Australia: Australian High Court Rules On Enforcing Foreign Judgments Against A Foreign State

Last Updated: 14 December 2015
Article by Matthew Pokarier and Edward Burrell

A recent High Court of Australia decision considers the unique circumstances in which a foreign State is entitled to relief from a foreign judgment made against it. A foreign judgment made against a State is capable of being registered and enforced in Australia, but before an applicant is entitled to get its hands on State assets the Court will scrutinise how the State uses those assets to determine whether relief can be granted on the basis that they are immune from execution.

On 2 December 2015 the High Court of Australia dismissed an appeal by Firebird Global Master Fund II Ltd (Firebird).  Firebird unsuccessfully argued that a foreign judgment against the Republic of Nauru (Nauru) should not have been set aside on the basis of State immunity.

Despite the fact that the registration of a foreign judgment against a State would ordinarily be immune from jurisdiction of the courts of Australia, the High Court held that in this instance the commercial transaction exception applied to restrict Nauru's immunity.  This meant that Firebird was able to register its judgment.

However that was a pyrrhic victory for Firebird because Nauru was found to be immune when it came to execution of the judgment; Nauru's assets were not deemed to fall within the commercial property exception to the general immunity against enforcement.

The decision provides some clarity on the interaction between the Foreign States Immunities Act 1985 (Cth) (Immunities Act), which provides immunity to foreign States and their assets from proceedings in Australian courts, and the Foreign Judgments Act 1991 (Cth) (Foreign Judgments Act), which provides for the registration and setting aside of foreign judgments.  More broadly it highlights the need to consider the ability and utility of enforcing judgments against foreign States in Australia.


Nauru is the world's smallest island nation located in the Central Pacific. It does not have a central bank and holds a large proportion of its money in Westpac bank accounts in Australia.

Firebird obtained an order from the Supreme Court of New South Wales that a judgment of the Tokyo District Court for 1.3 billion yen (plus interest), found to be due to Firebird under a guarantee by Nauru, should be registered under the Foreign Judgments Act. The effect of registration of the foreign judgment was to make it enforceable as a judgment of the Supreme Court.

The summons for registration was served late on Nauru and the period within which Nauru could make an application to have the registration set aside expired. The judgment was registered by Firebird and it obtained a garnishee order over Nauru's Westpac bank accounts, which required Westpac to pay the full amount of the judgment debt within 14 days.

Nauru sought to rely on section 38 of the Immunities Act to set aside both the registration of the foreign judgment and the garnishee order. This is permitted where a court is satisfied that a judgment made in a proceeding with respect to a foreign State is inconsistent with an immunity conferred by or under the Immunities Act. The Act does not expressly deal with proceedings for registration of foreign judgments.

The Supreme Court granted orders to set aside both the registered judgment and garnishee order. Firebird's appeal to the Court of Appeal was dismissed, and this was upheld in the High Court.

Reasons for dismissal

The High Court's judgment dealt with five issues.

1. The scope of the general immunity provision

The Court had to first consider whether a proceeding for the registration of a foreign judgment fell within the scope of the general immunity at section 9 of the Immunities Act.  It provides a general immunity for foreign States from the jurisdiction of the courts of Australia in a proceeding.

The Court held that the term "proceeding" should be given its widest meaning and operates to give immunity from all proceedings brought against a foreign State, subject only to the exceptions.

Firebird's registration of its foreign judgment against Nauru fell within the ambit of the general immunity conferred by section 9 and it was therefore necessary to consider whether any exceptions to that immunity applied.

2. Commercial transaction exception to the general immunity provision

The Immunities Act provides a number of exceptions to the general principle that a foreign State is entitled to immunity. One of them is if the proceeding concerns a commercial transaction (section 11).

Here, the High Court was satisfied, that the commercial transaction exception applied  i.e.  Nauru was not immune from the jurisdiction of Australia because the proceedings "concern[ed] a commercial transaction".  Whilst the proceedings prima facie simply concerned the registration of a foreign judgment, the High Court took a broader approach and looked at the commercial transaction upon which the foreign judgment was based, rather than simply the registration of the Japanese judgment in isolation.

3. Implied repeal to resolve inconsistencies

The Court was asked to consider the purported inconsistency between section 38 of the Immunities Act (to have the registration proceedings set aside) and the requirement of the Foreign Judgments Act (that a judgment be registered).

Firebird submitted that pursuant to the doctrine of implied repeal, the Foreign Judgments Act must be taken to have repealed those inconsistent provisions in the Immunities Act.

This submission was dismissed by the High Court.  It described the rationale of the Immunities Act as dealing with the "special and discrete topic" of foreign State immunity in Australia. A "later general statute" was therefore not intended to derogate from the Immunities Act provisions.

Further, the High Court was able to reconcile the two sets of provisions by reading down the Foreign Judgments Act to only apply in circumstances where a defendant is amenable to the jurisdiction of the courts exercising jurisdiction under the Act.

4. Requirements for service

Service on Nauru was effected after the order for registration was made.

Nauru contended that section 27 of the Immunities Act expressly prohibits the entry of a judgment against a foreign State where the proof of service requirements of Part III of the Act have not been complied with.  However, French CJ and Kiefel J held that section 27(1) requires proof of service in accordance with Part III only in circumstances where a judgment in default of appearance is entered against a foreign State, and not in ex parte proceedings.  Section 27 was not applicable in this instance.

5. Relief from enforcement

Finally and because it concluded that Nauru was not immune from Firebird registering its foreign judgment, the Court looked at whether Firebird could enforce that judgment.

It considered whether Nauru's Westpac bank accounts were subject to the immunity from enforcement provisions in the Immunities Act on the basis that they fell within the "commercial property" exception in section 32(1).

Property is deemed to be commercial property when it is "in use" by the foreign State for substantially commercial purposes (section 32(3)).

Crucially the High Court found that the Westpac accounts did not fall within the exception in section 32(3). It determined that "what might otherwise be thought to be a commercial enterprise is in fact no more than the provision of essential services to those resident in a foreign State by its government."

French CJ and Kiefel J considered Bathurst CJ's reasoning in the Court of Appeal, who had held that the funds within the accounts were not used for substantially commercial purposes; they were used for the purpose of government administration and the provision of government services. The Court considered the size and geographical location of Nauru, and the fact that the Westpac accounts are effectively Nauru's source of revenue as it has no central bank.

It also looked at what Nauru's various bank accounts were used for. The "fuel account" existed because the Nauru government trades fuel as it would not be commercially viable for a business to do so. The "utilities account" was used to fund the provision of water and electricity to the population and the "loan account" provided loans to small businesses on a non-profit basis.


To the relief of its population, Nauru is not required to pay its money held in Australia to Firebird, despite the High Court's determination that the Supreme Court had jurisdiction to register the foreign judgment.

Although Nauru was ultimately found to be immune from execution of the judgment, this case highlights the exposure foreign States' face when participating in commercial transactions whilst holding assets in Australia.

Parties transacting with a foreign State need to be aware that the Immunities Act affords significant protection and relief for foreign States with assets in Australia.

Before entering a transaction with, and certainly before taking any enforcement action against, a foreign State, prospective applicants would be wise to consider their prospects of successfully pursuing the foreign State should the need ever arise and, relatedly, whether any of the exceptions to State immunity are likely to apply in relation to either registration of a foreign judgment or enforcement of the same.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions