DECISION BY HIGH COURT OF JUSTICE, QUEEN’S BENCH DIVISION, COMMERCIAL COURT, RENDERED IN 2005 IN CASE NO. 2004/536

 

Subject Matter: Whether an arbitral award against a state, rendered in ICSID arbitration pursuant to a Bilateral Investment Treaty, may be enforced by obtaining from an English court so called Third Party Debt and Charging Orders against certain cash and securities held in London by third parties pursuant to a an agreement between these third parties and the central bank of the state in question.

 

Questions of state immunity from enforcement pursuant to the State Immunity Act of 1978.

 

Findings: The words “property of a State’s central bank” in section 14(4) of the State Immunity Act 1978 are to be construed widely and include all real and personal property in which the central bank has some kind of right or interest, whether it be legal, equitable, or contractual. All property of foreign central banks is immune from execution in the English courts, irrespective of the capacity in which the central bank holds the asset and whether or not it is in use or intended for use for commercial purposes. The immunity conferred does not violate the right conferred by Article 6(1) of the European Convention on Human Rights. On the facts of the present case the assets against which enforcement was sought were the property of a central bank within the meaning of section 14(4) and immune from the court’s enforcement jurisdiction. Even if, contrary to that view, they were not the property of the central bank, they were “the property of a State” within section 13(2)(b) and 13(4) of the State Immunity Act 1978 and, as they were not at any time either in use or intended for use for commercial purposes, they were immune.

 

Parties:

Claimants: 1. AIG Capital Partners, Inc, 2. CJSC Tema Real Estate Company Limited

Respondent: The Republic of Kazakhstan

Third Parties: 1. ABN AMRO Mellon Global Securities Services B.V., 2. ABN AMRO Bank N.V.

Intervener: The National Bank of Kazakhstan