“1. The Admitted Scheme Claims of Iraq under the Scheme [of arrangement in respect of Rafidain] have never been used, are not in use, and are not intended for use, by or on behalf of the State of Iraq for any commercial purpose. 2. Any assets or distributions received in respect of any Admitted Scheme Claim of Iraq under the Scheme are not intended for use by or on behalf of the State of Iraq for any commercial purpose. 3. The State of Iraq had directed the Scheme Administrators, and intends to continue to so direct the Scheme Administrators, to transfer any assets or distributions in respect of the Admitted Scheme Claims of Iraq under the Scheme to the Development Fund for Iraq.”
“The Security Council … Acting under Chapter VII of the Charter of the United Nations, … 12. Notes the establishment of a Development Fund for Iraq to be held by the Central Bank of Iraq and to be audited by independent public accountants approved by the International Advisory and Monitoring Board of the Development Fund for Iraq and looks forward to the early meeting of that International Advisory and Monitoring Board, whose members shall include duly qualified representatives of the Secretary-General, of the Managing Director of the International Monetary Fund, of the Director-General of the Arab Fund for Social and Economic Development, and of the President of the World Bank; 13. Notes further that the funds in the Development Fund for Iraq shall be disbursed at the direction of the Authority, in consultation with the Iraqi interim administration, for the purposes set out in paragraph 14 below; 14. Underlines that the Development Fund for Iraq shall be used in a transparent manner to meet the humanitarian needs of the Iraqi people, for the economic reconstruction and repair of Iraq’s infrastructure, for the continued disarmament of Iraq, and for the costs of Iraqi civilian administration, and for other purposes benefiting the people of Iraq; 15. Calls upon the international financial institutions to assist the people of Iraq in the reconstruction and development of their economy and to facilitate assistance by the broader donor community, and welcomes the readiness of creditors, including those of the Paris Club, to seek a solution to Iraq’s sovereign debt problems; … 20. Decides that all export sales of petroleum, petroleum products, and natural gas from Iraq following the date of the adoption of this resolution shall be made consistent with prevailing international market best practices, to be audited by independent public accountants reporting to the International Advisory and Monitoring Board referred to in paragraph 12 above in order to ensure transparency, and decides further that, except as provided in paragraph 21 below, all proceeds from such sales shall be deposited into the Development Fund for Iraq until such time as an internationally recognized, representative government of Iraq is properly constituted; …”
“The Security Council … Recognizing the benefits to Iraq of the immunities and privileges enjoyed by Iraqi oil revenues and by the Development Fund for Iraq, and noting the importance of providing for continued disbursements of this fund by the Interim Government of Iraq and its successors upon dissolution of the Coalition Provisional Authority, … Acting under Chapter VII of the Charter of the United Nations, … 24. Notes that, upon dissolution of the Coalition Provisional Authority, the funds in the Development Fund for Iraq shall be disbursed solely at the direction of the Government of Iraq, and decides that the Development Fund for Iraq shall be utilized in a transparent and equitable manner and through the Iraqi budget including to satisfy outstanding obligations against the Development Fund for Iraq, that the arrangements for the depositing of proceeds from export sales of petroleum, petroleum products, and natural gas established in paragraph 20 of resolution 2483 (2003) shall continue to apply, that the International Advisory and Monitoring Board shall continue its activities monitoring the Development Fund for Iraq …”
“(1) Except as provided in paragraph (2), the Development Fund for Iraq, its property and assets wherever located and by whomsoever held (including any rights or obligations owned by or to the Development Fund for Iraq), shall have the like privileges and immunities as the United Nations underPart II of the United Nations and International Court of Justice (Privileges and Immunities) Order 1974 . (2) The Development Fund for Iraq shall not have immunity from suit and legal process concerning liability for damages in connection with an ecological accident, including an oil spill, which occurs after22nd May 2003 .”
“5. The United Nations shall have the legal capacities of a body corporate. 6. Except in so far as in any particular case it has expressly waived its immunity, the United Nations shall have immunity from suit and legal process. No waiver of immunity shall be deemed to extend to any measure of execution.”
“(a) Any contract for the supply of goods or services; (b) Any loan or other transaction for the provision of finance and any guarantee or indemnity in respect of any such transaction or of any other financial obligation; (c) Any other transaction or activity (whether of a commercial, industrial, financial, professional or other similar character) into which a State enters or in which it engages otherwise than in the exercise of sovereign authority”
“42. … SerVaas’s case was … that the current use of the debt (i.e. the right to receive the monies) could only be ascertained from the underlying commercial transaction which would culminate in final payment of the debt. 43. If Section 13(4) is to have any application to the vast majority of commercial debts at all (most of which will not have an identified or identifiable use for the proceeds following satisfaction of the debt), it must be possible to describe a debt as being in use for some purpose. The only logical purpose which can be identified is the completion of the commercial transaction which gives rise to the debt itself. The current use of the Admitted Claims cannot be separated from the underlying transactions by which Iraq acquired those claims.”
“The crucial question of construction for your Lordships is whether a debt which has these legal characteristics falls within the description contained in section 13(4) of ‘property which is for the time being in use or intended for use for commercial purposes.’ To speak of a debt as ‘being used or intended for use’ for any purposes by the creditor to whom the debt is owed involves employing ordinary English words in what is not their natural sense, even if the phrase ‘commercial purposes’ is given the ordinary meaning of jure gestionis in contrast to jure imperii that is generally attributed to it in the context of rights to sovereign immunity in public international law; though it might be permissible to apply the phrase intelligibly to the credit balance in a bank account that was earmarked by the state for exclusive use for transactions into which it entered jure gestionis. What is clear beyond all question is that if the expression ‘commercial purposes’ in section 13(4) bore what would be its ordinary and natural meaning in the context in which it there appears, a debt representing the balance standing to the credit of a diplomatic mission in a current bank account used for meeting the day-to-day expenses of running the mission would fall outside the subsection. ‘Commercial purposes,’ however, is given by section 17(1) the extended meaning which takes one back to the comprehensive definition of ‘commercial transaction’ in section 3(3). Paragraph (a) of this tripartite definition refers to any contract for the supply of goods or services, without making any exception for contracts in either of these two classes that are entered into for purposes of enabling a foreign state to do things in the exercise of its sovereign authority either in the United Kingdom or elsewhere. This is to be contrasted with the other paragraph of the definition that is relevant to the instant case, paragraph (c), which on the face of it would be comprehensive enough to include all transactions into which a state might enter, were it not that it does specifically preserve immunity from adjudicative jurisdiction for transactions or activities into which a state enters or in which it engages in the exercise of sovereign authority, other than those transactions that are specifically referred to either in paragraph (a) or in paragraph (b), with the latter of which the instant appeal is not concerned. … My Lords, the decisive question for your Lordships is whether in the context of the other provisions of the Act to which I have referred, and against the background of its subject matter, public international law, the words ‘property which is for the time being in use or intended for use for commercial purposes,’ appearing as an exception to a general immunity to the enforcement jurisdiction of United Kingdom courts accorded by section 13(2) to the property of a foreign state, are apt to describe the debt represented by the balance standing to the credit of a current account kept with a commercial banker for the purpose of meeting the expenditure incurred in the day-to-day running of the diplomatic mission of a foreign state. Such expenditure will, no doubt, include some moneys due under contracts for the supply of goods or services to the mission, to meet which the mission will draw upon its current bank account; but the account will also be drawn upon to meet many other items of expenditure which fall outside even the extended definition of ‘commercial purposes’ for which section 17(1) and section 3(3) provide. The debt owed by the bank to the foreign sovereign state and represented by the credit balance in the current account kept by the diplomatic mission of that state as a possible subject matter of the enforcement jurisdiction of the court is, however, one and indivisible; it is not susceptible of anticipatory dissection into the various uses to which moneys drawn upon it might have been put in the future if it had not been subjected to attachment by garnishee proceedings. Unless it can be shown by the judgment creditor who is seeking to attach the credit balance by garnishee proceedings that the bank account was earmarked by the foreign state solely (save for de minimis exceptions) for being drawn upon to settle liabilities incurred in commercial transactions, as for example by issuing documentary credits in payment of the price of goods sold to the state, it cannot, in my view, be sensibly brought within the crucial words of the exception for which section 13(4) provides.”
“In my view SerVaas’s argument wrongly conflates the transactions by which Iraq acquired the debts that are the subject of the Admitted Claims with the intended use of those assets. Iraq is not presently using those assets, but intends to pay the dividends on them to the DFI. That property is not being used to provide finance to Iraq, and it is immaterial that that property was acquired by means of bonds in the cases where the consideration took the form of bonds. Nor is the property being used or intended to be used for transactions “otherwise than in the exercise of sovereign authority”
“The Republic of Iraq today announced the conclusion of the program to restructure Saddam-era commercial debt with payments that were made to holders of small claims against Iraq and Iraqi public sector entities…a total of$19.7 billion of commercial claims against Iraq have been settled over the past eleven months as part of the Government of Iraq’s program to address the huge debt stock accumulated by the Saddam regime.”
“29. In my judgment SerVaas has no real prospect of successfully rebutting the presumption created by the Certificate for the reasons given by counsel for Iraq. In my view SerVaas’s argument wrongly conflates the transactions by which Iraq acquired the debts that are the subject of the Admitted Claims with the intended use of those assets. Iraq is not presently using those assets, but intends to pay the dividends on them to the DFI…Iraq has decided to transfer the distributions to the DFI in the exercise of its sovereign authority, albeit constrained in this respect by Resolution 1483, for the purposes set out in the resolution.”
“58. A mere statement that an account is dormant begs the question of the duration of the dormancy. In this case, however, the period of dormancy is specified in the certificate of the High Commissioner. If an account has been dormant for at least 18 months, it cannot be said to be presently used for any relevant purpose, and the previous use is weak evidence of the present intention as to its use. In this case, that evidence is insufficient to disprove the statement in the High Commissioner’s certificate.”