ORASCOM TELECOM HOLDING SAE V REPUBLIC OF CHAD

[2008] EWHC 1841 (Comm), Queen’s Bench Division, Commercial Court, Mr Justice Burton, 28 July 2008

Arbitration – State immunity – Award obtained against State – Application for third party debt order against bank account – Whether account in use for commercial purposes – State Immunity Act 1978, sections 3 and 13

The claimant obtained an ICC arbitration award against the Republic of Chad and sought a third party debt order against a bank account – the Borrower’s Account – held by Chad in London. The account was set up under requirements imposed by the World Bank. Chad’s oil revenues were to be paid into a Transit Account, and sums were taken from that account every month to repay Chad’s borrowings from the World Bank. The balance went into the Borrower’s Account. Chad asserted state immunity for the Borrower’s Account, and relied upon section 13 of the State Immunity Act 1978 under which State property is immune from execution unless it is in use or intended for commercial purposes. The phrase “commercial purposes” is defined in section 3(3) as meaning, amongst other things, any contract for the supply of goods or services and any loan or other transaction for the provision of finance and any guarantee or indemnity in respect of any such transaction or of any other financial obligation. Burton J held that the Borrower’s Account was one held for commercial purposes, in that it was operated specifically to receive the proceeds of oil revenues and as a means of repaying loans, and accordingly it was not entitled to immunity.