U.S. SEC’s Legal Action Against Adanis and India’s Response

Source: The post U.S. SEC’s Legal Action Against Adanis and India’s Response has been created, based on the article “The SEC and Hague Service Convention” published in “The Hindu” on 28th February 2025

UPSC Syllabus Topic: GS Paper2-International Relations-Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests.

Context: The article discusses the U.S. SEC’s efforts to serve legal summons on Gautam Adani and his nephew, Sagar Adani, in a securities fraud case. It explains the Hague Service Convention’s role, India’s service process, and possible legal consequences if summons service fails.

What is the Hague Service Convention?

1. The Hague Service Convention was adopted in 1965 to ensure proper legal notification of defendants in foreign jurisdictions.
2. It has 84 member countries, including India and the U.S.
3. The Convention facilitates judicial and extrajudicial document service between signatory states.
4. The primary method of service is through designated central authorities in each country.

How is the U.S. SEC trying to serve summons on the Adanis?

1. The U.S. SEC invoked Article 5(a) of the Hague Service Convention to request India’s Ministry of Law and Justice to serve legal summons on Gautam Adani and Sagar Adani in a securities and wire fraud case.
2. The SEC is also exploring alternative service methods under Rule 4(f) of the U.S. Federal Rules of Civil Procedure, which governs legal proceedings in U.S. federal courts.
3. India acceded to the Hague Convention in 2006, but it rejects all alternative service methods under Article 10and allows service only through its central authority—the Ministry of Law and Justice.
4. All service requests must be in English or translated into English, and India can refuse service if it believes it would compromise sovereignty or security (Article 13).
5. The process usually takes six to eight months, making it time-consuming and difficult for foreign agencies like the SEC.
6. If India does not cooperate, a U.S. court can issue a default judgment under Article 15 after six months, provided all required conditions are met.
7. Example: In Duong v. DDG BIM Services LLC (2023), U.S. plaintiffs requested email service due to difficulties in effectuating service through India’s central authority. Judge Mizelle noted that Article 15 allows default judgments if service efforts fail.

How does the Trump administration’s order affect the case?

1. On February 10, the Trump administration paused the enforcement of the Foreign Corrupt Practices Act (FCPA)for 180 days.
2. The FCPA prohibits U.S. entities and individuals from bribing foreign governments, officials, or political parties to secure business.
3. The executive order directs the Attorney General to review all existing FCPA investigations or enforcement actionsand take steps to restore proper bounds on FCPA enforcement.
4. However, the SEC’s latest court filing indicates that the order does not apply retroactively.
5. As a result, the SEC’s investigation against the Adanis is likely to continue unless the FCPA is amended.

Question for practice:

Examine the role of the Hague Service Convention in cross-border legal proceedings and how India’s reservations under the treaty impact the service of judicial documents in foreign cases.