Conventional wisdom – the appropriate test and factors to consider for alternative service under the Hague Service Convention
In the recent judgment of Olympic Council of Asia v Novans Jets LLP and Ors, one of the issues considered by the English Court was the test for alternative service of contempt proceedings and court orders in which the Convention on the Service Abroad of Judicial and Extraterritorial Documents in Civil or Commercial Matters applies (commonly referred to as the Hague Service Convention).
The Claimant sought to serve contempt proceedings and various court orders on the Third Defendant, Mr Gringuz, for procuring the First Defendant (in liquidation) to breach a post-judgment freezing order. Mr Gringuz, however, was a party out of the jurisdiction and domiciled in Ukraine. Ukraine is a party to the Hague Service Convention and has adopted reservations under Articles 8 and 10 of that Convention. At a hearing addressing, amongst other things, the issue of alternative service, Mr Gringuz argued that the present case was not appropriate for an order for alternative service. CPR 6.15 employs the test of whether there is “good reason” to make an order for alternative service. However, in Société Générale v Goldas Kuyumculuk Sanayi Ithalat Ihracat AS (approved by the English Court of Appeal), it was held that where a signatory country to the Hague Service Convention has stated its objection under Article 10 to service, relief should only be granted under CPR 6.15 in "exceptional circumstances".
Mr Justice Butcher accepted that exceptional circumstances must exist for an order granting alternative service on Mr Gringuz by means other than those provided by the Convention. However, his Lordship also found in the present case there were exceptional circumstances:
- Contempt applications should be dealt with expeditiously to ensure compliance with and uphold the authority of court orders. Moreover, the Claimant had a legitimate interest in obtaining, under the relevant orders, information that would assist in quantifying and proving its debt in the liquidation of the First Defendant.
- The means used to bring the contempt application to Mr Gringuz’s notice was effective; therefore, he had no plausible case that alternative service would cause him prejudice.
- In light of the Russian invasion, Ukraine recently made a declaration of the inability to guarantee the fulfilment of its side of obligations under the Hague Service Convention.
- While the length of time to serve under the Hague Service Convention is not a good reason for allowing alternative service, the delays arising from the Russian invasion were relevant in considering whether there were exceptional circumstances.
- There were grounds for considering that Mr Gringuz would attempt to avoid and frustrate efforts to effect service. The Claimant tried, unsuccessfully, to serve Mr Gringuz by post at the address he used in his reply evidence. Furthermore, Mr Gringuz instructing his lawyers to represent him at the hearing but not to accept service betokened a desire to make service difficult.
- In considering how service would be effected in Ukraine, there was a real risk that service by the means available under the Hague Service Convention would not be effected, even after a possibly extended process attempting to do so.
- Article 15 of the Hague Service Convention does not satisfactorily answer the above issues whereby upon the lapse of six months after the date of transmission of the document, the English Court could render judgment even when service had not been effected. “Date of transmission” was not defined and it was held that the Claimant would suffer litigation prejudice by a delay of six months, especially if it could not timely obtain the information it sought in (1) above.
This case clarifies the appropriate test for alternative service on a party when the Hague Service Convention is involved and what factors are taken into account to satisfy exceptional circumstances for alternative service.