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Execution of State Property: United Kingdom Practice*

Published online by Cambridge University Press:  07 July 2009

Rosalyn Higgins
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Extract

This article deals with attitudes in the United Kingdom to the attachment or execution of State property pursuant to a judicial ruling by a Court. It is divided into two parts: the first covers the attitude and practice of the United Kingdom with regard to the attachment or execution of foreign state property within the former's jurisdiction. The second comments on the attitude and practice of the United Kingdom Government to attachment or execution of its property located within the jurisdiction of foreign states.

Type
Articles
Information
Netherlands Yearbook of International Law , Volume 10 , December 1979 , pp. 35 - 54
Copyright
Copyright © T.M.C. Asser Press 1979

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References

1. (1880) 5 PD 197.

2. Ibid, per Brett L.J. at p. 214. The Court of Appeal there reversed the decision of Sir Robert PhiUimore before whom the case had come at first instance. Sir Robert thought that The Parlement Belge was engaged in commerce, and that in these circumstances a sovereign was not entitled to immunity. Sir Robert had expressed similar point of principle in an earlier case, The Charkieh (1873) LR 4 A. and E 59. The sovereign statusof the owner in that case, the Khedive of Egypt, was in any event in doubt.

3. [1920] P. 30.

4. See for example, The Jupiter [1924] P. 236. And for comparable earlier in rem cases, see The Jassy [1906] P. 207, The Gagara [1919] P. 95; and The Cristina [1938] AC 485.

5. E.g., the Privy Council in the Sultan of Johore v. Abubakar Tunku Aris Bendahar [1952] AC 318. In Swiss Israel Trade Bank v Government of Salta [1972] 1 Lloyds Reports 497, Mackenna J. had carefully left open the question of whether a state-owned vessel was immune from English jurisdiction if it was being wholly or substantially used for trade.

6. Sir Robert Phillimore, although believing that proceedings in rem should be permissible against property used by a sovereign in trade, did not go so far as to contend that there should not always be immunity in respect of proceedings against a sovereign in personam.

7. See Mighell v Sultan of Johore [1884] 1 QB 149; Compania Mercantil Argentina v United States Shipping Board [1924] 131 LT 388; Bacchus S.R.L. v Servicio Nacional del Trigo [1975] 1 QB 438; Swiss Israel Trade Bank v Government of Salta [1972] 1 Lloyds Reports 497; United States and France v Dollfus Mieg et Cie and Bank of England [1952] AC 582 (HL); Thai-Europe Tapioca Service Limited v Government of Pakistan, Directorate of Agricultural Supplies [1975] 1 WLR 1492.

8. By Lord Denning, who enunciated the following exceptions to immunity: (1) in respect of land in England (2) in respect of trust funds or money lodged in England for the payment of creditors (3) in respect of debts incurred in England for services rendered to property in England. Lord Denning – bolder in this matter than his colleagues – also advanced the then contentious suggestion that there was no immunity (4) in respect of a commercial transaction entered into in England by a sovereign, if a dispute arises “which is properly within the territorial jurisdiction of our courts”.: [1975] 1 WLR 1490–1491.Google Scholar

9. Issued by the Acting Legal Adviser to the State Department, 1952.

10. Higgins, , “Recent Developments in the Law of Sovereign Immunity in the United Kingdom”, 71 AJIL (1977) pp. 423–437.CrossRefGoogle Scholar

11. See, for example, the varying views expressed by members of the Court of Appeal in Bacchus, loc.cit, n. 7; and in Trendtex Trading Corporation v Central Bank of Nigeria [1977] 2 WLR 356.

12. [1976] 2 WLR 225.

13. [1976] 2 WLR 232.

14. Ibid. p. 233.

15. [1977] 2 WLR 356.

16. Ibid, at p. 367.

17. In Rahimtoola v Nizam of Hyderabad [1958] AC 379, at 422, he had said “… if the dispute concerns, for instance, the commercial transactions of a foreign government (whether carried on by its own departments or agencies or by setting up separate legal entities), and it arises properly within the territorial jurisdiction of our courts, there is no ground for granting immunity”. In Thai-Europe Tapioca Service Ltd. v Government of Pakistan [1975] 1 WLR 1485 and 1491, he made a similar statement, adding that when a department of state engaged in commerce “it thereby enters into the market places of the world and international comity requires that it should abide by the rules of the market”.

18. On the requirement that the matter arise within the territorial jurisdiction, see pp. 40–1.

19. [1977] 2 WLR 367–8.

20. Ibid. p. 371.

21. Higgins, loc.cit, supra n. 10 at p. 427.

22. [1938] AC 485.

23. Ibid, at p. 490.

24. See, e.g., Scrutton, L.J. in The Jupiter [1924] p. 236.Google Scholar

25. 1954 3 WLR 531.

26. 1952 AC 582.

27. 1976 2 WLR 214 at 234.

28. 1977 3 WLR 778 at 796. An appeal is pending in I Congreso del Partido, where it was held that immunity was still available to a government if the reason for its breach of a commercial contract was a public one.

29. 1 LNTS 199.

30. Cmnd. 5081.

31. Ibid. Art. 3. See also – and generally, for an excellent survey of the pre-Philippine Admiral law, O'Connell, , International Law, vol. 2 (London 1970) pp. 927–961.Google Scholar

32. See the article by the present Legal Adviser to the Foreign and Commonwealth Office: Sinclair, , “The European Convention on State Immunity”, 22 ICLQ (1973) p. 254 at p. 272.CrossRefGoogle Scholar

33. This requirement for a territorial connection follows closely Lord Denning's views on that subject, as expressed in the Thai-Europe case and Rahimtoola: see n. 17 above. But it is not to be found in the new State Immunities Act. See below p. 40.

34. For an indication of the divergent practice in continental Europe on the differentiation between immunity from suit and immunity from execution, see Sinclair, loc.cit., supra n. 32, pp. 273–275

35. Further possibilities are made available in the optional Additional Protocol. And see Sinclair, loc.cit., supra at p. 276.

36. Cmnd 5611.

37. Section 1(2).

38. Section 2(4).

39. Art. 7, European Convention on State Immunity.

40. Order 11, Rules of the Supreme Court.

41. At the time of the Second Reading Debate, the Trendtex Case was awaiting appeal to the House of Lords. It has since been settled out of Court.

42. The new section 3(1)(a) seems to represent a move away from the “territorial link” requirements expressed in certain of the cases by Lord Denning: see above n. 17. In I Congreso del Partido, loc.cit., supra n. 28, which was a case based on in rem jurisdiction with no other territorial links to the United Kingdom being shown, Goff J. took a somewhat different view. Commenting that jurisdiction asserted by means of an arrest of a ship “is not an exorbitant jurisdiction”, he stated “I find it difficult to accept that the English Courts should not be able to assert jurisdiction in an action in rem against a foreign state-owned trading ship in such a case, even though the contract of carriage had no connection with the territorial jurisdiction of the English Court”. [1977] 3 WLR at 810.

43. Loc.cit, supra n. 8.

44. Though it is interesting that the line was drawn at performance within the jurisdiction and the other grounds for the assertion of jurisdiction in respect of contract claims stipulated in Order 11 of the Rules of the Supreme Court are not noted as giving rise to an exception to immunity. Note further that section 3(2) does not allow immunity if a contract, not being a commercial transaction, is made in the territory of the State concerned, and the obligation in question is governed by its administrative law. Presumably this provides continued protection for contracts concluded by the State on its territory in the exercise of its sovereign powers. One imagines that at some future date evidence of relevant foreign law may be needed to test the applicability of this subsection.

45. Earlier drafts of the Act included in the clause defining commercial transactions the clearer stipulation that the term includes any contracts for the supply of goods or services to a State, regardless of the purposes for which those goods and services are required; and any loan raised by a State, regardless of the purposes for which the borrowed money was to be used.

46. Section 4(1) State Immunity Act 1978

47. Section 3(1)(a).

48. Section 4(2).

49. Section 5.

50. Section 7.

51. Section 6.

52. Section 6(4) provides: “6. (4) A court may entertain proceedings against a person other than a State notwithstanding that the proceedings relate to property – (a) which is in the possession or control of a State; or (b) to which the State claims an interest, if the State would not have been immune had the proceedings been brought against it or, in a case within paragraph (b) above, if the claim is neither admitted nor supported by prima facie evidence”.

53. Section 10 confirms an issue that arose in I Congreso del Partido – namely, that in respect of sister-ship in rem jurisdiction the “double gate” test is to be applied, viz., both ships have to be in, or intended for, commercial use.

54. See n. 52 above.

55. Art. 1, Brussels Convention 1926.

56. Art. 3, Brussels Convention 1926.

57. The present writer believes that the listing is exhaustive.

58. See the Protocol of May 1934 interpreting and clarifying certain provisions of the Brussels Convention: Cmnd. 5673.

59. Nor does the Act include a suggestion made during the Committee Stage that provision should be made at least for Mareva injunctions against a State's property. For the first granting of such injunctions see Mareva Compania S.A. v. International Bulkcarriers S.A. [1975] 2 LL.L.R. 509.

60. Section 24 provides, on a reciprocal basis, for non-immunity in respect of cases falling beyond the listed category of immunity cases.

61. Section 14(1), State Immunity Act 1978.

62. SI 1978 No. 1524.

63. Section 18.

64. See Dicey, and Morris, , Conflict of Laws (London 1973) pp. 1031–1033.Google Scholar

65. Section 12.

66. Section 19.

67. This paraphrases the Act, which speaks of “proceedings in respect of which the United Kingdom was not entitled to immunity by virtue of a provision corresponding to section 6(2) above”: Article 19.

68. These provisions are based on Art. 20(2) and (3) of the European Convention on State Immunities, which in turn reflects the Hague Convention of 1971 on the Recognition and Enforcement of Foreign Judgments.