28May
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The words blockchain, bitcoin, and cryptocurrency are so often heard in the same sentence that many think these words are synonyms. But in fact, each word has its own, specific meaning.

Cryptocurrency is “a digital or virtual currency that uses cryptography for security.”[1] There are currently more than 50 different types of cryptocurrencies that are actively traded. One such type of cryptocurrency is bitcoin.[2]

Blockchain, in turn, is a technology involving “a growing list of records, called blocks, which are linked using cryptography.”[3] Blockchain is the technology underlying cryptocurrencies.

Blockchain technology is based on peer-to-peer transmission of information that bypasses the need for a trusted intermediary — like a bank.[4] Importantly, because blockchain technology is efficient and flexible, it finds application in many fields besides financial transactions. Blockchain technology is increasing being used for monitoring of supply chains, digital identification, smart contracts, and medical records.[5]

Given that blockchain technology is encrypted, provides digital identification, and can facilitate wire transactions, it is not surprising that there are now several companies developing the Internet 3.0. (Internet 1.0 is exemplified by the first Netscape browser while Internet 2.0 is exemplified by WiFi technology).

Internet 3.0 is the result of a marriage between Internet 1.0/2.0 and blockchain technology. Internet 3.0 promises to do away with trusted intermediaries (like Paypal and banks) and prevent fraudulent transactions through the use of encryption and user verification.

Many of these Internet 3.0 companies are well past the startup phase and are actively raising money to expand and gain market share. This blog post is about one such company, which we will call the Asian Blockchain Foundation (ABF), founded by Johnny Wu, a citizen of the People’s Republic of China. Although the parties’ names here have been changed, the facts are real.[6]

Effecting Service upon ABF

ABF is a registered corporation of a Southeast Asian country, which we will call “SEA-Country.” To raise money, ABF appears to have sold — or attempted to sell — its securities in a number of counties, including the US. At least in the US, ABF’s securities were not properly registered. When the Angel investors became aware of this, a civil action was filed against ABF and Johnny Wu.

The next step involved serving ABF and Wu, and here is where the “fun” begins. As we will see, service abroad can be very challenging, especially when said service must be performed on a rush basis.

Service by Letter Rogatory

SEA-Country is an English-speaking country that is not a signatory to the Hague Service Convention (HSC). Because SEA-Country’s official language is English, translation of the documents to be served is not required. This leaves service of ABF to proceed either via a Letter Rogatory or via an agent.

The former is the preferred method of service whenever there is a possibility that a US judgement will need to be recognized and enforced abroad.

But Letter Rogatory (LR) service has a number of disadvantages, including:

  • it must be executed by the forum court,
  • it must be transmitted to an appropriate court in the rendering country via the US Department of State (which charges $2275.00 as a handling fee), and
  • proof of service is routinely not obtained for more than a year after the LR is transmitted

Service by Agent

Agent service is generally completed within a month, but recognition and enforcement of a US judgement may be problematic.

In the case at hand, the client opted for agent service, which turned out to be the right choice for this particular case.[7]

When serving a corporation, most jurisdictions in the US require service be upon an “officer or director” of the corporation. The forum court where the litigation was filed against ABF followed this rule. Accordingly, after the request for service had arrived in SEA-Country, the agent made several unsuccessful attempts at service upon ABF’s officer/director at their home.

Next, the agent attempted service upon ABF at its business address. Service again was unsuccessful because the address had been vacated — and ABF had not left a forwarding address.

But we still had one trick up our sleeves: ABF had not canceled its SEA-Country registration. SEA-Country has a statute that states that service upon the registered agent of a corporation is proper service upon the corporation. Accordingly, the agent served ABF’s registered agent on behalf of ABF.

Effecting Service Upon Johnny Wu

Service upon Wu presented a new set of challenges.

ABF’s public documents listed Wu’s contact address as ABF’s SEA-Country corporate address. Even if ABF had not vacated its corporate offices in SEA-Country, effecting service on Wu at a corporate address, of necessity, would be problematic.

The reason for this is simple: Whenever an individual is served at work, the individual must cooperate in order to be served. Conversely, service of an individual is best when done at the defendant’s residential address. Unfortunately, it is not possible to perform residential address research for Chinese defendants. Thus, if service upon Johnny Wu was to be effective, a certain degree of creativity was needed.

Service by Other Means

The long term solution for service upon Wu was to plan for service by other means.

Electronic Service

Given that Wu’s profession places him at the vanguard of computer and cyber technology, it should come as no surprise that Wu has a social media presence. Accordingly, service by social media — with the forum court’s approval — was a possibility. Judges, however, like to see that all other methods of service have been attempted or are impractical[8] before granting service by electronic means.[9]

And indeed, in this case, service was effected by a more traditional method: “Tag Jurisdiction.”[10]

Tag Jurisdiction Service

The basic idea behind tag jurisdiction is that if service can be effected upon a defendant while they are in a particular jurisdiction for other reasons then such service is sufficient for the court of that jurisdiction to assert personal jurisdiction.

In this case, the Plaintiff’s attorneys learned that Johnny Wu would be giving a public presentation on blockchain technology in two weeks time at a UN building located in Paris. This provided an opening to effect service via tag jurisdiction, but because there was only a two-week time frame in which to prepare the documents to be served, service would need to be preformed on a rush basis.

First, France’s methods of service needed to be considered.

Service via a Central Authority

France is a signatory to the HSC. Therefore, service of process in France is proper when done pursuant to the Convention. France’s declarations to the HSC allow service via the French Central Authority (FCA)[11] or via a Huissier (i.e. a bailiff).[12]

In general, it takes the FCA 2-3 months to effect service. Hence, this method was a no-go for service upon Wu since time was of the essence.

Huissier Service

Huissiers, on the other hand, can effect service within a week or two. But Huissier service has a drawback: Huissiers determine the price for rush service,[13] whether they will accept the documents for service in hard copy or pdf attachments, and when service will occur.[14]

But service of Wu at the UN conference on blockchain technology created an even more important barrier to service via Huissier. Under French law, UN properties are considered international – and not French-properties. Accordingly, Huissiers are prohibited from serving on UN grounds.

Then, with 8 days notice, the Plaintiff’s attorneys discovered that Wu would be attending an ABF-sponsored cocktail party on a Saturday afternoon in Paris.

There were two challenges to effecting service at the cocktail party.

First, translation of the documents would be required. Fortunately, the total number of pages to be served upon Wu were few, so translation only required a few days.

However, with translation complete, there was insufficient time to Fed Ex the documents to a Huissier. So, we needed to find a Huissier who would be willing to work on a Saturday afternoon and accept the documents to be served via email.  Long story short, such a unicorn Huissier was found and service was effected.

The Bottom Line

Service abroad – especially when done on a rush basis – is never routine. It requires a lot of negotiations, which means you need a vendor with copious amounts of experience. The attorneys and paralegals at Legal Language Service have been successfully effecting service on international defendants for more than thirty years. Our team of professionals are experts in handling legal issues across national borders. We not only serve process in more than 90 countries, but also provide certified translation of documents into more than 200 languages.

To learn more about our international litigation services or to speak with a representation, contact us today.

Notes
[1] Jake Frankenfield: Cryptocurrency. Investopedia. Feb 12, 2019; https://www.investopedia.com/terms/c/cryptocurrency.asp.
[2] Coinbase: Top 50 cryptocurrency prices; https://www.coinbase.com/price.
[3] Blockgeeks: What is Blockchain Technology? A Step-by-Step Guide For Beginners. 2019; https://blockgeeks.com/guides/what-is-blockchain-technology/ (emphasis in the original).
[4] See Ben Mezrich: Bitcoin Billionaires: A True Story of Genius, Betrayal, and Redemption (2018) Chapter 7 for a good summery of how bitcoin circulates in the cybereconomy.
[5] Motley Fool: 20 Real-World Uses for Blockchain Technology, April 11, 2018; https://www.fool.com/investing/2018/04/11/20-real-world-uses-for-blockchain-technology.aspx.
[6] These are not the parties’ real name and any resemblance to any real persons or entities is a coincidence. However, the facts are real.
[7] An overseas court would not have attempted service in so many ways.
[8] The client considered service upon opposing counsel – which is a good thought. But at this state of the game, it is not clear who is the opposing counsel.
[9] The discussion of service by electronic means is simplified here because a detailed discussion is beyond the scope of this communication.
[10] Burnham v. Superior Court of California, 495 U.S. 604 (1990)
[11] Article 5(a).
[12] Article 10(b).
[13] For routine service, Huissier prices are fairly uniform because of competition within a geographic area. However, because Huissiers work limited hours (see FN13), competition no longer determines the price of Huissier services when service must be effected on a short time horizon.
[14] Arranging service on Wu made it abundantly clear that Huissiers do not like to work on nights, weekends, or holidays – even if you are willing to pay many multiples of the Huissier’s base rate (non-rush) service fee.

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