Foreign money judgments, enforcement of
| Pages | 19-23 |
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international law update Volume 18, January–March 2012
© 2012 Transnational Law Associates, LLC. All rights reserved. ISSN 1089-5450, ISSN 1943-1287 (on-line) | www.internationallawupdate.com
New York if, as and when the [Plainti]s seek to
enforce their judgment in New York.” [Slip op. 28].
: Chevron Corp. v. Naranjo, 667 F.3d 232
(2d Cir. 2012).
FOREIgN MONEy
JUDgMENTS,
ENFORCEMENT OF
T U K S C
U.S.
A
E []
U K
[]
E
e NML is a Cayman Island company. It is
aliated with a New York based hedge fund of a
type sometimes described as a “vulture fund.”
Speculators often use such funds to feed on the
debts of sovereign states that are in acute nancial
diculty. ey buy sovereign debt at a discount to
face value and then seek to enforce it judicially for a
higher amount.
is appeal relates to bonds issued by the
Republic of Argentina as to which, together with all
its other debt, Argentina declared a moratorium in
December 2001. Between June 2001 and September
2003, aliates of NML bought , at a little over half
their face value, bonds with a principal value of
$172,153,000 (“the bonds”).
On May 11, 2006, a Federal Court in New
York gave summary judgment to NML, as benecial
owner, for a total, including interest, of over $284
million. NML next brought a successful common
law action on that judgment in the English
Commercial Court.
e Court of Appeal, however, reversed that
judgment. It held that sovereign or state immunity
shielded Argentina from such a judgment. An appeal
was allowed to the Supreme Court of the United
Kingdom. e question raised by this appeal is
whether the above nding was correct. A ve-justice
panel reverses in a 3 to 2 vote.
e total bundle of issues for decision by the
Supreme Court amounted to the following ve:
(1) “whether the present proceedings for
recognition and enforcement of the New York
court’s judgment were ‘proceedings relating to …
a commercial transaction’ within the meaning of
section 3 of the State Immunity Act 1978 ;”
(2) “whether the Defendant was precluded
from claiming state immunity in respect of the
proceedings by section 31 of the Civil Jurisdiction
and Judgments Act 1982 ;”
(3) “whether the bonds contained a valid
submission to the jurisdiction of the English court
in respect of the present proceedings within the
meaning of section 2 of the State Immunity Act
1978;
(4) “whether the Claimant was entitled to
raise at the inter partes hearing two new points not
previously relied on for the ex parte application;”
and
(5) “whether, having regard to the answers to
the above questions, Argentina was entitled to claim
state immunity with respect to the claims made in
the present proceedings.
e resolution of the rst two issues turns on
statutory interpretation. e court must engage in
this interpretation, in the context of simultaneous
developments not only in the law of sovereign
immunity but also in the recognition of foreign
country judgments. (For space limitation reasons,
the present summary limits itself to the majority’s
ruling on the rst two statutory issues. It does
preserve, however, the high Court’s paragraphing
system should a reader wish to study the full opinion
of the Court.)
8. Q. What is the current English law on state
immunity from suit?
“At the beginning of the 20th century, state
immunity was a doctrine of customary international
law, applied in England as part of the common
law. Under this doctrine a state enjoyed absolute
immunity from suit in the court of another state.
e property of the state was also immune from
execution. During the time when a state could not
be sued, there was no procedural provision in this
jurisdiction for service of process on a foreign state.”
“e resolution of the rst two issues turns on
statutory interpretation. is must be carried out
in the context of simultaneous developments in the
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