Enforcement immunity

Domestic law

Describe domestic law governing the scope of enforcement immunity.

Germany does not have a specific law governing enforcement immunity of foreign states. Customary international law guarantees foreign states enforcement immunity with respect to property in use or intended for use for sovereign or public purposes. German courts directly apply customary international law pursuant to article 25 of the German Basic Law, which stipulates that the general rules of international law form an integral part of federal law and take precedence over other laws.

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?

In the case of enforcement measures against foreign states, German debt collection statutes and the enforcement sections of the German Code of Civil Procedure would generally apply.

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?

The German Federal Supreme Court held that a foreign state’s prior waiver of jurisdictional immunity or consent to the exercise of jurisdiction does not constitute the state’s consent to any further enforcement proceedings.

It is generally held that a waiver of immunity resulting from an arbitration agreement does not extend to the enforcement proceedings stage. The German Federal Supreme Court recently ruled that this issue must not be decided on if the arbitration clause states that the award shall be enforced according to the law of the enforcing state. This was deemed as a waiver of immunity in respect of enforcement proceedings before German courts. If this is not the case, a waiver resulting from an arbitration agreement will not extend to the execution proceedings, for which, a separate explicit or implicit waiver is required.

Property or assets subject to enforcement or execution

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

German courts directly apply rules of customary international law (see question 2 on article 25 of the German Basic Law). Property or assets of foreign states in use or intended for commercial use and not for sovereign purposes is therefore subject to enforcement or execution in Germany.

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.

Enforcement against the property of a foreign state that is presented or situated in German territory is inadmissible without the consent of the foreign state if such property serves sovereign purposes of the foreign state. This especially includes property or assets serving the fulfilment of official functions of diplomatic missions of the foreign state.

The German Federal Constitutional Court noted that claims against a general current bank account of the embassy of a foreign state that exists in the state of the forum and where the purposes include covering the embassy’s costs and expenses are not subject to forced execution by the state of the forum.

In the case of ‘mixed use’ property of foreign states, the Federal Constitutional Court noted that customary international law does not preclude enforcement measures with respect to such parts of property in use or intended for commercial purposes.

Notably, the German Federal Constitutional Court held that a general waiver of immunity contained in notes issued by a foreign state, may be sufficient to waive immunity for enforcement proceedings. According to the Federal Constitutional Court, this waiver may, however, not be construed as a waiver of sovereign immunity in relation to an embassy’s bank accounts if those bank accounts are needed to uphold the rudimentary functioning of the embassy.

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.

German courts directly apply customary international law on enforcement immunity. Generally, a central bank or other monetary authority is protected by enforcement immunity. The German Federal Constitutional Court repeatedly declared that forced execution of judgment by the state of the forum under a writ of execution against a foreign state that has been issued in respect of non-sovereign acts of that state, or property of that state within the territory of the state of forum, is unlawful without the consent of the foreign state if such property serves sovereign purposes of the foreign state. With regard to bank accounts of a foreign state, the Federal Constitutional Court clarified that the decisive criterion is the purpose of the funds in the bank account.

The German Federal Supreme Court decided that currency reserves of a foreign state’s central bank, in a bank account administered by a third-party debtor in Germany, serve sovereign or public purposes of the foreign state. It also decided that such a bank account is covered by enforcement immunity and cannot be subject to forced execution in Germany.

The Federal Supreme Court further noted that property or bank accounts of central banks or other monetary authorities enjoy absolute enforcement immunity under the United Nations Convention on Jurisdictional Immunities of States and Their Property, and that the Convention - which has not yet come into effect - reflects trends of commonly accepted rules of international law.

Test for enforcement

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

In Germany, domestic courts generally have not developed any further test that must be satisfied before enforcement against a foreign state is permitted.

However, if a claim or enforcement action is solely based on the fact that property or funds of a foreign state are located in Germany, which would allow German courts to have jurisdiction pursuant to section 23 of the Code of Civil Procedure, German courts require a sufficiently close nexus to Germany.

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?

Pursuant to section 750 and sections 794, paragraph 1, No. 4, letter a, 795 of the German Code of Civil Procedure, enforcement may be commenced only if judgments or decisions declaring arbitration awards as enforceable are served. According to section 54 of the Regulation on Civil Proceedings, documents to be served to a foreign state will be forwarded to the Federal Office of Justice. The Federal Foreign Office (Ministry of Foreign Affairs) will serve the documents via diplomatic channels (ie, the competent German diplomatic mission).

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?

While there is a plethora of German jurisprudence in relation to enforcement proceedings against states, the percentile relating to the enforcement of arbitral awards cannot be stated with absolute certainty.

Public databases

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

No.

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?

No.