Chettri V Nepal Bangladesh Bank

Chettri v Nepal Bangladesh Bank in 2011

United States views on international law (based on the document “Digest of U.S. Practice in International Law”): In May 2011, the United States filed a statement of interest in the U.S. District Court for the Southern District of New York in a case brought against the central bank of Nepal (“Nepal Rastra Bank”) and the Department of Revenue Investigation of the Government of Nepal (“DRI”). Chettri v. Nepal Bangladesh Bank, et al., 10-8470 (S.D.N.Y.). The U.S. statement of interest explained that these two defendants were immune from suit because they had not been properly served under the FSIA. Excerpts of the U.S. statement of interest follow (with citations to the record omitted). The full text of the U.S. statement of interest is available at (internet link) state.gov/s/l/c8183.htm.

Developments

Section 1608 of the FSIA…sets out the requirements for service on a foreign state and its political subdivisions, agencies and instrumentalities. …Because it appears that Plaintiffs failed to adhere to the provisions of Section 1608(a), DRI was not properly served in this matter. Likewise, because it appears that Plaintiffs failed to adhere to the provisions of Section 1608(b), Nepal Rastra Bank was also not properly served in this matter. Absent proper service, entry of a default judgment is improper.

DRI is a department within Nepal's Ministry of Finance, and therefore a political subdivision of the Government of Nepal.…

Courts have uniformly held that service on a foreign state and its political subdivisions must strictly comply with the requirements of Section 1608(a).…

In the instant case, the docket does not reflect any attempt to serve DRI in compliance with the procedures specified in Section 1608(a).…

Rather, the docket indicates that service of the summons and complaint was attempted by personal delivery on Amrit Rai, an employee of the Office of General Consulate of Nepal in New York. …This attempted method of service fails on several grounds. First, it does not comply with Section 1608(a). …Second, this attempt at service through Mr. Rai is also impermissible under Article 43 of the Vienna Convention on Consular Relations, which provides that, “[c]onsular officers and consular employees shall not be amenable to the jurisdiction of the judicial or administrative authorities of the receiving State in respect of acts performed in the exercise of consular functions.” …Third, it appears that Mr. Rai also serves as Counselor at the Nepal Mission to the United Nations in New York, which is located on the same premises as the Nepalese Consulate. The premises of a United Nations mission are inviolable. …Mr. Rai enjoys personal inviolability and comprehensive civil immunity in his role as member of the Nepal mission to the United Nations and thus cannot be served or made an involuntary agent for service of process. …

Details

…Plaintiffs argue that DRI “had actual notice of the lawsuit.” Even if that were true, a party's notice of a lawsuit is irrelevant to a determination as to whether service is proper under Section 1608(a).

The parties agree that Nepal Rastra Bank is an “agency or instrumentality” of Nepal, as defined in Section 1603(b) of the FSIA. . . .

Like the service provisions of Section 1608(a), the requirements in Section 1608(b) fulfill the critically important goal of ensuring that foreign state agencies have meaningful notice of the initiation of a suit against them. Although “several federal courts have rejected a strict reading of section 1608(b) and have upheld service where the serving party has 'substantially complied' with the requirements under the Act,” Sakhrani v. Takhi, No. 96-CV-2900 (KMW)(RLE), 1997 WL 33477654, at *6 (S.D.N.Y. Sept. 10, 1997)…, it is not necessary for the purposes of this case to determine whether substantial compliance would be sufficient.…

In this case, Plaintiff failed to substantially comply with the provisions of Section 1608(b). The docket indicates that service of the summons and complaint upon Nepal Rastra Bank was attempted only by personal delivery on Mr. Rai. That method does not comply with any of the provisions of Section 1608(b), is impermissible under Article 43 of the Vienna Convention on Consular Relations, and is inconsistent with the inviolability of United Nations missions. …

More about the Issue

…[Plaintiffs'] later service also did not substantially comply with the provisions of 1608(b).

…[T]he docket sheet shows that Plaintiffs attempted to serve the order to show cause by personal service on Raj Kumar Shrestha at Nepal Rastra Bank. …However, service by personal delivery to Mr. Shrestha at Nepal Rastra Bank may only comply with Section 1608(b) if: (a) Mr. Shrestha was “authorized…by appointment or by law to receive service of process,” 28 U.S.C. § 1608(b)(2); and (b) the delivery was made in the United States—neither of which is alleged here.

…[T]here is no indication that the documents were translated into Nepalese, as required by Section 1608(b)(3). In addition, …Plaintiffs did not effectuate service as directed by an authority of the foreign state or political subdivision in response to a letter rogatory or request. …And finally, Plaintiffs failed to comply with Section 1608(b)(3)(C) because Plaintiffs failed to demonstrate that any of their attempts at service were “directed by order of the court consistent with the law of the place where service is to be made.” 28 U.S. C. § 1608(b)(3)(C).