Case of the Day: Altos Hornos de Mexico v. Rock Resource Ltd.

The case of the day is Altos Hornos de Mexico, S.A.B. de C.V. v. Rock Resource Ltd. (S.D.N.Y. 2015). Altos Hornos moved for confirmation of an arbitral award it had obtained against Rock Resources. Altos Hornos sought to serve Rock Resources with process in Hong Kong via the Central Authority, using the address Rock Resource had given in the arbitration. The Central Authority couldn’t make service because Rock Resource’s address had changed. Altos Hornos was able to find the new address. Estimating that it would take four to six months to make a second attempt, Altos Hornos sought leave to serve process by alternate means under FRCP 4(f)(3), namely by postal channels and by email.

As a preliminary note, Hong Kong has not objected to service by postal channels. So you may be wondering why Altos Hornos brought a motion for leave to serve process by postal channels—why not just go ahead and do it? I don’t know what its lawyers were thinking, but as I’ve noted before, there is an interesting though not so widely adopted textual argument that FRCP 4(f)(2)(C)(ii), the provision of Rule 4 that authorizes service by mail, does not apply when the Hague Convention applies, so leave under FRCP 4(f)(3) is necessary. Longtime readers will know that in my view service by email is improper when the Hague Service Convention applies, but I’m not going to address that point further here.

Although the judge recognized that FRCP 4(f)(3) is discretionary and that it is not disfavored relative to the other methods of service in Rule 4, he noted, correctly, that courts, including some in the SDNY, sometimes require a showing that the plaintiff has made reasonable attempts to serve process another way or that court intervention is necessary before allowing service by alternate means. I am okay with this as long as it does not harden into a rule of law, since that, I think, would be inconsistent with the clear rule that a motion for leave under FRCP 4(f)(3) is committed to the court’s sound discretion. Anyway, here the judge found that Altos Hornos had not shown that court intervention was necessary, because it can serve process via the Central Authority at the new address.

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