Canada: Contracting Around The Hague Convention On Service Of Process

Last Updated: September 16 2013
Article by Scott H.D. Bower, James T. McClary and Christopher C. Pardell

When negotiating contracts with international parties, counsel should consider how their clients would, if necessary, serve judicial documents on counterparties based outside of Canada. The Hague Convention on the Service Abroad of Judicial and Extra-Judicial Documents in Civil or Commercial Matters, to which Canada is a signatory,sets out the channels for international transmission and service of documents and applies "in all cases, in civil or commercial matters, where there is occasion to transmit a judicial or extrajudicial document for service abroad" between signatory states. Recent court consideration of the Hague Convention, previously discussed by our colleagues here and here, generally requires plaintiffs to comply with the convention when serving documents on parties in signatory states.

Often service under the Hague Convention will have to be effected via the designated central authority in the destination state. However, service via the central authority is not always practical or even possible.  Plaintiffs may encounter difficulties with the Hague Convention's procedures, such as delays in service and unilateral revocation by the destination state. Central authorities are under no obligation to expedite service of process to ensure parties meet the required deadlines for service under the rules of the transmitting state, such as the Alberta Rules of Court. Article 13 of the convention allows signatory states to cite infringement of sovereignty or security as a basis for refusing to effect service.

In light of the potential delays and uncertainty in effecting service of process under the Hague Convention, parties to a contract can take steps to avoid its application. Relying on Rule 11.3 of the Alberta Rules of Court and similar rules in other provinces, parties to a contract can agree to appoint an agent located in Alberta upon whom service may be effected. Serving process on a local agent avoids the need to transmit documents outside of Canada, thereby avoiding the Hague Convention's rules on service abroad.

Contract provisions appointing a local agent for service of process must be specific. A general notice provision designating where all notices must be sent for the purposes of the agreement may not be sufficient for service of process under applicable provincial rules. Courts in Alberta, for example, have ruled that service under a general notice provision that does not specifically refer to commencement documents or process will not be considered valid service.

Recent amendments to the Alberta Rules of Court may allow for validation of service regardless of whether the Hague Convention applied or was followed, as previously discussed here. However, it remains advisable to require international counterparties to appoint a local agent for service of process, such as a local subsidiary or local counsel, in order to minimize potential delays and avoid uncertainty in how the rules may be applied in the future.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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Scott H.D. Bower
James T. McClary
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