Agrimex Ltd. v Tradigrain SA & Ors

An arbitral tribunal must itself determine the facts, analyse the law and formulate the reasons for its award. A draftsman may assist only by expressing the tribunal’s completed reasoning clearly. If the draftsman provides legal analysis or advice, the statutory safeguards for legal assessors apply. Any appointment of a draftsman should be rare and proportionate to the sums and issues involved. The tribunal must consider whether a lay draftsman would suffice, whether attendance at the hearing is necessary, and whether the proposed fee is fair and reasonable. Under the Arbitration Act 1996, the court may reduce fees that are excessive or disproportionate.

A dispute concerning grain demurrage was referred to GAFTA arbitration. The Appeal Board found for the buyers and directed the sellers to pay the Board’s costs, including more than £9,000 charged by a solicitor for drafting the award. The sellers initially challenged the award under section 68 of the Arbitration Act 1996, but abandoned that claim before the hearing. The remaining application sought adjustment of the GAFTA fees under section 28 on the ground that the drafting fee was excessive and disproportionate. The central issues were whether the Board was entitled to appoint a draftsman, what the draftsman’s proper role was, and what fee was reasonable.

1. Appointment of draftsman. The Board was entitled to appoint a draftsman in the special circumstances of this case, including GAFTA’s pilot scheme. That conclusion did not establish that the appointment of a lawyer, or the lawyer’s attendance at the hearing, was justified.
2. Proper function. The tribunal itself must decide the facts, evaluate the submissions, determine the legal issues and formulate its reasons. A draftsman may only set out the tribunal’s findings and reasoning. A draftsman must not provide or refine legal analysis. If legal advice or an opinion is required, the tribunal must use the statutory procedure for a legal assessor under section 37, including giving the parties a reasonable opportunity to comment.
3. Relevant considerations. A draftsman should be used only rarely. The tribunal must consider the sums in issue, the complexity of the legal arguments and the attitude of the parties. The latter cannot justify a draftsman where the tribunal’s duty under section 33 requires it to prevent unnecessary delay and expense and to ensure proportionate submissions. The tribunal must also consider whether a lay draftsman would suffice and whether a lawyer needs to attend the hearing, which will usually be unnecessary.
4. Fees. The tribunal must satisfy itself that any draftsman’s fee is fair and reasonable. The scrutiny required increases with the size of the fee. The solicitor’s attendance, time spent drafting and proof-reading charge were disproportionate to his limited role, the straightforward nature of the dispute and the amount in issue.
5. Disposition. The court exercised its power under section 28 to reduce the drafting fee to £5,000. The sellers were ordered to pay the first defendant’s costs of the abandoned section 68 proceedings, summarily assessed at £6,500.