Arbitration Award Abolished Down to Communication Error.
When it comes to legal matters, the security and privacy of confidential documents need to be taken very seriously. It has recently made public news that in 2016, the High Court threw out a high-profile arbitration award all because the communication was sent to someone who didn’t have the authority to receive it.
The employee who received news of the arbitration was used as a point of contact during a shipping dispute which was in relation to delays at a loading port. For an unknown reason, the employee who was described as a back office junior became the recipient of a series of correspondence regarding the arbitration award beginning in August 2015. Then, in September 2015, the defendant sent an email to the same employee’s email address disclosing the sum of money due on the balance of accounts which also invited Glencore Grain to agree to the appointment of a sole arbitrator.
Judge, Sir Justice Popplewell, expressed that it was not acceptable to email an individual solely on the basis that they had taken part in underlying proceedings and expect them to be able to accept service of arbitral proceedings.
Unaware of Arbitration Proceedings
Having received no response to any of their email communications, in January 2016, the defendant then emailed the employee once again, this time, giving notice of the appointment of an arbitrator. After this communication, the defendant then continued to update the employee on the progress of the case. The court heard that there was never a response or any communications from that individual’s email address.
Claimant Glencore Agriculture BV v Conqueror Holdings Ltd said that it had no part in any arbitration proceedings and was unaware of the situation until it received the award by post in October 2016 – over a year since the initial email was sent to the unauthorised employee.
Glencore Grain said that the employee who had received the communications was a junior back office employee who was not authorised to accept services, whether it is an enquiry form or a notice of arbitration. He told the court that none of the communications sent by Conqueror or the arbitrator was passed onto Glencore’s legal department meaning that they were completely unaware of the state of affairs.
Disputing the Role
Lawyers of Conqueror Holdings Ltd argued that service was sufficient because the employee in question was the individual who had dealt with operational matters in relation to the events which instigated the dispute. However, Popplewell warned against debating the role within a company of those whose function is operational, and those whose function involves dispute handling or dispute resolution.
This resulted in it being ruled that Glencore Grain was not effectually served with the notice of commencement of the arbitration. Therefore, set aside the arbitration order for the claimant to pay around £33,000 plus costs.
Don’t Make the Same Mistake
Legal matters can be tricky and you don’t want to find yourself in a similar situation. Therefore, as the leading provider of information and legal support services to Solicitors, Local Authority Legal Departments and various private clients, we’re on hand to help and offer advice.