SERVICE OF NOTICE OF ARBITRATION UNDER ENGLISH LAW

On 7 November 2017 we commented on an interesting judgement (Sino Channel Asia Ltd  Respondent – v – Dana Shipping & Trading PTE Singapore ([2017] EWCA Civ 170), where the English Court of Appeal was asked to rule on the question of service of a notice of arbitration on a counterparty.  

A similar judgment was handed down by the English High Court on 16 November in the case Glencore Agriculture B.V. v Conqueror Holdings Limited [2017] EWHC 2893 which, again, highlights the importance of effective service of a notice of arbitration.

A final arbitration award was issued against Charterers “Glencore” in respect of a charter party dispute with Owners “Conqueror”. The award was issued in default in circumstances where Glencore claimed not to have received any communications whatsoever from Conqueror pertaining to the arbitration including the initial notice of arbitration. Conqueror had indeed sent full correspondence to the email address of a Glencore employee who had left the company just before the award was published. Glencore appealed to the High Court to set aside the award.  

The Court had no difficulty in finding that notice served by email on the employee in question did not constitute proper service thus allowing Glencore’s appeal. The judge drew a distinction between individual email addresses and group or generic emails which he said give rise to a legitimate expectation will come to the attention of a person or persons authorised to deal with the issue. It was, according to the judge, illogical for Conqueror to reasonably believe that their notices were valid as (i) they ignored the internal arrangements between the company and the employee and (ii) was subjective and contrary to commercial certainty. Conqueror failed to get any sympathy from the Court as they could have taken positive steps to find alternative email addresses or even send the documentation by post.

Clear lessons can be learnt from this case to avoid invalid arbitration notices. Individual addresses should be avoided in favour of generic or group emails and if, in doubt, rely on the old “open post” service.

The full judgement can be read here