AIC had used the 1920 Act to register a judgment obtained in Nigeria against the Nigerian Government. The underlying matter was a commercial transaction. Nigeria applied to set the registration aside, saying that registration was an adjudicative act and that Nigeria was protected by state immunity by reason of section 1 of the 1978 Act. AIC argued that their application to register the judgment was a ‘proceeding relating to a commercial transaction’ within section 3(1)(a).
Held: The submissions was rejected: ‘In my judgment, the proceedings resulting from an application to register a judgment under the 1920 Act relate not to the transaction or transactions underlying the original judgment but to that judgment. The issues in such proceedings are concerned essentially with the question whether the original judgment was regular or not.’
Section 9 of the 1978 Act excludes immunity ‘as respects proceedings . . which relate to [an] arbitration’ where the state has entered into a written arbitration agreement. Since most arbitrations relate to commercial transactions, section 9 would be unnecessary if a claim in respect of an arbitration constituted a ‘proceeding relating to the commercial transaction’ to which the arbitration related, for that would fall within 3(1)(a). It would also be illogical to exempt from immunity the enforcement of a judgment in relation to a commercial transaction, but not the enforcement of a judgment in relation to any of the other matters in respect of which the 1978 Act provided exceptions to immunity under sections 3 to 11 of the Act.
It was unsurprising that the defendants were immune from proceedings for the registration of the Nigerian judgment: ‘the underlying principle of the State Immunity Act is that a state is not immune from the jurisdiction of the courts of the United Kingdom if it enters into commercial transactions or undertakes certain activities having some connection with this jurisdiction. Purely domestic activities of a foreign state are not the subject of any exception to immunity. Sections 3(1)(b), 4, 5, 6, 7, 8 and 11 all contain territorial qualifications to the exceptions to immunity to which they relate. Section 3(1)(a) does not include any such qualification, but even there the claimant wishing to bring proceedings must establish a basis for jurisdiction under CPR Part 6.20, normally under paragraphs (5) or (6), relating to contractual claims.’
Lord Denning MR when advancing the restrictive doctrine of state immunity in Rahimtoola v Nizam of Hyderabad [1958] AC 379, 422, in Thai-Europe Tapioca Service Ltd v Government of Pakistan, Directorate of Agricultural Supplies [1975] 1 WLR 1485, 1491 and in Trendtex Trading v Bank of Nigeria [1977] 1 QB 529, 558 had emphasised the significance not merely of the fact that the proceedings related to a commercial transaction, but that the transaction was connected with the United Kingdom.
Judges:
Stanley Burnton J
Citations:
[2003] EWHC 1357 (QB)
Links:
Statutes:
Administration of Justice Act 1920 9
Jurisdiction:
England and Wales
Citing:
Cited – Rahimtoola v Nizam of Hyderabad HL 1957
A claim was made against the former High Commissioner for Pakistan personally for money had and received. He established that he had received the money in England in his official capacity as High Commissioner.
Held: Appeal allowed. The . .
Cited – Thai-Europe Tapioca Service Ltd v Government of Pakistan, Directorate of Agricultural Supplies 1975
Lord Denning said: ‘a foreign sovereign has no immunity when it enters into a commercial transaction with a trader here and a dispute arises which is properly within the territorial jurisdiction of our courts. If a foreign government incorporates a . .
Cited – Trendtex Trading Corporation v Central Bank of Nigeria CA 1977
The court considered the developing international jurisdiction over commercial activities of state bodies which might enjoy state immunity, and sought to ascertain whether or not the Central Bank of Nigeria was entitled to immunity from suit.
Cited by:
Cited – Republic of Argentina v NML Capital Ltd CA 4-Feb-2010
The appellant republic appealed against an order allowing the enforcement against it of a judgment obtained in the US by the claimant. There is no treaty between the US and the UK for the mutual recognition and enforcement of judgments, and an . .
Cited – NML Capital Ltd v Argentina SC 6-Jul-2011
The respondent had issued bonds but in 2001 had declared a moratorium on paying them. The appellant hedge fund later bought the bonds, heavily discounted. Judgment was obtained in New York, which the appellants now sought to enforce against assets . .
Applied – Svenska Petroleum Exploration Ab v Lithuania and Another (No 2) ComC 4-Nov-2005
The court was asked whether a claim to enforce an arbitration award constituted ‘proceedings relating to’ the transaction that gave rise to the award for the purposes of section 3(1)(a).
Held: It did not. . .
Lists of cited by and citing cases may be incomplete.
Jurisdiction, Banking, International
Updated: 19 November 2022; Ref: scu.183563