Dynasty Company for Oil & Gas v Trading Ltd v The Kurdistan Regional Government of Iraq & Anor

State-immunity issues should ordinarily be addressed at an early stage because the court must give effect to immunity even where the state does not appear. That principle does not invariably require the immunity issue to be heard separately from other jurisdictional challenges. The court may determine all jurisdiction issues together where a claimant gives an effective concession preserving the defendant’s position on waiver, and where bifurcation would cause disproportionate delay, cost and a risk of multiple appeals. The appropriate course depends on the procedural circumstances and the overriding case-management objective of resolving jurisdiction efficiently and, where possible, finally at one hearing.

The claimant brought proceedings against the Kurdistan Regional Government of Iraq and the second defendant, Dr Ashti Hawrami. The second defendant applied to limit an upcoming hearing to state immunity and service issues under the State Immunity Act 1978, leaving domicile, act of state and forum conveniens issues for a later hearing.

The second defendant argued that immunity had to be determined first because the court would lack power to decide other jurisdictional issues if immunity applied. The claimant opposed bifurcation, relying on delay, cost and the risk of successive appeals. A related issue concerned whether the jurisdiction application amounted to waiver under section 2(3) of the Act.

1. Application refused. The jurisdiction issues were directed to be determined at one hearing, listed for three days.
2. State-immunity questions ordinarily require early consideration. The State Immunity Act 1978 requires the court to give effect to immunity even if the state does not appear. The authorities relied on by the second defendant supported early determination, but did not establish that immunity must always be decided at a separate preliminary hearing before every other jurisdiction issue.
3. The claimant’s concession was material. Having resisted bifurcation, the claimant accepted that it would not rely on later steps taken by the second defendant in advancing the jurisdiction challenge as further evidence of submission under section 2(3). The waiver issue could therefore be confined to the filing of the application itself.
4. That concession removed the principal reason for bifurcation. The court was then required to balance the competing case-management considerations. A separate hearing could lead to delay of many months, additional cost, a possible change of judge and successive appeals. A single hearing would allow all jurisdictional issues to be resolved together and would provide a more final and proportionate determination.
5. The court therefore rejected bifurcation and ordered a single three-day hearing.