The University of Texas at Austin   School of Law

Main menu:

Case:
BVerfGE 46, 342 2 BvM 1/76 "Philippine Embassy"
Date:
13 December 1977
Judges:
Hirsch, Dr Rinck, Wand, Dr. Rottmann, Dr Niebler, Dr. Steinberger, Träger
Copyright:
© Nomos Verlagsgesellschaft

HEADNOTES:

1. In the context of the referral procedure under Article 100(2) Basic Law, directions for evidence are to be regarded as decisions for which the question of preliminary submission is relevant to the issue, at least where the taking of evidence provided for involves the danger of infringement of international law in relation to a foreign State.

2. Exemption of foreign States from German jurisdiction in enforcement proceedings at present arises only through Article 25 Basic Law from general rules of international law.

3. Provisions of international treaties are to be interpreted and applied in the light of the general rules and principles of international law relating to the sphere covered by the treaty provisions.

4. The private individual - like a foreign State - can within the domestic jurisdiction of the Federal Republic of Germany "appeal" in the context of the relevant procedural law to general rules of international law just as much as to other objective law. General rules of international law may - according to their content and as a rule as a preliminary question - have effects as objective law upon the legal petition of the individual and thereby be relevant to the issue.

5. The fact that general customary international law contains the minimum obligation for contentious proceedings to grant immunity in relation to sovereign acts (acta iure imperii) does not by itself mean that, even as regards execution, it requires only limited immunity.

6. In determining norms of customary international law, the focus should primarily be on the conduct of relevance to international law of those organs of State which by virtue of international law or domestic law are called on to represent the State in international legal transactions. Alongside this, however, such practice may also be testified to in acts of other organs of State like the legislature or the courts, at least insofar as their conduct is directly relevant to international law. For decisions of national courts this applies in particular where, as in the sphere of the judicial immunity of foreign States, domestic law allows the national courts to apply international law directly.

7. At present there is no practice of States that would as yet be sufficiently general and supported by the necessary legal conviction as to establish a general rule of internal law whereby the State having jurisdiction would be barred from execution against a foreign State absolutely.

8. There is a general rule of international law that execution by the State having jurisdiction on the basis of a judicial writ of execution against a foreign State, issued in relation to non-sovereign action (acta iure gestionis) of that State upon that State's things located or occupied within the national territory of the State having jurisdiction, is inadmissible without assent by the foreign State, insofar as those things serve sovereign purposes of the foreign State at the time of commencement of the enforcement measure.

9. In the case of measures by way of security or execution against a foreign State, international law objects, at the time concerned serving its diplomatic representation in carrying out its official functions, may not be seized (ne impediatur legatio).

10. Because of the problems of demarcation in assessing endangerment of that functionality and because of the latent possibilities of abuse, general international law draws the area of protection in favour of the foreign State very broadly and focuses on the typical, abstract danger, not on the specific endangerment of the functionality of the diplomatic representation.

11. Receivables from a current ordinary bank account of the embassy of a foreign State existing in the forum State and intended to cover the embassy's expenses and costs are not subject to execution by the forum State.

12. It would constitute interference contrary to international law in the exclusive affairs of the sending State for the enforcement agencies of the receiving State to demand that the sending State, without its assent, give details of the existence or of the earlier, present or future uses of credits on such an account.

13. The question remains open whether and on what criteria claims and other rights on other accounts of a foreign State with banks in the forum State, for instance special accounts in connection with procurement purposes or issues of loans or on accounts without special earmarking, are to be treated as sovereign or non-sovereign assets and which limits in international law are accordingly to be taken into account as appropriate for the law of evidence.

The private individual wishing to enter into private economic relationships with a foreign State remains at liberty to guard his interests as far as possible, for instance by agreements as to the mode of settlement for services, as to procedure in the event of dispute - in particular through waiver of immunity that is in principle irrevocable - or as to securities.

14. The principle of the sovereign equality of States is a constitutive principle of contemporary general international law, which, at any rate within the sphere of the diplomatic transactions of States, requires far-reaching formal equality of treatment. Differential treatment of States in the sphere of diplomatic immunity according to their respective economic capacity would be incompatible therewith.

Order of the Second Senate of 13 December 1977 -- 2 BvM 1/76 --

in the proceedings to test the question whether there is a general rule of international law that execution arising out of a judgment given against a foreign State in relation to its non-sovereign activity, upon a bank account of that State or of its embassy, existing within the country and intended to cover the embassy's official expenses and costs is inadmissible absolutely or insofar as distraint would hamper the functionality of the embassy as a diplomatic representation, and whether such a general rule of international law is a part of federal law - submission by the Bonn local court of 12 April 1976 (23 M 480/76) -.

DECISION:

The following general rule of international law exists:

Execution by the forum State arising out of a judicial writ of enforcement against a foreign State issued in relation to non-sovereign action (acta iure gestionis) of that State upon things of that State located or occupied in the national territory of the forum State is inadmissible without assent of the foreign State, insofar as these things at the time of commencement of the enforcement measure serve sovereign purposes of the foreign State.

Receivables from a current ordinary bank account of the embassy of a foreign State, existing in the forum State and intended to cover expenses and costs of the embassy, are not subject to execution by the forum State.

This rule is a part of Federal law.

EXTRACT FROM GROUNDS:

A.-I.

The distrainor in the initial case secured a judgment by default from the Bonn Regional Court on 3 September 1975 against the Republic of the Philippines, for payment of a total of DM 95,231.86 plus interest and costs. The litigation in the trial arose from a rental contract concluded between the creditor and the Republic of the Philippines on 9 May 1966, concerning a house belonging to the creditor in Bonn-Bad Godesberg, rented by the Republic of the Philippines to use as an office for their embassy in the Federal Republic of Germany. In the course of June 1973 the tenant moved out of the house and made it available to the creditor, paying the rent until the end of June 1973 inclusive. The creditor founded her principal claims on arrears of rent... and on expenses for repair and maintenance work.

On the basis of the enforceable judgment by default, the creditor secured from the Bonn local court... an order for distraint and transfer against the Republic of the Philippines, whereby the alleged claim of the Republic of the Philippines against "the Deutsche Bank AG... - garnishee - for payment of the present and total future surplus (credit) due the debtor on drawing the balance on the existing business relation on current account... and all alleged claims and entitlements... arising out of giro agreements on the accounts indicated above for credit of all future receipts and of consecutive payment of the credit balances and of implementation of transfers to third parties" was distrained and transferred to the creditor for collection to the extent of the amount distrained.

Against the order of distraint and transfer, the Republic of the Philippines lodged an objection with the Bonn local court that the embassy's account was not subject to seizure by German jurisdiction. In the objection proceedings it presented an affidavit from its Chargé d'Affaires in the Federal Republic of Germany stating that the account denoted "Embassy of the Philippines" had been opened in 1956 with the Deutsche Bank in Bonn and had since 1973 been kept in Bonn-Bad Godesberg; signing power lay with either the Ambassador or the Chargé d'Affaires and the official competent within the embassy for financial matters; the government or the Republic of the Philippines made available in the embassy on this account the means necessary for current operations; in particular, staff and rent were paid from this account. The attachment of the account had made the embassy no longer able to meet its current obligations.

The Bonn local court stayed the proceedings pursuant to Article 100(2) Basic Law and submitted them to the Federal Constitutional Court for decision of the following question:

Is there a rule of international law whereby execution on the basis of a judgment given against a foreign State in relation to its non-sovereign activity upon a bank account of that State or of its embassy existing within the country and intended to cover official expenses and costs of the embassy is inadmissible absolutely, or insofar as distraint would impair the embassy's functionality as a diplomatic representation; is such a rule - if it exists - a part of Federal law?

....

II.

....

1. On behalf of the Federal Government the Federal Minister of Justice took the following position:

In the Federal Government's view there was a general rule of international law within the meaning of Article 25 Basic Law that execution upon a bank account of a foreign State existing within the country, intended to cover an embassy's expenses and costs, was absolutely inadmissible....

2. The Republic of the Philippines... took the following position:

On the basis of generally recognized rules of international law, the German court had had no jurisdiction over the Republic of the Philippines. It was the established legal position that a State could not be sued before the courts of another State without its agreement....

3. The creditor in the initial case stated the following:

In accordance with the Federal Government's view, it was to be taken that execution was in principle admissible against a foreign State where immunity had been restricted at the trial....

B.

The submission is admissible....

C.

The following general rule of international law exists:

Execution by the forum State arising out of a judicial writ of enforcement against a foreign State issued in relation to non-sovereign action (acta iure gestionis) of that State upon things of that State located or occupied in the national territory of the forum State is inadmissible without assent of the foreign State, insofar as these things at the time of commencement of the enforcement measure serve sovereign purposes of the foreign State. Receivables from a current ordinary bank account of the embassy of a foreign State existing in the forum State and intended to cover expenses and costs of the embassy are not subject to execution by the forum State.

This rule is a part of federal law.

I.

1. According to general international law at present in force, a State is not bound to grant a foreign State exemption from jurisdiction in a trial against that State to decide about its non-sovereign action (BVerfGE 16, 27ff.). The range of States and of courts following the doctrine of functionally restricted immunity, on which that case law is based, for trial proceedings has since grown larger (cf. Foreign Sovereign Immunities Act of 1976 of the United States of America, Public Law 94-583 of 21 October 1976, which entered into force on 19 January 1977, 28 United States Code para. 1602ff., 1605; Supreme Court of the United States in re Dunhill v. Republic of Cuba, 96 S.Ct. 1854, 1861ff. [1976]; Privy Council in re Philippine Admiral v. Wallem Shipping [Hong Kong] Ltd. [1976] 1 All E. R. 78, International Legal Materials [ILM] XV [1976] 133 - for actions in rem; English Court of Appeal in re Trendtex Trading Corp.Ltd. v. Central Bank of Nigeria [1977] 2 W.L.R. 356, ILM XVI [1977] 471ff. [13 January 1977 - not yet final]; for trial proceedings this direction is pointed to also by the European Convention on State Immunity of 16 May 1972, signed by among others the Federal Republic of Germany, European Treaty Series no.74, which came into force on 11 June 1976, Article 4ff.; see Explanatory Reports on the European Convention on State Immunity and the Additional Protocol, Council of Europe, Strasbourg, 1972, p.9ff).

2. As regards execution, by contrast, many States continue to keep to the granting of in principle unrestricted immunity to foreign States (on the development of State practice in this connection cf. E.W. Allen, The Position of Foreign States before National Tribunals, 1933, p.47ff. and passim); restrictions can be found in the practice of various States:

in securing of or execution arising from enforceable rights on immovable assets located in the enforcing State upon that property (cf. e.g. Supreme Court of Czechoslovakia, ruling of 26 April 1928, Annual Digest [and Reports] of Public International Law Cases [AD] 4 [1927-1928] no.111, except for property used for diplomatic purposes, Ruling of 28 December 1929, AD 4 [1927-1918] no.251);
in securing or enforcement measures on bequests located in the enforcing State that have fallen to the foreign State;
in securing or enforcement measures upon assets of State or State-controlled economic enterprises arising out of claims relating to their private economic actions (cf. Appeals Court of The Hague, Ruling of 28 November 1968 in re N.V. Cabolent v. National Iranian Oil Co., Netherlands Yearbook of International Law [Netherlands Yearbook], 1970, p.225.);
further restrictions can be found relating to securing or enforcement measures upon State commercial vessels on the basis of claims connected with the private economic operation of such ships in the Contracting Parties to the Brussels Convention for the unification of certain rules relating to the immunity of State-owned vessels of 10 April 1926 (RGBL. 1927 II p.483; Additional Protocol of 24 May 1934, RGBl. 1936 II p.303) in accordance with that Convention, while other States here as a rule renounce the assertion of immunity (e.g. the United States of America, cf. Hackworth, Digest of International Law, 2 [1941] 438f.).

For those States who grant in principle unrestricted immunity even in contentious proceedings, this generally follows as a de facto outcome of this kind of immunity; it bars the securing of a judicial title of execution, should the foreign State not subject itself to jurisdiction. But even many of those States that grant the foreign State exemption from their jurisdiction in trial proceedings only for suits relating to sovereign action (acta iure imperii), stick in principle to the ruling out of execution against the foreign State, irrespective of whether the title to be enforced in the forum State concerns non-sovereign action of the foreign State or whether the things upon which enforcement is contemplated serve non-sovereign or exclusively commercial purposes, such as private persons also pursue (cf. e.g. Swedish Supreme Court, Ruling of 13 April 1944, AD 12 [1943-1945] no.31; Supreme Court of Norway, Ruling of 12 November 1949, AD 17 [1950] no.42; and in general see Lauterpacht, The problem of jurisdictional immunities of foreign states, BYB 28 [1951] 220ff., 250ff.; Schaumann, BerDGVR op.cit., p.130f., Habscheid, BerDGVR op.cit., p.251; Venneman, L'immunité d'exécution de l'Etat étranger, in: L'immunité de juridiction et d'exécution des Etats, [1971]. p.119ff.). This practice accords with the international law, since general international law does not prevent the granting of unrestricted immunity to foreign States whether in trial proceedings or in enforcement proceedings. The fact that general customary international law contains a minimum requirement for trial proceedings, namely the granting of immunity in relation to acta iure imperii, does not by itself mean that it requires only limited immunity for execution too. Measures of security and execution as a rule intervene much more directly and decisively in the exercise of the sovereign power of the foreign State than court findings. It should therefore be separately tested whether and to what extent generalrules of international law stand against execution.

3. In order to attest a general rule of international law within the meaning of Article 25 Basic Law, the practice of many States in the sphere of execution mentioned would have to be an established practice exercised by States generally in the conviction that they were obliged to do so by international law (cf. Article 38(1) (b) of the Statute of the International Court of Justice; CPJI, Series A no.10 p.28 - Lotus case; ICJ, Reports 1950, p.276 - diplomatic asylum case; Reports 1951, p.131 - Norwegian fisheries case; Reports 1969, p.41ff. - Continental shelf case; BVerfGE 15, 25 [35]; 16, 27 [52]; Verdross, Die Quellen des universellen Völkerrechts, 1973, p.95ff.; Geck, Das Bundesverfassungsgericht und die allgemeinen Regeln des Völkerrechts in Bundesverfassungsgerichtund Grundgesetz, 1976, II, p.125ff. 132f.).

In determining norms of customary international law, the focus should be primarily on the conduct of relevance in international law of those State agencies that are in virtue of international law or of municipal law called upon to represent the State in international legal transactions. Alongside this, however, this sort of practice may also be attested to in the acts of other organs of State like the legislature or the courts, at least to the extent that their conduct is of direct relevance for international law, for instance in carrying out an obligation under international law or in exercising discretion provided for in international law. For decisions of national courts, this applies in particular where, as in the sphere of the judicial immunity of foreign States, domestic law allows the national courts to apply international law directly.

4. In the area at question here, there is not however any practice that would as yet be sufficiently general and supported by the necessary legal conviction as to establish a general rule of customary international law whereby the forum State would be absolutely forbidden from execution against a foreign State. Examination of relevant practice of States shows that a not inconsiderable number of States allows security and execution measures against foreign States, even if under particular conditions and restrictions as regards the legal nature of the substantive law underlying the title of execution, the things on which enforcement may be done and the nature of the implementation of the enforcement measures.

a) Italian case law has for long allowed enforcement measures against foreign States in the sphere of acta iure gestionis. As long ago as 1887, the Lucca Appeals Court held in re Hamspohn v. Bey of Tunis and Erlanger (American Journal of International Law [AJIL] 26 [1932] supp.p.713f.) that a distraint order on credit maintained by the Tunisian State in Italy was admissible. The Court of Cassation of the Kingdom of Italy ruled similarly in 1926 in re State of Romania v. Trutta (AJIL 26 [1932] supp. p.711f.]; it was held to be beyond doubt that except for things indipensable for the functioning of the official administration of the foreign State, all property of government was subject to execution.

Decree Law no. 1621 of 30 August 1925 (Raccolta Ufficiale delle Leggi e dei Decreti del Regno d'Italia, 1925 VIII, p.8109), converted, with amendments, into Law no.1263 of 15 July 1926 (loc.cit. 1926 III, p.2930), makes the admissibility of security and enforcement measures upon assets of foreign States dependent on prior assent by the Minister of Justice, thereby showing that such measures are not simply to be regarded as contrary to international law.

The Italian Constitutional Court was asked in connection with the case Amministrazione del Governo Britannico e Comune di Venezia c. Guerrato to deal with the question of the constitutionality of this Act. A point at issue was the admissibility of enforcement in an exhibition building in Venice belonging to the British government. The Tribunale di Venezia (Decision of 25 August 1959, Rivista di Diritto Internazionale XLII [1959] 618) had doubts as to unrestricted immunity of foreign States grounded in international law in enforcement proceedings, and laid the question of the constitutionality of the Act of 15 July 1926 before the Constitutional Court. It saw that Act, should international law absolutely forbid execution against foreign States, as an infringement of Article 10 of the Italian Constitution, which provides that "l'ordinamento italiano si conforma alle norme di diritto internazionale generalmente riconosciute". By decision of 13 July 1963 (Sentenze e Ordinanze della Corte Costituzionale II [1963] 572 [579]) the Constitutional Court denied infringement of Article 10 of the Constitution, since in legislation, case law and doctrine of various countries there was no agreement in tendencies and systems as far as exemption for proceedings for security and execution on assets belonging to foreign States and not intended for functions reckoned as part of the exerciseof their sovereignty was concerned.

b) The case law of the Swiss courts has similarly long allowed attachment proceedings against foreign States arising out of claims in private law (iure gestionis) on assets not serving sovereign purposes of the foreign State. The attachment procedure is an abbreviated trial procedure allowing preliminary measures to secure the claim.

The Swiss Federal Court held in re Royal and Imperial Austrian Ministry of Finance v. Dreyfus, in a judgment of 13 March 1918 (Decisions of the Swiss Federal Court, Official Collection [BGE] 44 I 49ff.) that the attachment of credits of the Austrian State with a Swiss bank for repayment of public treasury orders was admissible. The Austrian Finance Ministry had in issuing the treasury bonds acted iure gestionis; accordingly Swiss jurisdiction was not ruled out "for legal action against the State including security measures to that end such as attachment".

In an opinion in these proceedings, the Federal Justice and Police Department stated that it was "an extremely controversial question whether and to what extent a foreign State, when acting not as a bearer of sovereign rights but as a legal subject of private law, can be subjected to domestic jurisdiction". There were cases where such a presumption could be made even against the will of the foreign State; on the other hand, jurisdiction over a foreign State was ruled out at least in cases of acts of State authority. At any rate, in execution or attachment the foreign State could not simply be treated just like any private person. The present case was one of public monies serving the accomplishment of State tasks; their attachment was, quite apart from the lack of relationship to Swiss national territory, accordingly improper (cf. Guggenheim, Répertoire suisse de droit international public [Répertoiresuisse], 1 [1975] No.3.12).

In response to this judgment, the Swiss Executive National Council issued an order during the First World War on 12 July 1918, based on extraordinary powers to protect the country and uphold neutrality, forbidding attachment and execution measures upon the property of foreign States (Official Collection of Federal Acts and Ordinances of the Swiss Confederation [AS] vol.34, p.775; Gmür, Zur Frage der Gerichtlichen Immunität fremder Staaten und Staatsunternehmungen, Schweizerisches Jahrbuch für Internationales Recht, VII [1950] 9ff., 47ff.). In 1923 it brought in a similar bill. The explanatory statement stated that no State was subject to the jurisdiction of another State or could be subjected to execution by it. The Federal Assembly however declined to consider this bill further because it regarded compliance with limits in international law in the case of execution as sufficiently guaranteed by the Swiss courts (see Répertoire suisse, op.cit., nos.3.17-3.19). The Order of the Executive National Council of 12 July 1918was repealed on 8 July 1926 (AS vol.42, p.285).

While in its opinion of 29 April 1928 on a question by the League of Nations as to jurisdiction over foreign States Switzerland was in principle against the admissibility of measures of security and execution, the exposé of the Justice Department however stated that this was not a generally recognized principle (Répertoiresuisse, loc.cit., p.403, 400).

The Federal Court held in re Hellenic Republic v. Walder et al., in its judgment of 28 March 1930 (BGE 56 I 237ff), to its view that security measures in the form of attachment were admissible for claims arising from acta iure gestionis, though for the case in question it found Swiss international competence not to be present (for lack of adequate relationship of the object of dispute to Swiss national territory).

The Zurich High Court, in its decision of 30 September 1937 (AD 10 [1941-1942] no.60) found attachment of the credits of the Romanian State with the Swiss National Bank to be admissible. No statutory provisions barring attachment and ensuing execution existed, nor did any court practice to that effect in Switzerland.

On 24 October 1939, after the outbreak of the Second World War, the Executive National Council again issued an Order, based on the Executive National Council's Order for protection of the country and the upholding of neutrality, whereby assets belonging to a foreign State could be attached or made subject to enforcement only with the assent of the Executive National Council (cf. Article 2 of the Order, AS vol.55, p.1296); this provision was repealed after the end of the war by an Order of the Executive National Council of 3 September 1948 (AS 1948 p.962).

Taking up from its earlier case law, the Federal Court decided in re Kingdom of Greece v. Banque Julius Bär & Cie, in a judgment of 6 June 1956 (BGE 82 I 75ff.) that the sequestration of all accounts and credits of the Greek State and its ministries with various Geneva banks was not inadmissible for lack of jurisdiction. The decision explicitly rejects the view that unrestricted immunity against execution procedures had to be granted by international law. The overall development of international law was instead going steadily and increasingly towardsallowing enforcement in the sphere of acta iure gestionis.

In re United Arab Republic v. Mrs X, the Federal Court found in a judgment of 10 February 1960 (BGE 86 I 23ff.) that the attachment of balances and credits of the United Arab Republic with a Swiss bank was admissible. Since the assets attached, were at the time of attachment, no longer devoted to a particular purpose, the security measure was not inadmissible in international law.

c) The Belgian courts have long held without exception to the unrestricted immunity of foreign States in enforcement proceedings (see references in Suy, Immunity of States before Belgian Courts and Tribunals, in: Zeitschrift für ausländisches Recht und Völkerrecht [ZaöRV] 27 [1967] 660 [684ff.]; idem, L'immunité des Etats dans la jurisprudence belge, in: L'immunité de juridiction et d'exécution des Etats, p.279 [305ff.]). In re Socobelge v. Greek Government (Journal du Droit International [Clunet] 79 [1952] 244; International Law Reports [ILR] 18 [1951] no.2) however, the Brussels Civil Court, in a decision of 30 April 1951, declared the distraint of credit balances of the Greek State and the Bank of Greece with banks and enterprises in Belgium to be admissible. The underlying payment claims related to debenture bonds the Greek State had entered into under an agreement of 27 August 1925 with the Belgian company Socobelge on the construction and improvement of railway installations and the supply of railway equipment; an arbitration commission was to take final decisions on disputes. After the Greek government had in 1932 ceased servicing its public debt, Socobelge secured two arbitration awards, the second of which sentenced the Greek State to pay US-dollars 6,771,868 in gold plus 5 % interest. When Greece further essentially continued to refuse payment and the dispute could not be settled diplomatically, Belgium called in the Permanent International Court of Justice, which declared in a judgment of 15 June 1939 that the arbitration awards were final and binding (Société Commerciale de Belgique, CPJI Série A/B no.78, p.22). In 1950 Socobelge secured on the basis of the arbitration awards the provisional distraint of credit balances the Greek government and the Bank of Greece had with banks and enterprises in Belgium. The Brussels Civil Court did not see itself as prevented by either international law or comitas gentium from confirming the distraint measures (according to Colliard, Revue Critique de Droit International Privé 41 [1952] p.124, the credit balances distrained came from funds of Marshall Plan aid to Greece and were laterreleased again for other reasons).

d) The Dutch Supreme Court found in re Société Européene d'Etudes et d'Entreprises in voluntary liquidation (SEEE) v. Yugoslavia (Decision of 26 October 1973, Netherlands Yearbook, 1974, p.290ff.; ILM XIV [1975] 71ff.), as the Appeals Court of The Hague already had (Decision of 8 September 1972, Netherlands Yearbook 1973, p.390), that enforcement of an arbitration ruling on a claim arising out of acta iure gestionis of the foreign State contradicted international law only where international law forbade all execution upon assets of a foreign State; but no such law of international law existed. (Enforcement was later declared inadmissible by the Appeals Court for other reasons, Decision of25 October 1974, Netherlands Yearbook 1975, p.374ff.).

e) The Austrian Administrative Court, in a finding of 13 January 1945 (Findings and Orders of the Administrative Court n.F. 9 [1954], first semester, Financial Part, no.869), in administrative proceedings on the confiscation of unlawfully marketed brandy from a firm under the administration of the Soviet Union, rejected the appeal for immunity against the confiscation decision of the financial authorities with the following argument: "It is, to be sure, a generally recognized principle of international law that foreign States, insofar as they act as bearers of sovereignty, are not within the country subject to either judicial sovereignty or administrative sovereignty. It is by contrast not generally recognized, in either doctrine, the practice of international law or the case law of State organs of the members of the international legal community, that a foreign State, when acting within a country as a bearer of private rights, in particular when it maintains economic enterprises there, should in matters of these private legal relationships and these economic enterprises be exempted from domestic sovereignty." This was held also to have to applyto administrative sovereignty.

f) It is also to be derived from recent French case law that it no longer regards security and execution measures against foreign States arising out of claims in relation to acta iure gestionis as inadmissible simply in virtue of general international law. While the French government, like the French courts, in earlier years very predominantly followed the doctrine of absolute immunity in enforcement proceedings (see the many references in Kiss, Répertoire de la pratique française en matière de droit international public, III [1965] no.319ff), and departures from this practice were to be regarded as exceptions that did not change anything in this fundamental attitude (cf. as examples of such exceptions the cases Etat Roumain v. Pascalet et Cie, Marseilles Commercial Court, Order of 12 February 1924, Kiss, op.cit. no.366; USSR v. Association France Export, Court of Cassation, judgment of 19 February 1929, AD 5 [1929-1930] no.7; Procureur Général près la Cour de Cassation v. Vestwig et al., Court of Cassation, judgment of 5 Febuary 1947, AD 13 [1946] no.32), the decisions of the Court of Cassation in the cases Englander v. Statni Banka Ceskoslovenska (judgment of 11 February 1969, Clunet 96 [1969] p.923f.) and Clerget v. Représentation commerciale de la République démocratique du Viet-Nam (judgment of 2 November 1971, Clunet 99 [1972] p.267f.) can be interpreted to the effect that the Court of Cassation regards security and execution measures upon assets of a foreign State or its agencies as not barred by general international law where the origin and use of these things can in the proceedings be defined as havingto do with private business.

g) The Greek courts have admitted enforcement measures against foreign States insofar as private-law claims were the basis; thus, Athens Court of Justice 1928 (AD 4 [1927-1928] no.109, confirmed on appeal by the Areopagus) admitted distraint on property of the Soviet government on the basis of a claim arising out of a purchase contract (the court additionally regarded conclusion of the contract as subjection to Greek jurisdiction); and the Appeals Court of Athens, in connection with an action for possession (Decision no.1690/1949, Revue Hellénique de Droit International 3 [1950] p.331). Like the legislation of Switzerland and Italy, the Greek Act of 17 December 1938 (Emergency Act 1519/1938, Art. 1(1)) made domestic admissibility of enforcement measures against foreign States dependent on the prior assent of the JusticeMinister.

h) A significant turn has recently been taken by the United States of America on the question of the immunity of foreign States, by the enactment of the Foreign Sovereign Immunities Act of 1976. In the United States too, enforcement proceedings count as part of jurisdiction (cf. Alexy, Die Immunität fremder Staaten vor amerikanischen Gerichten, Diss. Heidelberg, 1960, p.186). Apart from so-called "attachment" proceedings which are in essence not enforcement proceedings but make possible measures to establish venue for particular types of proceedings (cf. Weilamann v. Chase Manhattan Bank, 192 N.Y.S. 2 d 469 [S.Ct.N.Y.] 1959), American case law, even after the State Department moved over to the doctrine of limited immunity in trial proceedings following the Tate letter of 19 May 1952 (Department of State Bulletin 26 [1952] 984; cf. BVerfGE 16, 27 [48f.]) kept until the entry into force of the Foreign Sovereign Immunities Act of 1976 to in principle unrestricted immunity of foreign States, at any rate for enforcement proceedings proper (cf. Dexter and Carpenter, Inc. v. Kunglig Jarnvagsstyrelsen, 43 F. 2 d 705 [1930], cert. den.282 U.S. 896 [1930]; New York and Cuba Mail Steamship Company v. Republic of Korea, 132 F. Supp.684 [1955]; Weilamann v. Chase Manhattan Bank, loc.cit., 473; opinion of the State Department in re Industria Azucarera Nacional S.A. v. Empresa Navegacion Mambisa, ILM XIII [1974] 120ff., 139; Whiteman, Digest of International Law, 6 [1968] 709ff.; but see also Harris & Co. Advertising, Inc. v. Republic of Cuba, 127 So. 2 d 687, 692ff. [1961]; Berlanti Construction Co., Inc. v. Republic of Cuba, 145 So. 2 d 256, 258 [1962]). According to the Foreign Sovereign Immunities Act of 1976, foreign States no longer continue even in enforcement proceedings to enjoy absolutely unlimited immunity before the courts of the United States. Sections 1604, 1609, admittedly lay down the principle of immunity of foreign States in trial and enforcement proceedings; but Sections 1605ff. and 1610f. provide for far-reaching exceptions to this principle. For trial proceedings, these exceptions include inparticular proceedings

"in which the action is based upon a commercial activity carried out in the United States by the foreign state; or upon an act performed in the United States in connection with a commercial activity of the foreign state elsewhere; or upon an act outside the territory of the United States in connection with a commercial activity of the foreign state elsewhere and that act causes a direct effect in the United States" (Sec.1605[a][2]"

as well as, in principle, actions against a foreign State for monetary compensation for damages for tortious conduct (including strict liability) of the foreign State, its office bearers or officials, to the extent that they are acting as part of their service activities (Section 1605[a][5]).

The exceptions to the immunity of foreign States in enforcement procedures are laid down in Section 1610 (a), which reads:

"(a) The property in the United States of a foreign state, as defined in section 1603 (a) of this chapter, used for a commercial activity in the United States, shall not be immune to attachment in aid of execution, or from execution, upon a judgement entered by a court of the United States or of a State after the effective date of this Act, if-
(1) the foreign state has waived its immunity from attachment in aid of execution or from execution either explicitly or by implication, notwithstanding any withdrawal of the waiver the foreign state may purport to effect except in accordance with the terms of the waiver, or
(2) the property is or was used for the commercial activity upon which the claim is based, or
(3) the execution relates to a judgment establishing rights in property which has been taken in violation of international law or which has been exchanged for property taken in violation of international law, or
(4) the execution relates to a judgment establishing rights in property-
(A) which is acquired by succession or gift, or (B) which is immovable and situated in the United States: Provided, That such property is not used for purposes of maintaining a diplomatic or consular mission or the residence of the Chief of such mission, or
(5) the property consists of any contractual obligation or any proceeds from such a contractual obligation to indemnify or hold harmless the foreign state or its employees under a policy of automobile or other liability or casualty insurance covering the claim which merged into the judgment."

Section 1610 (b) extends these exceptions to immunity against execution against an "agency or instrumentality" of a foreign State further, by making the admissibility of execution not dependent on the connection required in Section 1610 (a) (2) between the assets to be attached,the commercial activity and the underlying claim.

The provisions of the Act thus testify that the United States of America has moved to the doctrine of the limited immunity of foreign States in both trial and enforcement proceedings, and specifically also in the case of in personam proceedings, in which the foreign State is claimed against directly as a party to trial proceedings or as the debtor in enforcement proceedings. Though it may not be undoubted in the earlier case law of courts of the United States how far it is to be assessed as an expression of a requirement of international law and not merely as comitas gentium (cf. Alexy, Der Einfluss der Exekutive und innerstaatlicher Rechtsgrundsätze auf die amerikanische Rechtsprechung zur Immunität fremder Staaten, ZaöRV 22 [1962] 661, 670ff.), the provisions now adopted in the Foreign Sovereign Immunities Act of 1976 fully suggest that they have deliberately been adopted also having regard to the minimum obligations imposed by general international law, even if the form of the Act sometimes even goes beyond that and gives the foreign State a more favourable position than in general international law. This is suggested on the one hand by the fact that after the entry into force of the Act it is henceforth a matter for the courts alone to find as to immunity questions in accordance with legal criteria. It is further confirmed by the opinions of the State Department, the Justice Ministry and the Congressional Committees in the preliminary work on the Act. It is stated there that the central point of the Act is that decisions on claims to immunity by foreign States should best be taken by the courts on the basis of a statutory provision incorporating criteria recognized according to international law (cf. Section-by-Section Analysis, Introduction, and on Section 1602, Annex to the Communications by the Ministry of Justice and the State Department to the Speakers of the Senate and the House of Representatives of Congress of 31 October 1975, ILM XV [1976] 88ff., 102, 104; United States Congress, House of Representatives, 94th Congress, 2 d Session, report no.94-1487 [Legal Affairs Committee],ILM, op.cit., 12398ff., 1401ff.).

i) German case law before 1945 in principle granted foreign States unrestricted immunity even in enforcement proceedings, because a rule of customary international law obliged this (cf. Royal Prussian Court of Justice on decision of conflicts of competence, judgment of 25 July 1910, JbÖffR V [1911] 252ff. - Hellfeld case; Court of Justice on decision of competence conflicts, finding of 29 May 1920, JW 1921, p.773f.; finding of 4 December 1920, JW 1921, p.1480f; and finding of 12 March 1921, JW 921, p.1481ff.; contrary, incidentally, there is only OLG Hamburg, judgment of 30 May 1923, Leipziger Zeitschrift für deutsches Recht, 1923, Sp.615ff.). This view was a consequence not least of the granting of in principle unrestricted immunity in trial proceedings (see references in BVerfGE 16, 27[34f.]).

The rulings made since 1945, insofar as they have become known, almost without exception concern questions of immunity in trial proceedings (cf. BVerfGE 15, 25ff.; 16, 27ff., both with references) or the personal immunity of persons within the meaning of paras. 18, 19 Court Constitutions Act, earlier version (thus Bonn local court, Order of 10 June 1960, Archiv des Völkerrechts9 [1961/1962] 485).

In addition to the decisions of the Bonn local court mentioned in the submission, the Stuttgart Regional Court too (Order of 21 December 1971, IPRspr. 1971, no.129, p.389ff.) had to find as to questions of immunity of foreign States in execution. In these proceedings the creditor had secured an order of distraint and transfer against the Spanish State on the basis of an enforceable judgment by default from the judicial officer, restraining the alleged present, future and conditional claims of the Spanish State against the Deutsche Bank, Stuttgart, and the Banco Español en Alemania, Frankfurt, and transferring them to the creditor for seizure. The Stuttgart local court had quashed the order for restraint and transfer; the Regional Court threw out the creditor's immediate appeal because distraint of the accounts was against a general rule of international law making execution upon the property of a foreign State devoted to sovereign purposes inadmissible. It can be taken from the grounds of the decision that the Regional Court did not regard enforcement measures against foreign States as inadmissible simply in virtue of general international law; instead, it followed the doctrine of doubly restricted immunity, regarding enforcement as not ruled out by international law where based on titles arising from non-sovereign claims upon things not serving sovereign purposes of the foreign State. In the case decided the Regional Court took it that the distrained accounts, kept in the name of the Spanish Consulate in Stuttgart and of the Spanish General Consulate in Frankfurt am Main,served sovereign purposes of the debtor.

The Frankfurt am Main Regional Court, in a judgment of 2 December 1975 (NJW 1976, p.1044ff.; ILM XVI [1977] 501ff.), affirmed German jurisdiction for the issuing of attachment in rem against the Central Bank of Nigeria. It left undecided whether the respondent was to be regarded as a legally autonomous authority of the Nigerian State or as a separate legal person. Since the respondent's receivables to be secured arose from legal transactions of the bank, the respondent, even as an autonomous authority of the State of Nigeria, could not successfully claim exemption from German jurisdiction. The Regional Court found that the restricted immunity of the foreign State against being claimed as debtor in the forum State also applied to the assessment of the admissibility of attachment proceedings as a summary procedure and to enforcement of a court order applied for by the creditor. Insofar as jurisdiction reached, attachment in rem was also admissible upon assets within the country of a foreign State. Execution of attachment was denied only for those things which as such were devoted to the public service of the foreign State. In the case concerned the attachment application was however directed against money and securities accounts of the respondent in the Federal Republic of Germany, that is, things that were not "in the public service" of the respondent. A possible future use of these things to finance State expenditure didnot establish any immunity in the matter.

5. The treaty practice of quite a few States shows that execution on assets of foreign States is not regarded by the forum State as simply incompatible with general international law. A number of multilateral and many bilateral treaties contain provisions on judicial sovereignty, including sovereignty in enforcement, in relation to public or publicly operated trading vessels, public or State-controlled economic enterprises with or without legal capacity of their own, and in relation to State trading missions. These provisions in general allow execution arising from titles based on court trial proceedings about claims arising from private economic action against the public or State-controlled debtor, to be applied upon assets not serving sovereign purposes. Sometimes a material connection between the substantive right in the title and the object of execution is required; in part there are restrictions in relation to security measures where these are made without prior ordinary trial proceedings.

a) The International Convention for the Unification of Certain Rules relating to the Immunity of State-owned vessels of 10 April 1926, ratified by Germany (RGBl. 1927 II p.484, with additional protocol of 24 May 1934, RGBl. 1936 II p.303, binding for Germany in international law since 8 January 1937, Proclamation of 11 September 1936, RGBl. 1936 II p.303) and in force for 21 States (cf. Annex to BGBl. Part II, Fundstellennachweis B, 31 December 1976, p.168), distinguishes between State commercial vessels and other public vessels. By Article 1 of the Convention, sea-going vessels owned or operated by States, cargoes owned by them, and cargoes and passengers carried on Government vessels, and the States owning or operating such vessels, or owning such cargoes, are subject in respect of claims relating to the operation of such vessels or the carriage of such cargoes to the same rules on liability and the same obligations as those applicable to private vessels, cargoes and equipments. By Article 2, the same rules as to jurisdiction of tribunals, legal actions and procedures apply to these liabilities and obligations as to privately owned merchant vessels and cargoes or their owners. Accordingly, security and enforcement measures are also admissible.

The Geneva Convention on the High Seas of 29 April 1958, which became binding for 55 Contracting Parties on 31 December 1976 (BGBl. 1972 II p.1089, binding on the Federal Republic of Germany in international law since 25 August 1973, Proclamation of 15 May 1975, BGBl. 1975 II p.843) and the Convention on the Territorial Sea and the contiguous zone of 29 April 1958 (United Nations Treaty Series [UNTS] vol.516, p.205ff.) similarly draw the distinction between State commercial vessels and other public vessels. By Article 9 of the Convention on the High Seas, ships owned or operated by a State and used only on government non-commercial service shall have complete immunity, on the High Seas, from the jurisdiction of any other flag State; for other public vessels, accordingly, rules of domestic or international law remain unaffected. Article 21 of the Convention on the Territorial Sea clarifies that for government ships operated for commercial purposes immunity cannot be asserted against the national measures admissible in connection with the regulation of innocent passage. The Federal Constitutional Court has evaluated these provisions to the effect that they reflect the widespread conviction that States are now due immunity only for their sovereign acts (cf. BVerfGE 16, 27 [52f.]). The same accordingly also applies in principle to the sphere of execution.

The European Convention on State Immunity rules out, in Articles 1-14, the appeal to immunity for trial proceedings in broad areas of acta iure gestionis; security and enforcement measures against the property of a Contracting State are impermissible in the territory of another Contracting State without express consent by the State concerned pursuant to Article 23. However, this provision does not express a legal conviction of the treaty parties that such measures would be barred under general international law. Instead, it is to be explained from the special shape taken by the Convention. In accordance with Article 20ff., the Contracting States are obliged to give effect to judgments given against them by the courts of other Contracting States in trial proceedings; if this does not happen, then a party to the trial concerned can bring a special judicial finding procedure before a court of the Contracting State against which the judgment has been given or before the European Tribunal in matters of State immunity to be set up: Article 21 of the Convention, Articles 1ff. of the optional protocol. The exclusion of execution is accordingly to be seen in the light of this special provision (cf. Sinclair, The European Convention on State Immunity, The International and Comparative Law Quarterly 22 [1973] 254ff., 273ff.; Krafft, La Convention Européenne sur l'Immunité des Etats et son Protocole Additionnel, Schweizerisches Jahrbuch für internationales Recht 31 [1975] 11 [20ff.]; it does not however attest the legal conviction of signatory States that enforcement measures are inadmissible under general international law. Also in favour of this view is the optional provision of Article 26 of the Convention, according to which, notwithstanding the provisions of Article 23, a judgment rendered against a Contracting State in proceedings relating to an "industrial or commercial activity, in which the State is engaged in the same manner as a private person" may be enforced in the forum State against property of the State against which judgment has been given that is used exclusively in connection with such commercial activities, as long as both States have made declarationsunder Article 24.

b) Many bilateral treaties provide that State or State-controlled economic enterprises may in respect of their private economic actions and their assets serving private economic purposes not lay any claim to exemption from jurisdiction, including sovereignty in enforcement. As examples we shall mention only:
- Article 18 (II) of the Treaty of Friendship, Commerce and Navigation between Japan and the United States of America of 2 April 1953 (United States Treaties and Other International Acts Series [T.I.A.S.] no.2863);
- Article 18 (II) of the Treaty of Friendship, Commerce and Navigation between the Federal Republic of Germany and the United States of America of 29 October 1954 (BGBl. 1956 II p.488ff.; entered into force on 14 July 1956, Proclamation of 28 June 1956, BGBl. II p.763); the provision reads:

"No enterprise of either Party, including corporations, associations, and government agencies and instrumentalities, which is publicly owned or controlled shall, if it engages in commercial, industrial, shipping or other business activities within the territory of the other Party, claim or enjoy immunity therein from taxation, suit, execution of judgment or other liability to which privately owned and controlled enterprises are subject therein."

Similar provisions are contained in the Treaties of Friendship, Commerce and Navigation between the United States and Italy of 22 February 1948 (T.I.A.S. no.1965), Ireland of 21 January 1950 (T.I.A.S. no.2155) and Israel of 23 August 1951 (T.I.A.S. no.2948).

Treaties between the Soviet Union or Eastern European States and other States provide that the State trading missions cannot lay claim to exemption from jurisdiction, whether for trial or enforcement proceedings - with occasional exceptions for provisional security measures - for their private economic actions and their assets serving private economic purposes. Thus, Article 7 of Part II of the Treaty between the German Reich and the Union of Soviet Socialist Republics of 12 October 1925 (RGBl. 1926 II p.2) provided:

"Legal actions of the trade mission undertaken in Germany and binding on the USSR and their economic results shall be treated according to German laws and be subject to German jurisdiction. Execution upon USSR assets located in Germany shall also be admissible, insofar as this does not concern things that are, according to general internal law, intended to serve the exercise of State sovereign rights or official activity or diplomatic or consular representation."

By Article 2 of the Annex to the Agreement on general questions of trade and sea navigation between the Federal Republic of Germany and the Union of Soviet Socialist Republics of 25 April 1958 (BGBl. 1959 II p.222), which entered into force on 24 April 1959, Proclamation of 30 April 1959 (BGBl. II p.469), extended by a Protocol of 31 December 1960 (BGBL. 1961 II p.1085), regulating the legal position of the trade missions of the Soviet Union in the Federal Republic of Germany, the trade mission is a part of the Soviet embassy and enjoys corresponding privileges. In relation to immunity, Article 4 provides:

"The rights, immunities and privileges granted to the trade mission on the basis of Article 2(1) of this Annex shall also extend to its commercial activity, though with the following exceptions:

a) Disputes arising out of commercial transactions concluded or guaranteed by the trade mission pursuant to Article 3 of this Annex in the territory of the Federal Republic of Germany shall be subject to decision by the courts of the Federal Republic of Germany unless the competence of an arbitration tribunal or another jurisdiction has been agreed; in such disputes the defendant or plaintiff shall be the trade mission of the Union of Soviet Socialist Republics in the Federal Republic of Germany. However, measures to secure claims against the trade mission shall not be admissible in this connection.

b) Execution arising from final judicial decisions given against the trade mission in such disputes as are mentioned under a) shall be admissible. It may be levied on the entire assets of the Union of Soviet Socialist Republics in the Federal Republic of Germany, in particular on property, rights or interests arising out of commercial transactions concluded by the trade mission or guaranteed by it, with the exception of property of the organizations mentioned in Article 3(3) of this Annex.

Property and premises which by international usage are intended exclusively for the exercise of political and diplomatic rights by the Union of Soviet Socialist Republics in the Federal Republic of Germany, and the premises used by the trade mission and the furnishings located therein, shall be excluded from any execution."

Similar provisions are contained in the Soviet Union's Trade Agreement with France of 3 September 1951 (UNTS 221, 92; Article 10), the Soviet Union's Treaty on Trade and Navigation with Austria of 17 October 1955 (UNTS 240, 304; Article 4 of the Annex) and other Soviet treaties, for instance with Sweden, Greece, the United Kingdom and Japan (cf. AJIL 26 [1932] supp. p.707f.; Boguslavskij, Staatliche Immunität, 1965, p.153).

On corresponding Swiss treaty practice cf. the references in the Federal Court's decision in re Royaume de Grèce v. Banque Julius Bär & Cie (BGE 82 I 75, 86f.).

If such treaty provisions may also be interpreted as waiver of immunity declared by treaty, they nonetheless reflect the general development in international law of the understanding of immunity in the spheres in which States engage in non-sovereign, in particular commercial action.

c) The Asian-African Legal Consultative Committee, comprising representatives of Burma, Ceylon, India, Indonesia, Iraq, Japan, Pakistan, Sudan, Syria and the United Arab Republic, in 1960 tested the question of State immunity. The report of the Committee on Immunity of States in respect of Commercial and other Transactions of a Private Character states in relation to execution that it had been recognized by all delegations that a decision against a foreign State could not be executed upon its public property. However, the property of a State trading organization enjoying separate legal capacity could be subjected to execution (cf. Asian-African Legal Consultative Committee, Third Session, Colombo, Ceylon, January 20 - 4 February 1960, Final Report of the Committee on Immunity of States in respect of Commercial and other Transactions of a Private Character, p.66ff; Whiteman, Digest of International Law, 6 [1968] 572f.). The restriction to public property made in the report makes it impossible to derive a legal view of the Committee that measures of execution against foreign States other than upon these assets would be barred simply under general international law.

6. This survey shows that there is no practice sufficiently general and supported by the necessary legal conviction as to establish a general rule of customary international law whereby a forum State would be simply barred from execution against a foreign State upon its assets located in the forum State. The range of States which, as shown by the case law, legislation or treaty practice, at least do not rule out enforcement measures against foreign States where such measures arise from titles relating to acts iure gestionis of the foreign State and are executed upon assets serving non-sovereign purposes is so great that there cannot at present be any general practice of regarding execution as excluded by international law, however the requirement of generality of such practice if it is to establish a rule of customary international law may be defined. This concerns not merely action that a State can successfully uphold from the outset against application of an existing general rule of international law by way of perseverent protestation of rights (in the sense of the ruling of the International Court of Justice in the Norwegian Fisheries Case, ICJ Reports 1951, p.131); instead, the existence of a corresponding general rule of international law cannot at present be assumed.

7. This legal position is also confirmed in the statements of recognized academic associations and scholars of international law.

a) The Institut de Droit International, which had already made a statement at its Hamburg Congress in 1891 in its draft International Provisions on jurisdiction in the case of disputes with foreign States in favour of far-reaching measures of immunity in trial proceedings (Resolution of 11 September 1891, Annuaire 2 [1928] p.1215), stated, referring to the new questions that had since arisen and required solution, at its Congress in Aix-en-Provence, in a Resolution of 30 April 1954 on the admissibility of security and enforcement measures:

"Il ne peut être procédé ni à l'exécution ni à une saisie conservatoire, sur les biens qui sont la propriété d'un Etat étranger, s'ils sont affectés à l'exercice de son activité gourvenementale qui ne se rapporte pas à une exploitation économique quelconque."
(Article 5 of the Resolution, Annuaire 45 II [1954] p.293ff., 295)

It may be concluded from the exclusion of possibilities of seizure of assets serving sovereign purposes that the Resolution did not otherwise regard enforcement measures as barred by general international law. The discussions around this Article in the first place concern the question of delimiting the assets upon which execution may not be made.

The Harvard Law School's draft Convention on the competence of courts in regard to foreign States of 1932 (AJIL 26 [1932] supp. p.451ff. [Harvard Draft] assumes in Article 22 the exclusion in principle of enforcement against foreign States; by Article 23, however, enforcement is to be admissible upon immovable property and on property used in connection with conduct of a commercial enterprise of the foreign State's. According to the Comment (loc.cit p.707) the seizure of bank accounts is to be admissible where they are maintained by the foreign State in order to meet private obligations.

The second Study Commission of the German Association for International Law adopted theses on State immunity on 26/27 April 1967, on the basis of the reports by Schaumann and by Habscheid (BerDGVR 8 [1968] 1ff.; 159ff.; 283ff.). According to these, by international law at present in force, foreign States were due only limited immunity in relation to the exercise of judicial and administrative enforcement (theses 30, 62). For the exercise of court enforcement, jurisdiction of the venue State must exist, both in respect of the claim underlying the title of execution and in respect of the thing upon which execution is to be made (thesis 34). The court of jurisdiction is said not to be due any power of enforcement against a State in respect of the thing upon which execution is to be made if this object is intended for use for acta iure imperii. Particular things are withdrawn by international law from execution, for instance the properties and objects serving diplomatic missions, foreign naval and governmental ships and the equipment of foreign armed forces (theses 37, 38); this also applied to enforcement on bank credit balances and other monetary receivables serving the carrying out of acts iure imperii (thesis 67).

b) A considerable number of recognized scholars of international law, too, maintain the legal view, albeit with arguments and conclusions differing in detail, that general customary international law does not bar measures of security and execution against foreign States by the forum State arising out of judicial titles relating to action of the foreign State iure gestionis upon things serving non-sovereign purposes of the foreign State; to the extent that the existence of a rule of general customary international law barring such measures is not entirely denied therein, its existence is at least termed doubtful. As examples from the relevant literature we shall mention only:
van Praag, Juridiction et Droit international public, (1915), p.340ff.;
idem, La question de l'immunité de juridiction des Etats étrangers et celle de la possibilité de l'exécution des jugements qui les condamnent, in Revue de droit internationl et de législation comparée, 1935, p.100, 129;
Quadri, La giurisdizione sugli stati stranieri, (1941), p.57f.;
Gmür, Gerichtsbarkeit über fremde Staaten, (1948);
Riezler, Internationales Zivilprozessrecht und prozessuales Fremdenrecht, (1949), p.400ff.;
Lauterpacht, The Problem of Jurisdictional Immunities of Foreign States, BYB 28 (1951), 220ff.;
Sibert, Traité de Droit International Public, vol.1 (1951), p.272f.;
Lémanon, L'immunité de juridiction et d'exécution forcée d'Etats étrangers, in: Annuaire de l'Institut de Droit International 44 (1952) I, 5, 28ff.;
Lalive, L'immunité de juridiction des Etats et des organisations internationales, in: Recueil des Cours 84 (1953) III, 205, 272ff.;
Schnitzer, Handbuch des Internationalen Privatrechts, II (4th ed. 1958), p.836f.;
S_brensen, Principes de Droit International Public, in: Recueil des Cours, 101 (1960) III, 1, 172;
Dahm, Völkerrecht, vol. 1 (1958), p.238 ff.;
Wengler, Völkerrecht, vol.2 (1964), p.951;
Cohn, Gerichtsbarkeit über fremde Staaten, in: Wörterbuch des Völkerrechts, 2nd ed., vol. 1 (1960), p.661ff.;
Suy, Immunity of States before Belgian Courts and Tribunals, ZaöRV 27 (1967) 660, 690f.
idem, L'immunité des Etats dans la Jurisprudence Belge, in: L'immunité de juridiction et d'exécution des Etats, (1971), p.279, 311;
Deåk, in S_brensen, ed., Manual of Public International Law, (1968), p.424, 440;
Leigh, Monroe, New Departures in the Law of Sovereign Immunity, Proceedings of the American Society of International Law, 1969, p.187ff.;
Seidl-Hohenveldern, Völkerrecht, 3rd ed. (1975), no.1115;
Giuttari, The American Law of Sovereign Immunity, (1970), p.254ff.;

II.

If, accordingly, general rules of international law do not simply bar enforcement by the forum State against a foreign State, they nonetheless set limits in rem to the enforcement.

1. There exists an established, general, practice of States supported by legal conviction, that the forum State is barred by international law from applying execution arising from judicial titles against the foreign State upon assets of the foreign State located or occupied within the country and serving sovereign purposes of the foreign State without its assent.

To be sure, in the practice of States there is no complete agreement as to the extent of the assets protected by their nature by State immunity. While according to the Foreign Sovereign Immunities Act of 1976 of the United States of America in principle only assets that are or were used for a commercial activity of the foreign State connected with the substantive legal claim asserted are subject to execution (cf. Section 1610 [a] [2]), the Italian and the Swedish case law focuses on whether the things upon which execution is to be done actually do serve or are intended to serve non-sovereign or sovereign purposes of the foreign State. In connection with the present submission proceedings, no conclusive position for German law on these distinctions and their legal consequences is required. For the general agreement and established practice of States is at any rate to the effect that assets in the forum State that in fact serve sovereign purposes of the foreign State are by general international law not subject to execution. Isolated doubts, as reported in the Federal Government's position in relation to enforcement on embassy accounts - doubts not shared by the Federal Government itself - can change nothing in the fact that to that extent a general rule of international law exists. The practice of States, as attested in treaty practice, in legislation and in the case law of national courts, like the international legal literature, are to that extent unanimous in outcome, as the examples adduced under CI show.

2. For trial proceedings, the Federal Constitutional Court has stated that the description of a State's act as sovereign or non-sovereign according to the act's legal nature must in principle be done according to the national law applicable in each case, since international law does not, at any rate in general, contain criteria for this demarcation (BVerfGE 16, 27 [62f.]). The Court has not failed to recognize here that it hampers the application of general international law and militates against the desired unity of law if the national law concerned is invoked for this qualification. This drawback is however, mitigated by the fact that there are limits in international law to the description in national law of action by a State as an act iure gestionis. According to these, national law may be adduced in this connection only with the proviso that actions of the State that belong to the sphere of State power in the narrower and proper sense according to the view overwhemingly held by States may not be excluded from the sovereign sphere and therefore from immunity. Exceptionally, it may be required by international law to treat action by a foreign State as an act iure imperii because it is to be attributed to the core area of State power, although by national law it ought to be regarded as action in private law and not public law (BVerfGE 16, 27 [63f.]).

In the present case, in which only the admissibility of enforcement measures on receivables from the current, general account of the embassy of a foreign State is in question, it need not be gone into whether the description of an asset as serving sovereign purposes is in general to be made according to corresponding principles. For in relation to things serving the performance of the official functions of the diplomatic representation of a foreign State within the forum State, special provisions of international law intervene for this description, which irrespective of their partial establishment by treaty in the Vienna Convention on diplomatic relations constitute general rules of international law within the meaning of Article 25 Basic Law. They follow both from the principle of the inviolability of diplomatic missions and from the judicial immunity of the foreign State in relation to the official functions of its diplomatic mission.

3. According to an established view, which began to emerge even before Grotius (De iure belli ac pacis, L. II, c. XVIII, 9), and Bynkershoek (Foro Legatorum, sec.ed. 1744, Cap.XVI, XXIII), in the case of measures of security or execution against a foreign State, under international law things at the relevant time serving its diplomatic mission in carrying out its official functions may not be seized (see, each with numerous references, van Praag, Juridiction et Droit international public, 1915, p.357ff.; C.E. Wilson, Diplomatic Privileges and Immunities, 1967, p.1ff.; Gmür, Gerichtsbarkeit über fremde Staaten, 1948, p.134; Verdross, Völkerrecht, 5th ed. 1964, p.338f.; Habscheid, BerDGVR loc.cit., p.264f.). The norm of international law ne impediatur legatio rules out such measures insofar as they could hamper the carrying out of diplomatic tasks; accordingly, the Federal Constitutional Court has stated that German jurisdiction in trial proceedings against a foreign State in an action for approval of a correction to the Land Register in respect of ownership of a property used for international purposes is not excluded by a general rule of international law because the functionality of the diplomatic representation is not thereby infringed (BVerfGE 15, 25 [43]).

Because of the demarcation difficulties in assessing endangerment of this functionality and because of the latent possibilities of abuse, general international law draws the sphere of protection in favour of the foreign State very broadly, focusing on the typical, abstract danger, not on the specific endangerment of the functionality of the diplomatic representation by measures taken by the receiving State (cf.Habscheid, BerDGVR, loc.cit., p.206). Thus, for instance, Article 22(3) of the Vienna Convention on Diplomatic Relations of 18 April 1961, which here codifies general international law, excludes mission premises, their furnishings and other property thereon, and the mission's means of transport, from search, requisition, attachment or execution. This inviolability provision is however not exhaustive in the sense that these and other assets may not additionally enjoy immunity protection in international law of the official functions of the diplomatic representation of the sending State. Admittedly, this question was not, as far as can be seen, discussed in detail from the viewpoint of inviolability, apart from a proposed amendment by Sir Gerald Fitzmaurice, withdrawn for other reasons (cf. Yearbook of the International Law Commission 1957 I 64 , 396th meeting), in the International Law Commission of the United Nations, whose draft was the basis for the Vienna Conference. At the Vienna Conference itself, too, this question was as far as can be seen not further discussed, nor, however, decided in the sense of exclusion of further-reaching protection of immunity (in the case of a proposed amendment by Ukraine, Doc A/CONF. 20/C, 1/L. 132, that would include other assets under the protection of inviolability provisions, it was clarified that it referred only to objects on mission premises; with that proviso, it was adopted; see United Nations Conference on Diplomatic Intercourse and Immunities, Vienna 2 March-14 April 1961, Official Records, vol.II, p.20,57). The Preamble to the Vienna Convention accordingly affirms that the rules of customary international law should continue to govern questions not expressly regulated in the Convention. Thus, for instance, Article 4, last paragraph, of the Annex to the Agreement on general questions of trade and sea navigation between the Federal Republic of Germany and the Union of Soviet Socialist Republics of 25 April 1958(see above) excludes from execution not only the premises of the Soviet trade representation and the furnishings located therein but in general assets which by international usage are intended exclusively for the exercise of political and diplomatic rights in the Federal Republic of Germany.

This and similar treaty provisions confirm the general rule of international law that things used by the sending State in the exercise of its diplomatic functions enjoy immunity protection in any case, even when they do not fall under the material or spatial sphere of application of the inviolability provision of Article 22 of the Vienna Convention (so also Schaumann, BerDGVR loc.cit., p. 148, who derives this from general State immunity, even if "borrowed" from diplomatic immunity [loc.cit., p.148]; see also Article 23 of the Harvard Draft, loc.cit., AJIL 26 [1932] supp. p.707).

4 a) The question whether receivables from a general current bank account maintained by the sending State for its diplomatic representation in the receiving State and intended to cover and meet the embassy's expenses and costs participate under general international law in the special protection in favour of diplomatic representations can be answered from the special purpose of the international legal protection of diplomatic representation. The object of inviolability and of immunity in this sphere is to guarantee the unhampered functioning of the diplomatic representation of the sending State in the receiving State in carrying out its diplomatic tasks (cf. C.E. Wilson, Diplomatic Privileges and Immunities, p.19ff., with many examples from the practice of States). By Article 3 of the Vienna Convention on diplomatic relations, which here describes general international law, the functions of a diplomatic mission consist inter alia in:
a) representing the sending State in the receiving State;
b) protecting, in the receiving State, the interests of the sending State and of its nationals, within the limits permitted by international law;
c) negotiating with the government of the receiving State;
d) ascertaining by all lawful means conditions and developments in the receiving State and reporting thereon to the government of the sending State;
e) promoting friendly relations between the sending State and the receiving State and developing their economic, cultural and scientific relations.

It is clear that the use of financial resources is also indispensable to the carrying out of these tasks. The maintenance of such resources in the content of these tasks and the organization and administration of the financial settlement of the expenses and costs of the diplomatic mission by the sending State belong directly to the sphere of the tasks and functions of the diplomatic mission (see also Cahier, Le droit diplomatique contemporain, 1962, p.210, explicitly including bank credit balances of an embassy in the sphere protected by the inviolability rule).

It need not be gone into here whether the receiving State is bound in general international law to grant the sending State the possibility of maintaining bank accounts in the receiving State to meet the expenses and costs of the sending State's embassy. If the receiving State, however, opens this possibility and the sending State makes use of it within the framework of the receiving State's legal system, then the sending State's immunity for its receivables and other rights arising out of such an account does not disappear simply and insofar as the sending State's legal relationship to the bank is under the receiving State's law to be termed non-sovereign. It should be borne in mind here that the sending State is not in principle capable of its own sovereign power of treating things or rights directly serving the exercise of its diplomatic functions or the maintenance of the operations of its diplomatic representation as sovereign with effect for the legal system of the receiving State, for instance, to devote a thing to the public cause within the meaning of the receiving State's legal system. It is here largely dependent on the receiving State's legal system. Should this allow it here only action in accordance with, say, private law, this may nonetheless not curtail the immunity protection under international law in favour of the functionality of its diplomatic representation. The financial settlement of the expenses and costs of an embassy through a general current account of the sending State maintained with a bank in the receiving State belongs directly to the maintenance of the diplomatic functions of the sending State, irrespective of the fact that payments made through such an account may in relation to the bank or third parties come about within a framework of legal relationships or actions that by their legal nature may be described as acts iure gestionis. The sending State's claims on the basis of such an account against the bank therefore by general international law enjoy at any rate the protection of immunity in favour of diplomatic representations against execution.

Any other view would entail that the enforcement agencies of the receiving State would if necessary have to ascertain the existence of a credit balance on such an account, and the purposes for which the sending State had earmarked that credit balance or parts of it. It may seem questionable for German law in the case of a general current account, merely in terms of the adequate definability of the thing to be distrained, whether in this way criteria can be secured for the possibility of distraint on say, parts of the credit balance (similar doubts for French law are expressed by the Court of Aix-en-Provence, judgment of 14 February 1966, in re Statni Banka et Banque d'Etat tschécoslavique v. Englander, Clunet 1966, 846; quashed by the Court of Cassation in a ruling of 11 February 1969, Clunet 1969, 923; in re Clerget v. Représentation commerciale de la République démocratique du Viet-Nam, ruling of 2 November 1971, Clunet 99 [1972] 267 the Court of Cassation disallowed distraint of a bank credit balance because the origin and use had not been established at the trial); but even were this possible in individual cases in relation to receivables from such an account, as a general rule the danger of interference with the internal functional sphere of the diplomatic representation of the sending State will bar this; this is simply barred by international law on legations, without the sending State's assent. That enforcement agencies of the receiving State should expect a sending State without its assent to give details of the existence of the earlier, present or future uses of credit balances on such an account would, furthermore, constitute interference contrary to international law with exclusive matters of the sending State. General international law does not on the other hand bar a requirement on the sending State that it show that an account is an account serving the maintenance of the functions of its diplomatic representation. As to the content and form of this proof, however, the forum State will by international law have to accept the giving of a relevant assurance by a competent organ of the sending State.

b) No decisive objections to this finding can be derived from either the practice of the external organs of States, the case law of national courts or the literature on international law.

So far as can be seen, to date execution on receivables from a current, general bank account maintained by a foreign State for its embassy to meet the embassy's expenditure and costs has not been permitted in any case, even if individual decisions may not regard it as excluded - admittedly mostly in relation to other accounts not set up specifically for embassy purposes - to distinguish between the sovereign or non-sovereign origin and use of a credit balance or an account of a foreign State (see e.g. the French Court of Cassation in rebus Englander v. Statni Banka Ceskoslovenska, Clunet 96 [1969] p.923f. and Clerget v. Représentation commerciale de la République démocratique du Viet-Nam, Clunet 99 [1972] p.267f.; Swiss Federal Court in re République Arabe Unie v. Mrs X, BGE 86 I [1960] p.23ff.; Florida District Court of Appeal in re Harris & Co. Advertising Co., Inc. v. Republic of Cuba, 127 So. 2 d 687 [1961]; Supreme Court of New York in re New York World's Fair 1964-1965 Corp. v. Republic of Guinea, AJIL 63 [1969] p.343).

According to Schaumann (BerDGVR lot. cit., p.145) the foreign State can invoke immunity simply in the context of general State immunity in the case of a general bank account, and to a limited extent also in relation to other assets, by merely stating a sovereign purpose; for it is only rarely possible to prove the contrary. This outcome could not be avoided by a view of State immunity based on protection of the sovereign functions of the foreign State, borrowing from diplomatic immunity. Were one, for instance, instead of the designation of an asset for a sovereign purpose to require proof of its actual use for that purpose, then protection of the sovereign functions of the State in the external sphere would have to have lacunae. According to Habscheid (BerDGVR loc.cit., p.266f.) the focus should be on the specific earmarking of the receivables to be distrained. For this, for example the ministry denoted as holder of the account might be a basis.

c) The Senate does not fail to see that immunity in favour of receivables from a general, current account of the embassy of a foreign State could in individual cases be used to settle through such an account and under its protection financial matters not directly connected with the tasks of a diplomatic representation. Should such a case arise - and there are no bases for that in the initial case - it would be a matter for the competent organs of the Federal Republic of Germany to counter misuse of the immunity of diplomatic representations by diplomatic and other means admissible in international law. The private individual wishing to engage in private economic relations with a foreign State remains free to guard his interests as far as possible, for instance by agreements on the mode of making of payments, on procedure in the event of disputes - in particular, a waiving of immunity that is in principle irrevocable (in this connection see also the provision of the American Foreign Sovereign Immunities Act of 1976, Sec.1610 [a] [1]) - or through collateral security.

d) It need not be gone into here whether and on what criteria receivables and other rights on other accounts of a foreign State with banks in the forum State, for instance special accounts in connection with procurement purchases or loan issues or accounts without special earmarking may be regarded as sovereign or non-sovereign assets, and which limits in international law are accordingly to be complied with as appropriate in relation to law of evidence.

5. For the question of the sending State's immunity in favour of its diplomatic representation, the economic position of the sending State does not enter in; whether, say, it is in a position despite the distraint of receivables from a general, current account of its embassy to maintain embassy operation by financial contributions or payments made in some other way. Here it is only the abstract endangerment by enforcement measures of this nature that counts. This is present in the case of the legal effects that a distraint and transfer order has in German law against the enforcement debtor and garnishees. A distinction according to the economic position of the sending State could further lead to discriminatory treatment of foreign States in the sphere of diplomatic immunity, which would be against the principle in international law of the sovereign equality of States. It need not be gone into here whether this legal principle, as reflected in Article 2(1) of the United Nations Charter (BGBl. 1973 II p.430), concerns only the relations of membership rights within the context of the United Nations Organization; the principle of sovereign equality of States is over and above that a constitutive principle of contemporary general international law which at any rate in the sphere of diplomatic transactions of States requires far-reaching formal equality of treatment (cf. United Nations General Assembly declaration of 24 October 1970 on the principle of sovereign equality, Doc. A/RES/2625 [XXV], ILM IX [1970] 1292ff., 1296). Differential treatment of States in the sphere of diplomatic immunity according to their respective economic capacity to pay would be incompatible with this.

III.

1. The general rule of international law stated under C above is a part of federal law; Article 25, first sentence, Basic Law, para. 83(1) BVerfGG.

2. It establishes exclusively rights and duties in the relationship of States to each other in international law, but does not by contrast establish or change subjective rights or duties of the private individual within the national territory of the Federal Republic of Germany, even in consequence of Article 25, second sentence, Basic Law. There follows from it neither a subjective right of the private individual to execution against foreign States within the national territory of the Federal Republic of Germany to the extent that general international law admits, nor a subjective duty established not to aim at execution against a foreign State insofar as this is barred by general international law. Rights and duties of this content follow at present at most from other domestic law.

3. The distinction should be made here that the general rule of international law stated is in virtue of Article 25, first sentence, Basic Law valid law in the national territory of the Federal Republic of Germany as such, with its appropriate scope in international law, and can according to the substantive position have legal effects for or against private individuals, to the effect, for instance, that in relation to the existence or non-existence of German jurisdiction, enforcement proceedings brought by them or the nature of an enforcement measure, may be admissible or inadmissible. The Federal Constitutional Court's pronouncement in accordance with para. 83(1) BVerfGG is in such cases confined to the finding that the general rule of international law is a part of federal law.

IV.

This decision was taken unanimously.

Back to top

This page last updated Thursday, 01-Dec-2005 11:04:42 CST. Copyright 2007. All rights reserved.