NEWSFLASH | Jurisdictional immunity applies in Luxembourg when it comes to the recognition of foreign decisions

An unprecedented judgment of the First Chamber of Luxembourg District Court has been handed down on 27 March 2019, granting the immunity from jurisdiction to a foreign State (including some of its ministries and current or former head of State) and its central bank within the framework of an exequatur proceedings.

The jurisdictional immunity could be defined as a rule of international customary public law under which the courts of a sovereign State may not rule on the acts of another sovereign State and its emanations, with certain exceptions.

The judgment was already available on the website of the Ministry of Justice of the Grand-Duchy on the same day of the deliberation, alongside with a press release of the District Court[1] explaining the reasoning of the decision.

The above shows how much this judgment is a first-of-its-kind in Luxembourg, strengthening also the international customary rule of jurisdictional immunity of States (and their assimilated entities).

This decision is also peculiar considering the political context, i.e. exequatur request of US judgments compensating victims of the 9/11 attacks. In the case at hand, 152 victims of the 9/11 attacks were seeking the recognition in Luxembourg of US judgments rendered by default by the New York Court granting around USD 7 billion of damages (excluding the amounts allocated for the punitive damages). Such recognition in Luxembourg was a prerequisite to enforce in Luxembourg the foreign judgments, so that the US judgments can be considered as if they were rendered by a Luxembourg court.

Among the numerous defendants in the US class action were the Iranian State and its ministries, which figure on the list of the State sponsor of the terrorism elaborated by the US executive power (the Iranian Central Bank and some public companies are de facto assimilated by the US courts to the Iranian State and therefore treated in the same way). At this stage, a particular feature of the US legal system, in which the US executive power can designate certain States as sponsors of terrorism, should be outlined. The result is that these States cannot plea their jurisdictional immunity before the US Courts[2]. No other country, except for the Canada, has adopted such exception to the States' immunity from jurisdiction.

In this context, the first question examined by the exequatur Judge was to determine whether the Iranian State and its sovereign emanations, as well as its central bank, have a jurisdictional immunity within the recognition procedure of the US judgments in Luxembourg. The Luxembourg civil Court confirmed that jurisdictional immunity was to apply.

The Court then went into a thorough review of the alleged exceptions to the concept of jurisdictional immunity raised by the claimants (derogations to immunity for (i) acts which have caused death, bodily harm or material injury to private persons, (ii) acts of terrorism and (iii) acts violating a standard of jus cogens) and concluded that none of those alleged exceptions applied.

Consequently, the requests made against the Iranian State and its sovereign emanations, as well as its central bank, were inadmissible as these entities had jurisdictional immunity. The Court has therefore decided that US claimants cannot obtain the recognition of the US judgments in Luxembourg towards the Iranian State and its entities, as well as against the central bank.

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In this matter, BSP was assisting the Iranian State, its ministries and entities, as well as its central bank and other Iranian public companies.

To get more details about the judgment of 27 March 2019, have a look on the following link [https://justice.public.lu/dam-assets/fr/actualites/2019/Jgt20190327-exequatur-anonyme.pdf].