Strict Formalism Or Actual Notice? Supreme Court Denies Petition For Writ Of Certiorari In Important Service Of Process Case Under The Foreign Sovereign Immunities Act

• Published date: 14 October 2022
• Subject Matter: Litigation, Mediation & Arbitration, Arbitration & Dispute Resolution, Sovereign Immunity: Public Sector Government
• Law Firm: Steptoe & Johnson
• Author: Mr Steven Davidson, Michael Baratz and Steven Kaplan

First Tuesday Update is our monthly take on current issues in commercial disputes, international arbitration, and judgment enforcement. This month we cover the Supreme Court's denial of a writ of certiorari in an important service of process case under the Foreign Sovereign Immunities Act, in Saint-Gobain Performance Plastics Eur. v. Bolivarian Republic of Venezuela, 23 F.4th 1036 (D.C. Cir. 2022).

Background

As we previously wrote in DC Circuit Says Hague Service on Central Authority Not Good Enough, the US Court of Appeals for the DC Circuit reversed and remanded a lower court decision to enforce a $42 million International Centre for Settlement of Investment Disputes (ICSID) arbitral award against Venezuela because service of process under the Hague Convention and the Foreign Sovereign Immunities Act (FSIA) was not completed. In this case, Saint-Gobain Performance Plastics Europe (Saint-Gobain) served process on Venezuela via Article 5 of the Hague Convention and the proper papers were received by Venezuela's Central Authority. Article 5 of the Hague Convention requires that once the Central Authority of a signatory state receives a request for service, the Central Authority must serve the documents pursuant to the method identified by the receiving country's local law or by the method requested by the applicant.

Under Venezuelan law, these papers must be served on Venezuela's Attorney General. However, despite this requirement, neither Saint-Gobain nor Venezuela's Central Authority served these papers on Venezuela's Attorney General. Further, Article 6 requires the Central Authority to provide a certificate of service stating that the document has been served (in this case on the Attorney General), or if the document has not been served, providing the reasons which have prevented service. The Central Authority never provided this certificate and seemingly did nothing with the papers.

Article 15 of the Hague Convention provides that a court may not enter a default judgment based on a determination that the foreign entity "has not appeared" until the document is served according to Article 5 or another valid method of service under the Hague Convention. Because no one served Venezuela's Attorney General, the DC Circuit held that service was improper.

Writ for Certiorari

In its petition for certiorari, the question presented is:

Whether a District Court deciding a motion for default judgment may find service upon a foreign state pursuant to Article 15 of...