Two recent English High Court judgments illustrate the importance of ensuring that your arbitration notice or request fully complies with the formal requirements of the arbitral rules chosen by the parties and that the papers are sent to the correct party representatives. The decisions are cautionary tales of the frustration claimants in arbitration may experience if they do not take formalities sufficiently seriously when commencing arbitration.

1. Send the Notice or Request to the Right Person

On November 16, 2017, the English High Court issued its judgment in Glencore Agriculture BV v Conqueror Holdings Limited [2017] EWHC 2893 (Comm). The issue for the Court was whether service of a notice of arbitration upon an employee involved in business decisions relating to the dispute in question was sufficient service for the valid commencement of arbitration.

A dispute had arisen under a voyage charterparty in relation to delays at a load port. Instructions for the vessel to remain at the port had come by e-mail from an employee of Glencore Agriculture BV (“Glencore”). The same Glencore employee had also followed up those instructions with further e-mails.

Conqueror Holdings Limited (“Conqueror”) purported to commence arbitration by sending to the Glencore employee’s e-mail address a letter addressed to Glencore for the employee’s attention. Conqueror then sent a follow up letter to the same Glencore employee inviting Glencore to agree to the appointment of a sole arbitrator. No response was received to either letter, and a sole arbitrator was appointed. The arbitrator issued his final award without Glencore’s participation in the proceedings. After receiving the award by post, Glencore applied to have it set aside.

The Court found that sending a notice of arbitration by e‑mail to an employee does not necessarily qualify as valid service upon a company. The validity of service upon an employee depends on the employee’s role within the respondent company. On the facts of the case, the High Court held that the employee in question was not authorized to accept service on behalf of Glencore. The recipient of the notice of arbitration was merely a junior back office employee, and Conqueror had no reasonable expectation that he was authorized to accept service on behalf of Glencore. On that basis, the Court found that service of the notice of arbitration and other papers was defective and declared that, under the Arbitration Act 1996 (“the Act”), Glencore was entitled to question or challenge the award.

2. Make Sure Your Notice or Request Complies with the Formal Requirements in the Chosen Arbitral Rules

On December 21, 2017, the English High Court rendered another decision relating to a challenge of an arbitral award on the basis that the arbitration in question had not been validly commenced. In A v B [2017] EWHC 3417 (Comm), the High Court considered whether a single request for arbitration under the London Court of International Arbitration’s (“LCIA”) arbitral rules (“LCIA Rules”), seeking to refer disputes under two separate contracts, was valid. It also had to consider the deadlines for the raising of a jurisdictional objection under Article 23.3 of the LCIA Rules. At issue was whether the requirement for a respondent to raise a jurisdictional objection “as soon as possible but not later than the time for its Statement of Defence” could potentially establish a deadline earlier than the submission of a respondent’s Statement of Defence.

The claimant had issued a single request for arbitration (“Request”) in respect of disputes under two separate contracts, both containing an LCIA arbitration clause. The respondent served its response, in which it denied liability and reserved its right to challenge the tribunal’s jurisdiction. Shortly before the respondent’s Statement of Defence was due, it raised a jurisdictional objection on the basis that the Request was invalidly issued, as it had failed to identify the particular dispute and the particular arbitration agreement to which it related. The tribunal dismissed the respondent’s challenge to its jurisdiction. The respondent applied to the High Court under the Act, arguing that the tribunal lacked substantive jurisdiction over the dispute.

The High Court held that the LCIA Rules plainly treat a single request as giving rise to a single arbitration, the requirement for the payment of fees for that arbitration only, and the formation of a single arbitral tribunal. The LCIA Rules permit a later consolidation of arbitrations, but only by party agreement, which did not exist in the present case. The Court held it was inconceivable that the LCIA Rules could be read as permitting parties to pay a single fee in respect of multiple arbitrations. Accordingly, the Court found that the Request was invalid and the arbitrations were improperly constituted. Hence, the tribunal did not have jurisdiction.

The Court also considered the claimant’s argument that as the respondent had raised its jurisdictional objection too late and not “as soon as possible” as required under Article 23.3 of the LCIA Rules, the respondent had waived its right to object. The Court disagreed, finding that the mandatory provisions of the Act applied, which set a hard deadline for the raising of objections at the time of the Statement of Defence. The Court also noted that it was unlikely, in any case, that the LCIA Rules were intended to differ materially from the position under the Act. The Court therefore held that the respondent had raised its objections within the time limit.

3. Conclusion

It is crucial that the claimants in arbitration take the time to properly prepare an arbitration notice or request and to make sure it is delivered to an authorized recipient. Courts, arbitral institutions and tribunals take formal requirements seriously, so it is important to comply with requisite formalities. Formal defects can result in significant delays in the prosecution of claims in arbitration, so, where there are doubts as to how to comply with formalities, it is always better to err on the side of caution.