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Service of Process in International Commercial Arbitration

Release time：2024-05-07 16:30:51

Introduction

Service of process in international commercial arbitration refers to the act of parties, the arbitral tribunal, or arbitration institution delivering relevant arbitration documents to other parties within the framework of the arbitration proceedings. The service of process is a crucial link in arbitration, playing a central role in propelling the procedure forward by facilitating the transfer of arbitration materials among various entities involved in arbitration. In practical terms, the primary purpose of arbitration service is to notify the recipient, enabling them to receive and understand the contents of the arbitration materials in a timely manner. This aids them in effectively participating in the arbitration process, fully exercising their rights to respond, counterclaim, appoint arbitrators, and present cases, thereby advancing the development of the arbitration process. Given that parties involved in international commercial arbitration often reside in different countries, effective implementation of service to ensure all parties are aware of the progress of the arbitration process within an appropriate time frame becomes an extremely important issue.

I. Legal Consequences of Service of Arbitration Documents

Firstly, it impacts the jurisdiction of arbitration. In ad hoc arbitration, the arbitration process is deemed to have commenced only when the applicant has served the "arbitration notice" to the respondent. 1Theoretically, the commencement of the arbitration process signifies the parties' decision to exclude court jurisdiction over the dispute.

Secondly, it impacts the rights of the parties. From the day a party receives an arbitration document, they must actively exercise their relevant rights within a specified period; otherwise, it is deemed a waiver of these rights. For instance, upon service of the arbitration notice, the respondent should submit a response within a certain period. If there is a counterclaim, it should also be submitted within a specified period. Simultaneously, the arbitration notice also requires the respondent to appoint an arbitrator as per the agreement between the parties or the stipulations of the arbitration rules. If the respondent does not act within a specified period, it will be deemed to have waived the opportunity to respond and appoint an arbitrator. Another important arbitration document is the notice of the constitution of the arbitral tribunal and the hearing, which informs the parties of the composition of the arbitral tribunal and the time and place of the hearing. The parties may object to the arbitrators within a specific period and prepare for the hearing and case presentation. If a party does not actively exercise its right to object after receiving the arbitration document, it cannot subsequently raise objections on the grounds of not having had the opportunity to do so.

Thirdly, it impacts the arbitration award. From the perspective of judicial supervision, if a party does not receive the relevant documents, it constitutes a violation of due process, and the arbitration award may face the possibility of being revoked and not recognized or enforced. 2According to Article 5(1)(b) of the 1958 New York Convention, if the "notice of the appointment of the arbitrator" or "notice of the arbitration proceedings" or "otherwise unable to present his case" were not served to the party against whom enforcement is sought, the arbitration award will be refused recognition and enforcement. Besides, the date of service of international commercial arbitration documents is also the starting point for calculating the relevant periods in the arbitration rules.

II. Characteristics of Service of Arbitration Documents

Compared with service in civil litigation, the service of documents in international commercial arbitration has several characteristics:

Firstly, regarding the nature of service. The nature of service in civil litigation varies significantly due to different judicial philosophies and litigation models among countries. The service process in civil law jurisdictions is generally considered a "judicial" or "public authority" act. In contrast, in common law jurisdictions, the service process is viewed as a "private" act.

Secondly, in Chinese civil litigation, service refers to the act of the People's Court delivering litigation documents to the parties and other participants in litigation in accordance with statutory methods and procedures, i.e., service is characterized as a public authority act of the People's Court. The nature of service in international commercial arbitration is relatively straightforward. In theory, an international commercial arbitration process does not need to involve any public authority, as the initiation to execution of arbitration is conducted through agreements between the parties and with their participation. Therefore, as part of the process, service is considered within the scope of parties’ autonomy of will, with no need for court intervention. From a rules perspective, provisions on arbitration service usually offer considerable flexibility. Some countries do not even have regulations on arbitration service, leaving it to the parties to stipulate.

Thirdly, regarding the principal of service. Influenced by the nature of service, the principal of service in civil litigation varies between the two major legal systems. In civil litigation under the civil law system, service is typically carried out by the court or specialized service personnel. For example, in countries like France and Belgium, service is performed by bailiffs, who are public institutions for serving documents. In civil litigation under the common law system, service is usually carried out by professional private service companies or through lawyers. The principal of service in international commercial arbitration varies depending on the form of arbitration and the stage of the arbitration process. In institutional arbitration, the arbitral tribunal usually delegates the arbitration institution to carry out the service. In ad hoc arbitration, before the constitution of the arbitral tribunal, the parties themselves are the principals of service, such as the applicant serving the arbitration notice to the respondent. After the constitution of the arbitral tribunal, the tribunal becomes the principal of service, such as the tribunal notifying the time and place of the hearing.

Fourthly, regarding the method of service. Again, determined by the nature of service, common law jurisdictions allow litigation documents to be served in a manner agreed upon by both parties. U.S. law even allows contractual parties to stipulate the method for receiving service. However, in civil law jurisdictions, procedural rules are used to bind the court, and parties cannot modify them. Therefore, the method of service is statutory.3 For example, the Civil Procedure Law of the People's Republic of China stipulates several methods of service, including actual service,service by leaving the rejected court papers at the domicile(of the person to be served), delegated service, service by mail, transferred service, and service by publication. 4The method of service in international commercial arbitration can be stipulated by the parties. If the parties do not stipulate it, it is generally carried out according to the method of service in the arbitration rules, which usually stipulate that actual service, service by mail, and other methods that can provide a record of attempted service are all acceptable. Moreover, from the perspective of the practical application of the method of service, due to the flexibility of the method of service in international commercial arbitration, it is easier to keep up with updates in communication technology and innovate the method of service.

Fifthly, regarding service abroad. Due to the existence of notions of sovereignty and differences in service legislation among countries, the service of litigation documents abroad always presents many challenges, thereby affecting the progress of international civil litigation. Even with the foundation of the Hague Convention on the Service Abroad of Judicial and Extra-judicial documents in Civil and Commercial Matters[1965] (also known as the Hague Service Convention), conducting an efficient and legally risk-free service abroad in international civil litigation is not an easy task. Especially with the development of electronic communication technology, the recognition of electronic service in various countries' civil litigation laws is not uniform, which also results in low efficiency in international civil litigation service. Service in international commercial arbitration is almost always conducted across national borders, but since no country has mandatory rules on arbitration service and gives great freedom to the parties and arbitration rules, service in international commercial arbitration does not have the limitations of service in international civil litigation. 5In addition, service abroad in international civil litigation pays more attention to the method of service itself. If the method of service is prohibited by domestic litigation law, the service will be considered invalid. However, in the field of international commercial arbitration, even in judicial supervision, the focus is only on the actual result of service, and a vague confirmation method of "reasonable inquiry + delivery attempt" is adopted for the method of service itself.

Sixthly, regarding the terminology of service. The service in civil litigation has relatively fixed expressions in different countries. Taking the language versions of the term "service" in the Hague Service Convention as an example, the English version uses "Service," and the French version uses "Signifié" and "Notifié." Some scholars believe that these textual differences are due to different understandings of the meaning of service among countries. The service in international commercial arbitration, however, has distinctive terminology in some international treaties and arbitration rules. For example, the English version of Article 5(1)(b) of the New York Convention uses "Give"; 6the English version of Article 3 of the UNCITRAL Model Law uses "Deliver," and the French version uses "Remiser"; the UNCITRAL Arbitration Rules Article 2 maintains consistency with the UNCITRAL Model Law in terms of terminology; the LCIA 1998 Arbitration Rules Article 4 uses "Give" and "Deliver"; the ICC 1998 English version of the Arbitration Rules uses "Delivery," and the French version of the rules uses "Remiser." These terms are not the official terms for "service" in national litigation laws. The service in international commercial arbitration is not strictly service in the technical sense of litigation law, but merely "handing over" or "giving." This casual use of terminology also indirectly indicates that service in international commercial arbitration emphasizes more the actual result of "giving," rather than the technical requirements of "service" in the strict sense.

The methods of service in different procedures can be summarized in the following table:

II. Methods and Confirmation of Service in International Commercial Arbitration

From the perspective of relevant national legislation and institutional arbitration rules, the regulation of service in international commercial arbitration is simpler than that in litigation service. Compared to civil litigation, which focuses more on the technicality of service itself, the method of service in arbitration is more flexible. A significant feature of service in international commercial arbitration is the respect for parties’ autonomy of will, i.e., the method of service and the conditions under which service is deemed established can be freely stipulated by the parties.7 Only when the parties do not have such an agreement does arbitration service adopt other methods.

(1) Actual service

In-person service is the most direct and easily confirmed method of service, which involves directly delivering arbitration documents to the recipient in person. This method is straightforward and hence will not be elaborated further.

(2) Service by mail

The service by mail method is the most traditional and commonly used method of service in both civil litigation and international commercial arbitration procedures. The UNCITAL Model Law and UNCITRAL Arbitration Rules do not list mail as a method. However, we can still find traditional service by mail methods in other arbitration rules: "double registered mail, registered mail, express, fax, telegraph, telegram" "registered mail, courier service" "air mail, air express, fax, telegraph, telegram" "registered, express, fax, telegraph," etc. This list is not exhaustive. To avoid misunderstanding, arbitration rules usually add a sentence after these methods: "and other methods that can provide delivery records." With the influence of electronic communication technology, the specific methods of mailing are also keeping up with the times. Email, as a convenient and effective method of service, has been explicitly listed in the LCIA 1998 Arbitration Rules, SCC 2007 Arbitration Rules, SIAC 2010 Arbitration Rules, and APIAC 2023 Arbitration Rules.

Compared with traditional service methods, the use of electronic service in international commercial arbitration has unique advantages. Firstly, electronic service technology, with the help of the Internet, can assist the service authority in performing precise service. Under the traditional mode of service of paper arbitration documents, even if the service address is accurate, there may still be situations where the party forgets to check or is unable to receive due to business trips, illness, going out, etc. In addition, the traditional service system also has the problem of others receiving on behalf of the party, and the party does not receive the legal documents in time. However, the online electronic service system in international commercial arbitration can use Internet technology to generate a service receipt. 8In the theory of the service presumption system, the international commercial arbitration institution is considered to have served as soon as the arbitration documents are delivered to the designated system, and the service receipt is automatically generated, making it difficult for the party to evade service by refusing to accept.

(3) Other appropriate methods determined by the arbitral tribunal or arbitration institution

In-person service and mailed service in international commercial arbitration are not exclusive methods of service. Depending on the actual situation of the arbitration case, the arbitral tribunal or arbitration institution can also determine the appropriate method of service. For example, the AAA 2003 Arbitration Rules explicitly grant the arbitration institution and the arbitral tribunal the power to appropriately determine the method of service. Of course, even in those arbitration rules that do not explicitly authorize, the arbitral tribunal's discretionary power to appropriately conduct arbitration can be considered to include the determination of the method of service.

(4) Confirmation of service

More important than the flexible method of service in international commercial arbitration is how to confirm effective service. According to the provisions of the New York Convention and the UNCITRAL Model Law, the significance of confirming the result of service far exceeds the method of service itself. Article 5(1)(b) of the New York Convention is actually only concerned about whether the party against whom enforcement is sought has received the notice of constitution of the tribunal and the notice to participate in case presentation, and does not care about the method of service. Article 3 of the UNCITRAL Model Law stipulates that as long as it is sent to one of the recipient's "place of business," "habitual residence," or "communication address," it is considered received. If none of these places can be found after "reasonable inquiry," and it is sent to the recipient's last known address by registered mail or any other method that can provide a record of "delivery attempt," it is considered received.

The confirmation of effective service in international commercial arbitration is relatively lenient. As long as the server can provide a record of "delivery attempt," it can be considered effective service. Moreover, in judicial supervision, it is up to the party subject to enforcement is sought to provide evidence to prove that they did not receive the relevant notice. From practice, requests by the party subject to enforcement is sought to question the legitimacy of the arbitration process on the grounds that they did not receive the relevant notice are seldom successful. Taking the case of Kukje Sangsa Co. Ltd. (Korea) v. GKN International Trading (London) Limited (UK) as an example. The party subject to enforcement was sought raised objections, one of which was based on non-service, alleging procedural impropriety. The court noted that the address of the London office of the party subject to enforcement was sought was the same as that specified in the contract, and its manager had also registered as an agent for the service process. In addition, the arbitrator appointed by the London International Arbitration Court had notified the London office about the arbitration proceedings several times by registered mail. Since there was no evidence to show that these mails were returned, the court believed that these mails had reached the London office. Moreover, evidence also showed that the applicant for enforcement had several rounds of settlement discussions with the headquarters of the party subject to enforcement was sought. Therefore, the grounds for procedural impropriety raised by the party subject to enforcement was sought were rejected.

Conclusion

The requirement for service of arbitration documents in international commercial arbitration procedures is fundamentally to ensure that the parties receive notice of the arbitration process, thereby guaranteeing both parties the opportunity to present their cases and receive equal treatment. Therefore, the act of service is one of the specific manifestations of procedural justice requirements in international commercial arbitration. With the development of the times, the methods of service in international commercial arbitration will continue to advance, becoming more conducive to achieving the parties' goal of resolving disputes efficiently and conveniently.

Notes:

1 Yang Ling: "On the Issue of Service in International Commercial Arbitration Procedures," in "Chinese Yearbook of Private International Law and Comparative Law" 2010 Issue 13.

2 Anyang City Government Legal Network: The application and practice of the "deemed service" rule in arbitration, see https://sfj.anyang.gov.cn/2023/11-08/2414784.html.

3 Www.ChinaCourt.Org: The legal effect of the parties' pre-litigation agreement on "electronic service address," see https://www.chinacourt.org/article/detail/2020/01/id/4766415.shtml.

4 Ma Zhanjun: “A Study on the Problem of Commercial Arbitration Announcement Service”, “ in "Journal of Shenzhen University (Humanities & Social Sciences)”2010 Issue 2.

5 Du Xinli: "Theory on the Recognition and Enforcement of Foreign Abitration Award in China--Theory on applying the New York Arbitration Convention of 1958 to China," in "Journal of Comparative Law" 2005 Issue 4.

6 Han Ping: "On Application of Article 5 (1) (e) of New York Arbitration Convention of 1958," in "Law Review" 2011 Issue 3.

7 Party autonomy and justice in international commercial arbitration[J]. Moses Oruaze Dickson.International Journal of Law and Management,2018

8 Leng Shuai: "Service in the Chinese Foreign-Related Civil and Commercial Arbitrations," in "Arbitration Study" 2013 Issue 1.

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