NEWS
Rockefeller Investment Group Wins Unanimous California Supreme Court Victory | April 6, 2020
Los Angeles, California - A Rockefeller investment entity has won an important victory in the California Supreme Court. The case is Rockefeller Technology Investments (Asia) VII v. Changzhou SinoType Technology Co. Ltd. (Case Number S249923).
The California Supreme Court found that the Second District Court of Appeal had wrongly terminated litigation filed by Rockefeller to enforce the $414 million award it had won in arbitration against SinoType, a Chinese company that develops and licenses fonts to Apple, Adobe, and Microsoft, among others. The dispute stemmed from a deal to market international fonts. Rockefeller’s lawyers in the Supreme Court were Steven Blum and Gary Ho of Blum Collins & Ho of Los Angeles, California.
SinoType argued that it hadn't been properly notified of the dispute and arbitration, because its agreement with Rockefeller to give notice through FedEx or a similar courier service was trumped by an international treaty called the Hague Service Convention, which bars such service of process.
The Second District Court of Appeal agreed with SinoType. The Court of Appeal decision threatened to upend decades of contractual obligations and expectations and could have unraveled thousands of arbitration awards and judgments.
Attorney Gary Ho explained, “To let foreign parties to enter into a contract, and then proceed to unilaterally disregard the contract’s service of process and consent to jurisdiction provisions, would allow foreign parties to simply return to their country in order to avoid contractual obligations. This would result in anarchy and turn international arbitration law on its head.”
The California Supreme Court granted review to decide whether private parties can contractually agree to legal service of process by methods not expressly authorized by the Hague Service Convention.
The seven-judge panel unanimously answered in the affirmative and reversed the Court of Appeal decision.
In their opinion, the Justices explained that the Hague Service Convention only applies when the law of the forum state requires formal service of process to be sent abroad. By signing a private agreement on service, SinoType and Rockefeller waived the formal service of process required under California law, which means that the Hague Service Convention did not apply.
"Holding that the Convention does not apply when parties have agreed to waive formal service of process in favor of a specified type of notification serves to promote certainty and give effect to the parties' express intentions," the Justices wrote. "Conversely, to apply the Convention under such circumstances would sow confusion and encourage gamesmanship and sharp practices.
This California Supreme Court victory marks an important milestone in a long journey for Rockefeller and Blum Collins & Ho, LLP. Rockefeller hired the firm nearly a decade ago to litigate against SinoType. Mr. Blum and Mr. Ho led the litigation effort that resulted in the $414 million arbitral award for Rockefeller. The law firm Paul Hastings LLP, subsequently represented Rockefeller in judgment enforcement proceedings and the appeal to the Second District Court of Appeal.
After losing in the Court of Appeal, Rockefeller again turned to Blum Collins & Ho, LLP to save the $414 million arbitral award. The firm successfully petitioned the California Supreme Court to review the Court of Appeal decision and briefed the case. Mr. Ho presented oral argument before the Court on January 7, 2020.
“We are delighted that the Court agreed with our arguments and issued a unanimous opinion that saves billions of dollars for American companies and about three decades worth of arbitration agreements that could have been nullified,” said Mr. Blum.