Christopher Harris KC and Mark Wassouf successfully resist rare appeal of enforcement order by a State on the basis that the Court had failed to satisfy its obligations under s.1(2) of the State Immunity Act 1978.

Christopher Harris KC and Mark Wassouf (instructed by Withers LLP) have successfully resisted an attempt to appeal an enforcement order on the basis that the process by which it was made failed to satisfy the Court’s obligation to “give effect” to state immunity under s.1(2) of the State Immunity Act 1978.

The Court of Appeal’s judgment in Zhongshan v Nigeria [2023] EWCA Civ 867, handed down today, now clarifies the scope of the Court’s duty under s.1(2) in enforcement cases.

The context at first instance was an enforcement action.  Zhongshan applied, ex parte, for an order giving it permission to enforce an UNCITRAL investment arbitration award which it had obtained against Nigeria.  Cockerill J granted that order and, following the usual procedure, afforded Nigeria a deadline by which it could apply to set aside the order, whether on grounds of state immunity or otherwise.  Nigeria missed that deadline, and subsequently applied to the Court to extend the deadline retrospectively so as to grant it several further months in which to prepare and file an application to set aside the enforcement order.  No mention was made of state immunity in that application, though Nigeria later and immediately prior to the hearing suggested that immunity would be the basis of its application.  Cockerill J rejected Nigeria’s application and confirmed that the enforcement order had become final.

Nigeria applied for permission to appeal that decision. It contended, among other things, that Cockerill J’s approach had failed properly to “give effect” to Nigeria’s state immunity.  Nigeria argued that s.1(2) of the State Immunity Act required the Court to go further than it had at the ex parte stage; it argued that whether or not a state makes an immunity objection, the Court is required to consider the evidence and potential arguments as to state immunity in full, and determine them on a balance of probabilities. In the absence of such steps, Nigeria argued, the Court could not purport to exercise jurisdiction over Nigeria by granting a final enforcement order.

In today’s judgment, the Court of Appeal (Sir Julian Flaux C and Underhill LJ) rejected those arguments.  It confirmed that the usual ex parte procedure adopted in the Commercial Court “properly respects the requirements of section 1(2) of the [State Immunity Act 1978]”, and that a preliminary determination on immunity made at the ex parte stage (which hardens and becomes final in the absence of a challenge within the relevant window) is a proper determination of immunity.  The Court underlined the importance of States which are subject to claims in the English courts complying with the timelines set by the English court for raising immunity objections – States will not be afforded an open-ended opportunity to do so.

The judgment also addresses the Court of Appeal’s jurisdiction to reopen determinations of permission to appeal applications under CPR 52.30.

Christopher Harris KC and Mark Wassouf (instructed by Withers LLP) acted for Zhongshan at first instance and in the Court of Appeal.

Christopher Harris KC and Withers LLP also acted for Zhongshan in the underlying UNCITRAL investment arbitration against Nigeria.

Read the judgment in full here.

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