Orascom Telecom Holding SAE v Republic of Chad & Ors [2008] EWHC 1841 (Comm) (28 July 2008)

Orascom Telecom Holding SAE v Republic of Chad & Ors [2008] EWHC 1841 (Comm) (28 July 2008)

The Borrower's Account was established and operated specifically for the purposes of commercial transactions, namely to receive proceeds from contracts for the supply of goods or services and as part of a system for repayment of loans by the World Bank and EIB to Chad. Therefore, the account falls within the commercial purposes exception in s13(4) of the State Immunity Act 1978 and is not immune from execution. The certificate from the Chadian Ambassador was not persuasive and the evidence showed the account was earmarked for commercial purposes. The issue of waiver was not resolved as the first issue was determinative.

Citation
[2008] EWHC 1841 (Comm)
Parties
Claimant: Orascom Telecom Holding SAE; First Defendant: The Republic of Chad; Second Defendant: La Societe des Telecommunications du Tchad (SOTEL TCHAD); Third Party: Citibank N.A.; Intervenor: International Bank for Reconstruction and Development; Intervenor: European Investment Bank
Jurisdiction
England and Wales
Judgment Date
28 July 2008
Procedural Posture
Commercial Enforcement (third Party Debt Order) / Final Hearing of Application for Third Party Debt Order
Outcome
Application granted
Legal Topics
Enforcement of Arbitral Awards, State Immunity From Execution, Waiver of Immunity, Third Party Debt Orders, Interpretation of State Immunity Act 1978
Commercial Law Arbitration State Immunity Enforcement of Arbitral Awards State Immunity From Execution Waiver of Immunity Third Party Debt Orders Interpretation of State Immunity Act 1978

Case Brief

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Parties

Orascom Telecom Holding SAE

Claimant

The Republic of Chad

First Defendant

La Societe des Telecommunications du Tchad (SOTEL TCHAD)

Second Defendant

Citibank N.A.

Third Party

International Bank for Reconstruction and Development

Intervenor

European Investment Bank

Intervenor

Procedural Posture

Commercial Enforcement (third Party Debt Order) / Final Hearing of Application for Third Party Debt Order

Legal Issues

  1. 1 Whether the Borrower's Account held by Citibank for Chad is 'property in use or intended for use for commercial purposes' under s13(4) State Immunity Act 1978 and thus not immune from execution
  2. 2 Whether Chad waived immunity from execution by submitting to ICC Arbitration and Article 28(6) of the ICC Rules

Ratio Decidendi

The Borrower's Account was established and operated specifically for the purposes of commercial transactions, namely to receive proceeds from contracts for the supply of goods or services and as part of a system for repayment of loans by the World Bank and EIB to Chad. Therefore, the account falls within the commercial purposes exception in s13(4) of the State Immunity Act 1978 and is not immune from execution. The certificate from the Chadian Ambassador was not persuasive and the evidence showed the account was earmarked for commercial purposes. The issue of waiver was not resolved as the first issue was determinative.

Court Disposition

Application granted

Orders

  • Final Third Party Debt Order made against Citibank in respect of the Borrower's Account for the outstanding sum pursuant to the unpaid award (£3,980,410.38)
  • Chad to pay Orascom's costs (except for costs of French law expert reports, as to which no order)