SerVaas Incorporated v Rafidian Bank and Others: SC 17 Aug 2012

The appellant had contracted to construct a factory in Iraq. On the imposition of sanctions, the respondent bank’s assets were frozen. The appellant sought to recover the sums due to it, and obtained judgment in France. After the fall of Hussain, arrangements were put in place to begin to pay the respondent’s creditors, and debt assignments were undertaken by the respondent’s liquidators. The new Iraq government obtained orders for the repayment of sums due, and the appellant sought to obtain a third party debt order. The Iraqi government claimed exemption under the 1978 Act, certifying as required, and the court was now asked as to the true construction of the expression ‘property which is for the time being in use or intended for use for commercial purposes’ in section 13(4) of the 1978 Act, and whether, in these summary proceedings, the appellant had any prospect of rebutting the presumption raised by the respondent’s certificate. The appellants stated that the underlying transaction had been eminently a purely commercial one.
Held: The appeal failed. Whether property falls within the definition ‘for the time being in use or intended for use for commercial purposes’ within section 13(4) of the 1978 Act does not depend on whether has had that characteristic in the past.
Servaas had been unable to show any intended commercial use for the fund.
Lord Phillips, President, Lady Hale, Lord Clarke, Lord Sumption, Lord Reed
[2012] UKSC 40, [2012] 3 WLR 545, [2012] WLR(D) 257, UKSC 2011/0247
Bailii, Bailii SC, SC Summary, SC
State Immunity Act 1978 13(4)
England and Wales
Citing:
At Administrative CourtServaas Inc v Rafidain Bank and Others ChD 14-Dec-2010
Application for third party debt order. . .
At Commercial CourtServaas Incorporated v Rafidain Bank and Others ComC 14-Dec-2010
The claimant had supplied a factory to Iraq, but remained unpaid. Assets had been frozen in the respondent Iraqi bank, and with the new government, the liquidators were to pay assets to a fund who were, in turn to discharge debts pro rata. The . .
Appeal fromServaas Incorporated v Rafidain Bank and Others CA 3-Nov-2011
A commercial debt due to the claimant from the former Iraqi government, and for which judgment had been obtained in France, had been bought from receivers by the new Iraqi Development fund. The appellants sought to secure their judgment in full by a . .
CitedAlcom Ltd v Republic of Colombia HL 1984
A bank account used to cover the day-to-day expenses of an Embassy, clearly served sovereign purposes and therefore was immune from enforcement measures. The Act of 1978 must be read against the background of customary international law current in . .
CitedAIC Ltd v Federal Government of Nigeria QBD 13-Jun-2003
The court was asked: ‘i. whether a judgment against a State may be registered under section 9 of the Administration of Justice Act 1920 and enforced in this country; and
ii. whether moneys in a bank account of a central bank that is a separate . .
CitedAIG Capital Partners Inc and Another v Kazakhstan ComC 20-Oct-2005
Aitkens J said as to the United Nations Convention on Jurisdictional Immunities of States and Their Property that it though not in force, and not ratified by the United Kingdom: ‘its existence and adoption by the UN after the long and careful work . .
CitedOrascom Telecom Holding SAE v Republic of Chad and others Comc 28-Jul-2008
Final application for a third party debt order. . .
CitedConnecticut Bank of Commerce v Republic of Congo 29-Aug-2002
(United States Court of Appeals, Fifth Circuit) Connecticut Bank had acquired the rights to a valid London judgment against the Congo for defaulting on a loan agreement. It obtained a default judgment in New York in relation to the London judgment . .
CitedFG Hemisphere Associates LLC v Democratic Republic of Congo 10-Feb-2010
Hong Kong Court of Appeal . .

These lists may be incomplete.
Updated: 19 April 2021; Ref: scu.463743