The Cour de cassation revises the criteria of the State Immunities

January 23, 2023

On November 3, 2021, the Cour de cassation (French Supreme Court) handed down an important judgment chamber regarding State immunities.

In this matter, the Amsterdam District Court in a ruling dated September 27, 2000, the Amsterdam District Court ordered the company Rasheed Bank, an emanation of the Iraqi State, to pay various sums (“the Dutch ruling”). On July 28, 2011, Citibank proceeded to a provisional seizure of a bank account in the hands of Natixis, which was thereafter converted in a final seizure on the basis of the enforcement judgment of the Dutch ruling. The Rasheed Bank company disputed this seizure before the French Court, and raised its immunity, as a State emanation.

In this judgment of November 3, 2021, the French Supreme Court reverses Eurodif case law, on the grounds that the assets of a State emanation, in order to be seizable, do not necessarily have to have “a link with the claim, but that they must have a link with the entity against which the proceedings have been brought” and consequently gives a new reading to article L. 111-1-2 of the Code of Civil Enforcement Procedures (the French Code des Procédures Civiles d’Exécution). The Cour de cassation recalls that the condition of the existence of a link between the seizable property and the activity in dispute is not contrary to customary international law, as article 19 of the United Nations Convention does not specify anything in this respect.

The 1984 Eurodif decision admitted that the immunity enjoyed by foreign States was principled, except when the seized property was connected to an economic, commercial or civil transaction under private law which gave rise to the claim.

Article 19 of the 2004 United Nations Convention was implemented into article L.111-1-2 of the Code of Civil Procedure in 2016. This provision takes up three alternative conditions to allow the seizure of property belonging to a foreign State. It is necessary: that either the State has consented to the application of the measure by waiving its immunity; or that the State has reserved the property for the satisfaction of the claim that is the subject of the proceedings; or finally, that it must be used differently than for non-commercial public service purposes. This last condition was taken up by the Cour de cassation in this decision of November 3, 2021, and yet differs from the Court’s argumentation in the Eurodif judgment, which imposed the strict existence of a link with the legal claim.

According to the Cour de cassation, the Paris Court of Appeal’s rejection of Rasheed Bank’s claim is well-founded in that it considers that customary international law, as reflected in the 2004 Convention, requires only that the property in question be used differently than for non-commercial public service purposes and that it possesses a link with the entity against which the proceedings are brought.

The Paris Court of Appeal ultimately based its decision through the prism of three legal orders: French Law, European Law and public international Law. It underlines that the addition of an extra condition which was not provided for by the texts constitutes a “disproportionate and unjustified infringement of the creditor’s right to the forced execution of court decisions” guaranteed by article 6§1 of the Convention for the Protection of Human Rights and Fundamental Freedoms. Indeed, the Eurodif case law restricted too much the possibilities of seizure on the goods belonging to the State.

This decision is consistent with the guidance provided by the International Court of Justice, which had already been recognized on February 3, 2012 in the case Jurisdictional Immunities of the State.

The Cour de Cassation thus lays down the evolution of the international law of jurisdictional immunities by replacing the link with the legal claim with the sole requirement of a link between the entity and the claim.