Case of the Day: PetroChina v. BCI

Happy new year, readers! The case of the day is Petrochina International (America), Inc. v. BCI Brasil China Importadora e Distribuidora S.A. (S.D. Tex. 2021). The case was for breach of contract after BCI, a Brazilian petroleum wholesaler, ceased purchasing products from Petrochina during the COVID-19 pandemic. The issue was whether the pandemic constituted a force majeure under the contract.

The service issue in the case was as follows: PetroChina made a request for service of process to the Brazilian central authority, and the Brazilian authorities sent BCI a “notice of suit,” which had a hyperlink to the complaint but not the complaint itself.1 The Brazilian central authority “confirmed that it had effectuated service of process under Brazilian law,” but apparently not in the form of a certificate as contemplated by Article 6 of the Service Convention.

I don’t like the court’s approach, which was to say that Petrochina had made a good faith effort to comply with the Convention and that “formalistic challenges” to the sufficiency of service were unwarranted. Like it or not, service is a necessary step in a lawsuit, and a good faith effort at service is not enough. But there was plenty here to show that Petrochina did comply with the Convention. While a certificate following the model form is of course the gold standard and can avoid unnecessary challenges to service, evidence of service that contains the essentials of what the certificate should contain should be enough. Even a certificate that is faulty in some respect (for example, by omitting the method of service) should not vitiate the service when there was actual notice. (See, e.g., paragraphs 213 to 215 in the Practical Handbook).

The key substantive question here is whether providing a formal document that contains a hyperlink to the complaint satisfies the Convention. Put that way, we can see that the question doesn’t make sense, since under the Convention, in general, service is to be effected in accordance with local law. Therefore, the question isn’t whether the Convention allows this method of service, but whether Brazilian law allows that form of service. The court doesn’t engage with that question, although in the face of the Brazilian central authority’s statement that it had made service in accordance with Brazilian law, surely BCI would face an uphill battle.

  1. At least, this is how I understand the decision, but it is not entirely clear.
PetroChina logl

This Post Has 2 Comments

  1. kotodama

    OK, so I got curious enough about the enigmatic hyperlink to drop some coin on PACER and study the motion papers. Your understanding turns out to be correct. Page 9 of Petro’s opposition states: “BCI admits … the December 29, 2020 receipt of a letter rogatory from the Superior Court of Justice in Brazil. … The letter … contains a website link for obtaining the case documents. … Process is typically served in Brazil by such letters with website links to case documents.” (The opposition is now available gratis to everybody thanks to the miracle of RECAP.)

    As for actual substance, I don’t really have any commentary to add. Your critique of the court’s decision makes sense to me. I’d just note that the opinion seems fairly rushed and terse. For barely covering five pages, it also has multiple typos.

    In conclusion, Happy New Year!

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