DC Circuit Remands Venezuelan Expropriation Case for Lack of Proper Service

The U.S. Court of Appeals for the D.C. Circuit sent a case back to the the D.C. U.S. District Court over whether service was properly provided to the Venezuelan government in a case on the expropriation of a French company. The appellate court said that service was not provided to the Attorney General, as required by Venezuelan law, so the case was sent back so that the French company in question, Saint-Gobain Performance Plastics Europe, has a chance to properly effect service (Saint-Gobain Performance Plastics Europe v. Bolivarian Republic of Venezuela, D.C. Cir. #21-7019).

Saint-Gobain used to have a 99.99% interest in hydraulic fracturing component manufacturer NorPro Venezuela. However, in 2011, then-President Hugo Chavez of Venezuela ordered the expropriation of Saint-Gobain's interest. The French company then sought compensation for this action, entering into arbitration at the International Centre for Settlement of Investment Disputes. A tribunal awarded Saint-Gobain $42 million for the expropriation -- a sum that the Venezuelan government refused to pay.

Saint-Gobain then originally took its case to the U.S. District Court for the District of Delaware in a bid to have the arbitral award enforced. The Foreign Sovereign Immunities Act, though, says that when serving a foreign state, service is established in four different ways, ranked from most to least preferred. On top of the list is service made in accordance with any special service arrangement between the plaintiff and the foreign state. Saint-Gobain, however, effected service via the FSIA's second method: "by delivery of a copy of the summons and complaint in accordance with an applicable international convention on service of judicial documents."

The Delaware district court said that service was properly rendered, but the case's venue was transferred to the D.C. District Court, per Venezuela's request. The second district court also said that service was complete since the French company's interpretation was "reasonable and consistent with the findings of other courts." The appellate court disagreed in its Jan. 25 decision, finding that since Venezuelan law mandates service be affected to the Attorney General, Saint-Gobain failed properly render service.