Arbitration

Claim form - Service - Service out of the jurisdiction

Bitumex (HK) Company Ltd v IRPC Public Company Ltd: Queen's Bench Division, Commercial Court (Judge Mackie QC): 2 May 2012

The parties entered into contracts containing London arbitration clauses. A dispute arose and the claimant gave notice of arbitration. The defendant declined to agree to the appointment of an arbitrator. The claimant issued the arbitration claim form with the court’s permission. A complete copy of the arbitration claim and all other documents were sent by registered mail to the defendant’s registered office in Thailand. An employee of the defendant acknowledged receipt of the documents on behalf of the defendant’s managing director. The receipt of the documents was confirmed by the defendant’s lawyer.

The documents were also hand delivered to the registered office. They were received by the defendant’s senior executive vice-president and its legal department. The claimant sought the appointment of an arbitrator by the court. The defendant challenged the court’s jurisdiction on the ground that the arbitration claim form was not served on it in Thailand by a method permitted by the laws of Thailand under Civil Procedure Rule (CPR) 6.40(3)(c). The claimant sought a retrospective order under CPR 6.15 permitting service by the means that had been employed. The defendant submitted that the arbitration context did not make the case exceptional and did not take it outside the normal course.

It fell to be determined whether the court should make a retrospective order for alternative service. The court considered Cecil v Bayat [2011] All ER (D) 213 (Feb) (Bayat) and Abela v Baadarani [2011] All ER (D) 171 (Dec) (Abela) and the Arbitration Act 1996 (the 1996 act). The application would be granted.

Bayat established that, as service out of the jurisdiction without the consent of the state in which service was to be effected was an interference with the sovereignty of that state, service by an alternative method under CPR 6.15 should be regarded as exceptional, to be permitted in special circumstances only. While the fact that proceedings served by an alternative method would come to the attention of a defendant more speedily was a relevant consideration when deciding whether to make an order under CPR 6.15, it was in general not a sufficient reason for an order for service by an alternative method.

Abela further provided that it would usually be inappropriate to validate retrospectively a form of service which was not authorised by an order of an English judge when it was effected and was not good service by local law. It followed that a claimant who wished retrospective validation of a method of service in a foreign country should (save perhaps where there were adequate safeguards) show that the method of service which was to be retrospectively validated was good service by the local law (see [13], [14] of the judgment).

The instant was not a case where the English court was presuming to try a dispute itself, which, on the defendant’s case, had not been served to the standards required by local law for a trial in Thailand. The court was not being asked to try a dispute at all. It was being asked to assist the progress of an international arbitration in London, the method chosen by the parties for resolving their contractual disputes. Under section 1(a) of the 1996 act the parties were committed to fair resolution of disputes by an impartial tribunal without unnecessary delay or expense.

The defendant had, in breach of section 16 of the 1996 act, failed to join in the appointment of an arbitrator and the court was asked to appoint one so that the arbitration might proceed. The defendant was fully aware of the existence of the arbitration and the specific service steps had been taken to reinforce the information already in its possession. The defendant was relying on formalities relating to the appointment of an arbitrator by the court which did not apply to the initiation of the arbitration process itself. The defendant was knowingly causing unnecessary delay and expense in the arbitration process. The defendant’s submissions that the fact that the instant case was an arbitration case did not take it out of the norm would be rejected.

The considerations seemed to be facts relating to the proceedings which were crucial. They were facts which made the case exceptional in the sense explained in Bayat. They were considerations beyond the mere advantage of obtaining a speedier process than compliance with the local process would produce (see [22], [23] of the judgment). Retrospective service as permitted by CPR 6.15 but subject to conditions would be ordered. Cecil v Bayat [2011] All ER (D) 213 (Feb) applied; Abela v Baadarani [2011] All ER (D) 171 (Dec) applied.

Timothy Wormington (instructed by Nick Howe Solicitor) for the claimant; James Hatt (instructed by Watson Farley & Williams LLP) for the defendant.