Case of the Day: Saint-Gobain Performance Plastics v. Venezuela

The case of the day is Saint-Gobain Performance Plastics Europe v. Bolivarian Republic of Venezuela (D.C. Cir. 2022). In 2011, the Venezuelan government expropriated Saint-Gobain’s interest in NorPro Venezuela, C.A., a Venezuelan company. Saint-Gobain is a French company, and it brought an arbitration against Venezuela under the ICSID Convention. The tribunal awarded Saint-Gobain $42 million. Saint-Gobain sought to enforce the award in the District of Delaware. It sought to serve process via the Hague Service Convention, as was appropriate under the FSIA (because there was no special arrangement for service). The Venezuelan central authority received the request for service, but Saint-Gobain heard nothing further (and did not ask).

Saint-Gobain sought a default judgment. Venezuela moved to dismiss for lack of jurisdiction on the grounds that service was improper and also for improper venue. The court denied the motion to dismiss but it did transfer the case to the District of Columbia. The court refused to reconsider the Delaware court’s decision on service and entered a summary judgment. Venezuela appealed.

There is some superficial appeal to Saint-Gobain’s position. When you send a request to a foreign central authority (which is of course an agency of the foreign state) and you ask it to serve the foreign state, you’re asking the foreign state to serve itself. So why should the foreign state be able to defeat service by simply doing nothing, refusing to execute the request, and failing to return the Article 6 certificate? But the Convention plainly does not treat transmission of the request to the central authority as service on the foreign state: service, under Article 5, is to be effect in the manner prescribed by the local law of the state of destination, unless the sender requests another method. The DC Circuit therefore correctly reversed the summary judgment against Venezuela.

The court remanded for further attempts at service, noting that service might be attempted again under the Convention. This was, I think, a mistake. Service under the Convention has already failed, and Saint-Gobain should be entitled now to proceed to the other methods of service prescribed by the FSIA. But the court’s decision might force it to try service under the Convention again.

The decision does raise an interesting possibility. What if Saint-Gobain had requested service by a particular method, namely, by delivery to the central authority? I assume that that method, while not prescribed by Venezuelan law, is not prohibited by it. Could Saint-Gobain solve the problem that way?

2 responses to “Case of the Day: Saint-Gobain Performance Plastics v. Venezuela”

  1. kotodama

    I note that the underlying arbitration was pursuant to a bilateral investment treaty (BIT). From the perspective of Saint-Gobain or a similar party suffering expropriation, could this problem be fixed in the future by including provisions in new or revised BITs that require a sovereign like Venezuela to consent in advance to service or at least allow more convenient (for a party enforcing an award) service methods?

    1. Ted Folkman

      It’s an interesting point! Under the FSIA, a “special arrangement for service” can be the proper way to serve process.

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