Glencore Agriculture BV v Conqueror Holdings Ltd [2017] EWHC 2893 (Comm)

[2017] EWHC 2893 (Comm)Case No CL-2016-000684IN THE HIGH COURT OF JUSTICEBUSINESS AND PROPERTY COURTSOF ENGLAND AND WALESCOMMERCIAL COURTQUEEN’S BENCH DIVISIONVenue Royal Courts of Justice, Rolls Building, Fetter Lane, London, EC4A 1NLDate 16/11/2017
Before
THE HON. MR JUSTICE POPPLEWELL
Between
GLENCORE AGRICULTURE B.V.ClaimantCONQUEROR HOLDINGS LIMITEDDefendant
Mr Yash Kulkarni (instructed by Sutherland (Europe) LLP) for ClaimantMs Stephanie Barrett (instructed by Jackson Parton) for DefendantHearing Hearing dates: 10 November 2017
Judgment ApprovedThe Hon. Mr Justice Popplewell :Introduction
[1]The Claimant (“Glencore Grain”) seeks to set aside a final arbitration award of a sole arbitrator dated 26 September 2016, by which it was ordered to pay to the Defendant (“Conqueror”) US$43,176.27 and costs. Although the amount at stake is small, the application has been contested with vigour by the parties and argued with conspicuous skill by counsel on both sides.[2]Glencore Grain took no part in the arbitration and was unaware of the proceedings until it received the award by post on 28 October 2016. The notice of arbitration and other documents were sent to the email address of an employee of Glencore Grain called Florian Oosterman, who left Glencore Grain’s employment in September 2016. The issue is whether the notice of arbitration and notice under s.17 of the Arbitration Act 1996 were validly served by being sent to Mr Oosterman’s email address. The application is made pursuant to s.72 of the Act, alternatively s.67 or s.68. If based on s67 or s.68, an extension of time is required under s.79 and s.80(5), which is not opposed.

The Facts

[3]The dispute arises out of a voyage charterparty on the Synacomex 2000 form as amended, by which Conqueror chartered their vessel “AMITY” to Glencore Grain as charterers to carry corn in bulk from Ilychevsk in the Ukraine to an Egyptian Mediterranean port, in the event Damietta.[4]The charterparty contained an arbitration clause at clause 40 in the following terms:
“All the disputes from time to time arising out of this contract shall, unless the parties agree forthwith on a single Arbitrator, be referred to the final Arbitrament of two Arbitrators carrying on business in London who shall be members of the Baltic Exchange and engaged in the Shipping and/or Grain Trades, one to be appointed by each of the parties, with power to such Arbitrators to appoint an Umpire. … The arbitration to be on documents only for claims not exceeding US$100,000 … Arbitration in London in accordance with LMAA terms 1997, English Law to apply.”
The arbitration to be on documents only for claims not exceeding US$100,000 … Arbitration in London in accordance with LMAA terms 1997, English Law to apply.”

The arbitration to be on documents only for claims not exceeding US$100,000 …

[5]A dispute arose between the parties in relation to delays at the load port. The vessel had arrived at Ilychevsk at 0812 on 30 January 2015 and remained at anchorage until 1300 on 8 February 2015 because Glencore Grain had instructed the vessel to remain there. The instruction was given by an email on 31 January 2015 stating: “Please be informed that vessel cannot berth until the egyptian delegation has arrived. Pls take necessary actions accordingly, thanks”.[6]That email was sent by Mr Oosterman from florian.oosterman@glencore.com. Two further emails were sent by Mr Oosterman from the same email address on the following day, 1 February 2015. The first promised to keep owners informed about the delegation. The second confirmed the instruction that the vessel should not berth until further instructions.[7]The time spent at anchorage was 9.2 days. Conqueror claimed damages for detention for this period at the demurrage rate of US$7,000 per day, in the total sum in US$ 64,400. This gave rise to a balance due to Conqueror from Glencore Grain, taking into account other undisputed items, of US$43,176.27.[8]Conqueror appointed Mr Hewett of Hewett and Co. Inc., claims adjusters based in Piraeus, to pursue the claim. Mr Hewett sent a letter before action dated 20 August 2015 to Mr Oosterman’s email address. The letter was addressed to Glencore Grain for Mr Oosterman’s attention, as was all subsequent correspondence. Mr Hewett received an automated e-mail reply from Mr Oosterman’s email address, stating that Mr Oosterman was out of the office until 24 August 2015.[9]Mr Hewett sent a further letter dated 9 September 2015 to Mr Oosterman’s email address identifying the sum due on the balance of accounts as US$43,176.27 and attaching a freight statement. The letter invited Glencore Grain to agree to the appointment of a sole arbitrator and the application of the current LMAA terms if it did not intend to pay the claimed balance on the account.[10]Having received no response, Mr Hewett caused Mr Marshall to be appointed as Conqueror’s arbitrator and by letter of 21 January 2016, again sent to Mr Oosterman’s email address, gave notice of the appointment. The letter called upon Glencore Grain to appoint its arbitrator within 14 days.[11]Having had no response, on 3 February 2016 Mr Hewett sent a letter to Mr Oosterman’s email address reminding Glencore Grain that the time for the appointment of its arbitrator was due to expire shortly. Again there was no response. On 5 February 2016 Mr Hewett sent a letter, again to Mr Oosterman’s email address, giving notice pursuant to s. 17 of the Act that Conqueror would appoint Mr Marshall to act as the sole arbitrator.[12]Mr Marshall then conducted the reference as sole arbitrator. In the course of doing so a number of submissions and directions were served on Glencore Grain as recorded in the award. These too were sent by email to Mr Oosterman’s email address. They included claim submissions served on 18 February 2016; an order of 23 March 2016 by the tribunal for defence submissions to be served, to which there was no response; an application of 15 April 2016 for a final and peremptory order for service of defence submissions; a communication from the arbitrator of 19 April 2016 asking Glencore Grain for comments on the application; an order by the tribunal on 21 April 2016 for defence submissions to be served on or before 6 May 2016 in final and peremptory terms; service by Hewett and Co on 11 May 2016 of a schedule of costs; a request from the arbitrator of 13 May 2016 for Glencore Grain to comment on the schedule of costs, a request repeated on 14 September 2016; and a communication from the tribunal of 20 September 2016 that he was proceeding to his award.[13]Mr Oosterman remained an employee of Glencore Grain until September 2016. Accordingly he was an employee for the period covered by the majority, if not all of the relevant communications from Mr Hewett and the arbitrator. There was no response to any of them.

Mr Oosterman’s role

[14]In his first witness statement Glencore Grain’s solicitor, Mr McCaskill, on instruction from Glencore Grain’s legal department, described Mr Oosterman as a junior back office employee who had previously worked on Glencore Grain’s cotton desk and at the time of the incident had been working on grain operations for a few months. It was said that he was involved in handling documentation and execution matters with counterparties under sales contracts, but that once a charter was fixed, when it came to dealing with the vessel or owners, this was done by Glencore Grain’s chartering department, or if disputes arose by Glencore Grain’s legal department. Mr McCaskill deposed that Mr Oosterman, as a junior back office employee, was not authorised by Glencore Grain to accept service of originating process, be it a claim form or a notice of arbitration. His evidence is that none of the communications from Mr Hewett or the arbitrator to Mr Oosterman’s email address were passed on to, or seen by, Glencore Grain’s chartering or legal department.[15]This description by Mr McCaskill of the limits on Mr Oosterman’s role does not sit entirely squarely with the evidence of his involvement with this shipment. He was the author of the 31 January 2015 email directing the vessel to wait at anchorage for the Egyptian delegation, sent several days after the conclusion of the charterparty. It would appear that he was authorised internally to conduct this function, his email being copied to six other named individuals within Glencore and to the generic email address voyagecharter.rtm@glencore.com. He sent the two further emails on 1 February 2015, copied to the same addresses, on the same subject matter of the vessel awaiting the delegation. To that extent he had an operational role which went beyond that of handling documentation and executional matters. There is no evidence of any further involvement of Mr Oosterman thereafter. Once the dispute arose, it became the subject matter of communications through the broking channel. Those communications do not reveal the identity of the person or persons at Glencore Grain who were giving instructions to their brokers, or receiving communications from the brokers passing on the owner’s brokers’ communications in relation to the dispute.[16]Mr Oosterman’s personnel file was disclosed late in these proceedings. It contains two successive employment contracts under which from 22 November 2011 he was employed as “a Junior Employee in the Back Office World Department” at a monthly salary of €2,050 gross; a letter of 1 December 2015 confirming that with effect from 1 January 2016 his job title changed from Junior Employee to Employee at the Back Office World Department; and two organograms of the company structure within Glencore Grain, which had a staff of about 50, showing his position as a Junior Employee and then Employee, within the Back Office World Department. These organograms suggest, as his title and salary would also suggest, that Mr Oosterman was in the generally accepted sense a junior employee.[17]In addition there is in evidence a LinkedIn profile from a date after he left Glencore Grain, which contains as part of his cv a description of his role at Glencore Grain at the relevant time. He describes himself as having been “responsible for all operational matters related to South American grain trade” with a throughput of about 7-10 million tons annually; and that this included managing commercial relationships with a variety of stakeholders including ship agents, brokers and suppliers, “documentation” and managing bulk shipments. Given the documents in his personnel file, it seems likely that there is an element of exaggeration in this for the purposes of self-promotion.[18]Taking the material as a whole, it suggests at the most that he had an operational role at a relatively low level in the managerial structure within Glencore Grain. He is properly to be characterised as a relatively junior employee.

The Issue

[19]Sections 14, 16, and 17 of the Act set out the procedure for commencement of arbitral proceedings and appointment of arbitrators. The relevant parts provide as follows: “14. Commencement of arbitral proceedings. (4) 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. 16. Procedure for appointment of arbitrators. (4) If the tribunal is to consist of two arbitrators, each party shall appoint one arbitrator not later than 14 days after service of a request in writing by either party to do so. (6) If the tribunal is to consist of two arbitrators and an umpire -(a) each party shall appoint one arbitrator not later than 14 days after service of a request in writing by either party to do so, and(b) the two so appointed may appoint an umpire at any time after they themselves are appointed and shall do so before any substantive hearing or forthwith if they cannot agree on a matter relating to the arbitration 17. Power in case of default to appoint sole arbitrator. (1) Unless the parties otherwise agree, where each of two parties to an arbitration agreement is to appoint an arbitrator and one party (“the party in default”) refuses to do so, or fails to do so within the time specified, the other party, having duly appointed his arbitrator, may give notice in writing to the party in default that he proposes to appoint his arbitrator to act as sole arbitrator. (2) If the party in default does not within 7 clear days of that notice being given - (a) make the required appointment, and (b) notify the other party that he has done so, the other party may appoint his arbitrator as sole arbitrator whose award shall be binding on both parties as if he had been so appointed by agreement.” . (emphasis added) (4) 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. (a) each party shall appoint one arbitrator not later than 14 days after service of a request in writing by either party to do so, and (b) the two so appointed may appoint an umpire at any time after they themselves are appointed and shall do so before any substantive hearing or forthwith if they cannot agree on a matter relating to the arbitration (a) make the required appointment, and (b) notify the other party that he has done so, the other party may appoint his arbitrator as sole arbitrator whose award shall be binding on both parties as if he had been so appointed by agreement.” .[20]Sections 14 and 16 require service of written notice. Section 17 requires the giving of a written notice. Section 76 of the Act provides: “76. Service of notices etc.(1) The parties are free to agree on the manner of service of any notice or other document required 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.(3) A notice or other document may be served on a person by any effective means.(4) If a notice or other document is addressed, pre-paid and delivered by post: (a) … (b) where the addressee is a body corporate, to the body’s registered or principal office, it shall be treated as effectively served.” (a) … (b) where the addressee is a body corporate, to the body’s registered or principal office,[21]Section 76 is less circumscribed than the service provisions in the Civil Procedure Rules in relation to the use of email. It is essentially permissive (see paragraph [38] of Sino Channel Asia Ltd v Dana Shipping and Trading PTE Singapore and Another [2017] EWCA Civ 1703). Service is merely to be by “any effective means”. I agree with the observations of Christopher Clarke J in Bernuth Lines Ltd v High Seas Shipping Ltd (The Eastern Navigator) [2006] 1 Lloyd’s Reports 537 at paragraph [28] when he said:
“The Civil Procedure Rules cater for litigants of all kinds from major corporations represented by the most accomplished firms of solicitors to individuals represented by more modest firms and those who are not represented at all. By contrast arbitrations are usually conducted by businessmen represented by, or with ready access to lawyers. Section 76(3), when providing that a notice could be served upon a person by any effective means was, in my judgment, purposely wide. 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 e-mail). There is no reason why, in this context, delivery of a document by e-mail – a method habitually used by businessmen lawyers and civil servants – should be regarded as essentially different from communication by post, fax or telex.”
[22]On behalf of Glencore Grain, Mr Kulkarni argues that the issue in this case is governed by the principles of agency, as reaffirmed in the recent Court of Appeal decision in Sino Channel, which endorsed the principles articulated in Lantic Sugar Limited and Another v Baffin Investments Limited (The Lake Michigan) [2010] 2 Lloyd’s Reports 141. Service in this case was on Mr Oosterman, and he had no actual (express or implied) authority and no ostensible authority to receive service of documents in relation to arbitration or legal proceedings. Accordingly there was no valid service.[23]On behalf of Conqueror, Ms Barrett argues that agency principles are not engaged, because the service was to a Glencore Grain email address and so on the Claimant itself. There is no need to resort to agency principles which were identified in The Lake Michigan and Sino Channel, both of which were concerned with service on entities other than the contractual party itself. She argues that the case is on all fours with the TheEastern Navigator, in which Christopher Clarke J held that sending an email to info@bernuth.com was sufficient to amount to good service upon Bernuth Lines Limited whose website identified that as its email address. Alternatively Mr Oosterman had actual or ostensible authority.

Are agency principles engaged?

[24]In The Eastern Navigator, the relevant email address was promulgated by Bernuth Line Ltd as the company email address in Lloyds Maritime Directory and on the company website. It was a generic email address. As Christopher Clarke J observed, it was held out to the world as the only email address of Bernuth. Accordingly without any analysis of agency principles, Christopher Clarke J was able to conclude that sending the notice of appointment to that email address involved serving it on Bernuth itself.[25]Sending an email to an individual employee’s email account is different. There is a distinction to be drawn between an email address which is a personal business address of an individual, and one which is generic. Individual email addresses are readily recognisable as in the form name@domainname. By contrast businesses often have generic email addresses which do not identify the name of the person who will receive the email sent to that address. Info@glencore.com is an example, as is the chartering department generic email, voyagecharter.rtm@glencore.com. Where an individual email address is used, the sender will reasonably expect the email to be opened and read by the named individual. With a generic email address, the sender will not, at least usually, know the identity of the person who will open and read the email. However if the generic address has been promulgated by the organisation, whether on its website or otherwise, the sender can reasonably expect the person who opens the email to be authorised internally to deal with its contents if the subject matter falls within the scope of the business activity for the purpose of which the generic email address has been promulgated. A promulgated generic chartering department email address gives rise to the legitimate expectation that communications relating to chartering operations sent to that address will come to the attention of a person or persons internally authorised to deal with them. This is true also of those who open post addressed to a company address. The company can be expected to ensure that the letter or email is opened by someone with internal responsibility for putting it in the hands of whoever needs to deal with it on behalf of the company, and if he or she fails to do so, that risk falls on the company.[26]An email sent to an individual employee’s email address is different. It is being sent specifically to a named individual within the organisation. Service could not have been effective in this case by sending an email simply to any email address at Glencore Grain, as Ms Barrett conceded, and is inherent in the reservations expressed by Christopher Clarke J at para [29]. The question whether an email sent to a personal business email address is good service must yield the same answer as if the document were physically handed to that person. Whether it constitutes good service if directed to an individual’s email address must depend upon the particular role which the named individual plays or is held out as playing within the organisation.[27]Ms Barrett argues that it was sufficient in this case because Mr Oosterman was the individual who had dealt with operational matters in relation to the events which gave rise to the dispute. That, however, begs the question as to whether that role is such as to make service by sending an email to him sufficient to amount to service on his employer. By what principles is one to decide whether one individual’s email address will do and another’s not? Because one is dealing with a company, a persona ficta, it is necessary to identify the relevant rules of attribution which permit receipt by an individual to be attributed to the company so as to amount to receipt by the company: see generally Meridian Global Funds Management Asia Limited v The Securities Commission[1995] 2 AC 500 at [7]-[11].[28]In my judgement the correct answer lies in the application of agency principles. This is the logical answer, because those are the principles which govern whether the acts of an employee bind the company, just as they apply to the acts of a third party agent: see, for example, Meridian at [9], Hely-Hutchinson v Brayhead Ltd[1968] 1 QB 549 and the many authorities on managing directors and other employees referred to at Bowstead and Reynolds on Agency 20th edn paragraph 3-027. Those too are the principles which govern whether notice to a servant is notice to his employer: Tanham v Nicholson (1872) L.R. 5 H.L. 561; and, at least in most cases, whether knowledge of directors is to be attributed to a company: see for example Jetivia SA v Bilta (UK) Ltd [2016] AC 1 at [181]. It is the principled answer, because companies can only act by natural persons and whether a company is bound by notification to an employee should depend upon the authority which the company has granted to that employee to receive the notification (actual authority, express or implied); or is estopped from denying because of what it has represented to the third party about the employee’s authority to receive the notification (ostensible authority).[29]Although the decision of Eder J in Sino Channel was reversed on appeal on the facts of that case, there was no disapproval of his articulation of the relevant principle at paragraph 47 of his judgment (quoted at [27]) that “even where an employee or agent has a wide general authority to act on behalf of his employer/principal, such authority does not (without more) generally include an authority to accept service of a notice of arbitration” (emphasis added). This is logical and coherent. An individual may provide services to a company as an employee under a contract of service or a consultant or agent under a contract for services. It ought not to make any difference to the outcome of the current issue which it happens to be.[30]Ms Barrett formulated the relevant principle in a number of different ways. She argued that the relevant principle is that it is sufficient to send the notice to anyone who is reasonably believed by the sender to be a person or department dealing with the dispute. This is a subjective test, depending upon the sending party’s belief, which immediately gives rise to two objections. It is an illogical test, because whether a company is bound by receipt of a document by its employee ought to depend primarily upon the authority and role conferred by the company on the employee, not the belief of the sender. A rule which ignores the internal arrangements between company and employee is unfair. Secondly its subjectivity makes it contrary to the desideratum of commercial certainty, which is at its strongest in the context of service of legal process. Any formulation must enable the recipient company to know with reasonable certainty whether service has been validly effected. Moreover, this formulation does not get Conqueror home on the facts of this case, because there is no reason to suppose that Mr Oosterman had conduct of the dispute once it arose, or that Conqueror had any reasonable grounds for believing that he did. Apart from the three emails there is no reason to believe that he had any further involvement, whereas there was thereafter copious correspondence about the dispute all conducted between the brokers.[31]Ms Barrett adopted an alternative formulation that if one serves someone in a commercial department who has “been involved in” the dispute, that must be enough. This formulation lacked any principled basis, but even this formulation is not wide enough to capture Mr Oosterman, who was not, so far as the evidence goes, “involved” at any stage after a dispute had arisen.[32]An alternative formulation was that it was sufficient if the addressee was concerned in the commercial operations which give rise to an arbitrable dispute. But this is to conflate the role within a company of those whose function is operational and those whose function involves dispute handling or dispute resolution. They are distinct functions involving different experience and qualifications, and there is commonly a clear demarcation between those exercising each of them. Moreover, if Ms Barrett were right in her submission, it would have surprising consequences. For example if a claimant had been dealing with the legal department of the company for a while in relation to the dispute, it would nevertheless be able to serve notice of arbitration on an employee in the commercial or operational department who although involved in the original transaction might never have been involved in the dispute itself, or indeed never even have had any knowledge of any dispute having arisen.[33]Ms Barrett emphasised that s.76 was meant to be applied purposively and flexibly so as to facilitate service by email, in smaller businesses without legal departments, as well as large. She argued that service by email is generally permissible, and if it is not to be permissible on an operational employee will rarely be available at all. This submission confuses the general principle that service by email is capable of being an “effective means” within the meaning of s.76(3) with the issue whether service on a particular individual in a particular case by email is effective. There is no principle that service by email must be available in most cases. There will be cases where the company has promulgated a generic email address which will be sufficient, as was the case in The Eastern Navigator. There will be cases in which the role of an individual will justify notification to his individual email address. But it does not follow that sending an email to someone who has an operational role, rather than dispute handling or dispute resolution role, must be sufficient.[34]Ms Barrett argued that this was the most reasonable course for Mr Hewett to have taken in this case because it was the only email address he had for anyone at Glencore Grain, and was the email address of the one person who could be identified as having been involved in the underlying events. There was, she argued, no means by which Mr Hewett could have known the email address for Glencore Grain’s legal department because it was not on their website. Glencore Grain does not have its own website. The @glencore.com domain name is a generic one for the Glencore group and there is a group website at www.glencore.com. Under its “contacts” section the website lists names for particular individuals in relation to corporate communications, institutional investors and analysts and corporate sustainability. For general information it provides an email address which when clicked on generates a draft message addressed to info@glencore.com. Conqueror was not put at any disadvantage if it did not know the legal department email address. It could have asked through the broking channel to whom the notice should be addressed. It could have inquired at the email address given on the Glencore website. Moreover s. 76(4) provides that it is always possible to effect service by post to a registered or principal office, an address which in Glencore Grain’s case was available from public documents, and indeed set out in earlier transactional documents between the parties.[35]I therefore reject Ms Barrett’s submission that service was sufficient in this case merely because it was sent to a personal email address at Glencore Grain of someone who had had some involvement in the underlying events. It was sent to Mr Oosterman, and the answer to the question whether it amounted to effective service under s.76 is determined by whether he had actual or ostensible authority to receive it on behalf of Glencore Grain.

Actual authority

[36]Actual authority may be express or implied. It is express when it is given by expressed words. As to implied authority, an agent has(1) authority to do whatever is ordinarily incidental to the effective execution of his express authority (sometimes referred to as usual authority); and(2) such authority as is to be inferred from the conduct of the parties and the circumstances of the case. Implied authority focuses on the conduct of the principal and the agent because there is implied authority where the agent takes, and is allowed to take, authority with the consent and acquiescence of the principal: see Hely-Hutchinson v Brayhead Ltd[1968] 1 QB 549, 583B-C, 587D-F and Sino Channel at paragraphs [35] to [36].[37]Mr Kulkarni relied in particular on what the Court said in Sino Channel at paragraphs [43]-[45], that in the context of authority to accept service of originating process, it will “no doubt” be a rare case where there is such implied actual authority; and that it required an intense scrutiny of the particular and rare facts from which it was said to arise. This was because it is not to be viewed simply as a matter of the general law of agency in the absence of express authority: such an approach would not pay sufficient attention to the particular context of the seriousness of service of originating process and would create too great a risk of elision from a wide general authority falling short of authority to accept service of originating process; implied actual authority to accept service of originating process is a serious and distinct matter from general implied authority to conduct business on behalf of the principal; so, for example, even solicitors or P & I Club representatives who are clothed with authority to deal with a dispute will not without more be held to have authority to accept service of originating process: see The Lake Michigan at [44].[38]Care must be taken in applying these remarks to the case of an employee, rather than a third party agent which was what was under consideration in those two cases. A company may never have authorised another entity to accept service and can be expected to do so expressly if at all. By contrast, there will ordinarily be at least one employee of the company itself who carries such authority, and if their responsibility encompasses dispute handling and resolution, authority to accept service will ordinarily be implied, at least if they are of sufficient seniority. A finding of implied authority in the case of an employee will not necessarily be a rare case. Nevertheless the dicta about service of originating process being a serious and distinct matter, underlining the need for particular scrutiny to avoid elision between general authority to conduct business and particular authority to accept service of legal process, apply as much to an employee as to a third party agent. Ms Barrett’s argument that it is sufficient if the addressee was concerned in the commercial operations which give rise to an arbitrable dispute involves this very elision. It is to be avoided because it conflates the role within a company of those whose function is operational with the very different and distinct role of those whose function involves dispute handling or dispute resolution, and ignores the serious nature of acceptance of legal process as distinct from that of the conduct of the company’s ordinary commercial activities.[39]There was no express authority conferred on Mr Oosterman to accept service of arbitral proceedings in his contract of employment(s) or any other document in his personnel file. Ms Barrett contends, correctly, that express authority may be conferred outside formal documents, and invites the court to draw adverse inferences from the fact that there is an absence of clear and detailed evidence from Glencore Grain of what Mr Oosterman was doing on a day to day basis. I am not prepared to draw any adverse inference, not only because Glencore Grain has provided all the disclosure required following a partially unsuccessful application by Conqueror; but also, more importantly, because the existing documentation, including the evidence of Mr Oosterman’s lack of involvement after a dispute had arisen, provide a clear picture of his having, at the highest, a purely operational role in the department with no senior managerial position and no dispute handling function. There is no basis for finding that Mr Oosterman was expressly authorised to accept service of arbitral proceedings and all the available evidence suggests the opposite.[40]Nor is there anything in the facts of the present case to support a finding of implied authority. The most that can be said is that Mr Oosterman was a representative of the operational department who had sent operational communications in relation to the performance of the charterparty and the events giving rise to the dispute. That is not sufficient to give rise to the inference that he was cloaked with authority to assume the serious and distinct responsibility for accepting service of legal process. It cannot be said that he thereby impliedly had authority to handle any legal dispute arising out of the voyage, still less to accept service of legal or arbitral process and deal with it.

Ostensible Authority

[41]There is no serious dispute as to the applicable principles. Unlike actual authority, ostensible authority is a form of estoppel arising from a representation by the principal to the third party that the agent has authority to act in the matter on the principal’s behalf: see Hely-Hutchinson v Brayhead (sup)andSino Channelat [57].[42]In Sino Channel the Court said at [62] that in the context of the service of originating process the scrutiny of whether facts establish ostensible authority calls for even more caution than the intense scrutiny required when considering implied actual authority in that context. Again, the application of such scrutiny to avoid elision between general authority to conduct business and particular authority to accept service of legal process applies as much to an employee as it does to a third party agent which the Court was considering in that case.[43]Although actual and ostensible authority are conceptually very different, there are cases in which what is relied on are the same essential facts and in which they therefore coincide. Sino Channel was one such case. The present case is another. Ms Barrett cannot rely on any other holding out as giving rise to the ostensible authority of Mr Oosterman apart from his involvement in sending the three emails in relation to loading at Ilychevsk. They are insufficient to establish implied authority (even when taken with other evidence, such as the LinkedIn material which was not promulgated by Glencore Grain to Conqueror); on their own they do not hold Mr Oosterman out as having anything more than a limited operational role in relation to the voyage. They do not hold him out as having authority to handle any legal dispute arising out of the voyage, still less to accept service of legal or arbitral process and deal with it.

Conclusion

[44]It follows that Glencore Grain was not effectively served with the notice of commencement of arbitration or the s. 17 notice, and is entitled to relief under s.72. I will hear the parties on the form of the order if not agreed.

Cited in 1 later judgment