Firebird Global Master Fund II Ltd v Republic Of Nauru [2015] HCA 43: Foreign Judgments

Today (2 December 2015), the High Court has unanimously dismissed an appeal from a decision of the Court of Appeal of the Supreme Court of New South Wales but, by a majority, varying the orders made by that Court, in the case of Firebird Global Master Fund II Ltd v Republic of Nauru [2015] HCA 43.

Background to the Case

The appellant ("Firebird") was the holder of bonds guaranteed by Nauru.  After the issuer of the bonds defaulted, Firebird obtained judgment in the Tokyo District Court for ¥1,300 million together with interest and costs ("the foreign judgment") against Nauru as guarantor, and subsequently obtained an order from the Supreme Court of New South Wales ([2014] NSWSC 1358) that the foreign judgment be registered under the Foreign Judgments Act 1991 (Cth).

The summons for the order for registration was not served on Nauru.   Firebird then obtained a garnishee order against the Australian bank in which the accounts of Nauru were kept.  Nauru filed motions seeking to set aside the registration of the foreign judgment and the garnishee order, and the Supreme Court made those orders.  Firebird appealed to the Court of Appeal.

On Appeal to the Court of Appeal

The Court of Appeal ([2014] NSWCA 360) held that Nauru was entitled to the immunity from jurisdiction recognised in s 9 of the Foreign States Immunities Act 1985 (Cth) and that the exception in s 11(1) of that Act for "commercial transactions" did not apply to the proceedings for registration under the Foreign Judgments Act 1991 (Cth). The Court of Appeal declined to require that debt be paid from Nauru’s accounts at the Westpac Bank on the basis that the Foreign States Immunities Act 1985 (Cth) required that Nauru be served under pt III of that Act; that the immunity under s 9 is a freedom from liabilities or duties imposed by Australian courts and applies to Nauru; and that because these bank accounts were not used for commercial purposes, they are immune from execution of a garnishee order.

The Court of Appeal also rejected Firebird's argument that there was an inconsistency in the operation of the two statutes. By grant of special leave, Firebird appealed to the High Court.

In the High Court

The High Court appeal was heard from the 2-3 September 2015. In dismissing the appeal in its judgment today (2 December 2015), the High Court unanimously held that the proceedings for registration of the foreign judgment were proceedings to which s 9 of the Foreign States Immunities Act applied so that Nauru was immune from the jurisdiction of Australian courts, subject to the exceptions for which the Foreign States Immunities Act provides.  There was no inconsistency in the operation of the two statutes.

The exception stated in s 11(1) of the Foreign States Immunities Act applied to the proceedings for the registration of the foreign judgment in this case because they concerned a commercial transaction; namely, the guarantee upon which the foreign judgment was based.  Nauru therefore lost its immunity from jurisdiction.

However, Nauru was immune from execution against the bank accounts held in Australia under the Foreign States Immunities Act because the purposes for which these accounts were in use, or for which the monies in them were set aside, were not commercial purposes.

By a majority, the Court also held that there was no requirement that the summons for registration of the foreign judgment under the Foreign Judgments Act be served on Nauru before the foreign judgment was registered.

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Firebird Global Master Fund II Ltd v Republic Of Nauru [2015] HCA 43