Scheck et al v. The Republic of Argentina

Filing 25

OPINION. #100351 The Court declines to enter a default judgment. Pursuant to the stipulation of October 7, 2010, the Republic will answer, move to dismiss, or otherwise respond to the complaint and motion for summary judgment. The stipulation gave the Republic 60 days after completion of service. This is now amended so that 60 days runs from the time of the present opinion. The record shows no basis for entry of a default judgment against the Republic. This opinion resolves document number 19 listed on the docket. SO ORDERED (re: #19 MOTION for Default Judgment as to FRCP 55, 56 and Hague Service Convention Article 15(2). filed by Dieter Scheck, Lydia Scheck.) (Signed by Judge Thomas P. Griesa on 5/23/11) (djc) Modified on 5/24/2011 (ajc).

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
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LYDIA SCHECK AND DIETER SCHECK,
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Plaintiffs,
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- against :
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THE REPUBLIC OF ARGENTINA,
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Defendant.
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10 Civ. 5167 (TPG)
OPINION

Plaintiffs are two German citizens who claim to have obtained six
money judgments each against the Republic of Argentina (the “Republic”)
in a German court, based on their ownership of defaulted Republicissued German bonds. In this action, plaintiffs seek to enforce their
German judgments. Plaintiffs filed a motion for summary judgment in
September 2010, but the court placed it in abeyance pending completion
of service of process pursuant to the Hague Convention on the Service
Abroad of Judicial and Extrajudicial Documents, 20 U.S.T. 361, at *1.
Plaintiffs now renew their motion for summary judgment. They
also argue that a default judgment against the Republic should be
entered.
The purpose of this opinion is to explain that service of process has
been accomplished. Briefing on plaintiffs’ motion for summary judgment

should now be completed, so that this motion can be decided. The court
declines to enter a default judgment.
Background
On July 6, 2010 plaintiffs commenced the present action seeking
recognition and enforcement of the German judgments. Plaintiffs allege
that their German judgments against the Republic are “final, conclusive
and enforceable where rendered,” making them enforceable in this
jurisdiction pursuant to the Uniform Foreign Country Money Judgments
Recognition Act, N.Y. C.P.L.R. § 5302.
The terms and conditions for the German bond series at issue
designate an authorized agent for service of process in Germany for suits
brought in Germany. The documents do not provide an authorized agent
for service of process in the United States, or for suits brought in the
United States.
Nevertheless, on July 15, plaintiffs attempted to deliver the
summons and complaint to the Vice President of Banco de la Nación
Argentina in New York (“BNA”), the authorized agent for service of
process for claims brought on U.S. bonds. Then, on August 17, 2010,
plaintiffs, by means of Process Service Network LLC, sent a copy of the
summons and complaint, and other required forms, to the central
authority designated by the Republic for service of process pursuant to
Article 2 of the Hague Service Convention—the Argentine Ministry of
Foreign Affairs (the “Ministry”).
2

On September 13, 2010, the Republic moved to dismiss the
complaint for lack of personal jurisdiction and insufficient service of
process. On September 27, 2010, plaintiffs moved for summary
judgment.
On October 7, 2010, the parties’ entered into a stipulation, which
was so ordered by the court, as follows: (1) the motion to dismiss is
denied as moot; (2) the complaint and motion for summary judgment are
held in abeyance pending the completion of service as required by the
Hague Service Convention; and (3) the Republic shall answer, move to
dismiss, or otherwise respond to the complaint and motion for summary
judgment on or before 60 days after the completion of service of the
complaint on the Republic.
On February 7, 2011, plaintiffs’ process server contacted the
Republic’s Consul General in Los Angeles and was told four days later
that there were problems. On February 11, 2011, plaintiffs’ process
server sent an agent to the Ministry to inquire about the status of
process. The Ministry told the agent that the service was “in process.”
Plaintiffs have not yet received a certificate of service or delivery.
Discussion
Service of Process
Pursuant to Fed. R. Civ. P. 4(j)(1), the Foreign Sovereign
Immunities Act (the “FSIA”), 28 U.S.C. § 1608(a), sets out the
requirements for service of process on a foreign state:
3

a) Service in the courts of the United States and
of the States shall be made upon a foreign state
or political subdivision of a foreign state:
(1) by delivery of a copy of the summons and
complaint in accordance with any special
arrangement for service between the plaintiff
and the foreign state or political subdivision;
or
(2) if no special arrangement exists, by
delivery of a copy of the summons and
complaint in accordance with an applicable
international convention on service of judicial
documents . . .
As the governing documents do not provide for an authorized agent for
service of process for a suit on the German bonds in the United States,
the second paragraph applies. The applicable international convention
here is the Hague Service Convention (the “Convention”), which the
United States, Germany, and Argentina have all ratified.
Proper service of process pursuant to the Convention requires
several steps. Plaintiffs must first transmit the service request and
accompanying documents to a foreign state’s designated central
authority. Convention, Articles 2 and 3. The Republic’s designated
central authority is the Argentine Ministry of Foreign Affairs (the
“Ministry”). The request must comply with the form annexed to the
Convention, also referred to in the Convention as the “model,” hereafter
referred to by the court as the “request form.” Id. at Art. 3. Article 3
addresses the form that the request for service of process must take:
The authority or judicial officer competent under
the law of the State in which the documents
4

originate shall forward to the Central Authority
of the State addressed a request conforming to
the model annexed to the present Convention,
without any requirement of legalisation or other
equivalent formality.
The document to be served or a copy thereof
shall be annexed to the request. The request and
the document shall both be furnished in
duplicate.
The request form requires the applicant to state its name and address,
the address of the receiving authority, and the address of the person or
entity to be served. The request form also requires the applicant to select
the method of service for the designated central authority to use in
serving that person or entity, pursuant to Article 5 of the Convention.
There are three options:
(a) by a method prescribed by its internal law for
the service of documents in domestic actions
upon persons who are within its territory;
(b) by a particular method requested by the
applicant, unless such a method is incompatible
with the law of the State addressed; or
(c) by delivery to the addressee, if the addressee
accepts it voluntarily.
The request form must list the documents to be served, and requires that
the form bear a signature and/or stamp.
If the central authority determines that the request does not
comply with the provisions of the Convention, it must promptly inform
the applicant of its objections to the request. Id. at Art. 4. If there are no
issues of compliance, the designated central authority must then serve,

5

or arrange to have an authorized party serve, the documents on the
defendant. Id. at Art. 5. In order for service of process to be considered
complete, the plaintiff must receive a certificate of service from the
designated central authority pursuant to Section 1608(c)(2) of the FSIA
and Article 6 of the Convention.
Article 15 of the Convention allows a court to obtain jurisdiction
over a foreign defendant for purposes of giving judgment when a plaintiff
has not received a certificate of service or delivery if:
(a) The document was transmitted by one of the
methods provided for in this Convention,
(b) A period of time of not less than six months,
considered adequate by the judge in the
particular case, has elapsed since the date of
the transmission of the document,
(c) No certificate of any kind has been received,
even though every reasonable effort has been
made to obtain it through the competent
authorities of the State addressed.
See In re South African Apartheid Litigation, 643 F. Supp. 2d 423, 433
(S.D.N.Y. 2009).
Plaintiffs completed the first step by delivering the service request
form and required accompanying documents for service of process to the
Ministry on August 17, 2010. Such documents included a copy of the
summons issued by this court on July 6, 2010, and the complaint in
English and a copy in Spanish translation. On the request form,
plaintiffs selected two possible methods for the Ministry to use to serve

6

the Republic, options (a) and (c), as discussed above. Plaintiffs also
apparently signed the form.
The Republic argues that service of process remains incomplete
because the required service forms plaintiffs submitted to the Ministry
are defective. The Republic refers the court to a letter from the Ministry
to counsel for plaintiffs sent January 11, 2011. The Ministry wrote that
the service papers were defective for two reasons. First, plaintiffs
selected two methods for service on the Republic on the request form,
instead of just one. The Ministry claims that, under Argentine
legislation, the request is defective because “the court that would
intervene must address the notice of service with reference to one of such
procedures (one or the other), because the items a) and c) provide for
methods of service of process that are different, and are therefore
exclusive of each other.” Second, the signature on the form was not an
original. The Ministry claims that this is a “formal issue” that prevents
the Ministry from moving forward.
The court rules that the objection to plaintiffs’ selection of two
service methods is invalid and frivolous. The Ministry could have served
the documents by either method.
The court also rules that the objection to the copy of the signature
on the form is invalid. There is no requirement that the form bear an
original signature. Indeed, the Convention states that a stamp would be
proper.
7

Although plaintiffs have not yet received a certificate of service, the
court is entitled to assert jurisdiction over the Republic because plaintiffs
have satisfied the Article 15 requirements. Plaintiffs properly
transmitted the documents to the Ministry more than nine months ago,
and no certificate of any kind has been received even though plaintiffs
made every reasonable effort to obtain it by contacting the Ministry in
Argentina.
The court concludes that there was proper service of process.
Further Proceedings
Pursuant to the stipulation of October 7,2010, the Republic will
answer, move to dismiss, or otherwise respond to the complaint and
motion for summary judgment. The stipulation gave the Republic 60
days after completion of service . This is now amended so that 60 days
runs from the time of the present opinion .
The record shows no basis for entry of a default jUdgment against
the Republic.
This opinion resolves document number 19 listed on the docket.
SO ORDERED
Dated: New York, New York
May 23,2011

USDC SDNY
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H .Er r ~ o !'·a c.t\I~LY

Thomas P. Griesa

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