The case of the day is Yukos Capital S.A.R.L. v. Oio Samaraneftegaz (2d Cir. 2014). In 2004, Yukos loaned Samaraneftegaz almost 2.5 billion rubles. The loan agreement had an arbitration agreement providing for arbitration before the ICC. Samaraneftegaz defaulted, and Yukos demanded arbitration. Samaraneftegaz failed to participate, and eventually Yukos won a judgment for the full principal amount of the loan, plus more than 664 million rubles in interest and approximately $700,000 in fees and the costs of arbitration. The Russian courts refused recognition of the award, but the District Court in New York confirmed the award, entering a dollar-denominated judgment that used the exchange rate of the date of the award. Samaraneftegaz appealed. Continue reading Case of the Day: Yukos Capital v. Samaraneftegaz→
The case of the day is Bidonthecity.com LLC v. Halverston Holdings Ltd. (S.D.N.Y. 2014). The case involved a joint venture gone wrong. The plaintiff sought to serve one of the defendants, Halverston Holdings Ltd., BVI, a British Virgin Islands company, by Fedex. The UK has not objected to service by postal channels on the BVIs’ behalf, and the judge correctly held that Fedex is within the postal channel.
The more difficult question was service on RBC-TV Moscow, a Russian corporation. The plaintiffs sought to effect service by personal delivery and by mail. The judge correctly held that under FRCP 4(h)(2), personal delivery is not an available method of delivery for use on a corporation abroad. Service by mail won’t work, either, as Russia has objected to service by mail under Article 10(a) of the Hague Service Convention.
The plaintiffs didn’t make a simple mistake here. Rather, they were trying to grapple with Russia’s unilateral refusal to execute requests for service from the United States under the Convention. I have noted that refusal twicebefore. The fact of the matter is that Russia’s refusal to honor the treaty does not make permissible what the Convention makes impermissible. I don’t know enough public international law to know what would have to happen to change this analysis: certainly Russia has not withdrawn from the Convention.
All’s well that ends well. RBC-TV had hired a US lawyer to argue its position on service of process and other issues. And so the judge, correctly, authorized the plaintiff to serve RBC-TV by service on its US counsel. I’ve said it before: if you want to make a service of process argument, run silent, run deep. (I’ll do a post on this idea at some point. I think it’s right, even though I can think of some objections).