Can arbitration proceedings be validly served by email?
by Nicholas Scott, Solicitor, Commercial Litigation Department
International trade is well known for being “red in tooth and claw” and a recent decision that arbitration proceedings may be served at an address may do little to dispel that image. The decision might also appear to confer a tactical advantage by permitting surreptitious service of proceedings to an address that few, if any, commercial parties would seriously consider a valid channel for the service of legal proceedings.
That said, the recent case of Bernuth Lines Ltd v High Seas Shipping Ltd [2005] EWHC 3020 (Comm) should not be seen as a tacit acceptance by the courts that service of arbitration proceedings to a general purpose generic e-mail address, for the purpose of securing a procedural advantage, will always, or ever, be permissible. This article aims to: (a) explore what steps have to be taken to show valid service of arbitration proceedings by e-mail, with particular focus, on the significance of selecting the correct e-mail address for service; and (b) outline some suggestions as to how parties concerned as to the ramifications of service of arbitration proceedings by e-mail should respond, in practical terms, to this judgment.
Case facts
The arbitration proceedings were served by High Seas Shipping Limited (“High Seas”) on Bernuth Lines Ltd (“Bernuth”) at the address ‘’ for non-payment of charter hire. This was the only e-mail address available for the charterer and also, the e-mail address which was listed for Bernuth in the Lloyd’s Maritime Directory 2005. The relevant e-mails were read by junior employees of Bernuth but dismissed as ‘spam’ and, accordingly, not forwarded to the relevant, senior employees. No defence submissions were received and an arbitration award was made in favour of High Seas. An application was made to set aside the arbitrator’s award on the grounds that service of the proceedings by e-mail had not brought the proceedings sufficiently to Bernuth’s attention, such that there had been a serious irregularity affecting the proceedings which had caused substantial injustice.
Is it possible to validly serve arbitration proceedings at an e-mail address given ‘for information’?
Section 76(1) of The Arbitration Act 1996 (“the Act”) provides: that:
“(1) The parties are free to agree on the manner of service of any notice or other document required or authorised to be given or served in pursuance of the arbitration agreement or for the purposes of the arbitral proceedings.
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Can arbitration proceedings be validly served by email?
by Nicholas Scott, Solicitor, Commercial Litigation Department
(2) If or to the extent that there is no such agreement the following provisions apply.
(3) A notice or other document may be served by any effective means.”
Clarke J held that, first, an e-mail was an “effective means” to serve arbitration proceedings for the purposes of the Act and that second, in the circumstances, where the only e-mail address available for Bernuth was its ‘’ address, service of proceedings at that address constituted valid service under the Act. The learned judge reached this conclusion on the grounds that the ‘’ address was (a) the only e-mail address for that company (b) included in the Lloyd’s Maritime Directory 2005 and (c) there was no express indication in either the Lloyd’s Directory or on Bernuth’s website that the use of the address was in any way limited such that arbitration proceedings could not be served there.
At this point, it may be tempting to advise clients to keep a much closer watch on their ‘info@’ address; that would be sensible advice. However, Clarke J’s judgment is not as widely drawn as it first appears and should not lead to a rush of arbitration lawyers serving proceedings at an ‘info@’ address, to try and obtain the obvious tactical advantage of putting proceedings before employees who may not understand the significance of the documents in question, as happened in this case. At paragraph 29 of his judgment, having held that service of proceedings by e-mail constituted good service, Clarke J went on to hold that “That is not to say that clicking on the “send” icon automatically amounts to good service”. Indeed, Clarke J makes clear that valid service by e-mail requires (a) service at the correct address and (b) proof of delivery. These are discussed in the next section.
Service at the correct e-mail address: Identify the “intended recipient”
The correct e-mail address will be that of the “intended recipient”.
No detailed guidance is offered as to who this might be, beyond: “There may be circumstances where, for instance, there are several e-mail addresses for a number of different divisions of the same company, possibly in different countries, where despatch to a particular e-mail address is not effective service.” It seems to follow from this that there is, in principle, a hierarchy to e-mail addresses, which must be observed to achieve valid service. If Clarke J’s multi-divisional company analysis is followed, it may be considered appropriate, where this information is known (which, crucially it was not in this case) to serve the arbitration proceedings to the e-mail address of the most relevant person. For instance, the company secretary or the director or employee who executed the agreement containing the arbitration clause. This analysis must, however, be reconciled with Clarke J’s seemingly contradictory statement that “Having put into the current Lloyd’s Maritime Directory as their only e-mail address, they can scarcely be surprised to find that an e-mail inviting them to agree to the appointment of an arbitrator in a maritime matter was sent to that address”. In this instance, there could only be one “intended recipient”, the address. Had there been other available or known addresses, then they too might have been the intended recipient. In summary, valid service will depend on selecting the correct intended recipient in each situation.
Proof of Service
Parties seeking to serve arbitration proceedings by e-mail would be well advised to acquaint themselves with the tracking and receipt functions of their e-mail program. Paragraph 29 of the judgment notes that at least proof that, (a) firstly the e-mail has not been rejected and, secondly (b) that it has been delivered will be needed to establish service. It is not stipulated in the judgment but, presumably, a read-receipt would be the best evidence of effective service. However, it is notoriously difficult to make this function operate successfully outside of the sender’s own e-mail system.
Opting out of E-mail Service
The judgment makes clear at paragraph 28, that the Civil Procedure Rules (CPR) requirement that you must opt in to service by e-mail (see CPR 6 PD 3.1) is of no application to service of arbitration proceedings. Accordingly, it is a case of ‘opting out’ of service by e-mail because of the broad terms in which section 76(3) of the Act is drawn. Whilst this may not be a problem for new agreements - the parties can opt out of service by e-mail if they so choose (see section 76(1) of the Act) - this judgment clearly presents a potential problem for parties to agreements with arbitration clauses who never contemplated service of proceedings by e-mail.
I address below some suggestions further to guidance in the judgment as to how (a) parties could potentially ‘opt out’ of service by e-mail and (b) ensure they do not repeat the Claimant’s mistake.
Disinformation?
The ‘’ address appeared (a) as the only e-mail address for Bernuth in the Lloyd’s Maritime Directory 2005 and (b) after Bernuth’s postal address, telephone and fax numbers on its website. In evidence, it was said for Bernuth that the ‘’ address was used only for bookings for Bernuth’s cargo service. Clarke J noted that “There is, however, no indication on either the website or in Lloyd’s Maritime Directory that it is only to be so used”. The clear implication is that suitable drafting would be effective to exclude the possibility of serving arbitration proceedings at that address. However, it may be thought that such a disclaimer would constitute an ineffective unilateral variation of the relevant agreement, for the purpose of excluding the right to serve by e-mail under section 76(1) of the Act.
Whatever view is taken of the effectiveness of such a disclaimer, it is clear that the staff who monitor the ‘info@address’ will need appropriate training in light of this judgment. Clarke J held, applying Stoom v. Maats De Maas NV v. Nippon Yusen Kaisha (The Pendrecht) [1980] 2 Lloyd’s Rep 56, that, by analogy with faxes and letters, where service was effected by e-mail and as a result of internal failings that e-mail did not reach the relevant personnel, then the organisation served was stuck with the consequences of its own mistakes. Some of Bernuth’s employees did see the e-mails in question, but dismissed them as ‘spam’. This contention found, it is suggested, rightly, no favour with the court. That said, it may be felt that, culturally, although an employee would be very likely to pass on a solicitor’s letter, they may well not appreciate the significance of an e-mail purporting to serve arbitration proceedings and which, significantly, is unlikely to be emblazoned with a law firm’s logo. Accordingly, staff ought to be given appropriate assistance to scan the ‘info@address’ for any arbitration proceedings.
A Safer Option
This case has made clear that arbitration proceedings can be validly served by e-mail. This will be, for the most part, welcome news to the sophisticated business and legal users of both e-mail and arbitration that Clarke J identifies. What is, however, less helpful, is the uncertainty that will surround the identification of the ‘correct’ e-mail address for service. However convenient e-mail service may be, the safest option may still remain to serve in hard copy or by fax, if there is any doubt, on the facts, as to whether proceedings may be effectively served at an ‘info@address”.
For further information, please contact Nicholas Scott on +44 207 242 5905,
e-mail , or your usual Memery Crystal contact.
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