Commercial Court considers the application of State Immunity Act 1978

15/07/16

On 15 July 2016, Males J handed down judgment in L R Avionics Technologies Ltd v The Federal Republic of Nigeria & Anor [2016] EWHC 1761 (Comm), in which he considered the application of sections 9 and 13 of the State Immunity Act 1978.

The Claimant registered an arbitration award of US $5 million and a judgment of the Federal High Court of Nigeria which gave leave to recognise and enforce the award in the same manner as a judgment and made an additional award of interest. The Claimant then sought to enforce the award and the judgment against property situated in Fleet Street belonging to the Federal Republic of Nigeria. The Federal Republic of Nigeria had granted a lease of the Fleet Street property to a privately owned company to which it had outsourced the task of handling visa applications.

One of the issues in the case was whether the Federal Republic of Nigeria was immune in relation to the registration of the judgment of the Federal High Court of Nigeria. The Claimant relied on section s. 9 of the State Immunity Act 1978, which provides an exception to state immunity in respect of proceedings which relate to an arbitration where the state has agreed in writing to submit a dispute to arbitration. Males J accepted the Claimant’s submission that this provision is broad enough to encompass not only enforcement of the arbitration award but also registration of the judgment of the Federal High Court of Nigeria that related to the arbitration.   

Another issue in the case was whether the Fleet Street property was amenable to execution. Males J held that issuing passports and visas was not a commercial use of the property within the meaning of section 13(4) of the 1978 Act even where it had been outsourced to a private company and even where the transaction is commercial from the point of view of the private company in question. He held that what mattered for the purposes of section 13(4) was the purposes of the state against whose property execution is sought, and given that the property is being used not merely to earn rent under a lease but to provide consular services, it was not amenable to execution.  Males J nevertheless rejected the submission that the property formed part of the premises of the Nigerian High Commission for the purposes of section 2 of the Diplomatic Privileges Act 1964 and Article 22 of the Vienna Convention on Diplomatic Relations of 1961

The judgment appears here.