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In 2004 Bernuth Lines chartered the good ship Eastern Navigator from High Seas Shipping for a jaunt to Nicaragua. In August 2004 the ship set sail from Miami, but due to problems en route was forced to dock and unload her cargo at San Andreas. The vessel was subsequently returned to Miami but a dispute ensued over payment for the charter.

The charter stated that any dispute under $50,000 (£28,500) would be referred to arbitration in accordance with the Small Claims Procedure of the London Maritime Arbitrators Association (LMAA). With this in mind, High Seas Shipping sent an email to Bernuth notifying them that unless payment of the outstanding $34,100 was received, the matter would be referred to arbitration. There was no reply. So, High Seas sent Bernuth a further email enclosing the claim submissions and a copy of the letter they had sent to the LMAA. No reply. The LMAA then sent Bernuth an email informing them of the appointment of an Arbitrator. No reply. The newly appointed arbitrator then sent an email to Bernuth notifying them of his appointment and requesting their defence within the next 28 days. A month came, a month went - no reply. The arbitrator then sent a further email containing a peremptory order demanding Bernuth's defence within seven days. Deafening silence.

On 29 July 2005 the arbitrator issued his award, by email and post, to Bernuth. Unfortunately, the award was the first piece of correspondence that was sent by post so it came as quite a shock to Bernuth. Bernuth immediately complained to the arbitrator and applied to the High Court to have the arbitrator's award set aside on the grounds of a serious irregularity in the service of the notice of arbitration.

Section 76 of the Arbitration Act 1996 covers the service of documents. It states, under section 76(3), that "a notice or other document may be served by any effective means". The central issue to be decided here then, was whether a notice of arbitration sent by email was served by effective means.

Next time you are speaking to your IT department, ask this question: where does all the info@... email go?

During the course of the trial it was discovered that the emails were in fact received by Bernuth on their general email address; info@bernuth.com. However, these emails were automatically re-directed to the customer service department, who, upon receipt, took the view that no serious legal matter would be sent to that address and ignored them as spam.

In support of their position, Bernuth referred the Judge to the established service requirements in litigation. Reminding him that under the Civil Procedure Rules, service by email is only permitted if both of the parties have agreed to do so and the relevant email addresses are agreed.

The judge was having none of it. He accepted that service by email was not permitted under the CPR but noted that arbitration was a different animal. He saw that arbitration was usually conducted by businessmen and lawyers who habitually used email as a method of communication. In the context of arbitration, he could see no reason why email should be regarded as any different from post, fax or telex.

The customer service department took the view that no serious legal matter would be sent to that address and ignored the notice of arbitration as spam

The judge did, however, offer these words of caution:

"That is not to say that clicking on the send icon automatically amounts to good service. The email must, of course, be despatched to what is, in fact, the email 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."

In the present case the Judge had no such difficulties. The info@... email address was the only one stated on Bernuth's website and, as such, was held out to the world as their only email address. The judge then compared the email situation with other forms of communication and noted that: "The position is, to my mind, no different to the receipt at a company's office of a letter or telex which, for whatever reason, someone at the company decides to discard. In both cases service has effectively been made, and the document received will, in the first instance, be dealt with by a clerical officer."

The judge was having none of it... he could see no reason why email should be regarded as any different from post, fax or telex

Bernuth's application to set aside the arbitrators award was duly declined.

Email will no doubt become the service method of choice in the future, so next time you are speaking to your IT department ask this question; where does all the info@... email go? Track down the recipient and have a quiet word. It may save you a lot of embarrassment later.