If you are a business owner or manager, you just might be returning after the Christmas break to a big disciplinary headache or two, resulting from over exuberant merry making by staff at the office Christmas party. Although most office parties are...
Although companies are independent entities in law, they can only act through natural persons and serving a company with a legal document can therefore be tricky. The point was illustrated by a High Court ruling that effective service of arbitration proceedings had not been achieved by sending emails to a junior employee.
A commodities company had chartered a vessel to ship grain from Ukraine to Egypt. On arrival outside the destination port, the ship owners received an email from a junior employee of the company requiring them to delay berthing. The vessel was kept at anchor for about nine days and the ship owners claimed compensation, ultimately invoking a London arbitration clause in the contract.
The ship owners sent notice of the arbitration to the junior employee's email address. A request that the company appoint an arbitrator was sent to the same address, but neither communication received any response. In the event, the proceedings went ahead without any participation by the company, which was unaware of them. The single arbitrator awarded the ship owners a total of $43,176.27.
In upholding the company's challenge to the award, the Court noted that none of the emails received by the junior employee had been passed on to his managers or the company's legal department. On the evidence, he did not have ostensible or actual authority to accept service of the documents on the company's behalf.