Servaas Incorporated v Bank & Ors

Servaas Incorporated v Bank & Ors

The Court held that the debt owed to Iraq by Rafidain Bank was not, at the relevant time, in use or intended for use for commercial purposes. The intended use was to pay the funds to the Development Fund for Iraq for sovereign purposes, as evidenced by the certificate of the Chargé d’Affaires, which was not rebutted. The commercial origin of the debt was not sufficient to bring it within the exception to immunity from execution under section 13(4) of the State Immunity Act 1978.

Parties
Appellant/cross Respondent: SerVaas Incorporated; Respondent: Rafidain Bank; Respondent: Michael David Gercke; Respondent: Russell Downs; Respondent: David Christian Chubb; Interested Party/respondent/cross Appellant: The Republic of Iraq
Jurisdiction
England and Wales
Judgment Date
03 November 2011
Procedural Posture
Civil Appeal / Appeal From Chancery Division to Court of Appeal
Outcome
Appeal dismissed
Legal Topics
Immunity From Execution, Commercial Purposes Exception, Third Party Debt Orders, Sovereign Authority Vs Commercial Activity
State Immunity Civil Procedure Enforcement of Judgments Immunity From Execution Commercial Purposes Exception Third Party Debt Orders Sovereign Authority Vs Commercial Activity

Case Brief

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Parties

SerVaas Incorporated

Appellant/cross Respondent

Rafidain Bank

Respondent

Michael David Gercke

Respondent

Russell Downs

Respondent

David Christian Chubb

Respondent

The Republic of Iraq

Interested Party/respondent/cross Appellant

Procedural Posture

Civil Appeal / Appeal From Chancery Division to Court of Appeal

Legal Issues

  1. 1 Whether Iraq's admitted claim to a dividend in the Rafidain Bank scheme is 'property in use or intended for use for commercial purposes' under section 13(4) of the State Immunity Act 1978
  2. 2 Whether the certificate of the Chargé d’Affaires is sufficient evidence that the property is not in use for commercial purposes unless the contrary is proved
  3. 3 Whether the background commercial nature of the debt affects its immunity from execution

Ratio Decidendi

The Court held that the debt owed to Iraq by Rafidain Bank was not, at the relevant time, in use or intended for use for commercial purposes. The intended use was to pay the funds to the Development Fund for Iraq for sovereign purposes, as evidenced by the certificate of the Chargé d’Affaires, which was not rebutted. The commercial origin of the debt was not sufficient to bring it within the exception to immunity from execution under section 13(4) of the State Immunity Act 1978.

Court Disposition

Appeal dismissed

Orders

  • SerVaas’s appeal is dismissed; the injunction restraining payment to Iraq is not continued; the property remains immune from execution under section 13(2)(b) of the State Immunity Act 1978.