Glencore Agriculture B.v (Formerly Glencore Grain B.v) v Conqueror Holdings Ltd

JurisdictionEngland & Wales
JudgeMr Justice Popplewell,The Hon.
Judgment Date16 November 2017
Neutral Citation[2017] EWHC 2893 (Comm)
Docket NumberCase No: CL-2016-000684
CourtQueen's Bench Division (Commercial Court)
Date16 November 2017

[2017] EWHC 2893 (Comm)

IN THE HIGH COURT OF JUSTICE

BUSINESS AND PROPERTY COURTS

OF ENGLAND AND WALES

COMMERCIAL COURT

QUEEN'S BENCH DIVISION

Royal Courts of Justice, Rolls Building

Fetter Lane, London, EC4A 1NL

Before:

THE HON. Mr Justice Popplewell

Case No: CL-2016-000684

Between:
Glencore Agriculture B.V. (Formerly Glencore Grain B.V.)
Claimant
and
Conqueror Holdings Limited
Defendant

Mr Yash Kulkarni (instructed by Sutherland (Europe) LLP) for the Claimant

Ms Stephanie Barrett (instructed by Jackson Parton) for the Defendant

Hearing dates: 10 November 2017

Judgment Approved

Mr Justice Popplewell The Hon.

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."

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...

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