Thursday, January 19, 2006

Arbitrating By Email

Interesting decision by an English court (Queens Bench Commercial Court) that email is sufficient to arbitrate a maritime dispute under the English Arbitration Act 1996. Notice of the arbitration, together with various subsequent communications and briefings, were all done by email. Before rendering the award, the arbitrator noted that "No Defence submissions were received at any time. [But] I was and am satisfied that [defendants] are aware of these proceedings and that they have had a reasonable time to serve Defence Submissions. Accordingly I proceeded to my Award." After receiving a $40,000 adverse award in the mail, attorneys for the defendants argued that clerical staff ignored the emails and queried why no other medium of communication was utilized. Apparently the clerical staff thought the emails were spam and ignored them. Nonetheless, the Court ruled that the email communications were sufficient.

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. That is not to say that clicking on the "send" icon automatically amounts to good service. The e-mail must, of course, be despatched to what is, in fact, the e-mail address of the intended recipient. It must not be rejected by the system. If the sender does not require confirmation of receipt he may not be able to show that receipt has occurred. There may be circumstances where, for instance, there are several e-mail addresses for a number of different divisions of the same company, possibly in different countries, where despatch to a particular e-mail address is not effective service. But in the present case none of those difficulties arise. ...

That e-mail and those that followed it, are plain and straightforward in their terms. They bear none of the hallmarks of "spam". On the contrary they called for serious attention. The e-mail of 5th May was sent with High Importance. It referred to a vessel which Bernuth had in fact chartered by the charterparty mentioned in it. It identified Swinnerton Moore as High Seas' London solicitors, which they were, and referred to an outstanding hire claim which had been the subject of earlier correspondence. It purported to initiate arbitration proceedings by calling for agreement as to an arbitrator. I should be surprised if much junk e-mail purports to do that or to emanate, as later e-mails did, from an LMAA arbitrator.

This decision follows on an earlier post about South Korea issuing criminal indictments by text messaging. It appears that civil and criminal procedure is now making serious overtures to the Internet age. But in the abundance of caution, why not, perhaps use traditional mail as well? Just in case?

Is it not just possible that some spam has all the trappings of formal documentation (i.e., Urgent Email from Nigeria: "If you agree to help me, I will send you by courier the ELECTRONIC CARD KEY of my vault so that you can travel to London and open the vault; You will then remove the money total USD4 million and transfer it to your Bank Account. For your help and assistance, you will keep 10% of the money for your self and keep 90% for me in safe custody until I travel to meet you and invest my share.").

Is it not possible that clerical staff might just ignore these email documents? I'm not a technophobe, but it would seem that the arbitrator and the court should have displayed a little greater sensitivity to the procedural concerns of arbitrating exclusively by email.


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