According to a report in the Wall Street Journal, the U.S. Securities and Exchange Commission has received permission from a federal judge to serve summonses on four former Siemens AG executives by publishing the summonses in the International Herald Tribune and emailing the defendants’ lawyers in Germany.
According to the report, the newspaper summonses will request that Ulrich Bock, Uriel Sharef, Stefan Signer, and Herbert Steffen — who are charged with violating the Foreign Corrupt Practices Act’s anti-bribery provisions in connection with efforts to secure an Argentinean government contract – appear in federal district court in Manhattan within 20 days or else risk having a default judgment entered against them.
After four months of unsuccessful attempts at service using channels prescribed by the Hague Service Convention (or, The Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters), German authorities informed the SEC that an action seeking civil penalties for violations of securities laws is not, according to German law, a “civil or commercial matter” within the meaning of the Hague Service Convention. For that reason, the WSJ reports that German authorities declined to cooperate with the SEC’s efforts to serve the former Siemens executives using Hague Convention procedures, which led to the unusual request to serve the defendants by newspaper.
The Hague Service Convention was designed to streamline international service of process in signatory nations. The Convention sets out a procedure whereby a signatory state establishes a Central Authority to receive requests for service. Upon receipt of a request for service, the Central Authority arranges for service to be made and, once service has been effected, provides proof of service.
As demonstrated here, however, international service can be frustratingly difficult even in nations that have signed on to the Hague Service Convention, as Germany has. Service of process is even harder to accomplish in non-signatory nations, such as Brazil, Peru, Paraguay, Uruguay, Ecuador, Bolivia, South Africa, Chile, Austria, Malaysia, Colombia, and many others. Given these difficulties, litigants should be prepared – as the SEC apparently was in the case mentioned above – to invoke the provisions of Federal Rule of Civil Procedure 4(f)(3), which permits service on an individual in a foreign country “by other means not prohibited by international agreement, as the court orders,” or analogous state rules.