Botas -v- Tepe [2016] JCA 135 (08 August 2016)

Botas -v- Tepe [2016] JCA 135 (08 August 2016)

The Court held that the Republic of Turkey is not entitled to claim sovereign immunity in respect of the shares held by Botaş in TPIC and BIL, as Botaş is a separate entity and the shares are not property of the State for purposes of section 13(2)(b) of the Act. Even if section 6(4) applied, the Republic's interest and control over the shares did not amount to possession or a qualifying interest for immunity. The arrêt was confirmed in respect of the shares but not in respect of debts owed by TPIC and BIL to Botaş, as those debts were situated in Turkey and the respondent failed to establish that Turkish courts would recognize the arrêt as discharging the debts.

Citation
[2016] JCA 135
Parties
First Appellant: Boru Hatlari IIe Petrol Taşima AŞ (Botaş Petroleum Pipeline Corporation Limited); Second Appellant: Turkish Petroleum International Limited; Third Appellant: Botaş International Limited; Respondent: Tepe Inşaat Sanayii AŞ; Party Cited: Nacap BV
Jurisdiction
Jersey
Judgment Date
08 August 2016
Procedural Posture
Appeal / Court of Appeal Judgment
Outcome
Appeal dismissed in respect of sovereign immunity claim; cross-appeal dismissed in respect of debts owed by BIL to Botaş; Royal Court judgment largely affirmed.
Legal Topics
Enforcement of Arbitration Awards, State Immunity, Commercial Purpose Exception, Jurisdiction Over Foreign Assets
International Arbitration Sovereign Immunity Commercial Law Enforcement of Arbitration Awards State Immunity Commercial Purpose Exception Jurisdiction Over Foreign Assets

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Parties

Boru Hatlari IIe Petrol Taşima AŞ (Botaş Petroleum Pipeline Corporation Limited)

First Appellant

Turkish Petroleum International Limited

Second Appellant

Botaş International Limited

Third Appellant

Tepe Inşaat Sanayii AŞ

Respondent

Nacap BV

Party Cited

Procedural Posture

Appeal / Court of Appeal Judgment

Legal Issues

  1. 1 Whether shares held by a state-owned entity are subject to sovereign immunity under the State Immunity Act 1978 as extended to Jersey
  2. 2 Whether debts owed by subsidiaries to the state-owned entity can be enforced by arrêt entre mains
  3. 3 Whether the commercial purposes exception applies to enforcement against state property

Ratio Decidendi

The Court held that the Republic of Turkey is not entitled to claim sovereign immunity in respect of the shares held by Botaş in TPIC and BIL, as Botaş is a separate entity and the shares are not property of the State for purposes of section 13(2)(b) of the Act. Even if section 6(4) applied, the Republic's interest and control over the shares did not amount to possession or a qualifying interest for immunity. The arrêt was confirmed in respect of the shares but not in respect of debts owed by TPIC and BIL to Botaş, as those debts were situated in Turkey and the respondent failed to establish that Turkish courts would recognize the arrêt as discharging the debts.

Court Disposition

Appeal dismissed in respect of sovereign immunity claim; cross-appeal dismissed in respect of debts owed by BIL to Botaş; Royal Court judgment largely affirmed.

Orders

  • Interim arrêt confirmed in respect of shares held by Botaş in TPIC and BIL.
  • Interim arrêt not confirmed in respect of debts owed by TPIC and BIL to Botaş.