"Immunity from jurisdiction
1(1) A State is immune from the jurisdiction of the courts of the [Bailiwick] except as provided in the following provisions of this Part of this Act.
(2) A court shall give effect to the immunity conferred by this section even though the State does not appear in the proceedings in question.
Exceptions from immunity
3(1) A State is not immune as respects proceedings relating to -
(a) a commercial transaction entered into by the State; or
(b) an obligation of the State which by virtue of a contract (whether a commercial transaction or not) falls to be performed wholly or partly in the [Bailiwick]
(3) In this section 'commercial transaction' means -
(a) any contract for the supply of goods or services;
(b) any loan or other transaction for the provision of finance and any guarantee or indemnity in respect of any such transaction or of any other financial obligation; and
(c) any other transaction or activity (whether of a commercial, industrial, financial, professional or other similar character) into which a State enters or in which it engages otherwise than in the exercise of sovereign authority; …
6(1) A State is not immune as respects proceedings relating to -
(a) any interest of the State in, or its possession or use of, immovable property in the [Bailiwick]; or
(b) any obligation of the State arising out of its interest in, or its possession or use of, any such property.
(2) A State is not immune as respects proceedings relating to any interest of the State in movable or immovable property, being an interest arising by way of succession, gift or bona vacantia.
(3) The fact that a State has or claims an interest in any property shall not preclude any court from exercising in respect of it any jurisdiction relating to the estates of deceased persons or persons of unsound mind or to insolvency, the winding up of companies or the administration of trusts.
(4) A court may entertain proceedings against a person other than a State notwithstanding that the proceedings relate to property -
(a) which is in the possession or control of a State; or
(b) in which a State claims an interest,
if the State would not have been immune had the proceedings been brought against it or, in a case within paragraph (b) above, if the claim is neither admitted nor supported by prima facie evidence.
10(1) This section applies to -
(a) Admiralty proceedings; and
(b) proceedings on any claim which could be made the subject of Admiralty proceedings.
(2) A State is not immune as respects -
(a) an action in rem against a ship belonging to that State; or
(b) an action in personam for enforcing a claim in connection with such a ship,
if, at the time when the cause of action arose, the ship was in use or intended for use for commercial purposes.
(3) Where an action in rem is brought against a ship belonging to a State for enforcing a claim in connection with another ship belonging to that State, subsection (2)(a) above does not apply as respects the first-mentioned ship unless, at the time when the cause of action relating to the other ship arose, both ships were in use or intended for use for commercial purposes.
(4) A State is not immune as respects -
(a) an action in rem against a cargo belonging to that State if both the cargo and the ship carrying it were, at the time when the cause of action arose, in use or intended for use for commercial purposes; or
(b) an action in personam for enforcing a claim in connection with such a cargo if the ship carrying it was then in use or intended for use as aforesaid.
(5) In the foregoing provisions references to a ship or cargo belonging to a State include references to a ship or cargo in its possession or control or in which it claims an interest; and, subject to subsection (4) above, subsection (2) above applies to property other than a ship as it applies to a ship.
(6) Sections 3 to 5 above do not apply to proceedings of the kind described in subsection (1) above if the State in question is a party to the Brussels Convention and the claim relates to the operation of a ship owned or operated by that State, the carriage of cargo or passengers on any such ship or the carriage of cargo owned by that State on any other ship.
13(1) No penalty by way of committal or fine shall be imposed in respect of any failure or refusal by or on behalf of a State to disclose or produce any document or other information for the purposes of proceedings to which it is a party.
(2) Subject to subsections (3) and (4) below -
(a) relief shall not be given against a State by way of injunction or order for specific performance or for the recovery of land or other property; and
(b) the property of a State shall not be subject to any process for the enforcement of a judgment or arbitration award or, in an action in rem, for its arrest, detention or sale.
(3) Subsection (2) above does not prevent the giving of any relief or the issue of any process with the written consent of the State concerned; and any such consent (which may be contained in a prior agreement) may be expressed so as to apply to a limited extent or generally; but a provision merely submitting to the jurisdiction of the courts is not to be regarded as a consent for the purposes of this subsection.
(4) Subsection (2)(b) above does not prevent the issue of any process in respect of property which is for the time being in use or intended for use for commercial purposes; but, in a case not falling within section 10 above, this subsection applies to property of a State party to the European Convention on State Immunity only if -
(a) the process is for enforcing a judgment which is final within the meaning of section 18(1)(b) below and the State has made a declaration under article 24 of the Convention; or
(b) the process is for enforcing an arbitration award.
14(1) The immunities and privileges conferred by this Part of this Act apply to any foreign or commonwealth State other than the United Kingdom; and references to a State include references to -
(a) the sovereign or other head of that State in his public capacity;
(b) the government of that State; and
(c) any department of that government,
but not to any entity (hereafter referred to as a 'separate entity') which is distinct from the executive organs of the government of the State and capable of suing or being sued.
(2) A separate entity is immune from the jurisdiction of the courts of the [Bailiwick] if, and only if -
(a) the proceedings relate to anything done by it in the exercise of sovereign authority; and
(b) the circumstances are such that a State (or, in the case of proceedings to which section 10 above applies, a State which is not a party to the Brussels Convention) would have been so immune.
(3) If a separate entity (not being a State's central bank or other monetary authority) submits to the jurisdiction in respect of proceedings in the case of which it is entitled to immunity by virtue of subsection (2) above, subsections (1) to (4) of section 13 above shall apply to it in respect of those proceedings as if references to a State were references to that entity.
(4) Property of a State's central bank or other monetary authority shall not be regarded for the purposes of subsection (4) of section 13 above as in use or intended for use for commercial purposes; and where any such bank or authority is a separate entity subsections (1) to (3) of that section shall apply to it as if references to a State were references to the bank or authority."
"State-controlled enterprises, with legal personality, ability to trade and to enter into contracts of private law, though wholly subject to the control of their state, are a well-known feature of the modern commercial scene."
Yet, as he also noted, it had never been claimed that the relevant enterprise, Mambisa, although subject to direction and control of the Cuban government which provided all the funds necessary for its operation, was an agency of the Cuban State. The Board examined the developing recognition and the legal and practical significance of separate state-controlled entities with legal personality, assets and ability to trade and to enter into contracts of private law, while being subject to very extensive control by the relevant state, in La Générale des Carrières et des Mines v FG Hemisphere LLC  UKPC 27, especially paras 4-18.
i) section 6(1), which recognises that a State may have interests in, or the possession or use of, property,
ii) section 6(4), which refers to property which is in the possession or control of a State or in which a State claims an interest,
iii) section 10(5), which expressly provides that references to a ship or cargo belonging to a State include references to a ship or cargo in its possession or control or in which it claims an interest.
"No post-judgment measures of constraint, such as attachment, arrest or execution, against property of a State may be taken in connection with a proceeding before a court of another State unless and except to the extent that …"
"all real and personal property and will embrace any right or interest, legal, equitable, or contractual in assets that might be held by a state or any 'emanation of the state'."
The Board is also happy to proceed on that basis, assuming that, by a contractual right or interest in assets, Aikens J was referring to a contractual interest in an asset such as a bank balance to which Lord Diplock referred. All those are legally ascertainable interests in the relevant asset, and would no doubt have realisable value. Enforcement, in one form or another, can readily be envisaged against them. They can in a broad sense all be regarded as "proprietary" or legal interests. Whether they exist must necessarily be determined by reference to the relevant domestic law, ascertained on conventional private international law principles. The Board does not in this respect accept Botaş's submission that it should seek to define and apply some autonomous international concept of "property". Enforcement relates necessarily and only to property recognised as such for the purposes of enforcement under domestic law.
A Contracting State cannot claim immunity from the jurisdiction of a court of another Contracting State if the proceedings relate to:
(a) its rights or interests in, or its use or possession of, immovable property; or
(b) its obligations arising out of its rights or interests in, or use or possession of, immovable property
and the property is situated in the territory of the State of the forum.
No measures of execution or preventive measures against the property of a Contracting State may be taken in the territory of another Contracting State except where and to the extent that the State has expressly consented thereto in writing in any particular case."
Again, there is a clear distinction evident between the full wording used in the context of article 9, referring to use and control of as well as interests in property, and the limited wording of article 23, referring on to measures against "the property of a Contracting State".
i) Botaş is under its charter a State Economic Organisation ("SOE"), formed to build inter alia pipelines for oil, oil products and natural gas in Turkey and abroad and carry out related operations including transportation. It is subject to Decree 233, article 38 of which provides that decisions concerning inter alia assignment, sale and granting of operations rights of enterprises, institutions, subsidiaries, businesses, business units and affiliates within the scope of the Decree shall be taken by the Coordination Council. However, article 58(3) authorises the Council of Ministers to give permission to set up companies abroad "without being subject to this Decree Law and to determine principles/rules in relation to these matters for each individual organisation". The consequence of disapplying article 38 was however that, so far as Decree 233 was concerned, the company set up abroad would be free to sell or otherwise transfer the Shares without the need for consent by the Turkish State. Both TPIC and BIL were incorporated following decisions giving permission under article 58(3). TPIC was incorporated by Turkish Petroleum Corporation ("TPC"), which later transferred ownership to Botaş pursuant to a decision 2012/4152 of the Council of Ministers dated 24 December 2012. BIL was incorporated by Botaş. Decision 2012/4152 further provided that the management, operating principles and internal supervision of TPIC as well as its relations with Botaş should be determined by the Ministry of Development, Undersecretariat of Treasury and Botaş in coordination with the Ministry of Energy. The decision granting permission to incorporate BIL provided that the directors, organisation, operating principles and internal supervision of the company as well as its relations with Botaş should be established by the board of directors of Botaş, but specified that the relevant minister should appoint the general manager/chair of the board and two other directors of BIL, while the other two directors should be nominated by Botaş but approved by the minister.
ii) The Shares are subject to Law No 4046 Concerning Arrangements for the Implementation of Privatisation, according to which their privatisation would require the consent of the Privatisation High Council "PHC"). Law 4046 is however only concerned with voluntary privatisation, and, that apart, cannot as a Turkish law have direct relevance to a disposition of Jersey shares. A voluntary sale to an innocent purchaser outside Jersey would, for example, be unaffected. Tepe submits that Law 4046 impacts not merely privatisation of shares, but any voluntary disposition of assets. That far-reaching submission is not endorsed in the judgments below, and it is unnecessary to consider it further.
iii) The Royal Court also found that, by virtue of the principle of "parallelism", since the permission of the Council of Ministers was required, and was received, to incorporate TPIC and BIL, permission of the Council was also required for any (voluntary) disposition or liquidation of TPIC and BIL.
iv) By decision 2014/6842, the Council of Ministers in fact stated that approval of the Under ecretariat and Ministry of Development was required for "any action to be taken regarding the change of capital of subsidiaries and affiliates founded or to be founded pursuant to article 58(3) of the Decree Law 233".
v) In common with any other company more than half of whose shares are owned by a SOE, TPIC and BIL are subject to Law 4734 on Public Procurement, which regulates the procurement by such entities of goods, services and works, and establishes a Public Procurement Authority to oversee procurement.
vi) Various other elements relied on in support of Botaş's case on control were identified by the Royal Court as follows:
vii) Under Decree 233 the relevant Ministry has a power of inspection in pursuance of its responsibility for supervision of Botaş (article 40), the Council of Ministers can (upon the proposal of the Minister) determine the price of goods produced and services provided by and the fields of activity of Botaş and its subsidiaries (article 35(2)) and the Higher Planning Council can determine Botaş' headquarters (article 3(4)), approve its strategic plans (article 29(2)), make decisions regarding its liquidation or sale (article 38) and control the constitution of its board of directors (article 6).
viii) Under Decree 2014/6842, Botaş is required to send financial and non-financial information to the Under Secretariat and the Ministry in order to enable them to monitor Botaş's progress regarding targets set out in the general investment and finance programme for 2015 (article 20(2)), the Under Secretariat may carry out audits and inspections of Botaş (articles 22(3) and (4)) and the appointment processes for personnel of State Enterprises is subject to approval of the Under Secretariat (article 4).
ix) Law 2477 on the Procedure for Appointment of Public Bodies applies to general managers and deputy general managers of Botaş. Permanent employees of Botaş are deemed to be civil servants.
"The rule [of immunity] is not limited to ownership. It applies to cases where what the Government has is a lesser interest, which may be not merely not proprietary but not even possessory. Thus it has been applied to vessels requisitioned by a Government, where in consequence of the requisition, the vessel, whether or not it is in the possession of the foreign state, is subject to its direction and employed under its orders."
He went on to refer to inter alia The Broadmayne. Lord Atkin covered the same point succinctly at p 490 with a reference to property which is the sovereign's "or of which he is in possession or control".
"The word 'control' in the second limb of Lord Atkin's proposition is a word of vague import, and I think it fallacious to treat Lord Atkin's words as though they were the words of a statute. I do not think that the word 'control' is apt in the present context. The bars of gold did not require any treatment or anything in the nature of management. All that was required was that they should be left intact and undisturbed in the vaults of the bank." (pp 604-605)
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