Tag Archives: France

Case of the Day: Daguerre v. Rabizadeh

The case of the day is Daguerre S.A.R.L. v. Rabizadeh (N.Y. App. Div. 2013). Daguerre is a French auction house. It alleged that the defendant, Albert Rabizadeh, was the winning bidder at a 2007 auction in Paris for four antique Russian drinking cups. Daguerre sued for the purchase price in the Superior Court of Paris in 2009. A process server served the summons on Rabizadeh by leaving it with a suitable person at his place of business in New York. Rabizadeh did not appear in the action, and the French court entered judgment against him. Daguerre then sought recognition and enforcement in New York. The judge granted Daguerre’s motion for summary judgment, and Rabizadeh appealed.

The appellate court reversed on technical grounds. Service by delivery of the documents to the defendant’s usual place of business is a permissible method of service under New York law, but only if the documents are also mailed to the defendant’s last known address or his actual place of business. The return of service did not aver that the documents had been mailed and thus the service was insufficient. It’s unclear whether, on remand, Daguerre will be able to show that the process was mailed to Rabizadeh; if not, much time and money will have been wasted.

The case is rightly decided. But the case arises in an interesting posture. I’ve previously observed that courts treat an Article 6 certification by a central authority under the Hague Service Convention as prima facie evidence, or even something more than that, that service was properly effected. Suppose Daguerre had sought to effect service via the US central authority, and the central authority’s contractor had done what the process server did here. Would it be appropriate for the US court to give more deference to the Article 6 certificate than it would give to an ordinary return of service in a purely domestic case? On the one hand, the US court is in a position to decide whether the service complied with US law, and on ordinary principles, a judgment without valid service of process is void, at least if the defendant did not appear in the action. On the other hand, the whole point of the Convention’s central authority mechanism is to provide some assurance to the plaintiff in the foreign action that service will be effected properly, and perhaps the United States has some international obligation to recognize a foreign judgment where service was made in the US under the Convention if the only objection to recognition is based on faulty service of process. Should the United States certify that the service was made and then pull the rug out from under the feet of the foreign judgment creditor after the judgment creditor, in reliance on the Article 6 certificate, has taken the case to judgment?

I’m of two minds about this. On the one hand, the problem will really only arise in a default judgment case, so the foreign judgment creditor will not have had to bear the costs of litigating the case on the merits. On the other hand, subject to due process considerations (i.e., as long as the US defendant had actual notice and an opportunity to defend), I see room to make a case that the Convention itself should require the US to recognize a judgment in such circumstances.

Case of the Day: SerVaas Inc. v. Republic of Iraq

The case of the day is SerVaas Inc. v. Republic of Iraq (2d Cir. 2013) (mem.). We have considered the case twice before: first we looked at the District Court’s decision granting SerVaas’s motion for summary judgment; then we looked at some post-judgment discovery issues. Here were the facts:

Servaas had a contract with the Ministry of Industry of Iraq for supply of equipment and machinery for a copper scrap refinery plant in Anbar Province. The contract, which the parties made in 1989, had a total price of more than $40 million. In 1990, following Iraq’s invasion of Kuwait, the US government prohibited American citizens from performing any contracts relating to any industrial project in Kuwait. Servaas was therefore required to terminate the contract, even though it had already delivered all of the goods and carried out many of the services required under the contract. After termination, Servaas demanded payment for services rendered, and when Iraq failed to pay, it initiated an arbitration before the ICC, to which Iraq did not respond. The arbitral tribunal was not constituted, due to the failure of Iraq to nominate an arbitrator.

Servaas sued in the Commercial Court of Paris and served the writ of summons through diplomatic channels on the Iraqi embassy in Paris, which agreed to accept it. Iraq did not appear in the action. In 1991, the court awarded more than $14 million in damages.

The claim in the case was for recognition and enforcement of a French judgment that SerVaas had obtained against Iraq’s Ministry of Industry and against Iraq itself. Today’s case was Iraq’s appeal from the summary judgment. Iraq’s argument, which I covered in the prior post, was that it was error to recognize the judgment against Iraq itself. But the Second Circuit made short work of this argument. The French court had treated the Ministry and the Iraqi state as indistinguishable, and the US courts were bound to do likewise.

Case of the Day: Shoham v. Islamic Republic of Iran

The case of the day is Shoham v. Islamic Republic of Iran (D.D.C. 2013). Batsheva Shoham alleged that while she was driving in the West Bank with her infant son, she was ambushed by members of the Al-Aqsa Martyrs Brigade, a terrorist group. One of the terrorists threw a stone that struck her son, killing him. In 2011, Mrs. Shoham and victims of similar attacks sued Iran, Syria, and others in the District of Columbia. Judge Collyer severed Mrs. Shoham’s claims from the action and granted her leave to refile with a new caption, noting that the summonses would have to be reissued and that the amended complaint would have to be served.

Mrs. Shoham then filed a new action, with a complaint identical to the complaint in the prior action, but with a new caption. The remaining plaintiffs in the first case managed to serve Iran and its instrumentalities with process via diplomatic channels. After the court ordered Mrs. Shoham to show cause why her new action should not be dismissed for want of prosecution (as she had filed no return of service after six months), Mrs. Shoham moved for entry of default judgment on the theory that despite Judge Collyer’s order, service of the original complaint in the first action sufficed. She cited precedents for the proposition that service of an amended complaint under the FSIA after a default by the foreign state is necesssary only if the amendments are substantial.

Judge Lamberth distinguished these cases on the grounds that they involved the service of an amended complaint in a single action, not, as was the case here, service of a complaint in an entirely new civil action. It hardly matters, from the jurisdictional point of view, whether the complaint in the second action was similar or even identical to the complaint in the first. However, the judge did give her additional time to effect service, and he blasted the government for the high fees it charges to effect service via diplomatic channels under the FSIA.

Mrs. Shoham also sought leave to serve Bank Melli, Bank Saderat, and Iran Air in Austrialia, Canada, France, Italy, Hong Kong, the Netherlands, Sweden, and the UK, by registered mail, return receipt requested. The judge granted the request. All three defendants are agencies or instrumentalities of Iran for purposes of the FSIA. Therefore, service was governed by 28 U.S.C. § 1608(b). Mrs. Shhoam had been unable to make service by registered mail at the defendants’ headquarters in Iran, and therefore her request was proper under § 1608(b)(3)(C), which permits service by delivery of the documents “as directed by order of the court consistent with the law of the place where service is to be made” when other means of service have failed. All of the countries named are parties to the Hague Service Convention, and none has objected to service by postal channels under Article 10(a). 1 The judge held, correctly, that service by mail under Article 10(a) despite the minority view to the contrary.

Note that § 1608(b)(3)(C) asks whether the service is “consistent with the law of the place where service is to be made.” Is there an issue about whether service by postal channels is consistent with the law of the state where service is to be made, particularly if in a particular state the Convention is not self-executing? The decision does not raise this issue, and I simply pose it as a question.

Notes:

  1. Australia requires that such service be by registered mail, return receipt requested, and I refer readers to one of my many discussions with Antonin Pribetić on the issue of service by mail in Canada.