AIC Ltd v Nigeria
| Jurisdiction | England & Wales |
| Judgment Date | 13 June 2003 |
| Neutral Citation | [2003] EWHC 1357 (QB) |
| Date | 13 June 2003 |
| Court | Queen's Bench Division |
(Stanley Burnton J)
State immunity — Jurisdictional immunity — General rule that foreign State immune unless an exception to immunity is applicable — United Kingdom State Immunity Act 1978 — Proceedings for registration of judgment against foreign State given by court in that foreign State — Whether State entitled to immunity — Whether proceedings relating to commercial transaction
State immunity — Immunity from execution — Bank accounts — Property of central bank — Source of funds and purpose for which those funds intended irrelevant — Other bank accounts — Whether in use for commercial purposes — Dormant accounts — Evidence of foreign State's Head of Mission — The law of England
Summary: The facts: — The claimant, AIC Limited, was a Nigerian company which claimed that it had concluded an agreement with Aermacchi SpA, an Italian company, to act as Aermacchi's representative in Nigeria in return for a commission of 10 per cent on Aermacchi's net sales in Nigeria. AIC maintained that Aermacchi had obtained a contract with the Nigerian Ministry of Defence in the sum of US $81,943,000 and that AIC was accordingly entitled to receive commission of US $8,194,300. Having failed to obtain payment from Aermacchi, AIC brought proceedings in the Nigerian courts against the Federal Government of Nigeria to recover this sum. The Federal High Court ordered the Federal Government of Nigeria to pay the sum claimed plus interest. AIC then registered the judgment in England under Section 9(1) of the Administration of Justice Act 1920 (‘the 1920 Act’) and obtained interim third party debt orders in relation to a number of accounts of the Federal Government of Nigeria and the Central Bank of Nigeria with the Hong Kong and Shanghai Banking Corporation (‘HSBC’) and the Bank of England with a view to satisfying the judgment. The Federal Government of Nigeria applied to set aside the order of registration and the interim third party debt orders on the ground that it enjoyed immunity from the jurisdiction of the English courts.
Held: — The orders were set aside. The Federal Government of Nigeria was immune from the jurisdiction of the English courts with regard to the registration of the Nigerian judgment and the bank accounts in question were immune from attachment.
(1) Section 1 of the State Immunity Act 1978 applied to proceedings for the registration of a foreign judgment under the 1920 Act. Such proceedings were an exercise of jurisdiction by the English courts and a foreign State was accordingly immune unless one of the exceptions to immunity was applicable. Proceedings to register a foreign judgment under the 1920 Act were not proceedings relating to a commercial transaction even if the foreign judgment concerned proceedings relating to such a transaction. The proceedings for registration were proceedings relating to the foreign judgment not to the underlying transaction giving rise to that judgment. Accordingly the commercial exception to immunity in Section 3(1) of the 1978 Act did not apply. There was no other relevant exception in the 1978 Act. While the Civil Jurisdiction and Judgments Act 1982 made provision for registration of judgments given against a foreign State in the courts of a third State it did not remove the immunity granted by the 1978 Act in cases where a claimant sought to register a judgment given against a foreign State by the courts of that same foreign State (paras. 16–41).
(2) That finding made it unnecessary to determine whether the bank accounts were immune from attachment but it was clear that they were so immune. Two of the accounts were in the name of the Central Bank of Nigeria.
(a) The property of a foreign State's central bank was entitled to absolute immunity, by virtue of Section 14(4) of the 1978 Act. That principle applied to a bank account in the name of a central bank irrespective of the sources of the funds in that account or the purpose for which the account was maintained (paras. 46–54).
(b) The funds in bank accounts in the name of the Federal Government of Nigeria, as opposed to the Central Bank, were subject to attachment only if they were in use or intended for use for commercial purposes. The High Commissioner of Nigeria had certified that the accounts were not in use or intended for use for commercial purposes and had been dormant for eighteen months or more. If an account had been dormant for that long it could not be said that the funds it contained were presently used for any relevant purpose and the use to which they had previously been put was insufficient to rebut the presumption created by the High Commissioner's certificate (paras. 55–9).
The following is the text of the judgment of the Court:
1. This case raises the issues:
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(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
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(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.
2. The Claimant (‘AIC’) alleges that it entered into an oral agreement with an Italian company, Aermacchi SpA, in May 1981 whereby it was appointed Aermacchi's exclusive representative in Nigeria and Aermacchi agreed to pay it a commission of 10 per cent of its net sales in Nigeria; that subsequently, in 1983, Aermacchi was awarded a contract in the sum of US $81,943,000 by the Nigerian Government; and that accordingly Aermacchi became liable to pay AIC commission in the sum $8,194,300. That sum was not paid.
3. In June 1983, AIC issued proceedings in Nigeria against Aermacchi and the Nigerian Federal Ministry of Defence, through its representative the Attorney General of the Federation of Nigeria, claiming against Aermacchi payment of the sum of $8,194,300, and against the Attorney General an injunction restraining the Federal Ministry of Defence from making any payment to Aermacchi unless the latter ‘set aside’ the Claimant's claim.
4. In October 1989, AIC obtained judgment in its Nigerian proceedings against Aermacchi and the Attorney General for payment of its commission. That judgment was registered in this country under the 1920 Act. The registration and the Nigerian judgment against the Attorney General on which it was based were subsequently set aside.
5. In September 2000, AIC began fresh proceedings in the Federal High Court of Nigeria against the Attorney General and the Federal Government of Nigeria, on the basis that during the first proceedings they had represented to AIC that payment of the sum of $8,194,300 due to Aermacchi would be withheld, and that it should therefore be paid to AIC.
6. On 8 May 2001, judgment was given by the Federal High Court of Nigeria in those proceedings. By that judgment (‘the Nigerian judgment’), the Federal High Court ordered the Federal Government of Nigeria and the Attorney General (‘the Defendants’) to pay to AIC the sum of US $8,194,300 plus interest.
7. On 27 August 2002, solicitors for AIC applied to this Court without notice for the registration of the Nigerian judgment pursuant to section 9(1) of the Administration of Justice Act 1920. On 11 September 2002, Master Yoxall ordered the registration of the Nigerian judgment under that Act. His order was in common form, ordering the Nigerian High Court judgment ‘to be registered as a judgment of the Queen's Bench Division of Her Majesty's High Court of Justice in England and Wales pursuant to Part II of the Administration of Justice Act 1920 for payment of the said amount of US $8,194,300 plus interest or its Naira equivalent at the time of payment’. The order provided that the Defendants should be at liberty to apply to set aside the registration. I shall refer to the order of 11 September 2002 as ‘the registration order’.
8. The registration order was served on the Federal Government of Nigeria and its Attorney General on 7 November 2002.
9. On 5 December 2002, AIC applied for third party debt orders in relation to bank accounts of the Federal Government of Nigeria and the Central Bank of Nigeria, including accounts with the Bank of England and HSBC Bank pic. On 13 January 2003, Master Yoxall made interim third party debt orders that prohibited the third party banks from making any payment out of those accounts apart from any credit balance exceeding the sum of US $8,194,300. Those orders remain in force in relation to the accounts with the Bank of England and HSBC.
10. On 25 March 2003, Master Yoxall ordered there to be a hearing on the questions of the Federal Government of Nigeria's immunity from jurisdiction and its immunity from execution in respect of the bank accounts that had been attached by the orders of 13 January 2003.
11. In April 2003, an application was made by the Attorney General and the Federal Government to the Court of Appeal of Nigeria for permission to appeal the Nigerian judgment out of time. A decision has not yet been given on that application.
12. This is my judgment on the issues ordered to be determined by Master Yoxall's order of 25 March 2003.
13. The submission of the Defendants is simply that the Court has no jurisdiction under the 1920 Act to register the original judgment against a state: the Defendants are immune from jurisdiction by virtue of section 1 of the State Immunity Act 1978, and none of the exceptions to immunity is applicable.
14. AIC submits:
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(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.
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(ii) If section 1 is applicable, the proceedings in this...
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