Effective Notices of Arbitration - Avoiding Wasted Costs and a Potentially Time-Barred Claim

In a recent case, The Amity [2017], charterers successfully set aside an arbitration award on the basis that owners had not effectively served their notice of arbitration upon charterers since the person to whom owners had sent their arbitration notice, claim submissions and communications, whilst an employee of charterers, did not have actual or implied authority to accept service of proceedings on behalf of charterers. This meant that owners had to start the arbitration proceedings again if they wanted to pursue their claim in arbitration, wasting the legal and tribunal costs it had incurred in obtaining the award and also running the risk that owners’ claim had become time-barred.

To counteract this risk, the Club recommends that Members adopt the LMAA Arbitration Notice Clause in their charter parties, as quoted below, with each party specifying at least one individual and one generic email address:

"LMAA ARBITRATION NOTICE CLAUSE

Any and all notices and communications in relation to any arbitration proceedings arising in connection with this contract (including any communications giving notice of the commencement of such proceedings and/or appointment of an arbitrator) shall be treated as effectively served if sent by e-mail to the e-mail addresses as provided for in this clause (it is strongly recommended that at least one individual, together with their individual e-mail address, is named for service purposes but a general e-mail address may also be included or used in the alternative):

• E-mail address for Owners [owners should insert at least one individual and one general email address here]

• E-mail address for Charterers [charterers should insert at least one individual and one general email address here]

Either party shall be entitled to change and/or add to the e-mail addresses to which notices and communications may be sent for purposes of this clause by sending notice of change to the other party at the e-mail address provided for in this clause (or, if previously amended by notice, the relevant amended address).

Any notice and communication sent by e-mail pursuant to this clause shall be deemed to have been served, and become effective, from the date and time the e-mail was sent.

If a party retains solicitors or representatives with authority to accept service of notices and communications in relation to arbitration proceedings, the other party should be advised of the appointment and new service details in accordance with the terms of this clause; future service and communications should then be sent to the nominated solicitors or representatives only (unless otherwise directed). In the event the solicitors or other representatives cease to act and notice is given of this to the other party, the provisions contained herein shall re-apply."

Copies of the Clause in Word and pdf formats can be found here Incorporation Clause. Members with any queries regarding the use of this Clause should contact Nicola Cox, Deputy Director - FD&D.