Immunity of State Property

Immunity of State Property refers to the protection enjoyed by property belonging to a foreign State from attachment, seizure, execution or other enforcement measures by the courts or authorities of another State.

It is an important aspect of State immunity and must be distinguished from immunity from jurisdiction.

The basic principle is:

Foreign State property → generally protected from enforcement → subject to recognised exceptions

Meaning of Immunity of State Property

A foreign State may own property situated within the territory of another State.

The question arises whether the courts or authorities of the territorial State can:

• attach that property;
• seize it;
• freeze it;
• sell it;
• execute a judgment against it.

International Law generally provides significant protection to foreign State property, particularly where the property is being used for sovereign purposes.

Immunity from Jurisdiction vs Property Immunity

These are separate issues.

Immunity from Jurisdiction

Protects a State from being subjected to the jurisdiction of foreign courts.

Immunity from Enforcement

Protects State property from coercive measures such as:

• attachment;
• seizure;
• execution;
• sale.

Therefore:

A State may lose immunity from jurisdiction but still retain immunity from enforcement against its property.

Sovereign and Commercial Property

The restrictive theory of State immunity is also relevant to State property.

Property connected with sovereign activities generally receives stronger protection.

Property used for commercial purposes may, in certain circumstances, be subject to enforcement.

Thus:

Sovereign use → Stronger immunity

Commercial use → Possible exception

However, the precise rules depend upon applicable International Law and domestic legislation.

State Property Used for Sovereign Purposes

Property used for governmental or sovereign functions generally enjoys strong protection.

Examples include:

• military property;
• diplomatic property;
• embassy bank accounts;
• property used by armed forces;
• certain central bank assets;
• property belonging to sovereign governmental institutions.

Such property is generally protected from enforcement measures.

State Property Used for Commercial Purposes

Property used for commercial purposes may receive less protection under restrictive immunity regimes.

For example:

Foreign State owns commercial property

↓

Commercial transaction gives rise to judgment

↓

Creditor seeks enforcement

The possibility of enforcement depends upon:

• the applicable domestic law;
• the nature and use of the property;
• whether the State has waived immunity;
• whether a recognised exception applies.

Immunity of Diplomatic Property

Diplomatic property receives particularly strong protection.

This includes:

• embassy premises;
• diplomatic offices;
• certain diplomatic bank accounts;
• diplomatic communications and related property.

The Vienna Convention on Diplomatic Relations, 1961 provides important protections for diplomatic premises and property.

A foreign State generally cannot treat embassy property as ordinary commercial property simply because it is located within the territory of another State.

Military Property

Property used for military purposes generally enjoys strong immunity.

Examples include:

• military equipment;
• naval vessels;
• military aircraft;
• defence installations;
• property used by armed forces.

The sovereign character of military activities provides a strong basis for protection.

Central Bank Property

Property of a foreign central bank or other monetary authority is often given particularly strong protection.

This may include:

• central bank reserves;
• monetary assets;
• accounts held for sovereign purposes.

Many domestic State-immunity statutes specifically provide enhanced protection for central bank or monetary authority property.

State-Owned Commercial Enterprises

A State may own companies that operate commercially.

The property of such an entity does not automatically receive the same immunity as property belonging directly to the State and used for sovereign purposes.

The legal position depends upon:

• separate legal personality;
• ownership;
• nature of the entity;
• purpose and use of property;
• applicable domestic law.

Waiver of Immunity

A State may waive immunity from enforcement in appropriate circumstances.

For example, a State may expressly agree that certain property can be subject to enforcement.

However:

Waiver of immunity from jurisdiction does not automatically amount to waiver of immunity from enforcement.

A separate and sufficiently clear waiver may be required.

Consent to Arbitration

A State may agree to arbitration in a commercial contract.

This may limit its ability to object to the jurisdiction of the arbitral tribunal or related courts.

However, consent to arbitration does not automatically mean that all State property can be seized to satisfy the resulting award.

Jurisdictional immunity → Separate from enforcement immunity

Enforcement of Judgments

Suppose:

Company obtains judgment against State A in State B

The company cannot necessarily immediately seize State A’s assets in State B.

A separate question arises:

Is the particular property protected from enforcement?

The answer may depend on:

• nature of the property;
• use of the property;
• location;
• waiver;
• applicable legislation;
• international obligations.

Commercial Property and Enforcement

Even where a State is not immune from jurisdiction concerning a commercial transaction, enforcement against State property may still be restricted.

For example:

Commercial contract → State loses jurisdictional immunity

does not necessarily mean:

All State assets → available for seizure

Only property falling within the applicable enforcement exception may potentially be targeted.

State Property and Execution

Execution refers to coercive measures taken to satisfy a judgment.

These may include:

• attachment;
• garnishment;
• seizure;
• sale;
• freezing;
• execution against assets.

International Law provides particularly strong protection against execution against property used for sovereign functions.

Jurisdictional Immunities of the State Case

The leading ICJ case is:

Jurisdictional Immunities of the State (Germany v. Italy; Greece intervening), 2012

The case concerned attempts to bring proceedings against Germany before Italian courts concerning conduct during the Second World War.

The case also involved questions concerning measures of constraint against State property.

ICJ on Enforcement Measures

The ICJ distinguished between:

1. immunity from jurisdiction; and
2. immunity from enforcement measures.

The Court recognised that these are separate legal questions.

This is one of the most important principles for understanding immunity of State property.

Property Used for Sovereign Purposes

The protection against enforcement is particularly strong where State property is being used for sovereign purposes.

This is because seizure of such property can directly interfere with the functioning and independence of the foreign State.

Property of Diplomatic Missions

Diplomatic property is subject to additional protection.

For example, an embassy cannot ordinarily be treated as an ordinary commercial asset available for execution of a judgment.

This reflects the special rules governing diplomatic relations.

Warships and Military Vessels

Foreign warships generally enjoy immunity under the law of the sea and customary International Law.

A foreign warship located in another State’s waters cannot ordinarily be subjected to ordinary enforcement measures of the coastal State.

State Aircraft

State aircraft used for military, customs or other sovereign purposes also receive special protection under applicable international rules.

State Property and Commercial Transactions

A State may use its property for commercial purposes.

However, commercial use does not automatically mean that the property can be seized.

The relevant question is whether the applicable law recognises an enforcement exception for that category of property.

United Nations Convention on State Immunity

The United Nations Convention on Jurisdictional Immunities of States and Their Property, 2004 provides an important international framework concerning State immunity.

It addresses:

• jurisdictional immunity;
• commercial transactions;
• employment;
• property;
• enforcement measures;
• attachment;
• execution.

The Convention distinguishes between immunity from jurisdiction and immunity from measures of constraint.

Pre-Judgment and Post-Judgment Measures

Enforcement immunity may apply differently depending upon the stage of proceedings.

Pre-Judgment Measures

Measures taken before a final judgment, such as:

• attachment;
• freezing;
• seizure.

Post-Judgment Measures

Measures taken to enforce a final judgment, such as:

• execution;
• sale;
• attachment of assets.

International Law generally provides strong protection against both, subject to recognised exceptions.

Property Immune from Enforcement

Property that is generally afforded particularly strong protection may include:

• diplomatic and consular property;
• military property;
• central bank property;
• property used for sovereign governmental functions.

The exact scope depends upon the applicable legal framework.

State Property and Human Rights Judgments

A difficult issue arises where individuals obtain judgments based on serious human rights violations.

The argument may be made that State property should be available to satisfy those judgments.

However, the Jurisdictional Immunities case demonstrates that the seriousness of the underlying violation does not automatically remove State immunity from enforcement measures.

State Immunity and Human Rights

There is an important distinction between:

Substantive responsibility → Did the State violate International Law?

and

Procedural immunity → Can foreign courts exercise jurisdiction or enforcement against the State?

A State may be responsible under International Law while still benefiting from procedural immunity before foreign domestic courts.

Immunity and State Property in India

India follows a framework under which foreign States may claim immunity subject to the applicable provisions of domestic law and International Law.

Section 86 of the Code of Civil Procedure, 1908 is particularly important concerning suits against foreign States.

The provision establishes conditions governing when a foreign State may be sued in Indian courts.

Questions concerning execution against foreign State property may additionally involve:

• the nature of the property;
• applicable immunity rules;
• diplomatic protections;
• consent or waiver;
• the relevant procedural framework.

Common Confusions

Does State immunity protect all State property?

No. The degree of protection depends upon the nature and use of the property and applicable legal rules.

Is diplomatic property protected?

Yes, diplomatic premises and related property receive strong protection under diplomatic law.

Can State commercial property be seized?

Potentially, where a recognised enforcement exception applies, but commercial character alone does not automatically make every State asset available for seizure.

Does losing immunity from jurisdiction mean property can automatically be seized?

No.

Can a State waive enforcement immunity?

Yes, where the applicable legal requirements for waiver are satisfied.

Is a central bank’s property protected?

Central bank and monetary authority property generally receives particularly strong protection.

Are military assets protected?

Yes, military property generally receives strong immunity from foreign enforcement.

Can an embassy be attached to satisfy a judgment?

Generally no.

What is the leading ICJ case?

Jurisdictional Immunities of the State (Germany v. Italy), 2012.

Topic at a Glance

Point Position Meaning Protection of State property from foreign enforcement Main principle Sovereign property generally protected Jurisdictional immunity Separate from property enforcement immunity Sovereign property Strong protection Commercial property May fall within recognised exceptions Diplomatic property Strong protection Military property Strong protection Central bank property Strong protection Waiver Possible under applicable law Arbitration Consent does not automatically waive enforcement immunity Key case Jurisdictional Immunities, 2012 Important instrument UN Convention on Jurisdictional Immunities, 2004 Indian law Section 86, CPC, relevant to suits against foreign States

Quick Revision

• Immunity of State Property protects foreign State property from attachment, seizure and execution.
• It is a separate aspect of State immunity.
• Immunity from jurisdiction and immunity from enforcement are not identical.
• Property used for sovereign purposes generally receives strong protection.
• Particularly protected property may include:
  • embassy property;
  • military property;
  • central bank assets;
  • property used for governmental purposes.
• Commercial State property may potentially be subject to enforcement under recognised exceptions.
• A State may waive enforcement immunity, subject to applicable legal requirements.
• Consent to jurisdiction or arbitration does not automatically waive immunity from enforcement.
• The Jurisdictional Immunities of the State (Germany v. Italy), 2012 case is a leading authority.
• The UN Convention on Jurisdictional Immunities of States and Their Property, 2004 provides an important framework.
• In India, Section 86 of the Code of Civil Procedure, 1908 is important concerning suits against foreign States.
• The essential principle is:

State property used for sovereign purposes is generally protected from foreign enforcement, while certain commercial property may be subject to enforcement where a recognised exception applies.

Conclusion

Immunity of State Property is an important component of the modern law of State immunity. It protects property belonging to a foreign State from coercive measures such as attachment, seizure and execution by another State’s courts and authorities. The protection is particularly strong for property used for sovereign, diplomatic, military and monetary functions. At the same time, the modern restrictive approach to State immunity recognises that certain commercial activities and property may fall within established exceptions. A crucial distinction must be maintained between immunity from jurisdiction and immunity from enforcement: even when a foreign State can be subjected to proceedings, its sovereign property may remain protected from execution. The Jurisdictional Immunities of the State (Germany v. Italy), 2012 decision of the ICJ is a leading authority on this distinction. The UN Convention on Jurisdictional Immunities of States and Their Property, 2004 provides an important framework for the subject. In India, Section 86 of the CPC is particularly relevant to proceedings against foreign States. Ultimately, the law seeks to balance the enforcement of legitimate claims with the fundamental principle that one sovereign State should not ordinarily interfere with the property and governmental functions of another sovereign State.