National Development Co. v. Triad Holding Corp. And Adnan Khashoggi

930 F.2d 253 (2nd Cir. 1991)

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Nature of the Case

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Facts

National Development Company (P) is a corporation wholly owned by the Republic of the Philippines. P and Khashoggi (D) got in a dispute when a joint venture formed by P and D was dissolved. P claims that D converted approximately $3.5 million of the assets that should have been distributed to NDC when the joint venture was dissolved. The Agreement between the parties provided that 'any dispute or difference between the parties' concerning the joint venture be 'finally settled under the Rules of Conciliation and Arbitration of the [ICC].' Return mail receipts noticing the arbitration were received from D. D did not respond to the notice for arbitration, and then P commenced this action seeking to compel D to arbitrate. There was service of the summons and complaint affected on D on December 22, 1986. P handed a copy of the summons and complaint to Aurora DaSilva, a housekeeper at D's Olympic Tower condominium apartment on Fifth Avenue. Service on Triad Holding was effected pursuant to letters rogatory by Swiss judicial authorities. D failed to appear in the district court action and a default judgment was entered compelling him to arbitrate P's claim. The hearing was held without any appearance by D and a final award was issued holding D liable. D then filed a motion pursuant to Fed. R. Civ. P. 60(b)(4) to vacate both the 1987 default judgment compelling him to arbitrate and the 1989 default judgment confirming the ICC arbitration award. D contends that both default judgments are void for lack of personal jurisdiction inasmuch as the summons, complaint, and supplemental complaint were improperly served upon him. D testified that he is a citizen of Saudi Arabia and resides in Riyadh. He spent 3 months there in 1986 and spent the rest of his time traveling. D claimed that he first learned of P’s proceedings when P personally served him with its post-judgment discovery requests. The district court denied D's motion to vacate the default judgment entered on the original complaint (to compel arbitration), but granted his motion to vacate the default judgment entered on the supplemental complaint (to confirm the arbitration award). It held that service was proper because D had actual notice. This appeal followed.