Points of law

The Federal Constitutional Court dismissed the complaint as unfounded because it drew a distinction between the sovereign State and separate legal entities under private law established by it. It stated that:

"There is no general rule of international law requiring that a foreign State be treated as owner of receivables on accounts maintained with banks in the forum State kept in the name of an enterprise of the foreign State having legal capacity.

The forum State is not prevented from treating the enterprise concerned as entitled to receive claims and, on the basis of a title of enforcement given against that enterprise, issued in prior proceedings for protection of rights in relation to non-sovereign action by the enterprise, to distrain the receivables concerned in order to secure the claim in the title.

This applies irrespective of whether the credits on these accounts are freely available to the enterprise or are according to foreign law intended for transfer to an account of the foreign State with its central bank."

Summary of the case

Constitutional complaint by the National Iranian Oil Company (a joint stock company under Iranian law owned by the Islamic Republic of Iran) against orders of attachment and distraint by German courts, issued on petitions by British and U.S. firms.

Sources

German original in Entscheidungen des Bundesverfassungsgerichts Vol. 64, p. 1 et seq.

English extracts in: Decisions of the Bundesverfassungsgericht – Federal Constitutional Court – Federal Republic of Germany, Volume I/2: International Law and Law of the European Communitites 1952-1989 (published by the Members of the Court), 1992, p. 479 et seq.

Additional information (explanations, notes, etc.)

n/a