By: Tom On: January 2, 2020 In: International Service of Process Comments: 0
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Readers of this blog are aware that we are proponents of the use of Article 15 of the Hague Service Convention to obtain default judgments. This is especially true when attempting service in China which can take two years or more to complete.[1] Yet, before the Convention sets out the elements to obtain a default judgment, the first paragraph of Article 15 states (in its entirety):

Where a writ of summons or an equivalent document had to be transmitted abroad for the purpose of service, under the provisions of the present Convention, and the defendant has not appeared, judgment shall not be given until it is established that –

a) the document was served by a method prescribed by the internal law of the State addressed for the service of documents in domestic actions upon persons who are within its territory, or
b) the document was actually delivered to the defendant or to his residence by another method provided for by this Convention,

and that in either of these cases the service or the delivery was effected in sufficient time to enable the defendant to defend.

When reading Article 15, it is easy to overlook this first paragraph. After all, this paragraph simply makes clear that notice of judicial proceeding is a foundation for personal jurisdiction – in the US and many other countries. Thus, in a word, the first paragraph of Article 15 is non-controversial: a forum court must hold its proceedings in abeyance until an overseas defendant has been served pursuant to the Convention.

Yet, in the case of In Re: Kirwan Offices S.à.R.L.,[2], the first paragraph of Article 15 was used as a stratagem to put the brakes on an international litigation proceeding. Though, as the Second Circuit’s opinion in Kirwan Offices S.à.R.L. implicitly suggests, it is not a particularly good stratagem.[3]

While the appellant raised a number of arguments on appeal, herein we only address the issue of whether the he received adequate notice of a bankruptcy confirmation hearing.

Did the Appellant Receive Adequate Notice?

In the case of In Re: Kirwan Offices S.à.R.L., the appellees sought involuntary dissolution of the debtor. Because the Second Circuit provided few details about service of process, it is necessary to briefly review the trial court’s opinion to obtain the facts associated with service of process.[4] According to the district court, the appellant in this case argued that he was

not given adequate and proper notice of the time fixed for filing objections to the plan of reorganization and for the hearing to consider the same, in violation of Fed. R. Bankr. P. 3017(a) & (d), 2002(b) & (g), and Article 15 of the Hague Convention on Service Abroad of Judicial and Extrajudicial Documents, and in contravention of his due process rights.[5]

Here, it is important to note that the appellant was not challenging the service of process that initiated the bankruptcy proceeding, but rather he was challenging the notice of the time fixed to file objections to the proposed reorganization plan. But – spoiler alert — Article 15 only applies to the service of process that commenced the proceeding. Consequently, using the first paragraph of Article 15 as a means of stopping an international proceeding while not actually objecting to the service outlined in that paragraph, is flawed from the start.

A Closer Look at How Article 15 Functions

On appeal, the appellant argued that

the confirmation order is void because he did not receive adequate notice of the confirmation hearing in violation of the Due Process Clause of the Fifth Amendment and Article 15 of the Hague Convention on Service Abroad of Judicial and Extrajudicial Documents (“Hague Service Convention”), and because the notice period was improperly abbreviated.

The court first attested that the

failure to serve notice in conformity with the bankruptcy court’s rules did not establish a due process violation because [the appellant] received actual notice of the filing and contents of the Plan, and [the appellant] did not object to the notice of the confirmation hearing. United Student Aid Funds, Inc. v. Espinosa, 559 U.S. 260, 272 (2010) (holding failure to serve summons and complaint in conformity with the Bankruptcy Rules did not render a confirmation order void where the objecting party received actual notice and failed to object to inadequate service).[6]

Second,[7]

[The appellant’s] reliance on Article 15 of the Hague Service Convention is misplaced, as that article applies to a “writ of summons or an equivalent document” and has no bearing on the service of notice of a hearing on confirmation of a reorganization plan. See Hague Service Convention Art. 15. The Supreme Court has noted that the scope of the Hague Service Convention is likely limited to “service of process,” see Water Splash, Inc. v. Menon, 137 S. Ct. 1504, 1510 n.2 (2017), which is defined as “a formal delivery of documents that is legally sufficient to charge the defendant with notice of a pending action.” Volkswagenwerk Aktiengesellschaft v. Schlunk, 486 U.S. 694, 700 (1988). Here, [the appellant] was not a nonparty who needed “notice of a pending action.” Id. Instead, he had already voluntarily appeared in the bankruptcy proceedings and participated substantively, including, for example, by moving to dismiss the bankruptcy case (on other grounds) and to compel arbitration. Thus, the Hague Service Convention is not relevant here, and Espinosa controls.

Accordingly, the Second Circuit affirmed the trial court’s order: Article 15 pertains to the initiation of litigation and has nothing to do with communications between the court and the parties after litigation has commenced.

How LLS Can Help

At LLS, we’re familiar with the complications of serving process abroad and have a proven success record. With more than 35 years experience effecting service abroad, our team of international litigation specialists is the leading US provider of international service of process.

If you require assistance servicing process abroad contact the professionals at Legal Language today.

Call us at 1-800-788-0450 or simply fill out our free quote form.

Notes
[1] Cf. Service in China may be improving. In 2019, for the first time in years, the Chinese Central Authority completed service in less than a year in approximate 3 cases.
[2] No. 18-3371 (Second Circuit December 20, 2019).
[3] The Second Circuit does not explicitly state the appellants in this case were wasting the Court’s time, but the swift dismissal of the appellants’ arguments certainly suggests it.
[4] 592 B.R. 489 (S.D.N.Y. 2018).
[5] There was no need for the appellant in the current case to challenge the service at the district or appellate court levels because the appellant initiated this proceeding.
[6] Footnote omitted.
[7] The appellants raised a third argument, but the Second Circuit summarily dismissed it because it was not raised at the trial court level.

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