Considerations around the service of arbitration notices
Glencore Agriculture BV v Conqueror Holdings Ltd (The “Amity”) [16.11.17]
In the “Amity”, the Commercial Court was asked to consider the service of arbitration notices and whether or not an arbitration tribunal was properly constituted.
Disputes arose under the charter party of the vessel “Amity” which contained a London arbitration clause (subject to the LMAA Rules). Correspondence at the time of the dispute was sent by a Mr Oosterman from “firstname.lastname@example.org”.
The defendant (Conqueror) established that they had claims amounting to US$43,176.27 and appointed claims adjusters to pursue their claim.
The claims adjusters sent numerous communications to email@example.com including a letter before action, a freight statement and, eventually, a notice of arbitration. No response was received and Conqueror’s arbitrator was eventually appointed as a sole arbitrator. The arbitration proceedings commenced and, as there was never any response from Glencore, an award was published by the tribunal in favour of Conqueror.
Application to set aside
Glencore applied under section 72 of the Arbitration Act 1996 to have the award set aside, claiming that they were never aware of the proceedings. Glencore argued that service of all documents and correspondence was affected on Mr Oosterman alone and he had no actual or ostensible authority to accept service of such notices or other documents.
Conqueror argued that agency principles were not relevant because service was on the relevant contractual party – Glencore. As the notices and documents were not served on a third party unrelated to the charter party, agency principles were irrelevant and should be disregarded.
The court held that there was a distinction to be made between service to a generic chartering email address and a personal business address. Service to a generic chartering email address gives rise to a legitimate expectation that service of documents and correspondence will be dealt with appropriately. However, there was no indication, implied or express, that Mr Oosterman had any authority to accept service of proceedings and take any requisite action. Effectively, Mr Oosterman was not held out by Glencore as having more than a limited operational role and it could not be presumed that he had the requisite authority to action the service of formal legal proceedings.
Accordingly, the court found that Glencore was not effectively served and the court permitted Glencore’s challenge under section 72 of the Arbitration Act 1996.
This decision highlights the importance of ensuring that all arbitration notices - and other legal documents and correspondences - are sent to the recipient who has authority to action the request made. The risk of not doing so is as demonstrated above.