Service Of Arbitration Notices
Service of notices - getting it right In issue 23 of International Quarterly, we looked at the decision in Glencore Agriculture BV (formerly Glencore Grain BV) v Conqueror Holdings Ltd1 which highlighted the importance of ensuring arbitration notices are served on individuals within an organisation who have authority to accept service.
The case of Sino Channel Asia Ltd v Dana Shipping and Trading PTE Singapore & Another2 also highlights the importance of getting it right when it comes to the important step of serving a notice of arbitration. This case raised questions in relation to the implied actual and/or ostensible authority of a third party to receive originating process.
Background This case concerns arbitration proceedings commenced by Dana against Sino in relation to disputes which had arisen under a contract of affreightment (COA) entered into between Dana as owner and Sino as charterer. Whilst the COA addressed procedural matters regarding disputes such as in relation to the appointment of arbitrators (clause 55), and contained various provisions for the giving of (strictly) operational notices (clause 56), there were no provisions setting out any express requirements relating to the service of originating process (e.g. a notice of arbitration). Therefore, the service of notices was governed by section 76 of the Arbitration Act 1996.
The question of whether service of the arbitration notice by Dana had been effectively given did not arise until after the arbitral tribunal had issued its award in favour of Dana, which it sent directly to Sino's registered office in Hong Kong. Sino's challenge to the jurisdiction of the arbitral tribunal arose by virtue of the fact that its receipt of the award was the first time Sino had been made aware of the arbitration proceedings or the award. This was because the notice of arbitration had not been served upon Sino, but instead was served by email on a third party, a man named Daniel Cai who was an employee of a company called Beijing XCty Trading Ltd (BX). So what was BX's involvement in the COA and why was BX and not Sino the recipient of the arbitration notice?
Essentially, Sino and BX had an arrangement whereby Sino agreed to sign the COA and front the transaction, with the operation of the COA being left to BX. Sino had not intended to (nor did it) play any part in the negotiations or performance under the COA. Therefore, following execution of the COA, all communications were between Dana...
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