Belgian Constitutional Court Rules on Recent Legislation Protecting Property of Foreign States and International Organizations

Kelley Drye Client Advisory

In its 27 April 2017 judgment (No. 48/2017), the Court largely confirms the validity of the Act of 23 August 2015 whereby the immunity from execution of foreign States and international organizations was strengthened in Belgian legislation. The Court only annuls, for non-diplomatic property, the requirement that a waiver of the immunity must be specific’.

The Act of 23 August 2015 was aimed at avoiding future diplomatic incidents with foreign States, resulting from seizures of their assets located on Belgian territory (including bank accounts and other assets used by their diplomatic missions operating in Belgium). The Act laid down a system of prior authorization by the so-called Judge of Seizures for all seizures of property belonging to a foreign State or an international organization. Furthermore, the Act provided for that such an authorization can only be granted if the creditor demonstrates that one of the 3 conditions hereafter is fulfilled:

  1. the foreign State or international organization has expressly and specifically’ consented to the taking of seizure measures against the property at stake;
  2. the foreign State or international organization has allocated or earmarked the property at stake for the satisfaction of the claim which is the object of the enforcement title;
  3. the property at stake is specifically in use or intended for use by the foreign State or international organization for commercial, non-government purposes, and the property has a connection with the entity referred to in the enforcement title.

Actions for annulment were brought before the Constitutional Court by two companies, NML Capital Ltd and Yukos Universal Limited. The plaintiffs’s main argument was that the Act, through the constraints imposed on creditors of foreign States, allegedly creates a discrimination between those creditors and all other creditors, as it entails a disproportionate limitation on the right of access to a court (including the right to the execution of judgments) of creditors of foreign States.

The core elements of the Court’s answer can be summarized as follows.

No Need for Reasonable Alternative Means

After examining the relevant case-law of the European Court of Human Rights, the International Court of Justice and the Belgian Court of Cassation, the Constitutional Court confirms that the Belgian Legislature is not required to make the immunity from execution of foreign States contingent upon the existence of reasonable alternative means available to the creditor. In this respect, it can be noted indeed that in Manoilescu and Dobrescu v. Romania and Russia for instance, the Strasbourg Court considered that it suffices, for State immunity from execution to be compatible with the right of access to a court guaranteed under Article 6 of the European Convention on Human Rights, that the immunity reflects generally recognized rules of international law on State immunity.

Restrictive Scope of State Immunity from Execution

The Constitutional Court upholds condition No. 3 above as set forth in the challenged Act, and confirms that, according to existing customary international law, the immunity from execution enjoyed by foreign States is not absolute: measures of constraint may be taken on property which is specifically in use or intended for use by the foreign State for commercial, non-government purposes. The Court relies, in this connection, on the 2012 judgment of the International Court of Justice in Jurisdictional Immunities of the State (Germany v. Italy: Greece intervening), as well as Article 19(c) of the 2004 United Nations Convention on Jurisdictional Immunities of States and Their Property – which is not yet in force but which the Court depicts as an indication’ of current customary international law on State immunity from execution.

Legitimacy of a Prior Judicial Authorization

The Constitutional Court similarly validates the requirement of a prior authorization by the Judge of Seizures. The Court considers that the objective of preserving good relations with foreign States justifies this difference of treatment with other creditors. Moreover, according to the Court, the standard of proof applicable to creditors of foreign States – i.e. establishing that the property at stake is specifically in use or intended for use for commercial, non-government purposes – is not too high and does not render the proof impossible.

Non-Diplomatic Property: No Requirement of a Specific’ Waiver

While the requirement of an express waiver does correspond to customary international law, the latter does not impose, in the Constitutional Court’s view, that the waiver be specific’ as well – i.e. a waiver that would designate the specific assets on which seizures are alllowed. However, the Constitutional Court qualifies this conclusion by referring to the 22 November 2012 judgment of the Court of Cassation, from which it results that the property used for the operation of a diplomatic mission enjoys an autonomous immunity from execution, hence a specific waiver is effectively needed in respect of this property. Eventually, the Constitutional Court therefore annuls the requirement of a specific waiver, but only to the extent that it applies to seizures of assets others than those assets which are used in the exercise of the functions of a diplomatic mission (or consular post or special mission or mission to an international organization or delegation in organs of international organizations or in international conferences).

By and large, this ruling of the Belgian Constitutional Court echoes the 8 December 2016 decision of the French Constitutional Council, which confirmed the validity of the recent French law adopted partially on the blueprint of the Belgian Act of 23 August 2015 (see, on this, the previous edition of Diplomatic Community).

While it definitely should reassure, for now, foreign States and international organizations but also the Belgian federal government that promoted the Act of 23 August 2015, it remains to be seen whether the latter’s validity will not be further disputed before judicial courts – and ultimately the European Court of Human Rights.