The case of the day is Hyundai Merchant Marine Co. v. Grand China Shipping (Hong Kong) Co. (S.D. Ala. 2012). According to the complaint, Hyundai chartered the vessel Global Commander to Grand China for approximately $60,000 per day for a period of 59 to 61 months. Hyundai claimed that Grand China owed nearly $20 million in unpaid fees under the charter party. As required by the contract, Hyundai had initiated an arbitration in London, which was still pending. Hyundai also sought an attachment under Rule B of the Supplemental Rules for Admiralty or Maritime Claims. In summary, in an in personam admiralty or maritime action, Rule B permits an attachment of a defendant’s assets when the defendant is not found in the district where the action is brought. The rule also imposes requirements for notice to defendants:
No default judgment may be entered except upon proof—which may be by affidavit—that:
(a) the complaint, summons, and process of attachment or garnishment have been served on the defendant in a manner authorized by Rule 4;
(b) the plaintiff or the garnishee has mailed to the defendant the complaint, summons, and process of attachment or garnishment, using any form of mail requiring a return receipt; or
(c) the plaintiff or the garnishee has tried diligently to give notice of the action to the defendant but could not do so.
Hyundai served the summons and complaint and the writ of attachment on the defendants by Fedex. Most of the defendants were served in Mainland China; one was served in Hong Kong. The defendants moved to dismiss, arguing that the notice of the attachment had to be served by a method permitted by the Hague Service Convention, and that since China had objected to service by mail, the service was improper.
There are a few threshold points worth making. First, Rule B(2), quoted above, simply forbids a default judgment in cases where the notice is not made. There was no default judgment here, so even if the defendants were correct in arguing that the notice was improperly served, it’s not clear why that should lead to dismissal. Second, while China has indeed objected to service by mail, Hong Kong has not. So it’s not clear that the premise of the defendants’ argument is correct with respect to the one defendant who was served in Hong Kong.
But the main question in the case is interesting: does the Hague Service Convention require that the notice under Rule B(2) be served by a means permitted by the Convention? Or is the Convention simply inapplicable to any documents other than summonses and complaints? First I will give the judge’s view and then I’ll give my own.
The judge’s basic decision was that the Convention applied only to service of process, strictly defined, and not to service of other documents. She based her view primarily on a dictum from Volkswagenwerk AG v. Schlunk, 486 U.S. 694, 700-01 (1988):
The negotiating history supports our view that Article 1 refers to service of process in the technical sense. The committee that prepared the preliminary draft deliberately used a form of the term “notification” (formal notice), instead of the more neutral term “remise” (delivery), when it drafted Article 1. 3 Actes et Documents, at 78-79. Then, in the course of the debates, the negotiators made the language even more exact. The preliminary draft of Article 1 said that the present Convention shall apply in all cases in which there are grounds to transmit or to give formal notice of a judicial or extrajudicial document in a civil or commercial matter to a person staying abroad. Id., at 65 (“La presente Convention est applicable dans tous les cas ou il y a lieu de transmettre ou de notifier un acte judiciaire ou extrajudiciaire en matiere civile ou commerciale a une personne se trouvant a l’etranger”) (emphasis added). To be more precise, the delegates decided to add a form of the juridical term “signification” (service), which has a narrower meaning than “notification” in some countries, such as France, and the identical meaning in others, such as the United States. Id., at 152-153, 155, 159, 366. The delegates also criticized the language of the preliminary draft because it suggested that the Convention could apply to transmissions abroad that do not culminate in service. Id., at 165-167. The final text of Article 1, supra, eliminates this possibility and applies only to documents transmitted for service abroad. The final report (Rapport Explicatif) confirms that the Convention does not use more general terms, such as delivery or transmission, to define its scope because it applies only when there is both transmission of a document from the requesting state to the receiving state, and service upon the person for whom it is intended. Id., at 366.
The judge also focused on the Convention’s use of the words “transmit” and “send”, as oppose to “serve”, in Articles 1 and 10. Hyundai argued that those words indicated that that the Convention had a broader scope than just service of process. She rejected this argument, correctly noting that the better view of Article 10 is that it permits service of process by postal channels notwithstanding its use of the word “send” instead of “serve.”
I wonder whether the judge’s view can be correct, for the following reasons:
- The Convention applies to the transmission of judicial and extrajudicial documents. If the Convention is read to apply only to service of process, then what possible meaning could its extension to transmission of extrajudicial documents have?
- The judge relied on a restrictive definition of the word “service.” In ordinary US civil procedure, we use the word to refer both to service of process at the beginning of a case and service of other documents when a case is ongoing. FRCP 5 requires that all pleadings (after the complaint), motions, notices, discovery papers, etc. must be “served” on each party, though the service is, in general, required to be made on the parties’ attorneys and may be made by mail or even electronically, and not on the parties via the methods prescribed for service of process in FRCP 4.
- The French version of Article 1 reads:La présente Convention est applicable, en matière civile ou commerciale, dans tous les cas où un acte judiciaire ou extrajudiciaire doit être transmis à l’étranger pour y être signifié ou notifié. What does this mean? I’m no expert on French law, but according to an article by David Stewart and Anna Conley that I’ve cited before, signification refers to service that must be made by personal delivery by a judicial officer or huissier, while notification refers to service that can be made by mail or even fax.1 Letters Blogatory’s French correspondent, Fanny Cornette, points out that under the French Code de procédure Civile, there are times after the commencement of an action when a document is served by notification, e.g. notification entre avocats under Articles 671-74 of the CPC, and she opines that in France, at least, transmission of any judicial documents, not just summonses and complaints, must be transmitted in a way that complies with the Convention.
This is a difficult issue, and I’m not really sure of the answer, so I welcome thoughts from readers!