In our last post, we explained that the Convention on the Service Abroad of Judicial & Extrajudicial Documents in Civil or Commercial Matters (“Hague Service Convention”) is a multilateral treaty adopted on November 15, 1965 by member nations of the Hague Convention on Private International Law (the “Convention”). This Hague Service Convention created unified rules on several issues, including international service of process and has been ratified by 74 countries.
The Convention provides a streamlined way to effectuate international service of process through each signatory nation’s Central Authority of each signatory nation. Until recently, it has been unclear as to whether service by mail is allowed and many plaintiff’s choose this method because it is faster than the methods provided under the Hague and other methods for non-signatory nations.
Unclear Position From Japan
The Japanese government did not object to service of process by mail at any point since signing the Hague Convention in 1970 until 2018. That being said, litigation with Japanese defendants did not clarify the issue until the United States Supreme Court (SCOTUS) issued a decision in Water Splash. In that case, a U.S. company sued a former employee in Texas state court. At the time of the lawsuit, the defendant was residing in Canada and was served by public mail, private mail, and email. The Texas state court entered a default judgment against the defendant for failure to respond. The former employee filed suit arguing lack of proper service and the parties argued whether the Hague Service convention allowed service of process by mail. The SCOTUS used the second interpretation of Article 10(a) and allowed service by mail.
Because the position of the Japanese government was not clear and courts could interpret that under the Hague service of process by mail is prohibited irrespective of whether a signatory objected to this method, using service by mail for Japanese defendants was a risk. Accordingly, many careful plaintiffs used service through the Japanese Central Authority (JCA) under the Hague Service Convention. Until the SCOTUS decision in Water Splash, the Japanese government had halted direct service of process by mail.
After the SCOTUS decision in Walter Splash, it was more likely that service of process made directly to defendants located in Japan by mail would be permitted. Japan’s declaration, however, has annulled this alternative method of service. As a result, in contemplating future lawsuits against Japanese defendants, the parties to a deal may enter into negotiations where service under the Hague Service Convention is avoided by a potential plaintiff and in exchange the Japanese-stationed party can get favorable concessions in exchange for voluntarily accepting service of process. Indeed, an American party may request a Japanese counterpart to designate a United States agent for service of process in the event of a lawsuit in contract negotiations. Of course, the Japanese party should analyze the implications of agreeing to this.
More on this topic can be found here.
For info on service in Japan please go here.