S v Socialist Republic of Romania

CourtFederal Tribunal (Switzerland)
Switzerland, Federal Tribunal.
Socialist Republic of Romania and Another

State immunity Jurisdictional immunity Sovereign acts Expropriation of immovable property owned by emigrant leaving Romania Compulsory compensation fixed but not paid in Romania Attachment and execution Attempt to obtain attachment of Romanian State property in Switzerland to secure payment of debt Entitlement of expropriating State to State immunity

Expropriation Compensation Securing payment of compensation Compensation awarded but not paid Action for attachment to obtain payment of debt Whether expropriating State entitled to immunity The law of Switzerland

Summary: The facts:In 1982 S obtained permission to emigrate from Romania. In accordance with municipal legislation governing the immovable property of persons leaving the country, his apartment was compulsorily purchased and its sale price was fixed by the competent authorities. Payment was not made. In 1985 S applied to the Swiss courts for an attachment order in respect of sums held by the Romanian State in a Swiss bank account, in order to guarantee payment of the compensation. At first instance, and on appeal, the application for attachment was refused on the ground that the debt arose from an act performed jure imperii so that Romania enjoyed jurisdictional immunity. S then lodged a public law appeal before the Federal Tribunal.

Held:The appeal was dismissed.

(1) Acts of sovereignty performed jure imperii, which were covered by State immunity, were to be distinguished from commercial acts, performed jure gestionis, not by their purpose but by their nature. The critical question was therefore whether the act which gave rise to the debt at issue arose from the exercise of sovereign powers or was an act which any private individual could have performed.

(2) The act at issue in this case was not a private contract but rather a measure to which, having decided to leave the country, the appellant was automatically subject. The compulsory purchase and fixing of the price of his property constituted a public act of expropriation of a building in the public interest. The opinion of people outside Romania concerning the scope of that interest was of no importance. The act in question was therefore an act of sovereignty performed jure imperii by virtue of foreign public law.

The following is the text of the judgment of the Court:

S obtained permission permanently to leave Romania. By decision of 3 August 1982, taken by the municipal authorities in Bucharest, his share as co-owner in an apartment which he owned in Bucharest was then compulsorily purchased and transferred to the Romanian State. This measure was based on Decree No 223, which had been adopted by the Romanian Council of State on 3 December 1974. Articles 1 and 2 of this Decree provide that buildings situated in Romania can only be owned by natural persons who are domiciled in that country. Individuals preparing to leave Romania are therefore required to sell the buildings which they own on Romanian territory to the State. The sale price of the apartment of S was fixed in accordance with Article 2 of Decree No 467 of 28 December 1979.

On 23 July 1985 S applied to the juge de paix of the District of Lausanne for an order against the Romanian State for the attachment of sums held in the postal cheque account of company R in Lausanne, in order to guarantee the recovery of a debt of 40,000 Swiss francs as well as interest at 5% from 3 August 1982. This amount corresponded to the equivalent in Swiss francs of the compensation fixed for the acquisition by the State of his share in the apartment. The appellant invoked...

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