QUEENS BENCH DIVISION
Strand, London, WC2A 2LL
B e f o r e :
In the Matter of the Administration of Justice Act, 1920, Part II
And in the matter of Order 71 of the Rules of the Supreme Court (as set out in Schedule 1 to the CPR)
And in the matter of a judgment of the Federal Court of Nigeria, in the Abuja Judicial Division dated the 8th day of March 2001 obtained by the Claimant against the Defendants in proceedings numbered FHC/ABJ/CS/268/2000 in the sum of US $8,194,300 plus interest.
| AIC LIMITED
|- and -
|(1) THE FEDERAL GOVERNMENT OF NIGERIA
|(2) THE ATTORNEY GENERAL OF THE FEDERATION OF NIGERIA
|- and -
|(1) THE FEDERAL GOVERNMENT OF NIGERIA
|(2) THE ATTORNEY GENERAL OF THE FEDERATION OF NIGERIA
|(1) THE BANK OF ENGLAND
|(2) HSBC BANK PLC
Chima Umezuruike and Razak Atunwa (instructed by Andrews Solicitors) for the Judgment Creditor
Hearing date: 16 May 2003
Crown Copyright ©
Mr Justice Stanley Burnton:
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 legal entity, belonging beneficially to the government of its state, are liable to execution if those moneys are used or intended for use for commercial purposes.
Immunity from jurisdiction
The submissions of the parties
i. Section 1 of the State Immunity Act is inapplicable to the registration of a judgment under the 1920 Act, because registration is an act that does not involve any exercise by the court of its adjudicative jurisdiction.
ii. If section 1 is applicable, the proceedings in this court relate to "a commercial transaction entered into by a State" within the meaning of section 3(1)(a) of the State Immunity Act, on the basis that the transactions to which the Nigerian judgment relate were entered into by the state and were commercial.
Discussion: (a) Does section 1 of the State Immunity Act apply to the registration of a judgment under the 1920 Act?
"The State Immunity Act 1978, whose long title states as its first purpose to make new provision with respect to proceedings in the United Kingdom by or against other states, purports in Part I to deal comprehensively with the jurisdiction of courts of law in the United Kingdom both (1) to adjudicate upon claims against foreign states ("adjudicative jurisdiction"); and (2) to enforce by legal process ("enforcement jurisdiction") judgments pronounced and orders made in the exercise of their adjudicative jurisdiction. …
… the Act … draws a clear distinction between the adjudicative jurisdiction and the enforcement jurisdiction of courts of law in the United Kingdom. Sections 2 to 11 deal with adjudicative jurisdiction. Sections 12 to 14 deal with procedure and of these, sections 13(2) to (6) and 14(3) and (4) deal in particular with enforcement jurisdiction. …"
"… The judgment creditor may apply to the High Court in England…to have the judgment registered in the Court, and on any such application the Court may, if in all the circumstances of the case they think that it is just and convenient that the judgment should be enforced in the United Kingdom, and subject to the provisions of this section, order the judgment to be registered accordingly."
While the Master will normally order the registration of a judgment if the application for its registration, made under CPR Part 74, appears to be regular, he must nonetheless apply his judgment to the application and the written evidence in support in order to determine whether the requirements of the Act have been satisfied, and that it is just and convenient for the foreign judgment (an expression I use as including a Commonwealth judgment of a state other than the United Kingdom) to be enforced in this country. The fact that the application is made without notice does not mean that the court does not adjudicate on it: c.f. an application made without notice for injunctive relief. The old Rules of the Supreme Court required the Court hearing an ex parte application for the registration of a judgment to decide whether to direct a summons to be issued for the hearing of the application inter partes: see the original RSC Order 41A, which came into operation in 1922, and the later RSC Order 71. That decision too was adjudicative, and depended on the view taken by the Court as to the strength of the case for registration. The change in rules on the introduction of the CPR has not made the decision of the Court whether to order registration of a foreign judgment any the less an adjudication. While Part 74 of the CPR is silent on the issue of a hearing on notice before a foreign judgment is registered, paragraph 74.11.7 of Civil Procedure states:
"The application to register a judgment either under the 1920 Act or the 1933 Act should be made without notice by a witness statement or affidavit to the Master. It should be lodged in Room E214. It will then be checked in the Action Department before being submitted to a Master for him to consider the application who may, instead of dealing with the application without notice being served on any other party, direct that a claim form be filed and served. …"
b. Do the proceedings relate to a commercial transaction entered into by a state?
"If the dispute brings into question, for instance, the legislative or international transactions of a foreign government, or the policy of its executive, the court should grant immunity if asked to do so, because it does offend the dignity of a foreign sovereign to have the merits of such a dispute canvassed in the domestic courts of another country: but, 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."
The italics are mine. In Thai-Europe Tapioca Service Ltd. v. Government of Pakistan, Directorate of Agricultural Supplies  1 W.L.R. 1485, Lord Denning said, at 1491:
"... 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 legal entity which buys commodities on the London market; or if it has a state department which charters ships on the Baltic Exchange: it thereby enters into the market places of the world: and international comity requires that it should abide by the rules of the market."
In Trendtex itself, he pithily summarised the principle of restrictive immunity at 558:
"If a government department goes into the market places of the world and buys boots or cement - as a commercial transaction - that government department should be subject to all the rules of the market place. The seller is not concerned with the purpose to which the purchaser intends to put the goods.
There is another answer. Trendtex here are not suing on the contracts of purchase. They are claiming on the letter of credit which is an entirely separate contract. It was a straightforward commercial transaction. The letter of credit was issued in London through a London bank in the ordinary course of commercial dealings. It is completely within the territorial jurisdiction of our courts. I do not think it is open to the Government of Nigeria to claim sovereign immunity in respect of it."
"… the courts of the country of the original court shall not be deemed to have had jurisdiction –
(c) if the judgment debtor, being a defendant in the original proceedings, was a person who under the rules of public international law was entitled to immunity from the jurisdiction of the courts of the country of the original court and did not submit to the jurisdiction of that court."
This may indicate that registration of a judgment of a foreign court against a state that had submitted to its jurisdiction was permissible; however, it may have been intended to relate only to natural persons entitled to immunity, such as diplomats. Section 4(3)(c) of the 1933 Act did not in terms qualify the then absolute immunity of states from the jurisdiction of the English Courts. (The 1932 Report of the Foreign Judgments (Reciprocal Enforcement) Committee, Cmd. 4213, casts no light on this point.) A claimant seeking the registration of a judgment against a state under the 1933 Act would have faced the obstacles of section 2(1)(b) of that Act, which precludes the registration of a judgment that cannot be enforced by execution in the country of the original court, and possibly of section 4(1)(v), which requires the registration of a judgment to be set aside if enforcement would be contrary to the public policy of the registering court. In any event, however, section 4(3)(c) of the 1933 Act could not apply to a judgment of a court against its own government or state, since no question of submission to the jurisdiction could arise in such a case. In addition, whatever the position was before 1978, on the basis of my conclusion as to the scope of section 3(1)(a) of the State Immunity Act, the absence of any statutory exception to state immunity in relation to proceedings to enforce foreign judgments meant that after 1978 there was little if any scope for the registration of a judgment against any state under the 1933 Act.
"(1) A judgment given by a court of an overseas country against a state other than the United Kingdom or the state to which that court belongs shall be recognised and enforced in the United Kingdom if, and only if -
(a) it would be so recognised and enforced if it had not been given against a state; and
(b) that court would have had jurisdiction in the matter if it had applied rules corresponding to those applicable to such matters in the United Kingdom in accordance with
sections 2 to 11 of the State Immunity Act 1978."
"(3) Nothing in subsection (1) shall affect the recognition or enforcement in the United Kingdom of a judgment to which Part I of the Foreign Judgments (Reciprocal Enforcement) Act 1933 applies by virtue of section 4 of the Carriage of Goods by Road Act 1965, section 17(4) of the Nuclear Installations Act 1965, section 166(4) of the Merchant Shipping (Oil Pollution) Act 1971, section 6 of the International Transport Conventions Act 1983 or section 5 of the Carriage of Passengers by Road Act 1974."
Conclusion on jurisdictional immunity
Immunity from execution
(a) General principles
"Property of a State's central bank or other monetary authority shall not be regarded for the purposes of subsection (4) of section 13 above as in use or intended for use for commercial purposes; and where any such bank or authority is a separate entity subsections (1) to (3) of that section shall apply to it as if references to a State were references to the bank or authority."
(b) The Bank of England accounts
(c) The HSBC accounts
"I, Dr Christopher Kolade, High Commissioner of Nigeria, hereby certify that the funds deposited in the 16 HSBC Bank plc accounts listed in the attached schedule are not in use nor intended for use for commercial purposes.
All 16 of the accounts are dormant, and no payments have been made out of any of the accounts for at least 18 months.
In respect of all 16 accounts, the uses to which the Acting High Commissioner referred in his Certificate dated 23 January 2003 (in relation to the accounts listed in Schedule B of that Certificate) were in fact historical uses before the accounts became dormant. The accounts are no longer used for these purposes."