Service of Process in Arbitration Enforcement Actions

Maritime disputes often find their way to arbitration. Whether the arbitrations are sited in the United States or another country, collection of arbitration awards frequently requires that the prevailing party initiate a civil lawsuit to recognize and enforce the arbitration award in a U.S. federal court. In instances where the award debtor is foreign, serving process pursuant to U.S. rules often presents a significant hurdle to enforcing the award. 

Rule 4 of the Federal Rules of Civil Procedure (“FRCP”) provides that service of process can be effected on a foreign defendant by any internationally agreed means that is reasonably calculated to give notice or, if no such agreed means exists, by service reasonably calculated to give notice that is in compliance with the foreign country’s laws or in a manner otherwise not prohibited by that country’s laws or international agreement. Without effective service of process, U.S. courts are usually reticent to award a default judgment, and may be forced to grant a motion to dismiss under FRCP Rule 12(b).

The most common internationally agreed means of service arises under the Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters (“Hague Convention”). The Hague Convention provides for service through a ratifying country’s Central Authority, which is the governmental body designated to facilitate service of process. Service via the Central Authority is reliable and relatively cost effective, but can take a significant amount of time—sometimes more than six months—to accomplish, leading to increased delay and expense in enforcement actions. 

Adding to the complexity of Hague service, some countries that have ratified the Hague Convention maintain objections to specific provisions. For example, China, Germany, South Korea, and Brazil object to Article 10(a), and thus do not permit service by mail. Japan, on the other hand, objects to Article 10(b) and (c), so does not agree to service through Japanese judicial officers or officials. The resulting morass of rules and protocols, even among member countries, frequently and frustratingly leads to ineffective service of process in enforcement actions.

For those countries that have not ratified the Hague Convention and have not adopted another internationally agreed means of service (such as the Inter-American Convention on Letters Rogatory and Additional Protocol), local laws governing service of process can make the process anything from impractical to impossible. Often, local laws prohibit service by reliable and cost-effective means like personal service or service by mail, leaving creditors practically without the ability to enforce the award in the United States.

Fortunately, by its enactment of the Federal Arbitration Act (“FAA”) the U.S. enjoys a strong policy favoring arbitration, which has resulted in an alternative option—service as provided for in the arbitration agreement.

In 2021, the Western District of North Carolina denied a motion to dismiss under FRCP Rule 12(b)(5) for insufficient service of process where the plaintiff failed to effect Hague Convention service on an international defendant.[1] The Court held that service by e-mail and mail was sufficient for two reasons. First, the FAA provides that actual notice is sufficient when, during the underlying arbitration, the defendant consented to personal jurisdiction in the enforcing court. Second, the arbitration rules governing the underlying arbitration allowed for service of an action to confirm an arbitration award to be made by mail and e-mail. This case highlights the importance of paying close attention to the service requirements set forth in the underlying arbitration rules. 

The TVL International arbitration was governed by the American Arbitration Association (“AAA”) Commercial Rules, including Rule 43(a), which provided that:

“Any papers, notices, or process necessary or proper for the initiation or continuation of an arbitration under these rules, for any court action in connection therewith, or for the entry of judgment on any award made under these rules may be served on a party by mail addressed to the party or its representative at the last known address or by personal service, in or outside the state where the arbitration is to be held[.]”

More common in maritime disputes, however, are arbitrations under the Society of Maritime Arbitrators (“SMA”) or the Houston Maritime Arbitrators Association (“HMAA”). Like the AAA Rule 43(a), Rule 35 of the SMA Maritime Arbitration Rules provides that:

“Wherever parties have agreed to arbitration under these Rules, they shall be deemed to have consented to service of any papers, notices or process necessary to initiate or continue an arbitration under these Rules or a court action to confirm judgment on the Award issued. Such documents may be served: (a) by mail, including email, . . . or (b) by personal service.”

In contrast to AAA and SMA, the HMAA rules do not speak to service of enforcement actions, leaving parties to rely only on Federal Rule 4 and the FAA.

As a result, the inclusion of an SMA arbitration clause with SMA Rule 35’s explicit authorization of service by mail—including by e-mail—provides critical clarity on what constitutes valid service in arbitration-related court proceedings. Importantly, Rule 35 covers not only the service of arbitration documents and notices but also petitions to recognize and enforce or confirm an award in court, ensuring that all procedural steps are governed by the agreed-upon methods. This modernized approach—validating e-mail service—aligns with contemporary communication practices and significantly reduces ambiguity and the risk of procedural objections.

By reducing procedural hurdles relating to service, SMA Rule 35 enhances both the enforceability of SMA awards and the efficiency of converting those awards into binding court judgments. That makes including or incorporating a specific service provision an especially prudent and commercially sound choice in arbitration clauses, providing parties with predictability and confidence in enforcement proceedings.

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