HAGUE CONVENTION: FORMAL SERVICE OF PROCESS ON FOREIGN DEFENDANTS NECESSARY?
Is formal service of process required when serving foreign defendants located in countries that are signatories to the Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents (Hague Convention)? The short answer is “yes.”
According to the Hague Convention, foreign defendants located in signatory countries must be served according to the international treaty’s rules. There are also specific requirements that are mandated by the Hague Convention. These include mandates that must be complied with such as serving a complete certified translation of the process and service via a signatory nation’s central authority.
It is important for employers that are located in nations that are signatories to the Hague Convention that they are properly served. Service through a United States subsidiary is improper and not in compliance with the Hague Convention. Oftentimes this type of attempted service of process is quashed, and the court in which the lawsuit sits will not have jurisdiction over the foreign defendant until proper service of process is effectuated.
Substitute Service Through U.S. Subsidiaries
There are some limited situations in which a foreign corporation may be properly served in America through a wholly-owned U.S.-based subsidiary. In such a situation, the plaintiff must establish that the parent corporation exercised such a degree of control over the subsidiary that its activities were in fact those of the parent-corporation located within the United States. Notably, this is a high burden to meet for the plaintiff; the mere fact that the party that was served in America is a wholly-owned subsidiary of the defendant in the lawsuit is insufficient on its own. In order for this substitute service to be proper, facts must support the claim that the U.S.-based subsidiary controlled the defendant entity. Examples that could meet this high burden of proof would include:
- The subsidiary’s and parent corporation’s financial statements are consolidated into one;
- The parent corporation owned 100% of the subsidiary’s stock and voted at all stockholders’ meetings;
- The subsidiary’s and parent corporation’s board of directors, officers, and employees held offices in both companies.
Without a sufficient showing of control by the parent corporation over the subsidiary, such as the examples listed above, any substituted service could be quashed.
We Can Help With Your Service of Process Needs
Service of process is critical. Proper service is necessary to assert jurisdiction over a foreign defendant. The challenges to service of process, however, can be waived by a plaintiff if not timely raised. For this reason, the prompt analysis of whether service on a foreign defendant was effectuated and proper, and whether the Hague Convention applies, is critical. Contact Ancillary Legal today to serve your international service of process needs.
