REPUBLIC OF ANGOLA v SPRINGBOK INVESTMENTS (PTY) LTD 2005 (2) BLR 159 (HC)

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Citation: 2005 (2) BLR 159 (HC)
Court: High Court, Lobatse
Case No: Misca No 4 of 2002
Judge: Kirby J
Judgment Date: October 12, 2003
Counsel:
E W F Luke II for the applicant. V Vergeer for the respondent.
Flynote


Practice and procedure - Judgments and orders - Garnishee order - Funds in bank account standing to credit of foreign    state attached - Doctrine of incorporation applied - Rules of international law forming part of law of Botswana - International law dictating that unlawful to serve garnishee proceedings upon third party holding embassy bank account maintained by foreign state, particularly where it is not able to be proved that account used wholly for commercial purposes.

Headnote

The applicant brought an urgent application to set aside an attachment of funds standing to the credit of the bank account pursuant to a garnishee order obtained ex parte by the respondent. The applicant claimed that the account held sovereign balances used to operate its embassy in Botswana.

 

The sole issue before the court was whether it was lawful to garnish the applicant's claims in respect of its bank account in execution of the default   judgment. The applicant argued that the doctrine of sovereign immunity renders the diplomatic banking account of a foreign state immune from execution in civil proceedings under international law. Alternatively, it argued that the account was protected by diplomatic immunity since it was operated by diplomatic agents.

Held: (1) The courts acknowledged the existence of a body of rules which nations accepted among themselves. On any judicial issue, they sought to


 

 

ascertain the relevant rule and, having found it, would treat it as incorporated into the domestic law, so far as it   was not inconsistent with rules enacted by statutes or finally declared by their tribunals. The rules of international law accordingly formed part of the law of Botswana, save insofar as they conflicted with Botswana legislation or the common law, and it was the duty of the court to apply them. Chung Chi Cheung v R [1938] 4 All ER 786 (PC) applied.  

 

(2) In terms of cases directly on point decided in foreign jurisdictions, it was unlawful to serve garnishee proceedings upon a third party holding an embassy bank account maintained by a foreign state, particularly where it could not be proved that the account was used wholly for commercial purposes. Re: The Republic of the Philippines 73 AJIL 306 (1979) and Alcom Ltd v Republic of Columbia (Barclays Bank Plc and Another,   garnishees) [1984] 1 AC 580 (HL) applied.

(3) In the present case there was no suggestion, or any proof, that the account of the Republic of Angola was either wholly or partially used for commercial purposes. The relevant bank account fell within the category of a bank account needed to maintain the diplomatic functions and dignity of the applicant and was accordingly immune under international law from garnishment or attachment.

Case Information

Cases referred to:

Alcom Ltd v Republic of Colombia (Barclays Bank Plc and Another, garnishees) [1984] 1 AC 580 (HL); [1984] 2 All ER 6 (HL); [1984] 2 WLR 750; [1984] 2 Lloyd's Rep 24

Barker McCormac (Pvt) Ltd v Government of Kenya 1983 (4) SA 817 (ZS)  

Birch Shipping Corporation v Embassy of Tanzania 75 AJIL 373 (1981)

Chung Chi Cheung v R [1938] 4 All ER 786 (PC)

Inter-Science Research and Development Services (Pty) Ltd v Republica Popular de Moµambique 1980 (2) SA 111 (T)

Re: The Republic of the Philippines 73 AJIL 306 (1979)  F

Trendtex Trading Corporation Ltd v Central Bank of Nigeria [1977] 1 All ER 881; [1977] QB 529; [1977] 2 WLR 356; [1977] 1 Lloyd's Rep 581

URGENT application to set aside attachment of funds in bank account. The facts are sufficiently set out in the judgment.  

E W F Luke II for the applicant.

V Vergeer for the respondent.

Judgment

KIRBY J:

This is an urgent application brought by the Republic of Angola as applicant to set aside an attachment of the funds standing to the credit of its bank account with Standard Chartered Bank, the garnishee, pursuant to a    garnishee order nisi issued by Lesetedi J on 19 September 2003. That order was obtained ex parte by Springbok Investments (Pty) Ltd, the respondent, and the applicant thus had no opportunity to resist the attachment, which had the effect of freezing its bank account. The applicant claims that the account holds sovereign balances used to operate its embassy in Botswana.


 

 

KIRBY J

The garnishee order nisi was itself obtained pursuant to a default judgment in the sum of the Pula equivalent of   US $716 900, together with interest and costs, granted on 11 March 2002. The sum claimed was the purchase price of a residential property sold by the respondent to the applicant on deed of sale as a diplomatic residence, but from which agreement the applicant wishes to resile. There is no attack in these proceedings upon that judgment, and the applicant hopes to resolve the matter through diplomatic channels.  

 

The sole issue before the court is whether it is lawful to garnish the applicant's claims in respect of its bank account in execution of the default judgment.

 

The applicant argues that the doctrine of sovereign immunity renders the diplomatic banking account of a foreign   sovereign state immune from execution in civil proceedings under international law. Alternatively it argues that the account is protected by diplomatic immunity, since it is operated by diplomatic agents as defined in the Diplomatic Immunities and Privileges Act (Cap 39:01). This Act enforces those provisions of the Geneva Convention on Diplomatic Relations of 1961 which are contained in its first schedule as part of the domestic law   of Botswana. Article 22(3) of the schedule provides that the premises of a diplomatic mission, their furnishings and other property thereon and the means of transport of the mission shall be immune from search, requisition, attachment or execution.

 

The respondent rejoins that sovereign immunity enjoyed by a foreign state must be distinguished from diplomatic   immunity enjoyed by the diplomatic agents of that state. The Diplomatic Immunities and Privileges Act deals with the latter category only, and in any event the section relied upon by the applicant protects only property on the mission premises, other than diplomatic vehicles. A bank account is not covered. Further a foreign sovereign state is susceptible to suit and also to execution on its property held on the host nation's soil when it enters into commercial transactions such as the purchase of property.  

 

In the present case it is Angola, the applicant, which has been sued, and not its diplomatic agents, and it is the applicant's property and not that of its diplomatic agents upon which execution has been levied. Although some commentators argue that the protection enjoyed over property on mission premises extends to bank accounts operated by the mission (see for example G R Berridge, Diplomacy Theory and Practice at p 25), it is not   necessary on the view I take of the application to extend such a widened meaning to art 22(3).

 

 Rather it is those principles of international law applicable in Botswana which will determine whether the applicant's bank account is immune from attachment. Many countries have codified both the international law of sovereign immunity and that of diplomatic immunity in their own acts of parliament. Thus South Africa has enacted the Foreign States Immunity Act (No 87/81) to deal with sovereign immunity, and in the United Kingdom the State Immunity Act, 1978, was passed for this purpose. In Botswana only the Diplomatic Immunities and Privileges Act has been enacted. There is no statute as yet covering the sovereign immunity of foreign states.

 

The position is this country is thus similar to that which obtains in Zimbabwe, where there is also no act and to that which obtained in the United


 

 

KIRBY J

Kingdom and South Africa before their acts were introduced. All three countries have moved away from the    formal view (the doctrine of transformation) that all aspects of international law require to be introduced by statute, or by specific decisions of judges, or by long-standing custom, before they become part of the law of a country. Instead they have embraced the doctrine of incorporation, which holds that the rules of international law, or the jus gentium, are incorporated automatically into the law of all nations and are considered to be part of the    law unless they conflict with statutes or the common law. Under this doctrine the rules of international law may be developed by the courts in line with changes in the world. See Trendtext Trading Corporation Ltd v Central Bank of Nigeria [1977] 1 All ER 881 at p 888 (per Lord Denning); Inter-Science Research and Development Services (Pty) Ltd v Republica Popular de Mozambique 1980 (2) SA 124 (T) (per Margo J) and Barker  C  McCormac (Pvt) Ltd v Government of Kenya 1983 (4) SA 817 (ZS) at p 819 (per Georges JA).

 

The doctrine of incorporation was expressed thus by Lord Atkin in Chung Chi Cheung v R [1938] 4 All ER 786 (PC) at p 790:

     'The courts acknowledge the existence of a body of rules which nations accept among themselves. On any judicial issue,   they seek to ascertain the relevant rule and, having found it they will treat it as incorporated into the domestic law, so far as it is not inconsistent with rules enacted by statutes or finally declared by their tribunals.'

Similarly, I have no doubt that the rules of international law form part of the law of Botswana, as a member of the    wider family of nations, save in so far as they conflict with Botswana legislation or the common law, and it is the duty of the court to apply them.

Mr Vergeer argues on behalf of the respondent that commercial transactions are exempt from sovereign immunity in the modern international law and that accordingly judgments arising out of such transactions can be    enforced upon any property of the sovereign foreign state to be found in the host country, with the exception of items specially protected by art 22(5) of the first schedule to the Diplomatic Immunities and Privileges Act.

 

As to the first leg of that argument I agree with him. Each of the three authorities cited together above, and a host of others, holds that the restrictive doctrine of sovereign immunity has replaced in the modern law the earlier    doctrine of absolute sovereign immunity. In terms of the restrictive doctrine no immunity is conferred in respect of commercial transactions. I have no doubt that that is also the law of Botswana. In McCormac's case (supra) an action arising out of the breach of a lease of diplomatic mission premises was held to involve a commercial transaction, which was not immune. So too, the failed purchase of a residence for diplomatic purposes is a  commercial transaction rather than an act of State.

 

But it does not follow that where judgment is obtained arising from a commercial transaction, execution can be levied on any property at all of the sovereign foreign state, as long as it is not protected by the Diplomatic Immunities and Privileges Act. The extent to which sovereign property held abroad is protected from execution must be sought in the rules of


 

 

KIRBY J

international law. The most basic of these is described thus by D P O'Connell, International Law (1965) vol 2 at p  A  981.

     'The minimum rule that international law enjoins is that if a chose could relate to diplomatic functions it is immune. A bank account certainly falls within this category, since it cannot readily be determined what proportion of the account is needed to maintain diplomatic functions and dignity.'  B

This rule is repeated in Oppenheim's International Law (9th ed) Vol 1 at p 350 where reference is made to two cases which are directly in point with the present application. These are: Re: The Republic of the Philippines 73 AJIL 306 (1979), where it was held that it was unlawful to serve garnishee proceedings upon a third party holding    an embassy bank account maintained by the foreign state; and Alcom Ltd v Republic of Columbia (Barclays Bank Plc and Another, garnishees) [1984] 1 AC 580 (HL), where a garnishee order was refused against an embassy account where it could not be proved that the account was used wholly for commercial purposes.

With these cases may be contrasted Birch Shipping Corporation v Embassy of Tanzania 75 AJIL 373 (1981),   where a garnishee order was allowed upon proof that the embassy account was used, at least in part, for commercial purposes.

 

In the present case there is neither any suggestion, nor any proof, that the account of the Republic of Angola is either wholly or partially used for commercial purposes. On the contrary, it is stated on oath by the Charge   d'Affaires, Mr Manuel Gomes dos Santos that:

     'The funds (in that account) represent the proceeds of diplomatic and consular activity conducted on behalf of the Republic of Angola within the Republic of Botswana as well as funds placed in that account to enable the Embassy of the Republic of Angola to carry out its diplomatic and consular functions within the Republic of Botswana.'  

In my judgment that falls within the category of a bank account needed to maintain the diplomatic functions and dignity of the applicant. It is accordingly immune under international law from garnishment or attachment.

That rule of international law forms part of the law of Botswana.

In result:  

     (1)     The garnishee order nisi dated 19 September 2003 is discharged.

     (2)     Attachment of the applicant's bank account is set aside.

     (3)     The respondent is to pay the costs of the application.

Application granted.


 

 

 

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