English Court Takes a More Flexible Approach to Service of Proceedings on a Foreign State

March 06, 2018

A trend has emerged which demonstrates the London Commercial Court’s increasing willingness to adopt a pragmatic approach to the method of service of documents on a foreign State in appropriate cases, even though the governing legislation requires service to take place through diplomatic channels. This trend will be welcomed by commercial creditors wishing to litigate against sovereigns through the English Courts. 

The most recent example of this trend (Certain Underwriters at Lloyds London & Ors. v Syrian Arab Republic & Ors. [2018] EWHC 385 (Comm)) related to losses claimed by insurers of the aircraft that was destroyed as a result of the hijacking of an Egypt Air flight in 1985. The insurers had obtained a judgment in the US against the Syrian Arab Republic and related defendants (the “Syrian defendants”) for damages of over US$51 million caused by acts of “state sponsored terrorism” which had resulted in the hijacking. The insurers then sought to have their US judgment recognised in England for enforcement purposes. 

Issues arose as to whether the Syrian defendants had been properly served with the English recognition proceedings. 

Service on a State 

The State Immunity Act 1978 (the “Act”) provides that documents required to commence proceedings on a State must be served by transmission “through the Foreign and Commonwealth Office” (the “FCO”) to the State’s Ministry of Foreign Affairs (the “MFA”) and also requires that such documents must be “received” at the MFA. This mandatory procedure is typically referred to as service via the diplomatic channels and, although sometimes slow, it is often straightforward.

The principal difficulty in this case was that diplomatic ties between Syria and the UK had largely collapsed and so the usual method of transmission of papers through the FCO to the MFA was impossible. In those circumstances, the Court had previously ordered that valid service on the Syrian defendants would occur if the FCO transmitted the documents to the Syrian MFA by a commercial courier. However, that was not the end of the difficulty. When the courier tried to deliver the papers to the MFA, the MFA’s representative refused receipt and insisted that the courier remove them from the premises. The FCO could not therefore issue its usual certificate of service to establish that the documents had been “received” at the MFA in accordance with the Act. 

The Court’s Approach 

Whilst stressing that this was a “truly exceptional” case, the Court was not only prepared to accept the use of a commercial courier to transmit the papers but went on to conclude that the courier’s act of taking the documents into the MFA amounted to valid service by diplomatic means on the Syrian defendants – in other words, that both transmission to and receipt by the MFA had occurred. 

Of further interest was the Court’s alternative approach to service in this case. Recognising that it may be wrong on the issue of valid service on the MFA, the Court also decided to exercise its power to dispense with the requirement of service on the Syrian defendants altogether, despite the mandatory procedure for serving documents on a State under the Act. The insurers’ claim for recognition against the Syrian defendants was therefore allowed to proceed. 

Takeaways for Prospective Litigants 

Against a State Although the facts of this case are unusual, other similar circumstances can and do arise which make it difficult or impossible to establish that a State has been validly served in the manner contemplated by the Act. Another recent (but as yet unreported) example of this arose in February 2018 (European Investment Bank & Anor. v Syrian Arab Republic). In that case the Commercial Court found that service via diplomatic channels was effected on the Syrian Arab Republic by email transmission from the FCO to the email account of the MFA. 

Clearly, this trend does not signal the end of the general requirements under the Act as to how proceedings against a sovereign must ordinarily be served. The welcome news for those wishing to bring claims against foreign States is that, in cases where it will be impossible to satisfy the strict requirements of the Act, the English Court will adopt a sensible, pragmatic and commercially minded approach to ensure that legitimate claims against sovereigns are not unjustly impeded at their outset.

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