In Glencore Agriculture v Conqueror Holdings the Commercial Court held that a notice of arbitration served by email on a junior employee did not constitute good service. The Commercial Court's finding comes 14 months after the notice of arbitration was 'served' and after the arbitrator issued their award - clearly time and money wasted following a fairly basic and avoidable mistake. In this article we give some advice on how to ensure you effect good service and ensure that you know when you have been effectively served.
Glencore v Conqueror: the facts
Conqueror instructed a claims adjuster to pursue a damages claim arising out of the detention of a vessel at its load port. The claims adjuster sent a letter before action to the individual at Glencore with whom he had previously had email communications regarding the performance for the voyage and the delay at the load port. The claims adjuster used that same email address for appointment of the arbitrator and all other correspondence relating to the arbitration. Save for an automatic reply advising of a temporary absence, no reply was received from that email address.
The arbitrator proceeded to make an award. The award was posted to Glencore.
Glencore did not participate in the arbitration and stated that it was unaware of the proceedings until it received the award in the post. Glencore applied to the English Court under s. 72 Arbitration Act 1996 (AA 1996) (savings for the rights of person who takes no part in proceedings) for the award to be set aside. The question for the court was whether the notice of arbitration had been validly served under AA 1996, s 17.
A few points to note:
- This was an ad-hoc arbitration under the LMAA Terms. This issue of service is unlikely to arise, or at least reach this stage, in an institutional arbitration (see below).
- The email address used was in the format of [individual name@domain name], it was not a generic email address eg [info@domain name].
Service not valid
Mr Justice Popplewell in the Commercial Court found that the individual to whom the emails had been sent did not have actual, implied or ostensible authority to accept service of notices in the arbitration. The notice of arbitration had therefore not been validly served and he set aside the award under AA 1996, s 72.
AA 1996, s76(3) permits service of notice by 'any effective means'. This includes email (as held in The Eastern Navigator) but, as Popplewell J identified, there is a distinction between generic and specific email addresses. Notice can be effectively sent to a generic email address where "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 its business activity for the purpose of which the generic email address has been promulgated". In contrast, whether an individual's email address will be sufficient to accept service depends on the role of the individual which they hold or which they held out as - this is a question of agency.
Role of the institutions
As stated above, this situation of whether service has been effected is less likely to occur in an institutional arbitration, or at least will come to light at an early stage. This said, where your arbitration is institutional do check the notice provisions to see how to effect service or whether service has been properly effected as the rules differ between institutions.
By way of example, the LCIA Rules 2014 provide for the claimant to effect delivery of the notice of arbitration (Art 1.1(vii)) with confirmation of delivery being provided to the LCIA. Delivery by electronic means, including email, may only be effected to an address agreed or designated by the receiving party for that purpose or ordered by the tribunal (Art 4.1). The email address used in the Glencore case would not have passed this test and this issue would, presumably, have been identified and drawn to the claimant's attention at the outset of the proceedings.
Under the ICC Rules 2017, the Request for Arbitration is served on the respondent by the ICC Secretariat, not the claimant (Art 4). Notices from the Secretariat and the tribunal to be made to the last address of the party or its representative for whom the same are intended as notified by the party in question or the other party (Art 3). Such notices can be sent by email or other means that provides for a record of the sending (Art 3(2)).
Lessons to be learnt
There are lessons to be learnt for both potential claimants and respondents.
For claimants - while service by email is permissible you must ensure that that the email address you are using is either 1) a generic email address to which it is reasonable to expect a receiving person to have authority to deal with the matter in hand or 2) to an individual who has authority to accept service and to deal with the matter. If in any doubt, and in fact even where there is no doubt just out of an abundance of caution, the question should be asked directly prior to service. As in the Glencore case where the dispute was being handled by a third party these instructions must also be passed on to that third party handler.
For respondents - be aware that service by email is permitted under the Arbitration Act on generic email addresses and on individuals. All staff need to understand the importance of any documents they receive and to understand how to act in those circumstances. You may also consider a policy in email-signatures of stating that 'this email address does not accept service of legal notices' to be clear as to who does and does not have authority to accept service. When a notice of arbitration or other legal documents are received, you should always consider whether they have been validly served and, if not, what action to take. Sometimes, a failure of service can be used strategically to your advantage, sometimes it is advisable to acknowledge the error and permit proper service - don't however just accept that because you have received a document it has been properly served.
While service by email is generally permitted both by the courts and in arbitration, it is important not to be complacent. As the Glencore decision shows, giving insufficient consideration to the notice requirements at the outset can lead to wasted time and effort for all concerned.
Glencore Agriculture B.V (formerly Glencore Grain B.V.) v Conqueror Holdings Ltd  EWHC 2893 (Comm)
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.