Korbetis v Transgrain Shipping

LJ Korbetis v Transgrain Shipping BV [2005] EWHC 1345

Contract – Postal Rule – Acceptance – Jurisdiction – Fax – Reasonable Time

Facts

This case concerned a demurrage claim and the appointment of an arbitrator. In April 2004, the complainant, LJ Korbetis sent a fax to the defendants, Transgrain Shipping BV, that accepted one of the three nominated arbitrators. This message asked for their confirmation. The complainant did not receive a response to the first fax and proceeded to send another acceptance by fax in August 2004. It was not until December 2004 that the complainant realised the fax had been sent to the wrong number. As a result, LJ Korbetis sent the acceptance to the correct number and appointed the arbitrator after the expiration.

Issues

The complainant argued that the appointment of the arbitrator was accepted when the fax was sent in April 2004. However, the defendants argued that they had never received the initial faxes and rejected the acceptance they received from the complainant, due to being too late. They argued that the appointment was void. The issue in this case was whether there was a contract between the two parties regarding the appointment and if the postal rule applied.

Decision/Outcome

The court held that the postal rule would not apply when a letter of acceptance was sent to the wrong number or address. As a result of sending the acceptance to the wrong fax number, there had been no communication between the parties and the complainant should have checked that the defendants had received the acceptance; it had been a number of months. They cannot be bound by this, as it was the fault of the complainant that it was never received.