Arab Republic of Egypt v Cinetelevision Trust

JurisdictionSuiza
CourtFederal Tribunal (Switzerland)
Switzerland, Federal Tribunal.
Arab Republic of Egypt
and
Cinetelevision International Registered Trust and Another

Sovereign immunity Foreign States and agencies and their property Agreement for lease of films by television authority of foreign State Action for breach of agreement Whether authority entitled to jurisdictional immunity European Convention on State Immunity, 1972, Articles 1 to 15 Whether declaratory of existing international law on jurisdictional immunity of States Acts iure imperii and iure gestionis Whether nature or purpose of act decisive Requirement of close connection between case and forum Attachment of assets Immunity from attachment European Convention on State Immunity, 1972, Article 23 Whether declaratory of existing international law on immunity from enforcement of States Egyptian Office of Information and Tourism Whether entitled to immunity from attachment Whether its assets allocated for the performance of sovereign functions Relevance of distinction between patrimonial and administrative assets Whether purpose for which assets are allocated is decisive The law of Switzerland

Summary: The facts:In 1964 a Liechtenstein company, CINETEL, entered into an agreement for the lease of films to the Egyptian State Television Authority. A dispute arose over the agreement and CINETEL started proceedings in the Swiss courts, obtaining the attachment of assets of the Egyptian State and Egyptian State-owned institutions in Switzerland. In 1969 a compromise agreement was reached whereby various payments were to be made to CINETEL by the Egyptian State Television Authority and CINETEL was, in return, to vacate its attachments of Egyptian assets in Switzerland. The agreement provided that, if the agreed payments had not been made by a certain date, the parties would retain complete freedom of action to exercise their legal rights. CINETEL subsequently obtained orders for the enforcement of the attachments against the Egyptian Office of Information and Tourism in Geneva. The Egyptian State brought a public law appeal (recours de droit public) before the Federal Tribunal asking for vacation of the attachments and annulment of the enforcement orders on the grounds that it was entitled to immunity from jurisdiction and enforcement.

Held:The appeal was allowed and the attachments were vacated.

(1) The settled jurisprudence of the Federal Tribunal was that immunity from enforcement was simply the consequence of jurisdictional immunity and where a foreign State did not enjoy jurisdictional immunity it was equally not entitled to immunity from enforcement unless the measures of enforcement concerned assets allocated for the performance of acts of sovereignty (ground 4b).

(2) The European Convention on State Immunity of 16 May 1972 provided, on the other hand, that whereas jurisdictional immunity was denied to the contracting States in a series of different situations (Articles 1 to 14), the contracting States were always entitled to immunity from enforcement unless they had made an express waiver in writing (Article 23). The Convention was, however, doubly inapplicable in this case because Switzerland had signed but not ratified it and the Egyptian State was not a signatory (grounds 4b and c).

(3) Whilst the Convention could be considered as the expression of recent doctrine and jurisprudence in Western Europe tending to restrict the scope of jurisdictional immunity any reference to it as an expression of recent tendencies in public international law had to take account of the fact that it reflected a different concept of immunity from execution to that developed in the jurisprudence of the Federal Tribunal (ground 4c).

(4) An agreement for the leasing of films was indisputably to be classified according to its nature as a contract under private law (iure gestionis) so that the Swiss courts had jurisdiction over a dispute arising from such an agreement. This was so even though one of the patties was an entity of a foreign State and even though that State claimed that the purpose of the contract was to facilitate the performance of sovereign tasks (ground 5a).

(5) Even if the requirement of a close connection between the contract and Switzerland were satisfied execution could not be permitted in this case since the activities for which the assets of the Egyptian Office of Information and Tourism were allocated were, despite their economic aspect, tasks which were at least in part incumbent upon the Egyptian State in exercise of its public power. Although enforcement against foreign States was limited in Swiss legal doctrine to their patrimonial assets (biens patrimoniaux) as opposed to their administrative assets (biens administratifs), in certain circumstances the purpose for which funds belonging to a foreign State were allocated could render those assets exempt from enforcement. Such was the case not only where the assets in question formed part of State funds but also where they were allocated for the performance of sovereign activity (ground 5c).

The following is a statement of the facts as reported in Annuaire Suisse de droit international, 1981, p. 206:

Acting on the application of a Liechtenstein company, Cinetelevision International Registered Trust (CINETEL), the President of the Tribunal of First Instance in Geneva ordered the attachment of assets in Switzerland of the Federation of Radiodiffusion and Television of the Arab Republic of Egypt (TVARE), the Central Bank of Egypt (CBE) and the National Bank of Egypt (NBE), by three orders made on 23 May 1977. The source of the debt was a commercial debt and interest, recognised by three agreements signed in Geneva on 27 September 1969 and modified on 25 November 1969. It was expressly stated that the debtors, taken jointly and severally constituted State bodies [] forming a single economic entity with the State, their economic master. The attachment extended over funds held in the name or on behalf of the debtors, the Egyptian State or its ministries or in the name of persons, companies or establishments acting on behalf of that State through various bodies established in Switzerland, in particular through the Office of Information and Tourism of the Arab Republic of Egypt in Geneva (OIT). The attachment orders were enforced against the OIT.

The Arab Republic of Egypt (ARE) brought a public law appeal (recours de droit public) invoking the immunity from jurisdiction and enforcement of foreign States and asking the Federal Tribunal to annul the three attachment orders and their enforcement by the Office des Poursuites of Geneva, to the extent that the orders covered assets situated in Geneva and allocated by the State for the functioning of the OIT. In support of its appeal the ARE claimed that the OIT was merely an administrative branch of its Ministry of Tourism, to which the assets of the OIT belonged. These assets, being allocated for a public State function, were therefore not subject to attachment. The ARE claimed furthermore that it was a legal entity distinct from the three debtors against which the attachments were directed and that the attachments were in no way directed against the ARE in the capacity of a debtor so that the measures in question could not be granted since their purpose was to guarantee debts which it had not been established that the ARE owed. CINETEL and the Tribunal of First Instance of Geneva argued in particular that the appeal had been introduced out of time and concluded on the merits that the appellant was not entitled to rely on immunity from jurisdiction.

The following is the text of the relevant part of the grounds of the judgment of the Court:

3. (a)...

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