L J Korbetis v Transgrain Shipping BV
High Court
Citations: [2005] EWHC 1345 (QB).
Facts
The parties entered into a charterparty for the carriage of maize. Once the cargo was delivered, the parties got into a dispute about the demurrage payable. One clause of the charterparty required any dispute to be submitted to arbitration, so the parties started discussing who they would use as arbitrators.
The defendant offered three potential arbitrators. In April 2004, the claimant sent the defendant a fax accepting one of those arbitrators. The defendant did not respond, so the claimant re-sent their fax in August. In December, the claimant realised that they had been faxing the wrong number. They sent the fax to the correct number, but by then the time-limit had expired. The defendant rejected the claimant’s acceptance as being too late, arguing that their offer had expired. The claimant argued that their initial fax in April 2004 was a valid acceptance, because of the postal rule.
Issue(s)
- Did the postal rule apply in this case?
- Had the defendant’s offer expired by December?
Decision
The Court held against the claimant. The postal rule did not apply because the fax’s failure to arrive was the claimant’s fault. The claimant’s first valid acceptance was therefore in December. However, the defendant’s offer was only valid for a reasonable period of time. Since several months had past, that period had passed. The offer had therefore expired and could not be accepted.
This Case is Authority For…
The postal rule does not apply where it is the sender’s fault that the letter never reaches the defendant (or arrives late).
An offer which does not state a time-limit expires after a reasonable period has passed.
Other
The judges in this case assumed that the postal rule is in principle applicable to faxes. This is no longer good law. The postal rule does not apply to instantaneous forms of communication like faxes: Brinkibon Ltd v Stahag Stahl GmbH [1983] 2 AC 34.
