HILDA ADEJUMO’ RECENT REPORT ON COMMERCIAL COURT UPHOLDS STATE IMMUNITY IN NIGERIA CASE IN ITS CONSIDERATION OF THE “COMMERCIAL PURPOSES” EXCEPTION UNDER SECTION 13(4) OF THE STATE IMMUNITY LAW 1978

L R AVIONICS TECHNOLOGIES LTD v THE FEDERAL REPUBLIC OF NIGERIA & ANOR [2016] EWHC 1761 (Comm) (15 July 2016) In a recent decision handed down on 15 July 2016 in L R Avionics Technologies Ltd v The Federal Republic of Nigeria & Anor [2016] EWHC (Comm), the High Court (Males J) accepted Nigeria’s argument that premises owned by Nigeria were not “in use….for commercial purposes” within the meaning of section 13(4) of the State Immunity Act 1978 (“the SIA 1978”), and would therefore be immune from the enforcement of arbitral award or judgment against the State under that section. The Claimant had applied for and was granted leave to recognise and enforce an arbitral award of US$5 million in the same manner as a judgment by the Federal High Court of Nigeria, ordering the sums awarded to be paid together with interest. One of the issues in the case was whether the arbitral award can be enforced against Nigeria. The arbitration exception to state immunity in section 9 of the SIA 1978 applied, and the Claimant was entitled to register the award for recognition and enforcement under section 101 of the Arbitration Act. Another issue was the enforcement of the Nigerian judgment which was a distinct matter as that carried an interest. The judgment could not be recognised or enforced under section 101 Arbitration Act as it was not an arbitral award, but a judgment. The Claimant relied on section 9 of the SIA 1978, which provides an exception to state immunity in respect to proceedings in relation to proceedings which relate to an arbitration “where the state had agreed in writing to submit a dispute to arbitration”. In the circumstances, there was no challenge by the Defendant on the point, even though Males J concluded that any challenge to enforcement of the judgment must fail. The substantive and critical issue was whether the property is in use for commercial purposes so as to be immune from enforcement. That depended on the use to which the property in question was put. The Acting High Commissioner in London had given a certificate under section 13(5) certifying that “the property is part of the Nigeria High Commission of the Federal Republic of Nigeria in the United Kingdom and it is in use for Consular activities”. It was for the Claimant to prove that the property was in use for commercial purposes. The Court was to consider the “commercial purposes” position, where the State has outsourced its consular services, (such as issuing passports and visas), to a private company to carry out those services on behalf of the State within its premises. Males J, accepting the Defendants’ submission that such services did not constitute a commercial use of the premises within the meaning of section 13(4) of the SIA 1978 even where it had been outsourced to a private company, held that for the purposes of section 13(4), what was relevant as implicit in the wording of the section was that the purposes “ must be those of the state against whose property execution is sought”, and given that the premises is used for the provision of consular services – a public function – it was immaterial “regardless of whether that function is carried out by the defendant state itself or, as in this case, by an agent to whom performance of the function in question has been delegated (or outsourced)” ,and therefore the premises were not “in use….for commercial purposes” within the meaning of section 13(4) of the SIA 1978 and therefore not amenable to execution. The full judgment can be read here: http://www.bailii.org/ew/cases/EWHC/Comm/2016/1761.html Hilda Ephraim-Adejumo appeared unled on behalf of the Defendant. She was instructed by Gromyko Amedu Solicitors.