Glencore Agriculture B.V. (formerly Glencore Grain B.V.) -v- Conqueror Holdings Limited [2017] EWHC 2893 (Comm)
Details
Introduction
In this case, the High Court considered whether a notice of arbitration and notice under section 17 of the Arbitration Act 1996 (the Act) were validly served on a party by being sent to an individual employee’s email account. Mr Justice Popplewell employed the ordinary principles of agency and applied the recent decision in Sino Channel Asia Limited -v- Dana Shipping and Trading to reach his decision.
Factual background
Conqueror Holdings Limited chartered the vessel “AMITY” to Glencore Agriculture B.V. to carry corn in bulk from Ilyichevsk, Ukraine to Damietta, an Egyptian Mediterranean port. The parties entered into a voyage charterparty on the SYNACOMEX 2000 form, which provided for arbitration in accordance with the LMAA terms 1997, with each party to appoint an arbitrator in the event of a dispute.
On 30 January 2015, the vessel arrived at the loading port and remained there until 8 February 2015 following instructions by Mr Florian Oosterman of Glencore. Mr Oosterman used his personal business address to send three emails to Conqueror, in January and February, stating that the vessel would remain at anchorage.
A dispute arose between the parties in relation to the resulting delay at the loading port. Conqueror claimed damages for detention for this period at the agreed daily demurrage rate and appointed a claims adjuster to pursue the claim. He sent a letter before action to Mr Oosterman’s email address, followed by further correspondence including inter alia a notice of commencement of arbitration. Having received no response, Conqueror eventually exercised its power under section 17 of the Act and appointed its own arbitrator to act as the sole arbitrator.
In the course of the arbitral proceedings, all communications were sent by email to Mr Oosterman’s email address, there was no response to any of them. On 28 October 2016, Glencore was informed of the proceedings, for the first time, when it received by post the arbitration award issued in favour of Conqueror. Glencore sought to set aside the award pursuant to section 72 of the Act and claimed that the notice of arbitration and notice under section 17 of the Act were not validly served by being sent to the email address of a ‘relatively junior employee’.
Legal issues
The Act allows parties to agree on the manner of service of the notice. If there is no such agreement, section 76 (3) provides for service ‘by any effective means’ which includes emails. In The Eastern Navigator [2005] EWHC 3020 (Comm) Christopher Clarke J held that sending the arbitration notice to a generic email address, which was promulgated by the organisation as their only email address, was sufficient to amount to good service.
In this case, Mr Justice Popplewell distinguished between the use of a generic email address and that of an individual employee. He explained that the use of any email address at Glencore could not constitute good service and suggested that the role of the named employee would be decisive. Thus, he turned to the ordinary principles of agency to determine whether Mr Oosterman had the authority to receive the arbitration notice.
In Sino Channel [2016] EWHC 1118 (Comm) Eder J suggested 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’. It should be noted that, although this decision was reversed on appeal, on the facts of the case, there was no disapproval of this statement.
In his judgment, Mr Justice Popplewell relied on this reasoning and went on to distinguish between the role of employees whose function is operational and those whose function involves dispute handling or dispute resolution. He emphasised the importance of commercial certainty in the context of service of legal process and stated that the recipient company must ‘know with reasonable certainty whether service has been validly effected’.
The judge concluded that there was no basis for finding that Mr Oosterman was expressly authorised to accept service of arbitral proceedings. Similarly, his role as a representative of the operational department was not sufficient to support a finding of implied or ostensible authority to handle the service of legal process. Therefore, he held that the notice of arbitration and notice under section 17 were not effectively served. Glencore was granted relief under section 72 of the Act.
Comment
The High Court in this case distinguished between the general, purposely wide, principle that service by email is capable of being an ‘effective means’ within the meaning of section 76 (3) of the Act and the issue whether service on a particular individual in a particular case by email is effective. This decision serves as a reminder that caution should be taken when serving arbitration proceedings by email.
This article originally appeared in the December 2017 edition of shipping case digest. Other articles include:
ST Shipping and Transport Pte Ltd -v- Space Shipping Ltd (The “CV STEALTH”) [2017] EWHC 2808 (Comm)
