Why in news?

The U.S. Securities and Exchange Commission (SEC) informed a New York court that it has sought India's assistance under the Hague Service Convention to serve summons on Gautam Adani and Sagar Adani.

The Adanis face criminal and civil charges from the U.S. Department of Justice and the SEC for allegedly bribing Indian officials over $250 million to advance Adani Group’s solar projects.

What’s in today’s article?

• SEC’s Legal Actions Against Adanis
• Hague Service Convention
• India’s Accession and Reservations
• Conditions for a Default Judgment Under the Hague Convention

SEC’s Legal Actions Against Adanis

• The SEC informed a New York court that it had invoked Article 5(a) of the Hague Service Convention, requesting India’s Ministry of Law and Justice to facilitate summons delivery to Gautam and Sagar Adani.
• The agency is also considering alternative service methods under Rule 4(f) of the Federal Rules of Civil Procedure.
• FCPA Enforcement Paused by Trump Administration
  • Earlier, in February 2025, the Trump administration temporarily suspended enforcement of the Foreign Corrupt Practices Act (FCPA) for 180 days.
  • The FCPA prohibits U.S. entities and individuals from bribing foreign officials for business gains.
  • An executive order mandates a review of ongoing FCPA cases, but the SEC's court filing suggests the pause does not apply retroactively, allowing the Adani investigation to proceed.

Hague Service Convention

• The Hague Service Convention, signed in 1965, facilitates the cross-border exchange of legal documents, including summons, in commercial cases. India became a member in 2006.
• It aims to ensure defendants in foreign jurisdictions receive timely and actual notice of legal proceedings.
• Membership and Applicability
  • The Convention applies only when both the sending and receiving countries are signatories.
  • Currently, 84 states, including India and the U.S., are parties.
  • Each signatory must designate a central authority to handle service requests.
• Permitted Channels of Communication
  • The Convention allows service through diplomatic channels (via the Ministry of External Affairs), postal services, and direct communication between judicial officers or legal representatives.

India’s Accession and Reservations

• India joined the Hague Service Convention in November 2006, with reservations against all alternative service methods under Article 10.
• India mandates that legal documents in cross-border commercial cases must be served indirectly through a designated authority rather than directly to the individuals involved.
  • MEA reiterates that private judicial officers cannot serve summons directly in India.
• It prohibits the service of judicial documents through diplomatic or consular channels, except when the recipient is a national of the requesting country.
  • For instance, a U.S. court cannot serve documents in India through U.S. diplomatic or consular channels, unless the recipient is a U.S. national residing in India. 
• Additionally, all service requests must be in English or include an English translation.
• Role of the Ministry of Law and Justice
  • The Ministry of Law and Justice serves as India’s designated central authority for processing service requests.
  • It can reject a request but must provide reasons, such as concerns over sovereignty or security under Article 13.
  • However, it cannot refuse service solely based on claims of exclusive jurisdiction or differences in domestic law (Article 29).

Conditions for a Default Judgment Under the Hague Convention

• A default judgment can be issued if a foreign government does not cooperate in serving summons on a defendant.
• However, Article 15 of the Convention sets specific conditions:
  • The summons must have been transmitted through an approved Convention method.
  • At least six months must have passed since transmission, and the court must deem this period reasonable.
  • No certificate of service has been received despite reasonable efforts through the competent authorities.
• India’s Position on Default Judgments
  • India has explicitly stated that its courts may issue a default judgment in cross-border disputes even if no certificate of service is received, provided all Article 15 conditions are met.