[Author’s notes: (1) Although this post focuses mainly on entity defendants, we encounter the same problem with individual defendants. Individuals are simply harder to ascertain and locate, just like on this side of the Pacific. And (2) an update a year following publication of this post: not only does the research suggested here help to prevent failure, it often makes proof come back significantly faster to boot!]

Over the past decade I’ve submitted dozens– if not hundreds– of Hague Service Requests to the People’s Republic of China. It takes quite a while for proof of service (or failure) to come back, usually many months but sometimes as long as two years. That’s not a typo, and it’s incredibly frustrating for U.S. and Canadian litigators. The frustration doubles when a request fails after so much time has passed, and it doubles again when we see this reason for failure:

No such defendant at the address provided.

Harumpf. Harumpf harumpf. I mean a Mel Brooks-style harumpf harumpf.

Pretty ambiguous, that statement. Did we not properly name our defendant? Do we have a bad address? Did we strike out on both?

Every single time clients ask me to have a Chinese company served, I recommend that they undertake– at additional cost, of course– some research to look into that company and make sure it’s properly named and located. Just like we’d do with a corporate defendant here in North America.

Every. Single. Time.

When a client declines to avail her/himself of a little advance intelligence, the odds of failure literally skyrocket. To be sure, the investigation is no guarantee that service will be executed– it takes so long to get the thing pushed through the system that defendants often move before local officials get around to serving. We’re always dealing with the caprices of local officials who may not be entirely honest or motivated, or a judicial officer who might simply be in a bad mood because he had a fight with his wife at breakfast. There are about 137 variables that can throw the train off the tracks, an incorrect or incomplete address being just one. And this doesn’t apply solely to China– it’s the same calculus anywhere we rely on officials to effect service.

But a little homework at the beginning eliminates the single biggest problem in China.

The big questions surrounding that homework…

What?

What’s necessary? Nothing truly onerous. Just a reasonable inquiry into the defendant, to make sure you’re doing everything you can to serve successfully, hale the defendant into court, and make your client whole.

Best result? Information from NECIPS, the the National Enterprise Credit Information Publicity System.*

Why?

Why be so persnickety about this? Well, Big Tony (my 2L Business Organizations professor in law school) hammered into us on Day 1 that, if you’re going to sue an entity, you’d better name it properly, or your cause of action is dead before it leaves the starting gate.

That’s a vital, but not incredibly tricky, question in China. Chinese companies have to follow a recipe when they set up shop and paint a name on the door. Writes my friend and fellow global legal tour guide, Dan Harris, over at the China Law Blog about setting up a WFOE (Wholly Foreign-Owned Enterprise):

• In China, only the Chinese language name has any legal status; as a legal matter, the English is not relevant. This means you can use any English language name you want.
• Chinese company names follow this rigid structure: [City of formation] Company Name [business type] [Company Ltd.]
• So, an English equivalent of a typical Chinese company name would be: Shenzhen ABC Consulting Co. Ltd.
• The elements in [] square brackets are fixed by the local government. This means the only thing we need determine now is the Company Name. Since as you can see, company names can get rather long, it is usually best to limit the Company Name part to 3 or 4 Chinese characters at most.

For the record, Dan’s outline tracks with everybody else out there who writes about corporate naming conventions in the PRC. Take this to the bank, and recognize that, if your defendant’s trade name is “Chairman Mao’s Widgets” you can be assured of failure if that’s the name you slap on your summons and Hague Request.** Chairman Mao’s Widgets might be the name the company holds forth to the world in English, but the legal Chinese name literally translates to Shanghai Mao Rocks Widget Manufacturing Co. Ltd.

Sometimes the name starts in English but gets translated very poorly (ie: phonetically, Pidgin) into Chinese. As Dan stressed, a company can use any English name it wants, but the Chinese name is the only legally relevant moniker.

(To be sure, the necessity of an accurate name applies to individual defendants as well– but they’re a lot harder to track down absent a listing in a corporate filing or high internet profile. You can bet a request to serve Dave Xiaoping is going nowhere when his real name is Deng Xiaoping.***)

When?

When should it be done? The best time to undertake the investigation is before the suit is even filed. It saves a huge hassle to pinpoint the name in the first place, because you still have that single bite at the amendment apple that doesn’t need justification with the court. But if you’re already filed, you still absolutely must have the correction made before translation and before you send the Hague Request to Beijing. At that point, it’s all over but the shouting. There are no requests to amend over there. No mulligans, no do-overs. no take-backs.

You’re back to square one, starting over with a whole new Request and the additional costs that entails.

Who?

Hire a reputable, professional investigator in China. Yes, they have them, on the mainland and in Hong Kong. Don’t just call your usual guy that skip traces U.S. defendants for you, because it’s just not the same undertaking. And if your usual guy doesn’t speak and read simplified Chinese, well, how accurate do you think his result is going to be?

If an actual Chinese investigator provides the name and address of your defendant, it may differ from an SEC filing or Bill of Lading, but those documents don’t necessarily identify the proper address for service. That gets to the next question…

Where?

“Where?” is the most important question in serving any defendant– not just in China, but anywhere, at home or abroad. The single, most important piece of information in serving a properly identified defendant is his/her/its location.  Without the “where,” nothing else matters. 

The research we do at the outset gives us not only an accurate name and correct address for a Hague Service Request– it also gives us ammunition for alternative service in the rare instance that a Request fails. I once worked a case where my client (plaintiff’s counsel) took my advice and paid for an inquiry into the company defendant. My investigator came back with an address that appeared not only on the entity’s website, but also in its registry. Unquestionable intel that went straight into the Hague Request. A year later… “No such defendant at the address provided.” So we asked for — and were granted– a 4(f)(3) order to serve electronically. Now, that would have conflicted violently with the Hague Service Convention, but the Certificate of Nonservice was an official statement from the Central Authority that we didn’t know the defendant’s address. That negated applicability of the Convention.

Defense counsel (herself a Chinese lawyer admitted in the U.S.) argued until she was blue in the face that we violated the treaty. She contended that we had the right address, the company website and the registry agreed, and we agreed. The Central Authority called the shots, though, so it would be silly to think that it would work a second time. That didn’t matter, she insisted, telling me to resubmit and just tell the Chinese authorities to go back and do it properly.

Um, huh? Have you ever been able to order the Chinese government around?

The judge was not amused. He told defense counsel to shut up and stop being silly… all because we knew what we were doing and had done our homework in the beginning.

Wrapping up

No exaggeration here– just attempting to serve a defendant in China costs thousands of dollars and a year or two of a litigant’s life. Spending a few hundred extra dollars early to mitigate the odds of failure is always a worthwhile expenditure.

I cannot recommend an investigation strongly enough.

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* I did not name this outfit. NECIPS is a silly-sounding acronym, but they tell me it sounds awesome in Chinese.

** This applies to Hong Kong as well, but with even more peculiarity. Take a read of A Hong Kong Cautionary Tale for more.

*** Set aside the fact that Deng is his surname.

Terrible news to wake up to this morning– a massive container ship, some three football fields long, crashed into a pier of the Francis Scott Key Bridge spanning the Patapsco River and serving Baltimore Harbor. Around 1:30am, the central span collapsed, causing, at this writing, at least a half dozen vehicles to plunge into the river and closing off traffic to a critical commercial artery.

Stories abound concerning the ship and its safety record, so in addition to wrongful death and personal injury lawsuits, we anticipate significant litigation over property damage and disruptions to an already tenuous supply chain across many industries.

That litigation, notwithstanding the expected loss of life and impact on the Baltimore economy, will still be subject to the same procedural requirements as any other. Namely, whether the defendants are to be served in Denmark (Maersk) or Singapore (Synergy Marine, Grace Ocean) or elsewhere, adherence to the Hague Service Convention remains mandatory.

Above all, here’s hoping the loss of life and limb is limited, and that the disruption to the Baltimore community is resolved quickly.

Once or twice a month, a client will call or email me expressing incredulous frustration that it takes Swiss or French or German authorities two or three months to return a proof of service following a Hague Service Convention request. Or even worse, that it takes Mexican or Chinese or Indian authorities a year or two. (<– Not a typo.)

“WHY?!” they scream, silently. At least, that’s the subtext of their question– in the lion’s share of cases, subtext arising from haranguing by a grumpy judge or senior partner (or litigant) who simply doesn’t get it.

On those occasions, at least once or twice a month, I have to tell that client to “get out of your American lawyer head” (all of my clients are attorneys). Because American lawyers view service of process abroad in the same way that civilians (ie: those smart enough to not take a bar exam) view service of process here at home… they don’t understand what goes into it.

Just Google “service of process in the movies” and you’ll get the idea.* Contrary to popular belief, a defendant can’t just refuse to take an envelope from a process server and avoid service. Constitutionally speaking, all a plaintiff has to do is make a reasonable effort, so if the process server has to drop the summons at the defendant’s feet, the defendant is still on the hook.

And lawyers get that.

But what they often don’t get is the harsh reality that things just don’t work “over there” in the same way they work here. And they take longer– they just do. No amount of haranguing from a grumpy judge or senior partner (or litigant) is going to change that.

No, in most of the world, it doesn’t happen the way Hollywood makes it out. In fact, if you ask a U.S. or Canadian process server, they’ll tell you that it doesn’t even happen that way here. But in the parts of the world where the Union Jack** didn’t used to fly, service of judicial papers isn’t up to the parties. That function is undertaken by judicial officials of varying sorts, rather than by private agents.

And there is nearly always a bureaucracy involved. Therein lies the source of the delay.

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* The most inaccurate Hollywood depiction I’ve ever seen is, sadly, in Woman in Gold, which chronicled a Holocaust survivor’s successful quest to recover a famous painting stolen from her family by the Nazis. It’s a fantastic film, truly one of my favorites, but they completely bungled the service of process scene. I discuss that utterly ridiculous depiction with much chagrin in Dropping docs on a desk at the Consulate… not effective, counsel. Still, I’ve had the honor of managing proper service in several Nazi-theft-of-art cases, and those efforts have been among the most rewarding parts of my career.

** I always gripe that a flag cannot fly at half mast unless it’s on a ship– it’s at half staff on land. Likewise, some argue that the Union Jack flies above the ships of the Royal Navy and various other watercraft of the United Kingdom, while the Union Flag flies on land. Buckingham Palace validates the use of either, so I’m sticking with it, despite the Palace’s confusion about masts. With all respect to linguistic accuracy, this is poetic license at work– Jack has more pop to it.

No exaggeration here– be afraid.  Be very afraid.

… you simply cannot listen to overseas counsel unless they understand the nuances of the Hague Service Convention as it as it applies in North America.

Continue Reading Be wary of foreign counsel in Hague Service Requests