The significance of the case, decided 21st December, is limited:
this was a maritime arbitration, not an English court action. That
would be subject to different rules, rules that generally
do not permit the service of writs by email.
The case only came before the High Court when Bernuth Lines Ltd
sought to challenge the validity of the arbitration ruling against
it. The High Court ruled that, in an arbitration, effective service
did not depend on the email address to which service was made being
one that the serving party had been notified of as an address to be
used in the context of the dispute.
The dispute arose after Bernuth chartered a cargo ship to High
Seas Shipping Ltd for a voyage from Miami to Nicaragua. The draught
of the chartered ship – i.e. the depth of its keel below the
surface – was found to be over the limit for one of the shallower
ports on the voyage; so the captain felt compelled to unload the
cargo onto another ship. A dispute ensued over payment of
compensation.
High Seas’ lawyers emailed Bernuth, offering to settle the
dispute for $34,100. If no settlement was reached, arbitration
proceedings would commence, said the email. The email sought
Bernuth’s agreement to the appointment of an arbitrator.
However the email address used by the lawyers – info@bernuth.com
– had not been detailed on any prior communication between the
parties, although it was listed on the firm’s website and in the
Lloyds Maritime Directory.
Bernuth did not respond to the email – or to any of the others
that followed during the arbitration proceedings – despite High
Seas’ lawyers logging delivery receipts for all of the
messages.
Finally, on 29th July 2005, the arbitrator issued his
final award in favour of High Seas.
This time the arbitrator sent notice of the award by email and
by post. He was contacted shortly afterwards by Bernuth’s lawyers
who expressed surprise at the award.
It transpired that the info@bernuth.com address was used for
Bernuth's cargo bookings. The emails about the dispute would have
been ignored as probably being unsolicited email, argued Bernuth's
lawyers. They wrote to High Seas' lawyers: "Our client is perplexed
that the other channel of communication established through your
client’s Miami lawyers appears to have been by passed.”
Bernuth asked the High Court to invalidate the award on the
basis that the legal action had not been properly brought to the
firm’s attention and that there had “been a serious irregularity
affecting the proceedings which has caused or will cause them
substantial injustice.”
The Arbitration Act of 1996 allows awards to be challenged on
such a basis.
The ruling
According to Mr Justice Christopher Clarke, the case hinged on
whether the arbitration had been properly commenced or not.
Under the Arbitration Act this depends on notice in writing
being given, requiring the defendant to appoint or to agree to the
appointment of an arbitrator. Such a request had been expressed in
the first email to Bernuth, but questions remained over whether the
notice had also been properly served.
According to the Act, “A notice or other document may be served
by any effective means.”
In the opinion of the Judge, this provision has been made
“purposely wide”. He explained:
“It contemplates that any means of service
will suffice provided that it is a recognised means of
communication effective to deliver the document to the party to
whom it is sent at his address for the purpose of that means of
communication (e.g. post, fax or email). There is no reason why, in
this context, delivery of a document by email – a method habitually
used by businessmen, lawyers and civil servants – should be
regarded as essentially different from communication by post, fax
or telex.”
According to Justice Clarke, service emails must be sent to the
email address of the intended recipient and, where several email
addresses are shown, it must be sent to the correct one. In this
case, said the Judge, the email address had been held out as
Bernuth’s only address and emails sent to that address had
been logged as delivered.
“The position is, to my mind, no different to the receipt at a
company’s office of a letter or telex which, for whatever reason,
someone at the company decides to discard," added Justice Clarke.
"In both cases service has effectively been made, and the document
received will, in the first instance, be dealt with by a clerical
officer."
The fact that the emails did not reach the relevant
members of staff was an “internal failing” but did not affect the
validity of service.
Comment
John MacKenzie, a partner at Pinsent Masons, the law firm behind
OUT-LAW.COM, said: "When email first emerged there were concerns
about whether it was 'writing' at all. This case demonstrates the
almost uniform acceptance of email as a form of communication."
He said it also shows that if you have an email address,
the inbox needs to be carefully checked. This includes
generic addresses such as 'admin@' and 'info@', as in this
case.
"Not all court documents can be served by email due to specific
court rules, but there can be other important notices that may be
missed if the inbox is not checked," added MacKenzie.
Scottish court actions cannot be served by email. In England,
email service is possible but only when there is written consent to
this from the other party in advance, according to the Civil
Procedure Rules. Accordingly, if a British business
receives a court action "out of the blue" by email, it could
generally argue that service has not been effected.
