REPUBLIC OF ARGENTINA V NML CAPITAL LTD

[2010] EWCA Civ 41, Court of Appeal, Lord Justice Mummery, Lord Justice Aikens and Lord Justice Elias, 4 February 2010

State immunity - Judgment given against Argentina in New York court - Application to English court of permission to serve out of the jurisdiction a claim to enforce the judgment - Whether order should be set aside - Civil Jurisdiction and Judgments Act 1982, section 31 - Civil Procedure Rules, rule 6.20(9) - State Immunity Act 1978, section 2

In December 2006 NML obtained a judgment against the Republic of Argentina for a sum due under bonds, some US$284,184,632.30. In April 2008 David Steel J made a without notice order granting NML permission to serve proceedings outside the jurisdiction so that the judgment could be enforced in England. In so doing David Steel J held that Argentina was not entitled to rely upon state immunity under the State Immunity Act 1978, as NML had submitted material in which it asserted that Argentina had waived that immunity and that the transactions were commercial and thus outside the scope of state immunity. Argentina sought to set aside the permission for service out, on the grounds that neither of the exceptions to state immunity was applicable: any waiver did not relate to the English courts, and the action in England was not brought on a commercial transaction but was to enforce a judgment. NML conceded that the two grounds were wrong, but sought to uphold the permission on the basis that section 31 of the Civil Jurisdiction and Judgments Act 1982 empowered the English court to enforce a judgment if it would have had jurisdiction over the substantive issue. At first instance Blair J held that the correct interpretation of section 31 was that a foreign judgment was enforceable in England if: (a) the foreign court would have had jurisdiction if it had applied the UK rules on as set out in the 1978 Act; and (b) the state was not immune from the processes of execution. It was not disputed that the New York court would have had jurisdiction had it applied rules corresponding to those in the 1978 Act, by reason of submission to jurisdiction and by reason of the fact that the bonds were commercial transactions, so section 31 was satisfied. Blair J also held that the bonds by their terms amounted to a submission to the enforcement jurisdiction of the English courts. Blair J ruled that even though neither of these points had been relied upon in the application for permission to serve abroad, the application had correctly been made under CPR Part 6.20(9) (application to enforce a judgment) and there was no point in making NML start the proceedings again. Finally, Blair J rejected the argument that Argentina might have had a defence based on the principle of non-justiciability, in that the case was one which fell within the commercial sphere. The Republic appealed, and the Court of Appeal upheld the appeal.