Technologists-Inc-v-MIR-Ltd, Civil Action No. 09-1449 (D.D.C. 2010), reviewed an arbitral award under the Federal Arbitration Act, 9 U.S.C. §§ 1-14.  The dispute was arbitrated before the International Chamber of Commerce (ICC).  The noteworthy holding involved the issue of effecting proper service of process for the review of and/or challenge to an arbitral award against a non-U.S. entity.

After the claimant sought to challenge the award by filing a petition to vacate in the District Court, the defendant did not appear and later (as ruled on in this decision) sought vacatur of the order vacating the award on the ground that personal jurisdiction was missing over the defendant because service of process was erroneously done.  The issue was whether the defendant needed to be served pursuant to the service-of-process rules applicable to the formal initiation of complaints (i.e., Fed. R. Civ. P. 4), or whether the defendant could be served in the easier way motions are served (i.e., pursuant to Fed. R. Civ. P. 5). 

The FAA provides that applications for review “shall be made and heard in the manner provided by law for the making and hearing of motions”.  9 U.S.C. § 6.  So the question presented was “whether a party filing a motion to vacate an arbitration award pursuant to 9 U.S.C. § 10 must serve the adverse party” pursuant to Rule 4 or 5.

Section 12 of the FAA provides that if the adverse party is a resident of the district within which the award was made, service of a motion to vacate shall be made in the manner “as prescribed by law for service of notice of motion in an action in the same court”.  However, if the adverse party is a nonresident, then the notice must be served “by the marshal of any district within which the adverse party may be found in like manner as other process of the court”. 

The problem (and our interest) arises with respect to non-U.S. entities.  They typically cannot be found in any District.  Is it impossible to serve them?  And what do we do about the reference to marshals, who have not had a hand in effecting service of process in federal courts for roughly 30 years? 

This District Court followed the authority holding that service in accordance with Rule 4 was necessary and sufficient.  The Court relied in part on authority in the Second Circuit as well as Rule 81(a)(6)(B), providing that the Federal Rules of Civil Procedure apply to FAA proceedings except where the FAA provides other procedures. 

The Court also addressed a subject matter jurisdiction issue, holding that the $75,000 amount in controversy requirement was satisfied even thought the amount awarded was only $51,450, since, the District Court held, the “demand approach” applied, and the petitioner had demanded an amount exceeding $75,000.