persons who were unable to get legal representation before the courts. The same was done by the enactment of the Legal Services Authority Act, 1987. However, as far as arbitration is concerned, the right to legal representation is not protected explicitly under any statute or the Constitution. The Arbitration and Conciliation Act, 1996 makes it optional for the parties to have legal representation. However, arbitration in India has been majorly been the dominion of lawyers under the Advocates Act, 1961.
The Indian Constitution provides for the right of being represented through a legal representative only in criminal cases. Pursuant to Article 22(1) of the Constitution of India, a person shall have a right to be defended by a legal practitioner of his own choice as soon as he is arrested. Such a right, therefore, cannot be invoked in an arbitration proceedings. The following is the relevant extract of the provision[1]:
“22. Protection against arrest and detention in certain cases
(1) No person who is arrested shall be detained in custody without being informed, as soon as may be, of the grounds for such arrest nor shall he be denied the right to consult, and to be defended by, a legal practitioner of his choice.”
Neither the Indian Constitution nor any other Indian statute recognises the right of legal representation as a matter of absolute right in an arbitration proceedings. Party autonomy is the brooding and guiding spirit of arbitration and they are free to agree upon the Institutional Rules. In BALCO, the Supreme Court of India recognised the significance of party autonomy, and held that parties are free to agree upon the law of contract, terms of agreement and rules of procedure. In Bharat Aluminium Company & Ors. v. Kaiser Aluminium Technical Services Inc.[2], the Hon’ble Supreme Court of India held the following:
“5. Party autonomy being the brooding and guiding spirit in arbitration, the parties are free to agree on application of three different laws governing their entire contract- (1) proper law of contract, (2) proper law of arbitration agreement, and (3) proper law of the conduct of arbitration, which is popularly and in legal parlance known as “curial law”.”
The above proposition was further upheld in paragraph nos. 88 and 89 of Pasl Wind Solutions (P) Ltd. v. GE Power Conversion (India) (P) Ltd.[3].
ICC Arbitration Rules on legal representation
The ICC Arbitration Rules were adopted by the International Chamber of Commerce and came into force on January 1, 2021. The ICC Rules have followed the UNCITRAL Model and have not made legal representation mandatory in arbitration proceedings. For claimants and respondents, any person can represent the parties. Article 4(3)(b) applies to the claimants and Article 5(1)(b) applies to the respondent.
“Article 4:
(3) The Request shall contain the following information: a) the name in full, description, address and other contact details of each of the parties; b) the name in full, address and other contact details of any person(s) representing the claimant in the arbitration;”
“Article 5
(1) Within 30 days from receipt of the Request from the Secretariat, the respondent shall submit an Answer (the “Answer”) which shall contain the following information: a) its name in full, description, address and other contact details; b) the name in full, address and other contact details of any person(s) representing the respondent in the arbitration;”
The above two provisions use the expression “any person(s) representing the claimant/respondent”. The expression is of wide connotation and does not restrict only to legal representatives. Therefore, the ICC Rules do not make legal representation mandatory, rather allow any person to represent the claimant or respondent.
Legal Representation in LCIA Rules
The London Court of International Arbitration Rules (LCIA) became effective on October 1, 2020. In addition to these Rules, another set of Rules was adopted to bring clarification to the existing Rules. The same was called LCIA Notes for Parties. Article 14 of the LCIA Notes for the Parties, is by far the most explicit provision to state that it is not a requirement for parties to be legally represented in arbitration proceedings in an LCIA Arbitration. The provision states the following:
“14. REPRESENTATION IN AN LCIA ARBITRATION
..Although many parties choose to instruct lawyers to advise them and to represent them in arbitral proceedings, it is not a requirement that a party must be represented by a lawyer in an LCIA arbitration.”
The rules further state that a party may be legally represented by anyone who is lawfully authorised to represent the parties in arbitration proceedings.
Legal representation in UK’s Arbitration Act, 1996
In the UK’s Arbitration Act, 1996 there is nothing which makes it mandatory for the parties to be represented through legal representatives. Pursuant to Section 36 of the UK’s Arbitration Act, 1996, the parties have been given the liberty to agree whether they intend to be represented through a lawyer or not. The following is the relevant extract of the provision[4]:
“36. Legal or other representation.
Unless otherwise agreed by the parties, a party to arbitral proceedings may be represented in the proceedings by a lawyer or other person chosen by him.”
The expression “unless otherwise agreed by the parties” under Section 36 means that the parties have the autonomy to decide whether they wish to be represented through a lawyer.
Conclusion
The settled position, therefore, is that law relating to legal representation depends on the rules of institution which the parties have agreed upon. There is no blanket principle which either makes legal representation entirely mandatory or entirely discretionary. Thus, if the rules state that the legal representation is mandatory, then the parties will have to engage lawyers to represent them in arbitration proceedings. On the contrary, if the rules make legal representation optional, then the parties will have discretion in that regard.
Upon perusal of Institutional Rules of Arbitration of various jurisdictions, it is apposite to state that legal representation is not mandatory in many jurisdictions. The purpose and policy to allow any person to represent in arbitration proceedings are two-fold. Firstly, it aims to maintain the sanctity of party autonomy wherein the parties are at liberty to agree upon the terms of the contract and the proper law which governs the arbitration proceedings. Secondly, it aims to avoid litigation costs wherever possible. Thus, the fact that parties have the discretion to agree upon an appropriate representative does not render such a rule as opposed to public policy. Similarly, an arbitration proceeding carried out without a legal representative should not, ipso facto, render an arbitral award as opposed to public policy.
Mohd. Yasin, Junior Associate at S.S. Rana & Co. has assisted in the research of this Article.
[1] Constitution of India, Article 22(1)
[2] Bharat Aluminium Company & Ors. v. Kaiser Aluminium Technical Services Inc., (2012) 9SCC 552
[3] Pasl Wind Solutions (P) Ltd. v. GE Power Conversion (India) (P) Ltd., (2021) 7 SCC 1.
[4] Arbitration Act, 1996 (UK)