High Court provides guidance on waiver of sovereign immunity

In a recent decision, the High Court considered the scope of sovereign immunity provided by section 1 of the State Immunity Act 1978 (the “1978 Act“): High Commissioner for Pakistan In the United Kingdom v National Westminster Bank [2015] EWHC 55 (Ch).

The court expressed the view that once sovereign immunity is waived by a State instituting proceedings, it is waived for the duration of those proceedings, including any new claims that the State could have predicted would arise from the original proceedings.

The discussion in this case sheds some light on the boundaries of an area of law that has seen limited judicial consideration. It remains to be seen whether Pakistan will appeal, and so give a higher court an opportunity to provide further guidance. For more detail on the case, see this post on our PIL Notes blog.

Supreme Court clarifies “commercial purposes” exception to state immunity

The Supreme Court has clarified the scope of the exception to immunity under the State Immunity Act 1978 for property held by a state which is “in use or intended for use for commercial purposes”, an issue that has important practical implications both for states and for parties seeking to enforce judgments against assets held by states: SerVaas Incorporated v Rafidain Bank and others [2012] UKSC 40. The decision confirms that the origin of the property against which execution is sought is irrelevant to the question of whether it is held for commercial purposes.  In this case, the assets could not be said to be in use for commercial purposes and were therefore held to be immune from execution. Click here to read more about the decision on our arbitration blog.

Privy Council rules on the liability of state-owned corporations for debts of the state

A recent Privy Council decision clarifies the principles regarding enforcement of state debts against state-owned entities. Creditors of states are unlikely to be able to enforce against the assets of state-owned companies save in “quite extreme circumstances”: La Générale des Carrières et des Mines v FG Hemisphere Associates LLC [2012] UKPC 27. Click here to read more about the decision on our arbitration blog.