Adjudication Matters – February 2018

9th February 2018

Sent but not served – the pitfalls of serving documents by email

Summary

In Glencore Agriculture B.V., (formerly Glencore Grain B.V) v Conqueror Holdings Limited it was held that, where a contract permits documents (such as adjudication notices) to be served by email, the individual receiving the email needs to have the appropriate level of authority to accept such documents.

Introduction

Where a contract permits the parties to serve documents by email, particular care needs to be taken as to who the documents are sent to. It will rarely be sufficient to send adjudication notices or referral notices to the individual that have been dealing with the Project on a commercial day-to-day basis, as it is unlikely that this individual will have the necessary authority to accept service of the documents.

Case Details

Conqueror Holdings Limited (“Conqueror”) contracted out their ship to Glencore Grain B V (“Glencore”) to carry grain from Ukraine to Egypt. Prior to the ship loading the cargo in Ukraine, Mr “O” of Glencore requested that Conqueror hold off from berthing until the Egyptian delegate arrived. Mr O subsequently sent two further emails on that same day stating that he would keep Conqueror up to date on the delegation, and that Conqueror should not do anything else until instructed otherwise.

The ship was delayed for 9 days and Conqueror claimed damages for this period.

Conqueror sent a letter before action to Mr O’s email address and which they received Mr O’s out of office.

A subsequent letter was issued setting out the claim and inviting Glencore to agree to the appointment of a sole arbitrator if it intended to dispute the claim. This was ignored.

Numerous emails were then issued to Glencore – all to Mr O’s email address – in relation to the arbitration proceedings. These include: notice to appoint arbitrator; claim submissions; order for service of defence; communications from the arbitrator; a final order for defence submissions; service of a costs schedule; and communication from the tribunal that he was proceeding to his award.

No response was given to any of the above and the Arbitrator found in favour of Conqueror.

Conqueror subsequently brought court proceedings to enforce the Arbitrator’s decision.

Decision

The Judge found that Conqueror were entitled to issue proceedings by email in accordance with the Arbitration Act.

However, although service by email was acceptable, it was necessary that the person receiving the documents had the appropriate authority to accept such documents.

It was held in this case that Mr O did not have the relevant authority. He was an employer in the operational department of Glencore, at a relatively junior level. Although this meant Mr O was entitled to send and receive emails of a commercial nature on behalf of Glencore, the Court highlighted a distinct difference between this general authority, and the authority to accept service of a notice of arbitration.

Glencore did not hold out Mr O as having authority to accept such documents, nor were Conqueror entitled to assume that Mr O had the required authority based on the emails received. “Service of originating process is a serious and distinct matter from general implied authority to conduct business on behalf of the principal” and so more was required.

Accordingly the documents were not validly served and the arbitrator’s award was set aside.

Summary

Although this case was concerned with an arbitration, the notice requirements for arbitrations and adjudications are, for all material purposes, the same.

The first point of call for serving documents should always be to check the contract. This will typically require notice to be given in writing and provide the relevant address for service– subject to any subsequent details made known to you.

Where this is silent, service by email could be an acceptable method. However you should always ensure that the individual being sent the documents has the appropriate authority. This is more than the simple authority to act on behalf of the business, and the Courts have identified that it will be in rare cases where a person has implied authority to accept such proceedings.

Typically, unless the company has expressly stated the individual has authority, we would advise that written notice is served at the company’s registered address or any other notified addresses, either on the company itself or for the attention of the Company Secretary. Copies can always be sent by email to the appropriate contact details as a secondary measure.