English High Court orders payment of $100m arbitral peremptory order, denying KRG claim to immunity

Summary

In its recent judgment of 20 November 2015, the High Court of England and Wales (the "Court") enforced a US$100m peremptory order made in arbitral proceedings against the Kurdistan Regional Government of Iraq. The judgment considers a number of interesting questions regarding state immunity as well as the relationship between courts and arbitral proceedings: (1) Pearl Petroleum Company Limited (2) Dana Gas PJSC (3) Crescent Petroleum Company Limited v The Kurdistan Regional Government of Iraq [2015] EWHC 3361 (Comm)

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Video post: State immunity and waiver of immunity issues in English law

In this short video in our Observations series, Andrew Cannon, Partner in our International Arbitration and Public International Law practices, considers state immunity issues. Andrew discusses the restrictive doctrine of immunity enshrined in the State Immunity Act 1978 and describes the steps a party should take in dealing with a state to ensure an effective of waiver in respect of jurisdiction and enforcement.  

For more information on state immunity, please contact Andrew Cannon, Partner, Hannah Ambrose, Professional Support Consultant, Vanessa Naish, Professional Support Consultant or your usual Herbert Smith Freehills contact. 

Andrew Cannon
Andrew Cannon
Partner
+33 1 53 57 65 52
Hannah Ambrose
Hannah Ambrose
Professional Support Consultant
+44 20 7466 7585
Vanessa Naish
Vanessa Naish
Professional Support Consultant
+44 20 7466 2112

Herbert Smith Freehills hosts Panel Discussion and Seminar on “The State of State Immunity” in conjunction with the British Branch of the International Law Association

Herbert Smith Freehills, in conjunction with the British Branch of the International Law Association, is hosting a Seminar entitled “The State of State Immunity”. The Seminar will address Recent Developments, the “Commercial Purposes” Exception and provide practical guidance on negotiating immunity issues.

Date:Tuesday 29 September 2015
Time:6pm to 7pm, followed by drinks (Registration from 5:45pm)
Venue:Exchange House, Primrose Street, London, EC2A 2EG
Please click here to view map

 

Speakers:

Adam Johnson, Partner, Herbert Smith Freehills (Chair)

Chanaka Wickremasinghe, Legal Counsellor, UK Foreign & Commonwealth Office

Michael Stock, Senior Group Legal Counsel, Dispute Resolution, Standard Chartered Bank

Andrew Cannon, Partner, Herbert Smith Freehills

The immunity of states and their assets from the reach of national courts is an area of law with considerable practical implications in the context of contracts between states and commercial parties.

In this panel discussion, the speakers will consider recent developments on state immunity in the English courts, as well as the exceptions to the immunity of states granted by the State Immunity Act 1978. They will consider how effective waivers of immunity can be negotiated, and how immunity may apply to state-owned entities and other bodies. The speakers will draw on their considerable experience from the public and private sectors to offer practical guidance and insights into this significant area of law.

The event will be held under the Chatham House Rule.

Places are limited.  To register your interest in this event, or for further information, please contact Paul McKeating.

English High Court provides guidance on waiver of sovereign immunity

In a recent decision in the case High Commissioner for Pakistan In the United Kingdom (“Pakistan“) v National Westminster Bank (the “Bank“), the English High Court considered the scope of sovereign immunity provided by section 1 of the English State Immunity Act 1978 (the “1978 Act“).

The case concerned competing claims by India, descendants of an Indian Prince (together, the “Interested Parties”), and Pakistan on a sum of money deposited into a bank account in 1948, following the end of British rule in India.

It was not necessary for the court to decide the question of whether Pakistan had waived sovereign immunity in order to answer the questions before it. However, the Court took the opportunity to examine whether Pakistan’s conduct in the proceedings had amounted to a waiver of immunity under s.2 of the 1978 Act with respect to the Interested Parties as well as the Bank.

The Court considered 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 Court’s 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.

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ECHR reaffirms State immunity from civil proceedings for acts of torture in Jones v United Kingdom

In the recent case of Jones and others v United Kingdom, the European Court of Human Rights (the Court) found that the United Kingdom had not breached Article 6 of the European Convention on Human Rights (the right of access to a court) by granting immunity from jurisdiction to Saudi Arabia and its officials in respect of civil claims brought against them for alleged acts of torture. The Court held that the generally recognised rules of public international law did not contain an exception to State immunity in respect of civil claims concerning alleged acts of torture. It also found that such immunity of a State also protects individual employees and officers in respect of acts undertaken on behalf of the State.

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UK Court of Appeal considers the immunity from suit of the family of a head of state

The Court of Appeal has examined the extent to which foreign heads of state and their families can claim immunity under the State Immunity Act 1978 (the SIA) when acting in their personal capacity.

The Court of Appeal has confirmed that only close relatives of a head of state, who form part of his or her household, benefit from immunity from suit in the UK under s20(1) of the SIA. Relatives other than the spouse (or equivalent) of the head of state and dependants will not benefit from immunity under the SIA.

The Court also considered the commercial activity exception in Article 31(1) of the Vienna Convention on Diplomatic Relations (the Vienna Convention), opining that immunity applies to non-official commercial activities conducted outside the UK, but not those conducted within it.

As the Court pointed out, international commercial disputes are frequently adjudicated in the UK. This decision is noteworthy for its clarification of the extent to which relatives of a foreign head of state can claim immunity in respect of their personal activities when they appear before UK courts.

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