Key Facts
- •GDUK obtained an arbitral award against SoL for £16,114,120.62.
- •GDUK sought a charging order over SoL's property.
- •SoL claimed state immunity from execution under s.13(2)(b) of the State Immunity Act 1978.
- •GDUK argued SoL waived immunity through clause 32 of their contract.
- •The contract was governed by Swiss law.
Legal Principles
The State Immunity Act 1978 (SIA) is a complete code for state immunity, distinguishing between adjudicative and enforcement jurisdiction.
SIA, Benkharbouche v Embassy of the Republic of Sudan [2019] AC 777, Alcom Ltd. V. Republic of Colombia [1984] AC 580, General Dynamics United Kingdom Ltd v State of Libya [2021] UKSC 22; [2022] AC 318, Svenska Petroleum Exploration v Lithuania [2007] QB 886
SIA s.13(3) allows for the waiver of immunity with written consent, which may be found in a prior agreement; mere submission to jurisdiction is insufficient.
SIA s.13(3)
Contractual waivers of state immunity should be construed according to ordinary principles of construction for commercial contracts, considering the bargain as a whole and commercial common sense.
A Co. Ltd. v. Republic of X [1990] 2 Lloyds Rep 520
Swiss law governs the interpretation of the contract, using a subjective then objective approach if the subjective intention is not conclusive. Good faith is a key consideration.
Advice of Swiss lawyer Dr Christian Oetiker
Outcomes
The court held that clause 32 of the contract constituted written consent to enforcement against SoL's assets, waiving state immunity.
The phrase “wholly enforceable” in clause 32, considered within the context of the entire contract and applying Swiss law principles, demonstrated an intention to waive enforcement immunity. The court rejected SoL's argument that the phrase only applied to adjudicative immunity.
The interim charging order was made final.
The court found that SoL waived its immunity from enforcement against its assets in the contract.