MOSCOW, April 22 (RAPSI, Vladimir Yaduta, Alexander Panfilov) – Delex Inc. accused Sukhoi Civil Aircraft Company (Sukhoi) of breach of contract and ensured the seizure of its property worth about $420,000 that was about to be auctioned off, according to court records obtained by RAPSI.

According to Delex Inc., it had contracted with Sukhoi to lease office and warehouse storage space on the Russian company’s behalf entering into a three-year lease agreement. However, receiving no payment from Sukhoi, the US firm had to surrender the premises to the landlord and to file a complaint against the Russian company for breach of contract in March 2012.

In August 2012, King County Superior Court granted Delex's motion for an order of default and default judgement, since the Russian company had not responded to the claim. The court ruled that $327,378.49 might be recovered from Sukhoi. According to Delex Inc., it informed the Russian company about this judgement via e-mail, but had no response either. 

In January 2015, the court issued a writ of execution to the King County sheriff to seize Sukhoi's property, located in SeeTac and valued at approximately $420,000 (about 27.8 million rubles at the current rate). 

Later, the Russian company moved for relief from the default judgment in Delex’s favor and to stay the sheriff's sale. The trial court denied its motion. Sukhoi appealed, but to no avail. 

Sukhoi maintains that service of process was improper. Under the Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters (the Convention) the service of process should have been executed via a national Central Authority, in this case the Russia’s Ministry of Justice. Instead, Dulex used services of the Russian Post having served the summons and complaint through registered mail on Sukhoi’s registered office and personally on the head of the Russian company’s Foreign Activity Legal Support Department. 

Nevertheless, the US court has ruled the notification was proper taking into account the fact that Russia had ceased to service Russians on behalf of Americans. 

In the meantime, the parties agreed to quash the writ of execution, which was the basis for the sheriff's sale. Sukhoi deposited a $475,000 supersedeas bond, according to court records.

RAPSI has yet to obtain comments from the parties to the case. 

As RAPSI has reported earlier, Russia suspended all judicial cooperation with the United States in civil and commercial matters since July 2003. 

Russia opted to suspend judicial cooperation after the United States imposed a fee for all requests for service from any foreign country whether submitted under the Convention or via diplomatic channels. The fee was reportedly imposed to cover costs incurred by a private contractor hired by the U.S. Department of Justice to administer the service functions. The United States claim that fees are permitted under the Convention and charged by a number of countries that are party to the Convention. 

As a result of Russia’s policy, litigants were advised to seek guidance regarding alternative methods of service.