In our December update we discussed an English High Court decision that allowed service of proceedings on a Russian resident individual at our offices in London, circumventing the provisions of the Hague Service Convention.
Since then, we sought and obtained permission to appeal the decision. The appeal has now taken place and judgment has been granted (Marashen Ltd v Kenvett Ltd  EWHC 1706 (Ch)). The appeal judgment overturns the decision of the Master to allow service by an alternative method in England (instead of requiring service under the Hague Service Convention in Russia). The appeal judge confirmed that where the defendant is resident outside the jurisdiction, permission to allow service outside the jurisdiction must first be obtained before the court can consider whether or not to allow service by an alternative means, even if that involves service within the jurisdiction. The judge confirmed that power to serve proceedings by an alternative method within England and Wales in respect of a defendant who was resident outside the jurisdiction derived from the Civil Procedure Rules (rule 6.37(5)(b)(i)), and was permissible only if the court had already made an order for service outside the jurisdiction.
Is delay enough?
This is a significant decision in that it clarifies that, where there is an international service convention in place, it should be complied with unless there are exceptional circumstances. “Mere delay” will not be enough (ie. delay without any real prejudice). Equally, the expense involved in serving in accordance with the Hague Service Convention cannot, without more, constitute “exceptional circumstances”. Factors going beyond mere delay or expense need to be shown before such an order will be granted.
Should third party costs applications be treated differently?
A further point was raised about the hybrid nature of the documents that the claimant intended to serve – an application for a third party costs order against the shareholder of the defendant company. The third party costs application was connected to the main proceedings but was also an originating process for the third party against whom the application was made. This prompted the judge to consider whether the connection between the third party costs application and the main proceedings was such that it might give rise to a justification for bypassing the Hague Service Convention.
The judge concluded that the fact that the judicial document in question is a third party costs application cannot itself be sufficient to justify circumventing the Hague Service Convention. However, the hybrid character of this sort of application and the fact that the application is generally made against someone closely involved in the prior proceedings might be relevant to the court’s determination of whether or not an order permitting an alternative method of service should be granted.
Article 15 of the Hague Service Convention
Lastly, the court accepted the appellant’s argument that the effect of Article 15 of the Hague Service Convention is to offer claimants a safety mechanism that protects them from excessive delay or ineffective service abroad. Where there have been delays of over six months, this provision allows the claimant to proceed with the case despite formal confirmation of service. Interestingly, none of the prior cases appear to have considered the application of this provision. It is well worth reading!