Tag Archives: Hong Kong

Case of the Day: Shanghai Commercial Bank Ltd. v. Chang

The case of the day is Shanghai Commercial Bank Ltd. v. Chang (Wash. Ct. App. 2014). The bank sued Kung Da Chang in Hong Kong for failure to pay on a revolving multi-currency loan Chang had obtained in 2008 in order to facilitate the transfer of investments from the Bank of East Asia to the Shanghai Commercial Bank. Chang counterclaimed for fraud and on securities law claims, and he brought a parallel action against the bank in Hong Kong that asserted claims substantially similar to his counterclaims. In that action, the bank asserted counterclaims equivalent to its claims in the first case. As provided by Hong Kong’s rules of procedure, the bank sought an order requiring Chang, a non-resident plaintiff, to post security against the costs of litigation. After a hearing on the merits of the application for security, the Hong Kong court ordered Chang to provide more than HKD $6 million in security against costs in the parallel action in which it was a plaintiff. When Chang failed to post the security, the court dismissed the parallel claim. Later, the court awarded judgment for USD $9 million for the bank on its claims and against Chang on his counterclaims in the first case. Chang did not appeal from any of the decisions. The bank sought recognition and enforcement of the judgment in Washington under the UFMJRA. The King County Superior Court entered summary judgment for the bank, and Chang appealed.
Continue reading Case of the Day: Shanghai Commercial Bank Ltd. v. Chang

Case of the Day: Professional Investigating & Consulting Agency v. Suzuki

The case of the day is Professional Investigating & Consulting Agency, Inc. v. Suzuki (S.D. Ohio 2014). The plaintiff, David Suzuki and Suzuki Reconnaissance Advisors, Ltd., were located in Hong Kong. The plaintiff, Professional Investigating & Consulting, was an Ohio private investigation firm. The claims were for breach of contract. The action was filed in November 2011.

PIC hired a process serving firm to attempt to serve the defendants through the Chinese central authority, but their attempt failed because they had given incorrect addresses for the defendants. PIC then corrected the addresses and tried again, but for more than a year the Chinese central authority had not returned a certificate concerning service.

In September 2013, PIC effected service by personal delivery via a private process server. Suzuki (personally, not through his lawyers) sent a letter to the Court objecting to that mode of service. I’m not going to delve into the question whether Suzuki’s objection was sound—the judge found that personal service was improper and ordered PIC to try again.

PIC then moved for leave to serve the defendants by email. The court, continuing a sad trend, granted the motion. It held that PIC had shown that the Hague Service Convention does not prohibit service by email.

As Plaintiff contends, the Hague Convention is silent on email service. Various courts have agreed that service by email is not prohibited by the Hague Convention. Email service has been approved even where, as here, the country objects to Article 10 of the Hague Convention.

(citations and internal quotation marks omitted).

I’m not going to go over all this again. I’ll simply make a few points:

  1. Hong Kong has not objected to service under Article 10, contrary to the judge’s suggestion.
  2. Because the Convention is exclusive, it’s not enough to note that the Convention is silent on email. Indeed, the Convention’s silence on email should be fatal to the case for service by email, since the only permissible methods of service are those authorized or at least permitted by the Convention.
  3. The decision could be right despite the poor reasoning if you think email comes within the definition of postal channels. But for reasons I give in my recent paper, I don’t think that’s right.

At what point do I have to stop saying that the courts keep getting this wrong and start saying that the law is what the courts say it is? I’m sticking with this—all of the bad decisions so far are at the trial court level.

Case of the Day: Ackourey v. Noblehouse Custom Tailors

The case of the day is Ackourley v. Noblehouse Custom Tailors (E.D. Pa. 2013). The plaintiff, Richard Ackourey, sued Noblehouse Custom Tailors, a Hong Kong firm, and its owner, Vijay Wadwahani, for copyright infringement. The court dismissed the action for failure to serve process, and Ackourley moved to reopen the case, stating that he had served the complaint by certified mail, return receipt requested but had not yet received the proof of service because he had not yet received the return receipt. The court correctly recognized that the failure to file the return of service until after the case was dismissed was not fatal, because under FRCP 4(l)(3), “Failure to prove service does not affect the validity of service.” Still, the court considered whether the method of service was valid. The court got this right on all points. First, the Hague Service Convention applies to Hong Kong. Second, Article 10(a) permits service of process by mail. Third, although China has objected to service by mail, Hong Kong has not. The court therefore correctly granted the motion to vacate the dismissal. Easy.