A lawyer tasked with negotiating a contract on behalf of a non‐English company (let us call it “Beane’s of Boston Inc.”) might well find a clause like the following included in a draft contract it receives from the other party (which we will call “Grace Brothers Limited”):1“Beane’s of Boston Inc. irrevocably appoints Oldrope LLP of 1 EasymoneyLane, London EC1 XYZ as its agent to receive on its behalf in England or Wales service of any proceedings in connection with this Contract. Such service shall be deemed completed on delivery to such agent (whether ornot it is forwarded to and received by Beane’s of Boston Inc.). If for any reason such agentBrothers Limited may appoint another agent for this purpose in any such manner as it sees fit in its sole and absolute discretion.”2Agreeing to such a clause would come at a cost for Beane’s. By committing to appoint Oldrope as process agent, Beane’s is committing to pay a substantial fee (typically several thousand pounds a year) for an indefinite period.Unfortunately, the rules on where, and how, English courtproceedings can be served on a foreign defendant are complicated, and different rules apply depending on where the defendant is, and on any relevant treaty which is in place between the UK and that country.If it is necessary to serve a claim from outside England and Wales, it will often be necessary to apply to the court for permission. In contractual disputes which are subject to a jurisdiction clause this is generally a formality, and is unlikely to involve a substantial hearing. But, if permission is granted, it will then be necessary to effect service. It will often be necessary to obtain a translation of the relevant documents, and service may involve a considerable delay, depending on what arrangements are in place between the UK and the relevant country.The benefit of a service agent clause is two fold. In the event it needs to bring a claim, Grace Brothers avoids having to apply to the English court for permission to serve outside the jurisdiction, and avoids the delay, uncertainty and expense which can potentially arise when proceedings have to be served outside the jurisdiction. Agreeing a process agent clause also offers a shortcut, and saves the lawyers from having to look up the relevant law, and deciding whether they could do without a process agent in a particular case.But process agent clauses are not confined to contracts whichprovide for disputes to be subject to the jurisdiction of the English courts. Parties will frequently insist that they be included, even when the contract provides for disputes to be resolved by way of English‐seated arbitration. Is this just a waste of money?The concept of “service”“Service” is a creature of statute or contract. A statute or contract will set out that such‐and‐such is to happen on a party being “served” with a particular document, and will (should) define what is to constitute “service” for this purpose. A contract might permit or require contractual notices for all sorts of purposes. For example, serving a notice might operate to fix a rate of interest or an exchange rate, or a notice might be required as a condition precedent to extra payment under a construction contract. When it comes to those kinds of notices, and what is to constitute “service”, the parties are free to agree what they wish.This article is concerned with the “service” of documents whichare required in order to commence binding dispute resolution procedures – specifically English seated arbitration. What is to constitute “service” and the effect of “service” is defined by statute.
What is the effect of “service” in arbitration?Where the contract provides for arbitration seated in England, Wales or Northern Ireland, the relevant law is to be found in the Arbitration Act 1996.On the question of how arbitration proceedings are to be commenced, section 14 provides:“14 Commencement of arbitral proceedings.The parties are free to agree when arbitral proceedings are to be regarded as commenced for the purposes of this Part and for the purposes of the Limitation Acts.If there is no such agreement the following provisions apply.Where the arbitrator is named or designated in the arbitration agreement, arbitral proceedings are commenced in respect of a matter when one party serves on the other party or parties a notice in writing requiring him or them to submit that matter to the person so named or designated.Where the arbitrator or arbitrators are to be appointed by the parties, arbitral proceedings are commenced in respect of a matter when one party serves on the other party or parties notice in writing requiring him or them to appoint an arbitrator or to agree to the appointment of an arbitrator in respect of that matter.Where the arbitrator or arbitrators are to be appointed by a person other than a party to the proceedings, arbitral proceedings are commenced in respect of a matter when one party gives notice in writing to that person requesting him to make the appointment in respect of that matter.”Absent a contrary agreement, then, “serving” the notice on the other party (or, as the case may be, the appointing authority) will operate to “commence” the arbitration proceedings “for the purposes of this Part and for the purposes of the Limitation Acts”. “Commencing” proceedings stops limitation running and, absent contrary agreement, it also starts time running for the appointment of arbitrators (sections 16, 17 and 18).Does the “commencement” of arbitration proceedings have anyother effect? To answer that, it is necessary to look through the rest of “this Part” (i.e. Part I of the Act) for any provision where the fact of proceedings being “commenced” is stated to have some effect on the rights or obligations of the parties. As it happens, besides passing references in Articles 49 (regarding the power to award interest) and 84 (regarding arbitration proceedings commenced before the Act came into force) “Commencement” does not seem to have any other effect.
2 Adapted from Practicallaw.com standard form promissory note.
3 Institutional rules on “commencement”Section 14 of the Arbitration Act 1996 allows the parties to reach a different agreement as to when proceedings are to be regarded as “commenced”. Examples of such agreements are:The LCIA rules (Article 1.1) provide that a party wishing to “commence” an arbitration must send a written Request for arbitration in a certain form, together with certain other documents, to the registrar of the LCIA court, must pay a fee, and must confirm that the same documents have been served on the other party. (The arbitration is treated as “commenced” on the date the documents and fee are received by the LCIA Registrar.)The ICC Rules (Article 4) are similar, in requiring that a party senda number of copies of a request for arbitration in a certain form to the ICC secretariat, and also pay a fee, though the Rules provide for the ICC secretariat to “transmit” a copy of the documents to the Respondent. The arbitration is treated as “commenced” on the date the documents and fee are received by the ICC.“Proper notice” for the purposes of the New York ConventionThe New York Convention makes reference to “proper notice”. This is relevant if it is envisaged that an award is going to have to be enforced in a state which is a party to that Convention and which is either not the state in which the award was made, or is a state which would consider the award to be a domestic award.The New York Convention includes the following:“Article VRecognition or enforcement of the award may be refused, at the request of the party against whom it is invoked, only if that party furnishes to the competent authority where the recognition and enforcement is sought proof that...the party against whom the award is invoked was not given proper notice of the appointment of the arbitrator or of the arbitration proceedings or was otherwise unable to present his case;”The Convention does not contain any definition of what is to constitute “proper notice”.The UK is party to the New York Convention, and Article V is reproduced in Part III of the Arbitration Act 1996. That Part concerns the enforcement in England, Wales and Northern Ireland of awards made in other Convention states. The definition of what is to constitute “service of any notice” in s.76 of the Act, however, applies only for the purposes of Part I of the Act. It does not, therefore, define what would count as “proper notice” for the
purposes of Article V in English enforcement proceedings.In practice, courts take a common sense approach to what will constitute “proper notice” for the purposes of the New York Convention. Born summarises the position in this way:“In contrast to the issues that arise with regard to service ofprocess in many national courts, there are virtually never disputes regarding the manner of service in international arbitration (provided that the parties received actual notice, or that reasonable means of modern communication were employed): in particular, arguments that statutory or other means of service employed in domestic litigation contexts were not used in the arbitral proceedings have uniformly been rejected by national courts in recognition contexts.”3What constitutes “service” for the purpose of arbitration?As to what constitutes “service”, for the purposes of Part I of the Arbitration Act 1996, section 76, provides:“76 Service of notices, &c.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.2) If or to the extent that there is no such agreement the following provisions apply.A notice or other document may be served on a person by any effective means.If a notice or other document is addressed, pre‐paid and delivered by post—to the addressee’s last known principal residence or, if he is or has been carrying on a trade, profession or business, his last known principal business address, orwhere the addressee is a body corporate, to the body’s registered or principal office,it shall be treated as effectively served.This section does not apply to the service of documents for the purposes of legal proceedings, for which provision is made by rules of court.References in this Part to a notice or other document include any form of communication in writing and references to giving or serving a notice or other document shall be construed accordingly.”Born International Commercial Arbitration (2009) p2750..
(a) Once again, the parties are free to agree something different. The agreement between Beane’s and Grace Brothers that any notice of arbitration would be effective as against Beane’s upon delivery to Oldrope would be given effect under section 76(1). But it would be equally open to the parties to have agreed a different manner of service, which did not involve the expense of a process agent – sending an email to a particular address, for example.Institutional rules: what is to constitute “service”?The ICC Rules do not contain any agreement as to when documents are to be treated as served, and so, for an English‐ seated ICC arbitration, the default rule in s.76 would apply. The LCIA Rules provide:“Article 4Notices and Periods of Time4.1Any notice or other communication that may be or is required to be given by a party under these Rules shall be in writing and shall be delivered by registered postal or courier service or transmitted by facsimile, telex, e‐mail or any other means of telecommunication that provide a record of its transmission.4.2A party's last‐known residence or place of business during the arbitration shall be a valid address for the purpose of any notice or other communication in the absence of any notification of a change to such address by that party to the other parties, the Arbitral Tribunal and the Registrar.”Service under s.76 absent a contrary agreementAbsent a contrary agreement, service is permitted under s.76 by “any effective means”. What matters is not (as in court proceedings) whether the documents were sent to a particular place but, rather, whether the defendant actually received the relevant information. There is no requirement that the documents be translated or served through any formal channel, or that a court or tribunal give permission for them to be served in a particular way.In any event, provided the notice is “addressed, pre‐paid and delivered by post” to Beane’s “last known principal business address” or “registered or principal office” in Boston, then it is deemed to have been served, irrespective of who reads it or what is done with it thereafter.In the vast majority of commercial arbitration cases, service ofthe notice of arbitration is never going to be in issue. In most such
cases, the counterparty will be a company which is trading, there will have been pre‐action correspondence about the dispute, it will be easy to identify where documents should be sent, and one can be confident about whether documents have been properly served. The other party will usually take part in the proceedings, and will be unable to argue that any resulting award should not be enforced because of a failure properly to serve proceedings on them. It is only when the other party actively tries to evade service, and takes no part in the proceedings that questions of service are likely to arise.Is a service agent clause ever useful in arbitration?Does this mean that a “service agent” clause is always a waste of money in any contract which provides for English seated arbitration?Not necessarily. There might be contracts where one can foresee that, in the event of a dispute, the other party might try and evade service, refuse to take part in proceedings, and resist enforcement on the grounds of not having been validly served. These will tend to be contracts either with individuals or with the entities which they personally control, and where the individuals, the companies, and/or their assets are all situated in questionable jurisdictions where a court might be more likely to accept even an unmeritorious defence of defective service raised by the defendants in question if asked to enforce any eventual arbitration award or freeze the assets in question.In such cases, a “service agent” clause might offer some security,but when enforcement is sought, a biased local court could just as well hold that service via the service agent was defective. The underlying problem remains – that transactions with such people are inherently risky, and that the assets are in a jurisdiction where you can’t easily get to them.There will also be some situations where, despite the agreementto arbitrate in England, a party would still want to bring proceedings before the English court, and will need to serve a claim form for this purpose.One situation where one might, in theory, need to bring court proceedings is if it is necessary to apply to the court to appoint an arbitrator. This scenario can basically be avoided by agreeing that the arbitrator is to be appointed by some other body (as is the case under almost all the institutional rules).Two other situations where one will want to bring a claim beforea court are:where the tribunal has issued an award, and a party wants to bring enforcement proceedings before the English courts; orwhere a party requires some interim relief under s.44 of the Arbitration Act 1996 which the tribunal either lacks the power to grant or is unable for the time being to grant (e.g. a freezing injunction).
(a) In both cases, it will be necessary to serve a claim form on the other party. The first question to ask in any such case is whether there is anywhere is England or Wales where the claim form can be served, thus avoiding the difficulties which can arise when it is necessary to serve proceedings outside the jurisdiction.When can a claim form be served on an overseas company at an address in England or Wales?Part 6 of the Civil Procedure Rules provides detailed rules about where and how service is to be affected. The original Part 6 was described in a leading text book as being “among the least successful of the Woolf reforms”4 and by Dyson LJ as being difficult to apply and understand.5 Part 6 has since been substantially amended, but it remains a particularly complicated part of the rules. When service is required to be affected at an address outside England or Wales then it may be necessary to apply to the court for permission, and – depending on where service is to take place – follow a lengthy, costly procedure in order to get the proceedings validly served in that country. This, of course, is the mischief which service agent clauses are aimed at.When considering whether this problem can be avoided, and aclaim form instead served at an address in England or Wales, a useful starting point is CPR rule 6.11. This provides:“Service of the claim form by contractually agreed –method 6.11Wherea contract contains a term providing that, in the event of a claim being started in relation to the contract, the claim form may be served by a method or at a place specified in the contract; anda claim solely in respect of that contract is started,the claim form may, subject to paragraph (2), be served on the defendant by the method or at the place specified in the contract.Where in accordance with the contract the claim form is to be served out of the jurisdiction, it may be served –if permission to serve it out of the jurisdiction has been granted under rule 6.36; orwithout permission under rule 6.32 or 6.33.”A service agent clause such as that proposed by Grace Brothers would meet the requirements of CPR 6.11. It provides that “proceedings” (i.e. a claim form) can be served on Beane’s byBlackstone’s Civil Practice (2013) 15.1.Collier v Williams [2006] EWCA Civ 20.
delivering it to Oldrope at Oldrope’s London address. The form would not be being served outside the jurisdiction, and so there would be no question of permission to serve outside the jurisdiction being required. If Grace Brothers needed to enforce an arbitration award in England, or needed to apply to the English court for an injunction in support of arbitration proceedings, it could send the necessary documents to Oldrope.There is, however, an exception whereby Beane’s couldpotentially prevent Grace Brothers effecting service by sending the documents to Oldrope, and instead force it to send the documents elsewhere.CPR rule 6.7 is a long rule, which we do not propose to set out in full. It is essentially concerned with situations in which a defendant, or a solicitor or EEA lawyer acting on their behalf, has given the claimant written notice to the effect that the proceedings may be served at the solicitor or EEA’s lawyer’s business address in the UK or EEA. In such a case, the proceedings must be served at that address, and this seems to be the case even if there was a prior agreement to the effect that they could be served somewhere else. If the lawyer’s notified address is not in England or Wales then such service will be service outside the jurisdiction, and so subject to the rules for service outside the jurisdiction.Assume, however, that there is no service agent clause, and nonotice has been given under rule 6.7. Grace Brothers’ first priority would be to try and work out whether, even though Beane’s is a Massachusetts company, there is still some place in England or Wales where the proceedings could be served.An overseas company can potentially be served withproceedings in England, either under the provisions of the Companies Act 2006 or under CPR rule 6.9.Section 1046 of the Companies Act 2006 provides for theintroduction of regulations regarding the registration of overseas companies. In outline these require that overseas companies register with the registrar of companies if they have an “establishment” in the UK, defined to mean a “branch or place of business”. If there is a person in the UK who is authorised to accept service of documents on the company’s behalf, this must also be registered.Section 1139 of the Companies Act 2006 provides: “1139 Service of documents on company...A document may be served on an overseas company whose particulars are registered under section 1046—by leaving it at, or sending it by post to, the registered address of any person resident in the United Kingdom who is authorised to accept service of documents on the company's behalf, or
if there is no such person, or if any such person refuses service or service cannot for any other reason be effected, by leaving it at or sending by post to any place of business of the company in the United Kingdom.”(4) Where a company registered in Scotland or Northern Ireland carries on business in England and Wales, the process of any court in England and Wales may be served on the company by leaving it at, or sending it by post to, the company's principal place of business in England and Wales, addressed to the manager or other head officer in England and Wales of the company.”The effect is that: If a company: (i) is registered is under s.1046; and has either (ii) registered the address of a person who is authorised to accept service; or (iii) has a place of business in England or Wales (rather than in Scotland or Northern Ireland), then English court proceedings can be served at that address, without any need to serve outside the jurisdiction.Note that, there is no requirement that the dispute arise out of, or have any connection with, the company’s place of business in England. There is probably still a right to effect service under this s.1139, even when the company has given a notice under CPR r.3.7 that service is to be via its solicitor.6An alternative to serving the company under section 1139 of theCompanies Act 2006 is to effect service under CPR rule 6.9(2). This permits service of proceedings on an overseas corporation at "any place in the jurisdiction where the corporation carries on its activities; or at any place of business of the company within the jurisdiction". Again, there is no requirement that the dispute arise out of, or have any connection with, the company’s business or activities in the jurisdiction.This provision is the successor to a series of earlier provisionsgoing back to RSC Order IX r.8, and although the CPR constitute a new procedural code, the earlier authorities remain relevant and persuasive.A very useful summary of the principles established in thoseauthorities (albeit obiter) can be found in a recent judgment of the Court of Appeal (Kitchin LJ) in Actavis Group HF v Eli Lilly and Company.7:See paragraph 6.3.8, White Book, Volume 1, 2012:”In Cranfield v Bridgegrove Ltd [2003] EWCA Civ 656, the Court of Appeal explained (at paras 83 to 85) that service of the claim form on a defendant company, either by leaving it at, or by sending it by post to, the company's registered office in accordance with s. 725(1) of the 1985 Act (now s. 1139 of the 2006 Act) or in accordance with one of the methods of service permitted by r.6.3(1) are true alternative service routes available to the claimant. Various consequences followed from this. For example (1) if a defendant company or a company's solicitors act in accordance with r.6.7, a claimant may choose whether to follow the s.1139 route or serve at the business address of the solicitors; and (2) if a defendant company has not given an address for service, a claimant may choose whether to follow the s. 1139 or the r.6.9 route for service. It is possible for the parties to make a binding contract whereby the claimant agrees to serve the claim form by the r.6.3(1) route rather than under s.1139 or vice versa (see r.6.11), in which event the respective routes cease to be true alternatives.”7 [2013] EWCA Civ 517.
“A place of business needs to be fixed and definite, and the activity must have been carried on there for a sufficient time for it to be characterised as a business. However, it is not necessary to establish that a substantial part of the business of the corporation is carried on from the place in question, and a corporation may have a place of business even if the activities carried on there are incidental to the main objects of the corporation: South India Shipping Corporation Ltd v Export‐Import Bank of Korea [1985] 1 WLR 585 (CA). So, for example, in Aktieselskabet Dampskib "Hercules" v Grand Trunk Pacific Railway Company [1912] KB 222, the defendant was incorporated in Canada for the purpose of constructing and working a railway there, its main office being in Montreal. Four directors resident in London formed a committee to make contracts on behalf of the company for the purpose of raising loan capital. This constituted the carrying on of business in this country.As the editors of Dicey, Morris and Collins, The Conflict of Laws (15th edn), say at 11‐119, the Companies Act 2006 makes provision for the service of documents on a foreign corporation whose particulars are registered, and this does, as a practical matter, deal with the majority of cases. A real problem is only likely to arise in a case such as this where the corporation's business is said to be carried on by a representative or agent. In Adams v Cape Industries Plc [1990] 1 Ch 433, this court explained that in such a case the question whether the representative has been carrying on the business of the foreign corporation or merely his own business will necessitate an investigation of the functions the representative has been performing and all aspects of the relationship between them. It provided (at pages 530F – 531B) the following list of questions which are likely to be relevant to such an investigation:“(a) whether or not the fixed place of business from which the representative operated was originally acquired for the purpose of enabling him to act on behalf of the corporation;(b) whether the corporation had directly reimbursed him for(i) the cost of his accommodation at the fixed place of business; (ii) the cost of his staff; (c) what other contribution, if any, the overseas corporation made to the financing of the business carried on by the representative; (d) whether the representative was remunerated by reference to transactions, e.g. by commission, or by fixed regular payments or in some other way; (e) what degree of control the corporation exercised over the running of the business conducted by the representative; (f) whether the representative reserved part of his accommodation or part of his staff for conducting business related to the corporation;(g) whether the representative displayed the corporation's
name at his premises or on his stationery, and if so, whether he did so in such a way as to indicate that he was a representative of the corporation; (h) what business, if any, the representative transacted as principal exclusively on his own behalf; (i) whether the representative made contracts with customers or other third parties in the name of the corporation, or otherwise in such manner as to bind it; (j) if so, whether the representative required specific authority in advance before binding the corporation to contractual obligations."The court emphasised that this list of questions is not exhaustive, and the answer to none of the questions is necessarily conclusive. An important factor will, however, be whether the representative has authority to enter into contracts on behalf of the foreign corporation without submitting them to the corporation for approval. So also, if the representative never makes contracts on behalf of the foreign corporation then that will be a powerful factor pointing against it having a presence here.”Another method by which a claim form might be properly served at an address in England or Wales so as to commence a claim against an overseas company is to be found in CPR r.6.12, which is largely self explanatory:“(1) The court may, on application, permit a claim form relating to a contract to be served on the defendant’s agent where –the defendant is out of the jurisdiction;the contract to which the claim relates was entered into within the jurisdiction with or through the defendant's agent; andat the time of the application either the agent’s authority has not been terminated or the agent is still in business relations with the defendant.An application under this rule –must be supported by evidence setting out –details of the contract and that it was entered into within the jurisdiction or through an agent who is within the jurisdiction;that the principal for whom the agent is acting was, at the time the contract was entered into and is at the time of the application, out of the jurisdiction; andwhy service out of the jurisdiction cannot be effected; andmay be made without notice.”
Assume that there is no service agent clause, that Beane’s has no branch in England or Wales, and did not enter the contract through an agent within the jurisdiction.CPR r.62.5 provides:“(1) The court may give permission to serve an arbitration claim form out of the jurisdiction if –the claimant seeks to –challenge; orappeal on a question of law arising out of,an arbitration award made within the jurisdiction;(The place where an award is treated as made is determined by section 53 of the 1996 Act.)the claim is for an order under section 44 of the 1996 Act; orthe claimant –seeks some other remedy or requires a question to be decided by the court affecting an arbitration (whether started or not), an arbitration agreement or an arbitration award; andthe seat of the arbitration is or will be within the jurisdiction or the conditions in section 2(4) of the 1996 Act are satisfied.”This does not seem to apply when what is sought is enforcement of the award. If a court claim is being made to enforce an award, a possibility is to apply to the court for an order under CPR rule 6.15:“(1) Where it appears to the court that there is a good reason to authorise service by a method or at a place not otherwise permitted by this Part, the court may make an order permitting service by an alternative method or at an alternative place”This provision has been considered in two recent cases ‐ one a pure English court action and the other an arbitration‐related claim.Abela and others v Baadarani [2013] UKSC 44 concerned a claimconcerning an alleged fraud in respect of a contract which was subject to an English jurisdiction clause against parties domiciled in Lebanon. The UK is not party to any international agreement with Lebanon regarding the service of process. The claimant obtained an order under CPR r.6.15 allowing the claim to be served by personal service at an address in Beirut, which the claimant believed to be the defendant’s home. Having failed to effect service by this route, the Claimant sent the claim to the defendant’s lawyer’s offices in Beirut. Four months later, the lawyer returned the papers, stating that he was not authorised to accept service
and never had been. He provided no information about the Defendant’s whereabouts. The claimant sought an order under CPR r.6.15, that the claim had been validly served by sending it to the lawyer in Lebanon. The order was granted at first instance, but set aside on appeal.The Supreme Court reinstated the order, confirming that CPRallows service at an alternative location to be validated retrospectively, and allows the court to authorise alternative service at a place either inside or outside the jurisdiction. The alternative method of service need not be expressly permitted under local law, as long as it is not contrary to local law. In holding that there was a “good reason” for alternative service, the court considered it relevant that: (i) there was no service convention; (ii) the claim form had actually come to the defendant’s attention; (iii) the defendant had sought to evade service; and (iv) service through diplomatic channels was likely to prove difficult and expensive, and result in further delay.In a case like Abela, the effect of the order under CPR 6.15 is to allow a claim to proceed before the English court. Any eventual judgment might well have to be enforced in the other country through the local courts. They might not recognise the alternative service method authorised by the English court.That problem does not arise where the claim form is, instead,being served in order to be able to enforce an arbitration award in England, or obtain an English freezing injunction.An example of CPR rule 6.15 being deployed in a piece of arbitration‐related litigation was Cruz City 1 Mauritius Holdings v Unitech Ltd and Others [2013] EWHC 1323 (Comm). That case concerned a claim to enforce an arbitration award which had been issued by an arbitral tribunal seated in England. The judge granted an order under CPR r.6.15 allowing the claim form to be served at the London office of the solicitors who had represented the defendant in the arbitration. He held that it was:“...the invariable practice in the Commercial Court in relation to arbitration applications relating to arbitrations seated within the jurisdiction to permit service upon a party's solicitor who has acted for that party in the arbitration, provided that that solicitor does not appear to have been disinstructed and absent other special circumstances”The judge quoted with approval an earlier judgment which gave as the reason for this practice:“It is inherently desirable and in the interests of all parties that if arbitration applications are made in relation to either pending or otherwise completed arbitrations they are determined by the court as soon as reasonably practicable, consistent with their being dealt with justly. Such disposal contributes to the achievement of finality of the arbitral process. Moreover, in the ordinary case where an overseas party to an English arbitration has or has had solicitors in
England acting for him in that arbitration, service of the application and associated documents upon the English solicitors is the most reliable method whereby those documents will be brought expeditiously to the attention of the responsible persons within the relevant entity sought to be served. It will also usually be the most economical method of achieving that result.”This “invariable practice” is of no assistance where the defendant is using a lawyer with no London office, or where the proceedings are brought before any such lawyer has been appointed (as will often be the case where the claim is for interim relief, such as a freezing injunction).But, if a freezing injunction is required, this is always going to involve a costly and substantial ex parte application (i.e. it will be obtained without serving the defendant). Having a process agent does not avoid the need for an application to the court. The question of how the foreign defendant is to be served with the claim form and the injunction will be dealt with at the same hearing. In light of the urgency, the court may well be amenable to granting an order for alternative service, if service on a foreign defendant under a service convention is going to prove slow or difficult. It also needs to be borne in mind that, in practical terms, when what is sought is a freezing injunction the first priority is to make sure that the defendant’s bankers are given notice of the injunction. A service agent clause with the defendant will not help to establish how to serve their bankers.ConclusionA service agent clause will usually be a waste of money when a contract provides for disputes to be resolved exclusively by way of English seated arbitration. A service agent clause can make sense when dispute resolution is to be by way of English court litigation, when the sums involved are sufficient and/or when the counterparty and its assets are located in a jurisdiction where service and enforcement are likely to be difficult. Rather than inserting boilerplate service agent clauses by default, whether such a clause is really needed should be considered carefully in each case.
