Case Alert - [2017] EWHC 2893 (Comm)
Judge holds that arbitration notice was not effectively served on a party's employee
The claimant company sought to set aside an arbitration award on the basis that it had taken no part in the proceedings because it had been unaware of them. The notice of arbitration had been sent to the email address of a relatively low level employee who had left the claimant a month before the purported service of the notice.
Section 76 of the Arbitration Act 1996 provides that the parties are free to agree the manner of service of the notice but, failing that, the notice may be served "by any effective means" (a far wider concept than service of a claim form under the CPR). In Bernuth Lines v High Seas [2006], the arbitration notice was sent to a generic email address which was held out to the world as the only email address of the company. Sending the notice to that email address was held to be valid service in that case.
However, in this case, Popplewell J held that sending an email to an individual employee's email address was different: "Whether it constitutes good service if directed to an individual's email address must depend upon the particular role which the named individual plays or is held out as playing within the organisation". The answer to this question depended on the application of agency principles (even though the individual here was an employee, and not an agent, of the claimant).
Reference was made to the case of Sino Channel v Dana Shipping. Although the first instance decision in that case was overturned last week, there was no disapproval of Eder J's articulation of the principle that "even where an employee or agent has a wide general authority to act on behalf of his employer/principal, such authority does not (without more) generally include an authority to accept service of a notice of arbitration".
The judge found that, on the facts, the employee did not have actual authority, since no express authority had been conferred on the employee to accept service of arbitral proceedings. Nor was there anything to support a finding of implied authority. He had only been a representative of the operational department who had sent operational communications in relation to the performance of the contract, and there was no inference that he was cloaked with authority to accept service of legal process. Nor was there any factual basis to find that the employee had ostensible authority (unlike in the case of Sino Channel).
Accordingly, the notice had not been effectively served.
COMMENT: This case is therefore a warning that care should be taken when serving arbitration notices by email – unlike under the CPR, parties are not obliged under the Arbitration Act to confirm that they are prepared to accept service by email. The judge in this case said that where a generic email address such as info@otherparty.com "has been promulgated by the organisation [as the company email address], whether on its website or otherwise, the sender can reasonably expect the person who opens the email to be authorised internally to deal with its contents if the subject matter falls within the scope of the business activity for the purpose of which the generic email address has been promulgated".
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