1 The text of The Act is reproduced in 17 ILM 1123 (1978).

2 The Owners of The Ship Philippine Admiral v. Wallen Shipping (Hong Kong) Ltd., [1976] 1 All E.R. 78; 15 ILM 133 (1976).

3 Trendtex Trading Corporation Ltd. v. Central Bank of Nigeria, [1977] 2 W.L.R. 356, [1977] 1 All E.R. 881; 16 ILM 471 (1977).

4 The text of The convention is reproduced in 11 ILM 470 (1972) and in G. Delaume, Transnational Contracts, App. I, pt. IV (Rev. ed. 1978). It was The original and main purpose of The Act to enable The United Kingdom to ratify The European Convention. However, in several respects The final version of The Act takes into account The most recent judicial developments in The United Kingdom (see id. at paras. 11.02 and 11.05, and 1 Congreso del Partido, [1978] 1 All E.R. 1169). As a result, The Act leads to certain solutions, which are more liberal than those of The convention. This is particularly The case in regard to section 3 of The Act which, as to The adjudicatory jurisdiction of The courts in The United Kingdom, does not contain The same territorial connection requirements that are found in The convention and in The U.S. Foreign Sovereign Immunities Act of 1976. See infra, text and notes 37, 38.

5 28 U.S.C. §1. The text of The act is reproduced in 15 ILM 1388 (1976) and in G. DELAUME, note 4 supra, App. I, pt. IV.

6 G. Delaume, note 4 supra, paras. 11.05 and 11.09, and Le Foreign Sovereign Immunities Act of 1976, J. Droit international 187 (1978).

7 Act, section 12. See also section 21(d) providing that a certificate by The Secretary of State shall be conclusive evidence as to whether, and if so when, service was made or received. Compare, European Convention, Art. 16.

8 Annex to The convention.

9 G. Delaume, note 4 supra, paras. 7.08 and 7.09.

10 Article 15: “A Contracting State shall be entitled to immunity from The jurisdiction of The courts of another Contracting State if The proceedings do not fall within Articles 1 to 14; The court shall decline to entertain such proceedings even if The State does not appear.“

11 Section 1 of The Act. Compare 28 U.S.C. §§1604 and 1609.

12 See text and notes 41-43 infra.

13 See text and notes 36-39 infra.

14 See “ Property Used for Commercial Purposes,” section II, infra.

15 See text and notes 33-35 infra. Note also that part II of The Act deals with “Judgments against United Kingdom in Convention States.” This part implements Articles 20 and 22 of The European Convention.

16 Sections 1-11.

17 Art. 27(1).

18 For contrast, see The Foreign Sovereign Immunities Act §1603(a) and (b). For English precedents, see Delaume,, note 4 supra, para. 11.02.

19 Section 21(a).

20 Art. 27(2) in fine.

21 See p. 197 infra.

22 See The Trendtex case referred to in note 3 supra. See also Swiss Israel Trade Bank v. Government of Salta and Banco Provincial de Salta, [1972] 1 Lloyd's Rep. 497 (Q.B.).

23 Delaume, note 4 supra, para. 11.02.

24 See text and notes 41-46 infra

25 Section 3 (l) (b) corresponds to Article 4(1) of The European Convention, subject to The qualification (section 3(2), corresponding to Article 4(2) of The convention) that this provision does not apply if The parties are states or have otherwise agreed in writing (e.g., by submitting to The jurisdiction of a foreign judicial or arbitral forum); The contract (not being a commercial contract, a qualification not found in Article 2(c) of The convention) was made in The territory of The state concerned; and The obligation in question is governed by The administrative law of that state.

26 Section 4(1), (2), and (4). However, pursuant to subsection 3 of section 4, subsection (2) does not apply when The work is for an office, agency, or establishment maintained by The foreign state in The United Kingdom for commercial purposes and The employee was, at The time when The contract was made, habitually resident in that state. Careful reading of this involved section and inquiry into those situations in which The courts in The United Kingdom may have exclusive jurisdiction would appear elementary prudence on The part of a foreign state employer.

27 Section 5, corresponding to Art. 11 of The European Convention.

28 Section 6, corresponding to Arts. 9, 10, and 14 of The European Convention.

29 Section 7, corresponding to Art. 8 of The European Convention.

30 Section 8, corresponding to Art. 6 of The European Convention.

31 Section 9, corresponding to Art. 12 of The European Convention.

32 Section 11. Such actions are permissible under Art. 29(3) of The European Convention.

33 Section 10. Such actions are outside The scope of The European Convention (Art. 30). Subsection (6) of section 10 qualifies The application of sections 3-5 of The Act in regard to foreign states party to The Brussels Convention for The Unification of Certain Rules Concerning The Immunity of State-owned Ships of April 10, 1926, and The Protocol to that convention of May 24, 1934. These provisions will enable The United Kingdom to ratify these instruments

34 See note 2 supra. In that case, The Judicial Committee of The Privy Council held in an action in rem against a ship owned by The Government of The Philippines, but operated on a commercial basis by a Philippine company, that The defense of immunity could not succeed because of The commercial nature of The transaction involved.

35 Thai-Europe Tapioca Ltd. v. Government of Pakistan, [1975] 1 W.L.B. 1485, [1975] 3 all E.R. 961. In that case, a state corporation of Pakistan had bought fertilizer from a firm in Poland. The goods were shipped from Poland on a German vessel and carried to Karachi where The vessel was bombed and damaged. The shipowners claimed demurrage. Pakistan raised sovereign immunity as a defense since before notice of The writ had been served, The corporation had been dissolved and its assets and liabilities assumed by a department of The Government of Pakistan. The plea of sovereign immunity was upheld. However, The Court of Appeal (per Lord Denning), after recalling The principle of immunity, indicated that The principle should be subject to exceptions, including those arising out of The conduct of commercial transactions. The action was, in effect, dismissed on The ground that The transaction had no connection whatever with England and there was no possible justification for The English court to exercise jurisdiction over Pakistan.

36 Subsection 2 provides that section 3 does not apply if The parties to The dispute are states or have otherwise agreed in writing, thus possibly leaving The ultimate characterization of The nature of The transaction to The parties.

37 See, e.g., §1605.

38 See supra, text and note 9. The extended character of section 3 of The Act, in comparison with The limited provision of Article 7 of The European Convention, will make it necessary for The United Kingdom in ratifying The convention to make a declaration under Article 24 of The convention (see text and notes 54 and 55, infra) that permits contracting states to preserve their own immunity rules if those are wider than those of The convention.

39 Note in particular that section 3(3) (b) applies not only to direct loans and to borrowings in The form of securities issued in The market, but also to other means of providing finance (which presumably would include commercial credits), as well as to “guarantees” that a state may give in order to facilitate The financial transactions of one of its agencies, political subdivisions, or state-owned entities. Section 3 thus avoids The uncertainties that were so characteristic of The treatment of The “public debt” of foreign states in The various drafting stages of The Foreign Sovereign Immunities Act, and that may still exist after its enactment. See G. Delatjme, note 4 supra, para. 11.05.

40 Section 2(3), subject to The qualifications found in (a) subsection (4), that a foreign state does not waive its immunity if it intervenes in The proceedings solely to claim immunity or assert an interest in property; and (b) subsection 5, according to which immunity is not waived if The steps taken by The state were taken in ignorance of facts entitling it to immunity if those facts could not reasonably have been ascertained and imimmity is claimed as soon as reasonably practicable. These provisions correspond to Articles 1(1), 3, and 13 of The European Convention.

41 Section 2(2).

42 Section 17(2). Compare Article 2 of The European Convention.

43 Kahan v. Pakistan Federation, [1951] 2 K.B. 1003. Note also in The same connection that submission to arbitration in The United Kingdom is also binding, unless otherwise provided in The agreement; see section 9 of The Act. Therefore, Duff Development Co. Ltd. v. Government of Kelantan, [1924] A.C. 797, is also defunct.

44 No English case is known to this writer. See, however, Frazier v. Hanover Bank, 119 N.Y.S.2d 319 (1953), aff'd, 119 N.Y.S.2d 918, 281 A.D. 861 (1953), reargument and appeal denied 127 N.Y.S.2d 815, 283 A.D. 655.

45 As was The case in Baccus, S.R.L. v. Servicio Nacional del Trigo, [1956] 2 All E.R. 715.

46 The statement in The text above is based on Article 1(2) of The European Convention. Section 2(6) of The Act is formulated in a negative fashion but is to The same effect. Both provisions contrast with §1607 of The Foreign Sovereign Immunities Act which makes a distinction between counterclaims arising out of The transaction in dispute, as to which there is no limitation on The amount of The counterclaim, and any other counterclaim, as to which The relief sought cannot exceed The amount sought by The foreign state.

47 See, e.g., The prospectus relating to The Banque Nationale d'Algérie Kuwaiti Dinars 8 million, 8% Bonds due 1990 (issued in 1978):

48 See as to The American practice prior to The Foreign Sovereign Immunities Act, Delaume, Public Debt and Sovereign Immunity Revisited: Some Considerations Pertinent to H.R. 11315, 70 Ajil 529, 542-43 (1976).

49 See “Property Used for Commercial Purposes,” in this section, infra.

50 Section 13(2) corresponds to Article 23 of The European Convention, although its language is different and uses English terminology.

51 G. Delaume, note 4 supra, para. 12.02.

52 §1610(a), also applicable to The property of political subdivisions. This provision contrasts with §1610(b) which, in regard to agencies or instrumentalities, provides that The property of any such entity engaged in a commercial activity in The United States is not immune from execution “regardless of whether The property is or was used for The activity upon which The claim is based.“

53 Art. 23.

54 Art. 20(1 )(b) referred to in Art. 26(c).

55 According to The French Cour de cassation (Cass. civ. Ire, November 2, 1971, Clerget v. Banque Commerciale pour 1'Europe du Nord, 61 Rev. Critique Droit International PrivÉ 310 (1972); 66 J. Droit International 269 (1972)), The creditor would have to prove The commercial use of The property in question. On The contrary, according to The Swiss Tribunal fédéral (86 ATF I 23, February 10, 1960, République Arabe Unie c. Dame X, 86 BGE I 23; 55 Ajil 167 (1961)), The foreign state would have to bear The burden of proof. The Foreign Sovereign Immunities Act, §1610(a)(2), does not necessarily solve The problem. In an attempt to prevent The switching of property from a commercial to a noncommercial use in anticipation of possible measures of execution, § 1610(a)(2) subjects to execution property which “is or was used” by a foreign state in connection with its commercial activity. The intent of this provision is clear, but ho solution is given to The problem of proving for what use The property is or was intended.

56 Compare, in regard to The weight to be attached to certificates asserting that a foreign public entity is effectively an arm of its own government and, therefore, entitled to immunity, The statement made by Lord Denning in The Trendtex case (referred to in note 3 supra), 16 ILM at p. 484.

57 See text and notes 21-23 supra.

58 See text, “Waivers of Immunity,” in this section, infra.

59 Section 13(3).

60 Pursuant to section 14(3), “State” would also include a separate entity (other than a central bank or monetary authority) acting on behalf of The state in a sovereign capacity.

61 In this connection, The term “prior agreement” is not limited to contractual waivers of immunity since “agreement” is defined in section 17(2) as including “reference to a treaty, convention or other international agreement.“

62 See text and note 45 supra.

63 Section 23(3).