Enforcement immunity

Domestic law

Describe domestic law governing the scope of enforcement immunity.

The Act provides that ‘the property . . . of a foreign state shall be immune from attachment arrest and execution except as provided in sections 1610 and 1611’ (see section 1609). Sections 1610 and 1611 establish several exceptions to enforcement immunity. These exceptions are generally similar to those from jurisdictional immunity under sections 1605 to 1607.

Application of civil procedure codes

When enforcing against a state, would debt collection statutes and the enforcement sections of civil procedure codes or similar codes also apply?

Yes, to the extent enforcement immunity would not be applicable. Specifically, under the Act and the Federal Rules of Civil Procedure, state law governs the circumstances and manner of attachment and execution proceedings. When a foreign state is not protected by sovereign immunity, the foreign state shall be liable in the same manner and to same extent as a private individual under like circumstances (see section 1606). Therefore, in attachment and execution proceedings involving foreign states, the federal courts will generally apply Fed R Civ P 69(a), which mandates the application of local state procedures (see EM Ltd v Republic of Arg, 473 F3d 463 (2d Cir 2007) cert den). For example, in an action in which the judgment creditors had obtained default judgments awarding compensatory damages against Cuba, the award creditors sought turnover orders pursuant to Fed R Civ P 13 and 69 and NY CPLR section 5225(b) against garnishees that held funds belonging to entities that allegedly were agencies and instrumentalities of Cuba (see Weininger v Castro, 462 F Supp 2d 457 (SDNY 2006)).

Consent for further enforcement proceedings

Does a prior submission to the jurisdiction of a court or tribunal constitute consent for any further enforcement proceedings against the property of the state?

Prior submission to the jurisdiction of a court or tribunal does not necessarily establish waiver or consent to further enforcement proceedings against state assets. The Act provides, among others, that a foreign state shall not be immune from execution or attachment if the ‘foreign state has waived its immunity from attachment in aid of execution or from execution either explicitly or by implication’ (section 1610(a)(1)) or when ‘judgment is based on an order confirming an arbitral award rendered against the foreign state, provided that attachment in aid of execution, or execution, would not be inconsistent with any provision in the arbitral agreement’ (section 1610(a)(6)).

Property or assets subject to enforcement or execution

Describe the property or assets that would typically be subject to enforcement or execution.

The property or assets that would be subject to enforcement, execution and attachment would be property used for a commercial activity in the United States.

Assets covered by enforcement immunity

Describe the assets that would normally be covered by enforcement immunity and give examples of any restrictive or broader interpretations adopted by the courts.

As explained above, only property used for a commercial activity in the United States would potentially be exempted from enforcement immunity. For example, in Aurelius Capital Partners, LP v Republic of Argentina, the Court of Appeals for the Second Circuit held that Argentinian social security funds were immune from attachment because those funds had not been used for any commercial activity whatsoever (584 F3d 120 (2d Cir 2009)). Conversely, in Birch Shipping Corp v Embassy of United Republic of Tanzania, the District Court for the District of Columbia held that a checking account used by the embassy of Tanzania was not immune from attachment (see 507 F Supp 311 (DC Dist 1980)).

Explain whether the property or bank accounts of a central bank or other monetary authority would be covered by enforcement immunity even when such property is in use or is intended for use for commercial purposes.

Pursuant to section 1611(b)(1), the property of a foreign state shall be immune from attachment and from execution, if ‘the property is that of a foreign central bank or monetary authority held for its own account, unless such bank or authority, or its parent foreign government, has explicitly waived its immunity from attachment in aid of execution, or from execution, notwithstanding any withdrawal of the waiver which the bank, authority or government may purport to effect except in accordance with the terms of the waiver’. For example, the Court of Appeals for the Second Circuit held that funds deposited with Argentina’s central bank were immune from attachment and the ‘commercial activity’ exception to enforcement immunity, holding that section 1610(a)(2) did not apply because the central bank used those funds for central banking purposes and therefore held the funds ‘for its own account’ (see NML Capital, Ltd v Banco Cent De La Republica Arg, 652 F3d 172 (2d Cir 2011) cert den).

Test for enforcement

Explain whether domestic jurisprudence has developed any further test that must be satisfied before enforcement against a state is permitted.

No further test has been developed (but see question 9).

Service of arbitration award or judgment

How is a state served with process or otherwise notified before an arbitration award or judgment against it (or its organs and instrumentalities) may be enforced?

Service of process is effected as described in question 14.

History of enforcement proceedings

Is there a history of enforcement proceedings against states in your jurisdiction? What part of these proceedings is based on arbitral awards?

Yes, there is a long and ever-increasing line of cases relating to proceedings against states or state entities in the United States. A significant number of these proceedings are for the enforcement and execution of both commercial and investor-state awards.

Public databases

Are there any public databases through which assets held by states may be identified?

Yes, assets held by states may be identified by undertaking a variety of searches of public information, including, among others, searches on corporate registries or searches for real property through land registries (such as the office of the county tax assessor and the county recorder’s and registrar’s offices).

Court competency

Would a court in your state be competent to assist with or otherwise intervene to help identify assets held by states in the territory?

In principle, yes (see section 1606 and question 17), but discovery is subject to the limitations under section 1605(g)(1)(A):

the court . . . shall stay any request, demand, or order for discovery on the United States that . . . would significantly interfere with a criminal investigation or prosecution, or a national security operation, related to the incident that gave rise to the cause of action, until such time as the Attorney General advises the court that such request, demand, or order will no longer so interfere.