Heiser, Estate of & Ors v The Islamic Republic of Iran & Anor

Recognition and enforcement of an overseas judgment against a foreign state under section 31 of the Civil Jurisdiction and Judgments Act 1982 requires satisfaction of both statutory conditions. The foreign court must have had jurisdiction under ordinary English private international law rules, including the requirement that the defendant was present in the foreign country when proceedings began. It must also have had jurisdiction under rules corresponding to sections 2 to 11 of the State Immunity Act 1978. “Corresponding” requires the hypothetical application of the United Kingdom rules, not merely the application of a broadly analogous foreign exception. Section 5 is concerned with the place of the act or omission causing the injury, not the place where injury or loss is suffered. State-sponsored terrorism remains a governmental act for the purposes of the commercial transaction exception.

The claimants sought recognition and enforcement in England of twelve judgments of the United States District Court for the District of Columbia against Iran and the Iranian Ministry of Information and Security. The judgments arose from terrorist attacks causing death and personal injury, including one shooting in New York. The defendants applied to set aside orders permitting service out of the jurisdiction and default judgment, relying on state immunity and defective service. The principal issues were whether the defendants had submitted to jurisdiction, whether the conditions in section 31 of the Civil Jurisdiction and Judgments Act 1982 were met, and whether the proceedings and default judgment had been validly served.

1. The applications were substantially successful. The defendants had not submitted to the jurisdiction. The claimants failed to satisfy section 31(1)(a) of the Civil Jurisdiction and Judgments Act 1982, because presence of the foreign state in the United States was required and had not been proved.
2. Presence is a factual requirement under the ordinary English rules for recognition of foreign judgments. The court declined to expand those rules merely because service out was permitted under United States law. Evidence of findings in Kirschenbaum v 650 Fifth Avenue was inadmissible as proof of the underlying facts at a final hearing.
3. Section 31(1)(b) requires the court to hypothesise the application of United Kingdom state-immunity rules. The United States terrorist exception could not be substituted for section 5 of the State Immunity Act 1978. Article 6 ECHR did not require a broader construction.
4. Section 5 concerns the place where the act or omission causing the injury occurred. The location of the resulting injury, or the residence of secondary victims, was insufficient. The foreign terrorist attacks, apart from the New York shooting, occurred outside the United States.
5. The New York judgment would satisfy section 31(1)(b), because the defendants were joint tortfeasors under the principles in Sea Shepherd UK v Fish & Fish Ltd. That did not overcome the independent failure under section 31(1)(a).
6. The commercial transaction exception did not apply. State sponsorship and financing of terrorism were governmental acts, and the proceedings did not relate to a commercial transaction.
7. Proceedings were validly served on 10 February 2014. The default judgment was not validly served either when documents were refused on 2 September 2015 or by email on 6 September 2018.