Points of law

1) The words "property of a state's central bank or other monetary authority" within section 14(4) State Immunity Act mean any asset in which the relevant enguptainstitution has some kind of property interest irrespective of the capacity in which it holds the assets or the purpose for which the assets are held; this includes all real and personal property and embraces any legal, equitable or contractual right or interest in those assets. Therefore, even where it is unclear what the nature of the national bank's right is, the assets concerned are still immune from enforcement processes.

2) The State Immunity Act makes clear that the position of a central bank or other monetary authority should be dealt with distinctly from any other state department: when it is performing the function of acting as guardian or regulator of the state’s monetary system, it is exercising sovereign authority and not acting for commercial purposes.

3) Section 14(4) State Immunity Act is not incompatible with rights under the European Convention on Human Rights. Although section 14(4) impinges on the rights of access to the enforcement jurisdiction of the courts, engaging Article 6 European Convention on Human Rights, a restriction on the right of a party to enforce a judgment on the property of a central bank or other monetary authority is legitimate and proportionate, and so justified under Article 6(2). Furthermore, section 14(4) would not deprive a claimant of its “possession” in the form of an arbitration award, since that award is subject to the restrictions on enforcement existing at the time of the award, so precluding an infringement of article 1 to the First Protocol to the Convention.

Summary of the case

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Sources

[2005] EWHC 2239 (Comm); [2006] 1 W.L.R. 1420

Additional information (explanations, notes, etc.)

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