The Commercial Exceptions to Foreign State Immunity

Abstract

The Foreign States Immunities Act 1985 (Cth) provides that foreign states are immune to the jurisdiction of Australian courts, and that their property is immune from execution. Those immunities are subject to important ‘commercial exceptions’. First, foreign states are not immune in Australian proceedings insofar as they concern a ‘commercial transaction’. Second, foreign states are not immune from execution in respect of ‘commercial property’. The distinction between the commercial and the non-commercial may be difficult to pin down. With reference to recent case law, including the High Court's decision in Firebird Global Master Fund II Ltd v Republic of Nauru (2015) 258 CLR 31, this article aims to articulate the scope of the commercial exceptions. It is argued that the scope of the commercial transaction exception is uncertain, and depends on courts’ approach to the task of characterisation. It is also argued that the commercial property exception is undesirably narrow, and will present a recurring impediment to the vindication of private rights.