Original version by Matthias Herdegen January 2007; reviewed by Matthias Herdegen November 2024.

1  In the case Clerget v Banque commerciale pour l’Europe du Nord (‘Clerget Case’) the French courts had to rule upon the status of an unrecognized state and delimit the scope of state immunity with respect to measures of execution (Non-Recognition; Recognition). Clerget, a former engineer in the service of the Democratic Republic of (North) Vietnam, had brought an action against Vietnam for the payment of salary still due and damages. The Paris Cour d’appel (Regional Court of Appeal) had held that the conclusion of the contract of employment invoked by the plaintiff was not an act iure imperii and therefore not covered by immunity from jurisdiction; thereupon the labour relations court of Paris gave judgment in default against Vietnam in May 1965. In enforcement of this judgment, the plaintiff obtained a saisie-arrêt (provisional attachment (translation by the author)) of the funds held by the Banque commerciale pour l’Europe du Nord for Vietnam or its commercial representative in France. When the plaintiff sought judicial validation of the attachment, the Banque commerciale pour l’Europe du Nord and the Banque du commerce extérieur du Vietnam intervened to oppose the claim. The latter bank was an emanation of the Democratic Republic of (North) Vietnam and held an account at the Banque commerciale pour l’Europe du Nord. Vietnam was not represented in court. Rejecting the plaintiff’s argument that the Democratic Republic of (North) Vietnam was not recognized by the French government, the Tribunal de grande instance de la Seine (Ordinary Court of Original Jurisdiction of the Seine) held that (North) Vietnam was a State enjoying immunity from execution and ordered the suspension of the measures of execution, i.e. the unblocking of the foreign funds (Paul Clerget v Banque commerciale pour l’Europe du Nord (1967)). In holding that (North) Vietnam possessed the attributes of a state, the Court pointed out that the Geneva Accord of 1954 on Vietnam had established two zones, that a delegate of the French Government was accredited to the authorities of the Democratic Republic of (North) Vietnam and that the French government had agreed to receive a commercial delegation of the Democratic Republic, which had later obtained the status of a general representation and certain diplomatic privileges (Immunity, Diplomatic). The judgment of the Cour d’appel de Paris of 7 June 1969 followed the same view (Clerget v Banque Commerciale pour l’Europe du Nord and Banque du Commerce Extérieur du Vietnam (1969)). The Cour d’appel held that, as the Democratic Republic of (North) Vietnam was a state, recognition could only be declaratory of this fact and that immunity from jurisdiction or execution depended on the independence of a state and not on its recognition by the government of the forum (Territorial Integrity and Political Independence). However, the Court went on to establish that in the light of the actual facts, this concept did not collide with the constitutional authority of the domestic government in foreign affairs. It was held that immunity from execution was distinct from jurisdictional immunity and that the funds of the Democratic Republic of (North) Vietnam could not be seized in execution of a judgment based on an obligation to pay arising from acts iure gestionis. By its judgment of 2 November 1971, the Cour de cassation confirmed the decision of the Court below (Clerget v Banque Commerciale pour l’Europe du Nord and Banque du Commerce Extérieur du Vietnam (1971)). While the Cour d’appel seemed to acknowledge the absolute character of sovereign immunity from execution, the reasoning by the Cour de cassation that the origin and destination of the funds seized were not clearly determined points to a more restrictive view (Sovereignty).

2  The judgments in the Clerget Case corroborate the idea that sovereign immunity from execution is not merely the prolongation of immunity from jurisdiction. It is suggested that the decision of the Cour de cassation leaves it open to the plaintiff to argue and to prove that the property at issue does not serve specific state functions but is for commercial or other non-sovereign purposes and can therefore be seized in execution of an enforceable judgment. Following this interpretation, the Federal Constitutional Court of Germany (Bundesverfassungsgericht) has referred to the decision of the Cour de cassation in support of the restrictive view in the immunity case of 1977 (2 BvM 1/76 (1977) 374–75). The restrictive approach has also been adopted by the Cour de cassation in other cases, where the Court has held that immunity from execution depends on the nature of the objects seized, i.e. on their attribution to sovereign functions. Some uncertainties raised by the jurisprudence of the lower courts (e.g. Procureur de la République v Société LIAMCO (1979)) have been removed by a decision of the Cour de cassation (République islamique d’Iran v Société Eurodif (1984)). There, the Court stated that the principle of immunity of States from execution is subject to exceptions, notably when the property concerned was destined for the commercial activity upon which the claim is based (see also Société Nationale Algerienne de Transport et de Commercialisation des Hydrocarbures v Migeon (1985)). Similar to this case law, section 1610(a)(2) United States Foreign Sovereign Immunities Act (1976), for the purposes of execution against a state—as opposed to a state agency or instrumentality—requires a link between the state property and the claim to be enforced. However, in the last decades, multilateral treaties, legislative practice, and case law of other States have moved away from such a condition and generally allow the execution with respect to State property used for commercial purposes (section 13(4) State Immunity Act 1978 [UK]; 2 BvR 678/81, 2 BvR 679/81, 2 BvR 680/81, 2 BvR 681/81, 2 BvR 683/81 (1983) 40–41; Art. 19(c) Convention on Jurisdictional Immunities of States and Their Property).