Valna Holding Cypress Ltd v. BiBo Biopharma Engineering Company Ltd., et al.

Background

Valna Holding Cypress Ltd. filed the case seeking confirmation of arbitration awards against BiBo Biopharma Engineering Company Ltd., BiBo Pharma Scientific Company Ltd., and BiBo Biopharma Engineering Co., Ltd. The awards required BiBo Biopharma and BiBo Pharma to pay $3 million, pre-award interest of $175,808.22, post-award interest at 3% per year, €1,133,963.71 in legal costs and expenses, and £7,037.17 in arbitration costs, along with post-award interest at 3% per year.

Valna asked to serve BiBo Biopharma through 89bio, Inc., a non-party. The opinion states that 89bio is incorporated in Delaware and has its principal place of business in San Francisco, California. In April 2024, 89bio entered into a collaboration agreement with BiBo Biopharma under which BiBo Biopharma would build a production facility in China to produce the active ingredient needed for 89bio’s product. 89bio committed $175 million to the facility’s construction and viewed BiBo Biopharma as a primary-source supplier.

Legal standard

The Federal Rules allow service on a corporation in the United States under the law of the forum state or the state where service occurs. California law permits service on a corporation by delivering the summons and complaint to a “general manager.” California law also permits service on a foreign corporation doing business in California through its general manager in the state.

The court discussed Cosper v. Smith & Wesson Arms Co., in which the California Supreme Court found service proper through an agent who promoted the defendant’s products, serviced dealer accounts, helped identify prospective dealers, handled publicity, and investigated and reported customer complaints. The key considerations were whether the corporation was doing business in California and whether the person served had sufficient rank and responsibility to make it reasonably likely that the corporation would learn about the service.

Court’s analysis

The court found that Cosper did not apply. Unlike the sales representative in Cosper, 89bio was collaborating with BiBo Biopharma to build a factory in China so that 89bio could obtain active ingredients for its own product. The court found no supporting evidence for Valna’s apparent suggestion that BiBo Biopharma contracted with 89bio to transport pharmaceuticals to California for sale there or that 89bio repackaged BiBo Biopharma’s chemicals.

Based on 89bio’s securities filing, the court concluded that BiBo Biopharma was effectively supplying raw material to 89bio. The court therefore viewed 89bio as BiBo Biopharma’s customer, not its agent or representative responsible for handling California customers. The arrangement did not give BiBo Biopharma the business advantages it would have received from operating through its own California office, and there was no indication that 89bio provided regular contact between BiBo Biopharma and its customers.

The court also noted that the cases Valna cited involved domestic subsidiaries or other entities that distributed the foreign corporation’s products in California or provided customer service to California customers. The court stated that those cases consistently required the proposed general manager to play a significant role for the defendant in reaching California customers. The evidence did not show that 89bio performed that kind of work for BiBo Biopharma.

Disposition

The court DENIES Valna’s motion for alternative service. The order does not state a ruling on the merits of Valna’s request to confirm the arbitration awards.