By a decision of 13 March 2020, the Munich Court of Appeal, having regard to the expected delay in the processing of a request for service in China, allowed a resident of Germany to effect service by publication on a person of known residence in China, after sending an e-mail for information purposes.
The claimant, a resident of Germany [G], had obtained an injunction in Germany. This was served on the respondent (a resident of China) [C] while the latter attended an exhibition in Germany.
Two months later, G filed a motion for the imposition of a fine [an Ordnungsmittelantrag] against C before the Court of First Instance of Munich. Pursuant to § 891 of the German Code of Civil Procedure, the debtor must be heard before such a decision is taken.
G requested to serve the application for the fine by publication, although he was aware of C’s whereabouts. G founded the request upon the serious delay to be expected in case of service through the Chinese judicial assistance channels, based on the Hague Service Convention. The Court of First Instance dismissed the request.
G challenged the decision before the Munich Court of Appeal.
The Court of Appeal reversed the decision of the Court of First Instance. It found that G had produced sufficient evidence, presumably emanating from the Munich Court statistics, proving the delay in the processing of requests by the Chinese authorities, i.e. nearly 18 months or more, which would seriously infringe his rights.
In this situation, the court continues, the interests of the creditor in effective legal protection outweigh the interests of the debtor in presenting his case before the Court. It ruled that the creditor must inform the debtor about the application via electronic communication channels known to the creditor and also used by the debtor. The creditor must also inform the debtor about the request for service by publication, and the possibility for the debtor to appoint a representative to receive documents on his behalf in Germany, including English-language translations.
The Court of Appeal also ruled that in view of the short limitation period of only two years provided in Article 9(1) 2 EGStGB (Introductory Law to the German Penal Code), the creditor’s right to legal protection would not be respected if she would be forced to execute the service of documents in China through judicial assistance channels, despite the known problems with this procedure. On the other hand, the debtor’s right to be heard could be violated by granting service by publication before the creditor has been informed by the debtor about the application, the request of service by publication and the possibility of appointing a representative. The final decision on the proper procedure would be left to the Court of First Instance.
The judgment has been reported (in German) by Benedikt Windau with a note here.
I have mixed feelings about the judgment. On the one hand, I would endorse the innovative idea of involving frequently used communication channels between the parties for information purposes on service of process modalities. This has been also proposed in the preparatory stages of the Service Regulation Recast (which should be published anytime soon). Regrettably, however, it has not been adopted by the competent legislative bodies.
On the other side, the Court is approaching the matter in full defiance of the Hague Service Convention, to which Germany and China are signatories. The ruling is founded upon § 185(3) of the German Code of Civil Procedure, and the interesting part here is the second scenario envisaged in the provision, i.e. when service of process does not raise hopes of success.
Prior to the application of the domestic rule, one would expect a reasoning on how the court by-passed the Service Convention. Surely the Court would have no reason to engage in a detailed analysis if the debtor was indeed of unknown residence. A sheer reference to Article 1(2) of the Convention would suffice. However, notwithstanding the fact that the debtor’s whereabouts were known to the creditor, and without even stating why Article 15 Hague Service Convention was unworthy of any reference, the court followed the course every judge prefers the most, i.e. the application of national rules.
The importance of the Service Convention has been repeatedly underlined in German legal scholarship. The Federal Republic of Germany has made a declaration concerning Article 15 (the six – months rule). In the judgment of the Supreme Court referred by the Munich Court of Appeal, the former ruled against service by publication with regard to a Russian party [BGH NJW-RR 2009, p. 855].
To sum up, the judgment raises (at least) two interesting and rather intriguing questions: If we follow this path: (a) what would be the value of Article 15 in the future? and more broadly, (b) what would be the consequences in a wider dimension? Will other contracting States follow suit?