New judgment: SerVaas Inc v Rafidain Bank & Ors  UKSC 40
17 Friday Aug 2012
On appeal from:  ECWA Civ 1256
The appellant, SerVaas, sought enforcement of a Third Party Debt Order against the debts payable to Iraq by Rafidain to recover money due under an agreement with the previous Iraqi regime. Iraq applied to discharge the injunction on the grounds that the money due to the state was immune from execution by virtue of the State Immunity Act 1978, s 13(2)(b), (4) as the funds were not property “for the time being in use or intended for use for commercial purposes”.
The Supreme Court unanimously dismissed the appeal, noting that the certificate signed by the Iraqi ambassador in London stating the debts would not be used for any commercial purpose created a rebuttable presumption that SerVaas has no real prospect of rebutting. The nature of the origin of the debts was not relevant to the question of whether the property was in use for commercial purposes – Parliament did not intend a retrospective analysis of all the circumstances which gave rise to the property, but an assessment of the use to which the state had chosen to put the property.