L R Avionics Technologies Ltd v The Federal Republic of Nigeria & Anor

State immunity distinguishes recognition or enforcement proceedings from execution against state property. Where a state has agreed to arbitration, proceedings to register and enforce an award relate to the arbitration and fall within the arbitration exception. Execution against property remains governed by section 13 of the State Immunity Act 1978. The relevant question is the actual and intended use of the property, viewed by reference to the state’s purposes and the character of the activity carried out there. Outsourcing consular visa and passport functions to a private company does not make premises commercial merely because the company charges fees, pays rent or operates for profit. The judgment creditor bears the burden of disproving a certificate under section 13(5).

The claimant obtained an arbitration award against Nigeria for breach of a military-equipment contract. The award was upheld in Nigeria and converted into a Nigerian Federal High Court judgment carrying interest. Phillips J registered both the award and judgment in England and permitted service out of the jurisdiction.

The claimant then obtained charging orders over Nigerian-owned premises in Fleet Street, leased to Online Integrated Solutions Ltd for visa and passport services. Nigeria applied to set the orders aside, arguing that the judgment could not be enforced and that the property was immune from execution. The central issues were whether the award and converted judgment could be enforced, and whether the premises were in use for commercial purposes under the State Immunity Act 1978.

1. Arbitration award. Under section 9(1) of the State Immunity Act 1978, Nigeria was not immune from proceedings relating to the arbitration. Following Svenska Petroleum Exploration AB v Government of the Republic of Lithuania [2006] EWCA Civ 1529, such proceedings include registration or enforcement of an award under section 101 of the Arbitration Act 1996. Execution against state property is a separate question governed by section 13.
2. Converted judgment. The Nigerian judgment could not be enforced under section 101 because it was a judgment, not an award. Nevertheless, the section 9 discretion under the Administration of Justice Act 1920 should be exercised in favour of registration and enforcement where the judgment represented an award converted into a judgment under a foreign statutory scheme. AIC Ltd v Federal Government of Nigeria [2003] EWHC 1357 (QB) did not prevent that conclusion.
3. Execution against property. Section 13(4) required attention to the property’s actual or intended use and the character of the relevant activity. The primary use of the premises was the performance of consular functions, namely processing Nigerian visa and passport applications. That remained a public function even though it was outsourced to OIS, carried out for profit, and involved fees. The relevant purposes were those of the state against whose property execution was sought.
4. A lease, a possible services contract, work for other diplomatic missions, secondary bank-verification activities, commercial advertising and VAT registration did not establish commercial use. The claimant had not discharged the burden imposed by the certificate under section 13(5). The property was therefore immune from execution.
5. The property was not shown to be diplomatic or consular premises protected under the separate statutory regimes. The procedural defects were left undecided because the property was immune in any event. The charging orders were set aside.