SerVaas Inc v Rafidain Bank & Ors

SerVaas Inc v Rafidain Bank & Ors

The assets due to Iraq under the scheme are immune from execution under section 13(2)(b) of the State Immunity Act 1978 because they are not in use or intended for use for commercial purposes, as evidenced by the diplomatic certificate and Iraq's intention to pay distributions to the DFI. The applicant failed to rebut the presumption of non-commercial use. However, Iraq did not establish immunity under article 9(1) of the 2003 Order, as the assets are Iraq's property, not the DFI's.

Parties
Applicant: Servaas Incorporated; First Respondent: Rafidain Bank; Second Respondent: Michael Gercke; Third Respondent: Russell Downs; Fourth Respondent: David Christian Chubb; Interested Party: The Republic of Iraq
Jurisdiction
England and Wales
Judgment Date
14 December 2010
Procedural Posture
Civil (enforcement of Foreign Judgment) / Ruling on Applications for Third Party Debt Order and Continuation/discharge of Injunctions
Outcome
Application for Third Party Debt Order dismissed; further argument to be heard regarding the injunctions.
Legal Topics
Enforcement of Foreign Judgments, State Immunity, Third Party Debt Orders, Injunctions, Sovereign Debt, UN Sanctions
Civil Procedure International Law State Immunity Enforcement of Foreign Judgments Third Party Debt Orders Injunctions Sovereign Debt UN Sanctions

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Parties

Servaas Incorporated

Applicant

Rafidain Bank

First Respondent

Michael Gercke

Second Respondent

Russell Downs

Third Respondent

David Christian Chubb

Fourth Respondent

The Republic of Iraq

Interested Party

Procedural Posture

Civil (enforcement of Foreign Judgment) / Ruling on Applications for Third Party Debt Order and Continuation/discharge of Injunctions

Legal Issues

  1. 1 Whether assets due to Iraq under a scheme of arrangement are immune from execution under section 13(2)(b) of the State Immunity Act 1978
  2. 2 Whether article 9(1) of the Iraq (United Nations Sanctions) Order 2003 confers immunity on such assets
  3. 3 Whether the applicant can obtain a Third Party Debt Order and continuation of injunctions against the assets

Ratio Decidendi

The assets due to Iraq under the scheme are immune from execution under section 13(2)(b) of the State Immunity Act 1978 because they are not in use or intended for use for commercial purposes, as evidenced by the diplomatic certificate and Iraq's intention to pay distributions to the DFI. The applicant failed to rebut the presumption of non-commercial use. However, Iraq did not establish immunity under article 9(1) of the 2003 Order, as the assets are Iraq's property, not the DFI's.

Court Disposition

Application for Third Party Debt Order dismissed; further argument to be heard regarding the injunctions.

Orders

  • Application for Third Party Debt Order is dismissed.
  • Further argument to be heard regarding the continuation or discharge of the injunctions.