Quite correct both of you, and to quote the rules on this so all will know what's going on:
Diplomacy [Character, Free, Realm, Regent] (p. 90)
Realm – Diplomacy can be used as a realm action by spending one court action for each domain invited beyond the first. Your domain is now said to be holding a Court Session. This is what the Chamberlain of Anuire is doing.
Free – While your court is in session, any regent invited may use a single diplomacy action (regent action) to execute any number of diplomacy actions (as free actions) with you or any other participating regent. This is what you will be doing.