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Confirming International Arbitral Awards in California: The Importance of Jurisdiction and Service of Process

In Rockefeller Tech. Investments (Asia) VII v. Changzhou Sinotype Tech. Co., 24 Cal. App. 5th 115 (2018), the California Court of Appeal held that a motion to set aside an order confirming an international arbitral award and subsequent judgment was proper because the petition to confirm the award was served by mail rather than pursuant to the Hague Service Convention.

A sole arbitrator issued an award in favor of Rockefeller. Rockefeller then filed a petition to confirm the award as a judgment. The underlying agreement between the parties stated: “The Parties shall provide notice … to each other at the addresses set forth in the Agreement via Federal Express or similar courier, with copies via facsimile or email ….”

The Court of Appeal held that Changzhou Sinotype’s motion to vacate the judgment entered based on the petition should be granted because the parties could not contract around the requirements of the Hague Service Convention. The Court did not address the underlying arbitral award itself. Instead, the Court concluded that the petition to confirm the award was “legal process” requiring adherence to the Hague Service Convention. Moreover, the parties did not have the right or power to waive the requirements of the Convention because it is a treaty in the nature of a contract between nations. Additionally, permitting parties to avoid a nation’s service requirements by contract is inconsistent with Article 261 of the Civil Procedure Law of the People’s Republic of China, which requires service through channels stipulated by international treaties (among other means).

The California Court of Appeal’s decision may be in conflict with decisions in other states, but the practice point is that service of notice of an arbitration shall be analyzed differently than service of legal process, and parties should know they do not, at least in California, have the right to contract around the Hague Service Convention with regard to legal process.

Read the Court of Appeal’s decision here.

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