England and Wales High Court (Commercial Court) Decisions

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
IN THE MATTER OF THE ARBITRATION ACT 1996
AND IN THE MATTER OF AN INTENDED ARBITRATION

		Royal Courts of Justice Strand, London, WC2A 2LL
		18/12/2009

Mr Justice Gross :

INTRODUCTION

1. There are before the Court applications by the First and Second Claimants ("Lantic", "Copersucar" and "the Claimants", respectively) for relief as follows:

i) A declaration that arbitration proceedings were commenced on or before the 12^th March, 2009 – and so, in time - in accordance with s.76 of the Arbitration Act 1996 ("the Act");

ii) If the arbitration proceedings were not commenced in time, an extension of time for their commencement up to the 23^rd March, 2009, or such further date as the Court may permit, pursuant to s.12 of the Act.

2. The applications have been pursued by Lantic and Copersucar, though, in reality, it may be that they primarily affect the position of Lantic. The Defendant ("Baffin") opposes both applications.
3. The factual history is as follows. By a Bill of Lading on the "CONGENBILL" form, dated 19^th November, 2007 ("the Bill of Lading"), Baffin, the owner of the m/v Lake Michigan ( "the vessel"), acknowledged receipt of about 32,000 mt of raw cane sugar ("the cargo") at Santos, Brazil, for carriage to the St. Lawrence River Canada. It is not in dispute that the Bill of Lading incorporated a provision for London arbitration and the Hague/ Hague-Visby Rules.
4. Copersucar was the shipper and Lantic the consignee, named in the Bill of Lading.
5. Discharge of the Bill of Lading cargo was completed in Montreal on the 22^nd December, 2007. The Claimants allege that, on discharge, a significant quantity of cargo was found to be damaged – due to rain wetting the cargo during loading and/or as a result of defects in the vessel's hatch covers.
6. It is common ground that any claims under the Bill of Lading were subject to a 12 month time bar, which would have expired on the 22^nd December, 2008, unless extended.
7. Pausing there, it is convenient next to describe the contractual and corporate background against which the Bill of Lading shipment took place. In summary, as to the contracts:

i) A contract of affreightment ("the COA") dated 6^th October, 2004, between Copersucar, as charterers and Fednav International Ltd ("FIL") as disponent owners, provided for the carriage of about 525,000 mt raw cane sugar in 15 shipments;

ii) The underlying sale contract was a sugar sale and purchase agreement, dated 26^th October, 2004, made between Copersucar, as sellers and Lantic, as buyers.

iii) The vessel came into the picture by way of, first, a time charterparty, dated 7^th December, 2002, between Baffin, as owner and FIL as charterer.

iv) Subsequently, the vessel became a carrying vessel under the COA, by virtue of a voyage charterparty, dated 25^th October, 2007, between FIL as disponent owner and Copersucar, as charterer.

8. As to corporate matters:

i) Baffin is incorporated in Barbados, where it has its principal and registered office. It has, in addition, registered offices in Hong Kong and the Marshall Islands. In the Marshall Islands it has a registered local agent for receiving service of process, the Trust Company of the Marshall Islands Inc ("TCMI").

ii) The vessel was managed on behalf of Baffin by Anglo-Eastern Ship Management Ltd, Hong Kong ("Anglo-Eastern").

iii) At all material times, Baffin was entered in the register of members with the Standard Steamship Owners' Protection and Indemnity Association (Bermuda) Limited ("the Club").

iv) Both Baffin and FIL were part of the "Fednav Group" of companies ("the Fednav Group") and were (indirectly) wholly owned subsidiaries of a Canadian company Fednav Limited ("Fednav").

9. Returning to the factual history, following the completion of discharge (December 2007), discussions commenced between the parties. The Claimants were represented by a Mr. Behr, a Brazilian lawyer practising in London, at a firm or entity Consultrade. Baffin was represented in these exchanges, principally, by a Mr. Morland of Charles Taylor P&I Management ("Charles Taylor"), on behalf of the Club. These communications extended to the provision of Letters of Undertaking ("LOUs") by the Club, on behalf of its member/s, as security for the Claimants' claims, settlement negotiations and extensions of time to commence arbitration, granted by the Club on behalf of "owners/carriers".
10. Two such extensions of time were granted. For present purposes, the second extension, granted by the Club on the 3^rd February, 2009, is critical. It extended the time for commencing arbitration up to and including the 12^th March, 2009.
11. I turn to the key points in time. On the 6^th March, 2009, Mr. Behr addressed a "Notice for Arbitration" to FIL and the Club, so far as concerns the latter, for the attention of Mr. Morland ("the 6^th March Notice"). Insofar as material, the 6^th March Notice provided as follows:

" Re: M/v Lake Michigan CoA dd. 6.10.04, at Montral Dec. 2007, B/L Santos/Montreal 00707LXSTMOBP001. Wet damage to cargo of raw sugar loaded at Santos, Brazil.

Notice for Arbitration

Please be informed that by appointing Mr. William Robertson…, as the first arbitrator on the dispute based upon the captioned CoA, clause 22 and others, and bill of lading 00707LXSTMOBT001 Santos/Montreal against the Disponent Owners.

Please accept this letter-fax as our Notice for Arbitration and invitation for you to appoint the second arbitration, pursuant to 'The LMAA Terms 2006' article 8(a) within fourteen days to be counted from the date of this Notice (unless you are agreeable to maintain Mr. Robertson as the sole arbitrator)…..

For the Claimant: FORTIS CORPORATE INSURANCE NV, subrogated cargo underwriters of the Charterers, COPERSUCAR TRADING AVV."

In terms of clarity, the 6^th March Notice, with respect, left much to be desired. In the event and as will be seen, the drafting shortcomings in this Notice may matter less than in other circumstances they might have done. For the moment, suffice to say that, as is undisputed, the references to the numbered bill of lading are references to the Bill of Lading.

12. With regard to the 11^th March, 2009, I need to consider whether there was a telephone conversation between Mr. Behr and Mr. Morland and, if so, what was said. The evidence in this regard is not free from curiosity.
13. First, the assertion that there was a conversation between Messrs. Behr and Morland on that day emanates from the Baffin "camp". Mr. Morland has himself never produced a witness statement. However, in his witness statement dated 15^th May, 2009, Mr. Brown of Mays Brown, Baffin's solicitor, says this:

" On 11 March 2009, Gerson Behr of Consultrade telephoned Eddy Morland of the Club to enquire as to whether he had received the faxed ….[6^th March Notice]…Mr Morland informed Mr. Behr that he was taking instructions on the fax but that, pending express instructions, the Club did not have authority to accept service on behalf of…..[Baffin]….This conversation was referred to in a later email sent by Mr. Morland to Mr. Behr on 12 March 2009….."

14. Secondly, Mr. Behr in his witness statement dated 9^th September, 2009, said that he "cannot now remember at all" whether he spoke with Mr. Morland on the telephone on the 11^th March - though the sense of his statement does suggest that there were telephone conversations between him and Mr. Morland over the period 6^th – 12^th March. Mr. Behr said that, in particular, he did not remember Mr. Morland telling him, in any telephone conversation between the 6^th and 12^th March (for the events of that day, see below) that the Club was not authorised to accept service of notice of arbitration on behalf of Baffin; nor did Mr. Behr remember Mr. Morland telling him expressly that the Club did have such authority. Mr. Behr added that he believed it to be "very unlikely" that Mr. Morland did say that the Club did not have authority to accept service on behalf of Baffin. Had Mr. Morland said that, Mr. Behr thought that he would have reacted as he did on the 12^th March (see below). Moreover, given Mr. Morland's authority to deal with the LOUs, settlement negotiations and extensions of time, Mr. Behr says that he had "no reason to believe" that Mr. Morland did not also have authority to accept service of notice of arbitration on behalf of Baffin.
15. Thirdly, I have regard to the contemporaneous or near-contemporaneous e-mails. On the 12^th March and after the balloon had, so to speak, gone up (see below), Mr. Morland said this in an e-mail to Mr. Behr:

" I had previously told you by telephone that we had received your email attaching the notice of arbitration but that the Club was not able to accept/acknowledge service."

Later on the same day, Mr. Behr – by now primarily and understandably focussed on seeking to serve the notice of arbitration on Baffin itself – said that he would comment on the contents of Mr. Morland's e-mail "soon". That, he did not do, directly to Mr. Morland. However, in an e-mail to Anglo-Eastern, dated 15^th March, 2009, Mr. Behr referred in terms to Mr. Morland's 12^th March e-mail, remarking:

" Eddy Morland….declared in writing that he told the undersigned by phone Standard could not be served notice on behalf of owners. That is absolutely untrue. He never told that…."

16. For my part, I am persuaded that there was a telephone conversation between Messrs. Behr and Morland on the 11^th March, 2009 ("the 11^th March conversation"). It is likely that there would have been such a conversation. The Baffin "camp" says there was and, with the 12^th March deadline rapidly approaching, of which Mr. Behr was well aware, he would have been likely to "chase" Mr. Morland for a response to the 6^th March Notice. As to what was said, I am unable to accept that Mr. Morland did say that the Club did not have authority to accept service on behalf of Baffin. Had he done so, I regard it as overwhelmingly likely that Mr. Behr would have reacted vigorously, as he did when Mr. Morland said just that on the next day (the 12^th March). In my judgment, that consideration is decisive. It follows that Mr. Morland must be mistaken as to what he said at the time; perhaps, on the 12^th March he was attempting to make his stance more palatable and persuaded himself that he had said something to that effect in the 11^th March conversation. Nothing in the e-mails exchanged at the time serves to dissuade me from this conclusion. It was understandable that Mr. Behr's focus on the 12^th March rested on seeking to serve notice of arbitration upon Baffin itself. Moreover, his 15^th March e-mail to Anglo-Eastern was expressed in very clear, even trenchant, terms. It is also perhaps noteworthy that Mr. Morland has never himself produced a witness statement. For my part, the most likely ambit of the 11^th March conversation is as summarised in the witness statement of Mr. Moore (the solicitor for the Claimants), dated 30^th April, 2009:

" On 11 March 2009 Mr. Behr spoke with Mr. Morland and asked him if he and Fednav had received his email and fax inviting the appointment of an arbitrator. Mr. Morland said he had and he was awaiting instructions from Fednav."

It is not clear to me – but I do not think it matters – whether this reference to "Fednav" was a reference to the parent company identified above or to the Fednav Group.

17. I must return to the significance of the 11^th March conversation in due course. But one thing can immediately be treated as clear. In the light of the Baffin case as to the 11^th March conversation, it cannot be said that the 6^th March Notice was regarded as confined to disputes between Copersucar and FIL under the COA. Instead, whatever its infelicities of language, the 6^th March Notice was understood as applying (or extending) to the prospective arbitration of disputes concerning the Bill of Lading.
18. I come to the events of the 12^th March, 2009. On that day, Consultrade (i.e., Mr. Behr) sent a further fax to the Club and to FIL ("the 12^th March Notice"), which (neutrally) may be said to have expanded or clarified the 6^th March Notice. The 12^th March Notice was received by the Club at 18.33 GMT and by FIL at 18.37 GMT. Insofar as material, the 12^th March Notice was in these terms:

" Re: M/v Lake Michigan, Co Add. 6.10.04, at Montreal Dec. '07, B/L Santos/Montreal 00707LXSTMOBP001. Wet damage to cargo of raw sugar loaded at Santos, Brazil.

I refer to my previous notice of the appointment of Mr. William Robertson as arbitrator in this matter and write to advice that Mr. Robertson's appointment has now been extended and that he has been appointed as arbitrator

(i) on behalf of Copersucar….and/or Fortis Corporate Insurance NV in respect of all claims arising under and/or out of the CoA dated 6 October 2004 with ….[FIL]…, and

(ii) on behalf of Lantic….and/or the Owners and/or Underwriters (Fortis Corporate Insurance NV) or cargo carried under the captioned bill of lading and/or other persons entitled to sue in respect of claims concerning such cargo, in respect of all claims against the Owners of the m/v 'Lake Michigan' and/or carriers under the captioned bill of lading.

I call upon …[FIL]… and the Owners of the m/v Lake Michigan…and/or carriers respectively to appoint and advise us of the identity of their appointed arbitrator in respect of the above claim within 14 days from today's date….."

19. On the same day at 18.58 GMT (apparently 14.58 in New York), Mr. Morland responded to the 12^th March Notice, saying:

" Please note that neither ….[FIL] nor …[the Club]….is authorised to accept notice of arbitration on behalf of the owner of m/v Lake Michigan."

At 18.54 GMT, a Mr. Dong Li, from Fednav (of whom more, presently), had replied to Consultrade in the same terms, on behalf of FIL.

20. A little later, Mr. Behr responded, querying the disavowal of authority as expressed in Mr. Morland's e-mail and making reference to the Club's conduct hitherto. To that e-mail, Mr. Morland in turn replied (at 16.47 New York time, so 20.47, GMT), saying:

" In the case of the time extension, the settlement offer, and the LOU, either the Club specifically asked the member for the authority or the member gave specific instructions to the Club. However, with regard to the notice of arbitration, members told the Club expressly that the Club had no authority to accept the notice of arbitration."

Mr. Morland then added the assertion about what he had previously told Mr. Behr, a matter already dealt with above in relation to the 11^th March conversation.

21. Thereafter, Mr. Behr made considerable and speedy efforts to identify who were the registered owners of the vessel and, in the event, to serve the notice of arbitration on Baffin, without prejudice (as he put it) to the 6^th and 12^th March Notices. In summary:

i) Within minutes, at 21.00 GMT on the 12^th March, Mr. Behr asked Mr. Morland for the full style of the member.

ii) In the light of the information available (from Lloyd's MIU and otherwise), the owners of the vessel appeared to be Baffin Investments Ltd of the Marshall Islands and the vessel was said to be managed by Anglo-Eastern of Hong Kong.

iii) Still on the 12^th March – in terms of GMT – Notices (in the same terms as the 12^th March Notice) were dispatched to the Marshall Islands and Hong Kong. However, because of the time difference, these Notices were not on any view served until the 13^th March local time – as far as I can tell, the first Notice served was that served on TCMI in the Marshall Islands at approximately 08.30 local time on the 13^th March. (For the avoidance of doubt, it was not disputed before me that the time which mattered was local time at the place of receipt: see The Pendrecht [1980] 2 Lloyd's Rep. 56, esp., at p.66.)

iv) On the 13^th March, the Club confirmed that Baffin's registered and principal place of business was in Barbados. No e-mail or fax details were supplied. It would seem that this was the first time those in the Claimants' "camp" realised that Baffin was located there. Further copies of the Notices were duly sent to Baffin both in Barbados and Hong Kong, by registered post. The Notice sent to Barbados was served on Baffin on the 23^rd March, 2009.

22. On the 16^th March, 2009, Mays Brown sent two faxes to Consultrade. The first, appointed an arbitrator on behalf of FIL in the COA arbitration; this fax also raised an understandable reservation as to Copersucar's insurers not being a party to the COA. The second and for these purposes, more important fax was sent on behalf of Baffin with regard to the Bill of Lading arbitration. This fax made the same point as to the insurers not being a party to the Bill of Lading contract. Further, Mays Brown said this:

" We are…advised that as of today, Baffin have not been validly served with any notice of arbitration….

Our purpose in writing to you now is to confirm that we have authority to accept service on behalf of Baffin and are instructed on behalf of Baffin to do so……

Further, your clients must also appreciate that all rights of Baffin are reserved, in particular in relation to time bar."

It would appear that Mays Brown were not then aware of service of the Notice on TCMI in the Marshall Islands.

23. Pausing here, there was no or no serious dispute before me that service of the Notice in the Marshall Islands would have constituted good service, subject only to questions of time bar. In that regard it may be noted that service was "late" (if in fact it was late) by a matter of some 8 ½ hours. It follows, in my judgment, that had Mr. Behr become aware that the Club lacked authority to accept service on behalf of Baffin, at any time between and including the 6^th – 11^th March, then it must be probable that service could and would have been effected before the expiry of the time bar. Put another way, neither on the 6^th March nor at the time of the 11^th March conversation, were the Claimants doomed to miss the time bar. Further, as the Notice was dispatched before 23.59 GMT on the 12^th March, if service of this Notice was late, the lateness followed from the Marshall Islands' time zone; had the relevant location for service been elsewhere (e.g., Barbados), this Notice would on no view have been "late". Still further, therefore, had the Club, in answer to Mr. Behr's request at 21.00 GMT on the 12^th March, supplied him with fax or e-mail details for Baffin in Barbados at any time before midnight GMT, then the Notice would still (in all probability) have been served on time. It is, however, in the nature of time bars that they do produce cut-offs, sometimes of an arbitrary or harsh nature.

POST-HEARING EVIDENCE

24. In the course of the hearing, I expressed disquiet as to the state of the evidence concerning the suggestion that the Club lacked actual authority to accept service of the 6^th or 12^th March Notices. It seemed to me that if a time bar argument was to be maintained by Baffin, it was at the very least appropriate that the relevant decisions and decision-makers should be clearly identified. I therefore gave the parties the opportunity, subsequent to the hearing, to adduce further evidence and, if they saw fit to do so, advance further written submissions. In the event, further evidence was forthcoming from Baffin and brief further written submissions were advanced by both the Claimants and Baffin.
25. As to the evidence, Mr. Dong Li (to whom reference has already been made) states that he is and was at the material time the Claims Manager of Fednav. He had responsibility for and authority to handle all cargo claims brought against companies within the Fednav Group, including Baffin. Though Fednav is the parent company and Baffin the subsidiary, Mr. Dong Li's evidence is that his authority to handle cargo claims comes from Baffin.

" As Fednav…arranges P&I cover for Baffin, I have been authorised by Baffin to deal with cargo-related P&I matters and claims, such as the present claim….This includes all aspects of any such claim, from service of the claim to dealing with its substantive merits and any discussions as to settlement."

Mr. Dong Li's evidence is supported in this regard by a witness statement from Mr. Christopher de Caires, Chairman and Managing Director of Baffin.

26. With regard to the events of the 12^th March, Mr. Dong Li says that Mr. Morland telephoned to notify him of the receipt of the 12^th March Notice and to ask whether the Club had authority to accept service on behalf of Baffin. In the light of the timing of the exchanges (already set out), this telephone call must have taken place between 18.37 GMT and 18.54 GMT. Mr. Dong Li goes on to say this:

" 8. As the person authorised by Baffin to handle claims on its behalf, I told Mr. Morland, during our call, that the Club did not have authority to accept service on behalf of Baffin.

9. I should add that, according to my usual practice (and Fednav's…practice) of claims handling, we do not authorise and, in the past, have never authorised any of our P&I Clubs to accept formal service of arbitration or court proceedings on behalf of any individual Fednav Group company. Our practice is that service of arbitration notices or writs needs to be upon the defendant in question at its offices."

27. Although in no sense a breach of the Order I had made, it is perhaps to be noted that nothing at all is said by Mr. Dong Li as to the events of the 6^th – 12^th March and any instructions sought by Mr. Morland over that period.

THE STATUTORY PROVISIONS

28. The relevant statutory provisions are contained in ss. 14, 76 and 12 of the Act.
29. S.14 deals with the commencement of arbitral proceedings. S.14(4) is here in point and provides as follows:

" Where the arbitrator or arbitrators are to be appointed by the parties, arbitral proceedings are commenced in respect of a matter when one party serves on the other party or parties notice in writing requiring him or them to appoint an arbitrator or to agree to the appointment of an arbitrator in respect of that matter."

30. S.76 deals with service of notices. Insofar as relevant, s.76 is in the following terms:

" (1) The parties are free to agree on the manner of service of any notice….required or authorised to be given or served in pursuance of the arbitration agreement or for the purposes of the arbitral proceedings.

(2) If or to the extent that there is no such agreement the following provisions apply.

(3) A notice….may be served on a person by any effective means."

31. Finally, s.12 deals with extensions of time for the commencement of arbitral proceedings:

" (1) Where an arbitration agreement to refer future disputes to arbitration provides that a claim shall be barred, or the claimant's right extinguished unless the claimant takes within a time fixed by the agreement some step –

(a) to begin arbitral proceedings…..

the court may by order extend the time for taking that step….

(3) The court shall make an order only if satisfied –

(b) that the conduct of one party makes it unjust to hold the other party to the strict terms of the provision in question."

For completeness, s.12(3)(a) is irrelevant for the purposes of this dispute and no mention need be made of that provision. It may at once be noted that s.12(3)(b) of the Act furnishes a test in significantly different terms to that found in its predecessor, s.27 of the Arbitration Act 1950 ("the 1950 Act"). The test in s.27 of the 1950 Act was not in terms linked or confined to the conduct of one party; instead, s.27 gave the Court power to extend time if it was of the opinion "…that in the circumstances of the case undue hardship would otherwise be caused…".

THE RIVAL CASES

32. For the Claimants, Mr. Olbourne's submissions proceeded as follows. First, the 6^th and 12^th March Notices had been served in time, i.e., on or before the 12^th March, 2009.

i) S.76 of the Act was drafted in wide terms. It was and was intended to be more flexible than the regime for service provided in respect of Court proceedings by the CPR. Here, Baffin knew before the expiry of the time bar that the Claimants had (at least purportedly) commenced arbitration against it under the Bill of Lading contract. Baffin knew and must have known this; how else could Mr. Morland or FIL have informed Consultrade that the Club did not have authority to accept service? In that regard, Mr. Dong Li's (post-hearing) evidence was confirmatory. Knowledge of the 6^th and 12^th March Notices was significant; such a notice was unlike the issue of a Claim Form under the CPR - which did not require a defendant to do anything until service – it called upon Baffin to do something. Such knowledge was sufficient for service to have been properly effected under s.76.

ii) In any event and regardless of actual authority to do so, the Club had ostensible authority to accept service of the 6^th and 12^th March Notices. With regard to the wide range of matters discussed by the parties subsequent to the discharge of the cargo, the Claimants had throughout dealt and (for the most part) dealt only with the Club. At no time had there been any suggestion that the Club, dealing expressly on behalf of the owners of the vessel, had ad hoc authority only, limited to those matters where it had been specifically conferred. In all the circumstances, Baffin had permitted it to be represented that the Club had authority to accept service on Baffin's behalf. That was a reasonable belief for Mr. Behr to hold and the silence following the 6^th March Notice, together with the contents of the 11^th March conversation (i.e., that instructions were being taken) reinforced that belief.

33. Secondly, if the 6^th and 12^th March Notices had not been served in time, then the Claimants were entitled to an extension of time under s.12 of the Act. The conduct of Baffin and those representing Baffin made it unjust for the Claimants to be held to the strict time limit – which they had in any event missed (if they had missed it) by a matter of hours. The Claimants complained that Baffin and the Club had failed to bring to their attention the fact that the Club was not authorised to accept service of the Notices in question. On the facts of this case, this was not a complaint founded on mere silence. The 11^th March conversation was significant, involving, as it did, the Club taking instructions as to the 6^th March Notice. Baffin's and the Club's conduct had led or contributed to the Claimants failing to give notice in time; even as at the 11^th March, it would have been possible for the Claimants to effect service on Baffin itself, before the expiry of the time bar. Still further, there was no good reason for the Club's overnight silence as to Baffin's details, on the 12^th – 13^th March.
34. For Baffin, Mr. Kulkarni submitted that service of the 6^th and 12^th March Notices had not been effected in time. For service of these Notices to be properly effected, they would have had to be served either upon Baffin itself or upon an agent with actual or ostensible authority to accept service. Mere knowledge on the part of Baffin that the Claimants were "floundering" was not the same as or sufficient for proper service. It was clear on the evidence that the Club had no actual authority to accept service. The Claimants' case on ostensible authority was doomed to fail; there had been no holding out by the principal (Baffin) that the agent (the Club) had such authority. All the Club's dealings (as to LOUs, settlement negotiations and extensions of time) had been on express instructions from Baffin. It did not follow that the Club had – or was held out as having – authority to accept service of originating process. As Mr. Kulkarni put it:

" Consultrade, in believing that the Club did have such authority, made the (not uncommon) mistake of thinking that service of originating process is, in principle, no different from general negotiations and dealings in respect of a case."

The position of the Club was analogous to that of a solicitor instructed by a party to deal generally with a case on his behalf; absent express instructions, the solicitor would not have authority to accept service of originating process.

35. With regard to an extension of time, there had been a sea change in the law. The test in s.12 was markedly more restricted than that contained in s.27 of the 1950 Act. The rationale was the emphasis under the Act on the parties' bargain; the Court's discretion to intervene was to be sparingly exercised. Baffin had had no direct dealings with the Claimants. It followed that the Claimants' case for an extension rested on its dealings with the Club. The Claimants were driven to contending that the absence of an express statement from the Club that it was not authorised to accept service of the Notice/s made it unjust for the Claimants to be held to the time bar; that was a hopeless argument. The Claimants' predicament arose not from any conduct of Baffin or the Club; it arose instead from Consultrade leaving it to the last minute to attempt service of the 6^th and 12^th March Notices, coupled with the "unreasonable" assumption that service upon the Club was as good as service upon the Club's member.

DISCUSSION

36. Three principal questions arise:

i) Was Baffin properly served with the 6^th and 12^th March Notices on or before the 12^th March, 2009? (Question (I))

ii) Did the Club have actual or ostensible authority to accept service on behalf of Baffin? (Question (II))

iii) Are the Claimants entitled to an extension of time under s.12 of the Act? (Question (III))

I deal with each in turn.

37. Question (I): Was Baffin properly served with the 6^th and 12^th March Notices on or before the 12^th March, 2009? Although I have a measure of sympathy with the Claimants' submission, to my mind the clear answer is "no". My reasons follow.
38. First, as to sympathy. The position of Mr. Dong Li, Baffin and the Fednav Group is wholly technical and, if I may say so, unattractive. The purpose underlying service is that the arbitration claim or court proceedings, as the case may be, should be brought to the attention of the intended respondent or defendant, within the permitted period of time. In the present case, there were undeniably close corporate relationships between Baffin, FIL and Fednav, all companies within the Fednav Group. More than that, all the relevant roles were combined in one key individual– Mr. Dong Li, as his own witness statement made clear. His authority extended both to instructing the Club that they did not have authority to accept service and to dealing with the claim in the event that service was effected on Baffin. On the evidence, it is plain that Mr. Dong Li was fully apprised of the intended proceedings before time expired. All that said, a defendant, if it chooses to do so, is entitled to take advantage of the expiry of a time limit, if a claimant has failed to effect service within time.
39. Secondly and now putting sympathy aside, as Mr. Kulkarni correctly submitted, the Claimants were required to serve Baffin itself (or an agent with actual or ostensible authority to accept service) before the expiry of the applicable time limit. As far as it goes, Mr. Olbourne was right to submit that s.76 of the Act was intended to operate more flexibly than the regime for service provided in respect of Court proceedings by the CPR. So, by way of examples, notices commencing arbitration (ss. 14 and 76 of the Act) should be interpreted broadly and flexibly rather than strictly or technically: Seabridge Shipping v Orssleff's [1999] 2 Lloyd's Rep 685, at p. 690. So too, s.76 is more flexible than the CPR as to mode or means of service, as exemplified in The "Eastern Navigator" [2005] EWHC 3020 (Comm); [2006] 1 Lloyd's Rep 537. But, crucially and even assuming in the Claimants' favour that there are differences between the issuing of claim forms and the service of notices such as those of the 6^th and 12^th March, this flexibility does not assist the Claimants in satisfying the need to serve Baffin properly and within time. Separate corporate personality cannot simply be ignored. In short, nothing in the Act, authority or principle exempts an arbitration claimant from serving a notice commencing arbitral proceedings on the correct party.
40. Thirdly, again as Mr. Kulkarni correctly submitted, Baffin's (or the Fednav Group's) knowledge that the Claimants were floundering, does not equate to good service. The requirement was that the Claimants should serve Baffin before the expiry of the time limit; not that Baffin should be aware that the Claimants were trying to do so. If a claimant is required to serve X and, mistakenly purports to serve Y, the mere fact that Y informs X of the purported service so that X knows of it, cannot convert Y's receipt of the documents into good service upon X. To my mind, Mr. Olbourne's submission in this regard is untenable. For completeness and with great respect, I am not dissuaded from this conclusion by apparent obiter dicta of Mance J (as he then was), on very different facts and based upon a concession, in The "Santa Cruz Tres" [1995] 1 Lloyd's Rep. 208, at p.212.
41. Accordingly, as already indicated, I am bound to conclude that the answer to Question (I) is "no".
42. Question (II): Did the Club have actual or ostensible authority to accept service on behalf of Baffin? I can dispose at once of the question of actual authority. The conclusion is inescapable, certainly on the post-hearing evidence, that the Club did not have actual authority to accept service on behalf of Baffin.
43. With regard to ostensible authority, the "holding out" or representation must of course come from the principal rather than the suggested agent. That said, the holding out (or representation) need not be express; Bowstead and Reynolds on Agency (18^th ed.) puts the matter this way (at Art. 72):

" Where a person, by words or conduct, represents or permits it to be represented that another person has authority to act on his behalf, he is bound by the acts of that other person with respect to anyone dealing with him as an agent on the faith of any such representation, to the same extent as if such other person had the authority that he was represented to have, even though he had no such actual authority. "

Building on this principle and as already foreshadowed, Mr. Olbourne's submission was that on the facts of this case, Baffin permitted it to be represented that the Club had authority to accept service on its behalf.

44. With respect, I am unable to agree. In my judgment, Mr. Kulkarni's response was well-founded. The fact that the Club was authorised by Baffin to deal with a wide range of matters, including the LOUs, settlement negotiations and extensions of time, did not give rise to a representation on the part of Baffin that the Club had authority to accept service of originating process. It simply does not follow; as is well-known, a Club might but need not have such authority. Although I do not rest my decision on it, the Club's position in this regard is at least broadly analogous to that of solicitors, where even a wide general authority to deal with a case on behalf of a client will not (without more) translate into authority to accept service of originating process. I record that Mr. Kulkarni here drew my attention to a number of authorities, to which it is unnecessary to refer.
45. It is fair to say that Mr. Behr is by no means the first person and will almost certainly not be the last, to make a mistake of this nature as to a Club's authority to accept service of originating process; but mistake it was and I have no real hesitation in answering Question (II), "no".
46. Question (III): Are the Claimants entitled to an extension of time under s.12 of the Act? It is helpful to begin with a consideration of s.12(3)(b) of the Act. I remind myself that the relevant test is not that contained in s.27 of the 1950 Act; the Court can no longer extend time because it concludes, in general terms, that it would be just to do so: The "Catherine Helen" [1998] 2 Lloyd's Rep. 511, at p.520. Thus, without more, the shortness of the extension required (1 day, on the basis of service in the Marshall Islands) and the complete absence of prejudice (other than the loss of the time bar defence per se) will not suffice. Instead, it would seem that a price to be paid for the increased emphasis on party autonomy in arbitration is the stricter test now found in s.12. Here, therefore, the Court can only extend time if the conduct of Baffin or the Club (acting on Baffin's behalf) makes it unjust to hold the Claimants to the time bar. Some conduct must be shown that is causative of the failure to comply with the time bar or related to the injustice which would arise if relief is not granted: Thyssen v Calypso [2000] 2 Lloyd's Rep 243, at [24 - 25]; Harris, Planterose & Tecks, The Arbitration Act 1996, A Commentary (4^th ed.), at p.81; that conduct, however, need not amount to an estoppel or something akin to it (Harris et al, ibid). Mere silence on the part of the party seeking to rely on the time bar, or failure to alert the party seeking the extension to the need to comply with the time bar, cannot make the barring of the claim unjust: Harbour & General v Environment Agency [2000] 1 Lloyd's Rep. 65, at pp. 73 (Colman J) and 82 (CA). Similarly, the mere fact that a party took part in settlement negotiations would not be conduct making it unjust for him to rely upon the time bar: Ambrose & Maxwell on London Maritime Arbitration (2^nd ed.), Ch. 8.
47. With such considerations in mind, where do the facts of the present case stand? I cannot avoid saying that, at the least, some of the responsibility for the Claimants' predicament with regard to the time bar must be laid at the door of Mr. Behr. Already well into his second time extension, he left the dispatch of the 6^th March Notice until late in the day. Moreover, the drafting of that Notice left much to be desired. It is perhaps fortunate for the Claimants that on any view of the 11^th March conversation, the Notice does appear to have been taken as relating to the Bill of Lading dispute. The 12^th March Notice, which does not suffer from the shortcomings of the 6^th March Notice, was of course sent on the very last available day. Plainly such matters tell against the grant of an extension and I keep them well in mind: see, Hawkes v Beli [2009] EWHC 1740 (Comm).
48. Further, I doubt that mere silence on the part of Baffin in the face of the 6^th March Notice – had matters rested there - could assist the Claimants. So too, I am not inclined to think that the overnight 12^th -13^th March delay in supplying details as to Baffin's place of business would, by itself, have sufficed to make the barring of the claim unjust, even if eyebrows might have been raised; evasion of service is one thing but an obligation to assist a struggling claimant may well be another.
49. There remains, however, the 11^th March conversation. On the evidence, I have already concluded that:

i) there was a conversation between Messrs. Behr and Morland on that day;

ii) Mr. Behr was chasing for a response to the 6^th March Notice;

iii) Mr. Morland acknowledged receipt of the 6^th March Notice;

iv) On the Baffin case, the 6^th March Notice was treated as applicable to Baffin and the Bill of Lading arbitration;

v) Mr. Morland said that he was taking instructions with regard to that Notice;

vi) Mr. Morland did not say that pending such instructions, the Club did not have authority to accept service on behalf of Baffin. To recap and reiterate, I have no real doubt that had Mr. Morland said anything of that nature, Mr. Behr would have acted promptly, as indeed he did the next day.

50. To my mind, the facts of the 11^th March conversation (as found) are striking. I start with what was not said. Given the conversation which did take place, the obvious, fair and natural thing for Mr. Morland to have said was that the Club did not have authority to accept service of the Notice. It is revealing that once the balloon had gone up, Mr. Morland did claim to have said that. In fairness to Mr. Morland, it was not suggested that this claim was knowingly falsely advanced. For my part, I underline that I attribute this subsequent and (as I have held) mistaken assertion to rationalisation after the event, rather than anything more sinister – but it remains telling nonetheless that that is what Mr. Morland would like to have said.
51. Turning next to what was said, how should the 11^th March conversation be viewed? In my judgment, the premise of the 11^th March conversation was that the Club was considering the question of the appointment of an arbitrator in respect of (inter alia) the Bill of Lading arbitration, pursuant to the 6^th March Notice. If the Club was taking instructions in that regard, the timescale in responding would be readily explicable. But taking time and instructions as to the appointment of an arbitrator would be difficult to reconcile with the Club or Baffin having already taken a view that the Notice had not been properly served. Moreover, the question of whether the Club had authority to accept service of such a Notice could not sensibly take five days to resolve; when it came to the 12^th March Notice, the answer to that question was given within minutes (as is clear from the contemporaneous exchanges and Mr. Dong Li's evidence). At all events, there can be no doubt that the Club did have authority to deal generally with Mr. Behr in connection with the dispute and, to my mind, the reasonable impression created by the 11^th March conversation was that the Club was taking instructions as to the substance of the Notice rather than the procedural propriety of its service. It may be the case that the Club and the Fednav Group had hoped that time would expire without more ado, so leaving open for subsequent dispute both the service and (perhaps) the drafting of the 6^th March Notice and with the Claimants in the position of having nothing but silence to rely upon. But that option (if such was the Club's or Fednav's thinking – and there is no evidence in this regard) was foreclosed by the 11^th March conversation. That conversation took the matter beyond what might be termed mere silence.
52. Pulling the threads together, the course taken by the 11^th March conversation meant that if a point was to be taken on the Club lacking authority to accept service of the 6^th March Notice, it was only fair that something should then have been said. However inadvertent, the failure to do so, against a background of the Club taking instructions on the Notice, was misleading - and none the less so because its effect was to reinforce Mr. Behr's own error as to the Club's authority to accept service. It is plain from Mr. Behr's actions that the moment he did realise that there was a difficulty with serving the Club, he sought with determination and speed to serve Baffin directly or through other agents (as in the Marshall Islands) with authority to accept service. Had Mr. Morland said on the 11^th March that which he later claimed to have said (and which he did say on the 12^th March, upon receipt of the 12^th March Notice), it is at least probable that the matter was still curable and that proper service would have been achieved in time, whether in the Marshall Islands or elsewhere. In this respect, not least, the present case is plainly distinguishable from Hawkes v Beli (supra). I do not lose sight of Mr. Behr's own responsibility in the matter (see above). But, in my judgment, the conduct of the Club as agent for Baffin in the course of the 11^th March conversation makes it unjust to hold the Claimants to the time bar – which, in the event they "missed" by no more than 8 ½ hours. That conduct on the part of the Club contributed to, even if it was not the sole cause of, the Claimants' failure to comply with the time limit in question. In my view, on the particular facts of this case, s.12(3)(b) of the Act is satisfied. That being so, in all the circumstances (as already set out) and in the exercise of my discretion under s.12(1) of the Act, I am amply persuaded that the just course is to extend time.
53. Accordingly and despite, with respect, Mr. Kulkarni's clear and helpful submissions, I answer Question (III), "yes".
54. I shall be grateful for the assistance of counsel in drawing up an appropriate order and as to all questions of costs.