Order of the Second Senate of 13 December 1977

Reasons:

A.

I.

1

On 3 September 1975, the judgment creditor of the initial proceedings obtained a default judgment from the Regional Court of Bonn against the Republic of the Philippines for payment of a total of 95,231.86 German Marks (Deutsche Mark) plus interest and costs. This default judgment decides a legal dispute which arose from a tenancy agreement concluded between the creditor and the Republic of the Philippines on 9 May 1966 for a house belonging to the creditor in Bonn-Bad Godesberg, which the Republic of the Philippines rented for use as office premises for its embassy in the Federal Republic of Germany. In the course of June 1973, the tenant moved out of the house and made it available to the creditor, paying the rent up to and including June 1973. The creditor based its main claims both on rent arrears up to and including May 1974 because the contractual notice period had not been observed, as well as on repair costs.

2

On the basis of the enforceable default judgment, the creditor obtained an attachment and transfer order against the Republic of the Philippines from the Bonn Local Court on 13 February 1976. The order attached and transferred the following alleged claims and receivables to the creditor for collection in the attached amount: the alleged claim of the Republic of the Philippines against ‘Deutsche Bank AG Filiale Bonn-Bad Godesberg, Kaiserplatz – third-party debtor – for payment of the present and total future surplus (credit balance) that is due to the debtor from the business connections under the current account [...] once the account has been balanced ..., and all alleged receivables and claims ... for the crediting of all future receipts and for the continuous payment of the credit balances as well as for the handling of transfers to third parties under the current account agreements on the above-mentioned accounts’ [original quote in German].

3

The Republic of the Philippines challenged the attachment and transfer order before the Bonn Local Court, asserting that the embassy’s account was not subject to German jurisdiction. In the proceedings before the Bonn Local Court, the Republic of the Philippines submitted an affidavit from its chargé d'affaires in the Federal Republic of Germany stating that the account with the name ‘Embassy of the Philippines’ had been opened in 1956 at Deutsche Bank in Bonn and had been maintained in Bonn-Bad Godesberg since 1973; the authorised signatories are the ambassador or chargé d'affaires and the official responsible for financial matters within the embassy. The government of the Republic of the Philippines uses this account to provide the embassy with the funds required for ongoing operations; staff and rent in particular are paid from this account. As a result of the attachment of the account, the embassy is no longer able to fulfil its current obligations.

4

The Bonn Local Court stayed the proceedings in accordance with Art. 100(2) of the Basic Law and referred the matter to the Federal Constitutional Court for a ruling on the following question:

5

Is there a rule of international law which stipulates that enforcing a judgment on a foreign state’s non-sovereign conduct by attaching a bank account which that state, or its embassy, maintains in Germany to cover the official expenses and costs of the embassy is impermissible per se or impermissible to the extent that it impairs the functioning of the embassy as a diplomatic mission; if such rule exists, is it part of German federal law?

6

[...] The Local Court has doubts as to whether and, if so, to what extent the execution against such an account falls within German jurisdiction. […]

7-8

[…]

II.

9-40

[…]

 B.

41

The referral is admissible.

42

1. […]

43-50

2. […]

51

3. Referrals under Art. 100(2) of the Basic Law are also admissible if the content of the rule of international law is not suitable to directly create rights and obligations for the individual, but only applies to states or their bodies as the addressees of those legal provisions (Decisions of the Federal Constitutional Court, Entscheidungen des Bundesverfassungsgerichts – BVerfGE 15, 25 [33f.]; 16, 27 [33]). Outside the area of minimum human rights standards, current general international law rarely contains legal provisions that directly establish subjective rights or obligations for private individuals at the level of international law; rather, its scope essentially covers sovereign international relations between states and state relationships; subjective rights or obligations of private individuals are generally only established or affected indirectly via domestic law.

52

To the extent that Art. 25 second sentence and Art. 100(2) of the Basic Law state that the general rules of international law create rights and obligations directly for individuals, this certainly includes those general rules of international law that directly establish subjective rights or obligations for private individuals at the level of general international law, meaning that no further normative act, for instance, of domestic primary or secondary legislation is needed to this effect. It follows from the aim and purpose of Art. 25 and Art. 100(2) of the Basic Law that these types of general rules of international law are not the only ones eligible for referral proceedings. Rather, these proceedings can also be brought with respect to those general rules of international law which, by way of their regulatory content and addressees, do not establish or alter subjective rights or obligations for private individuals at the level of international law, but are directed exclusively at states or other subjects of international law. The general order giving effect to the general rules of international law under Art. 25 first sentence of the Basic Law includes this second type of general rules of international law as well. Under this constitutional provision, these general rules of international law too are, in their respective scope, an integral part of federal law. They too take precedence over ordinary legislation and, being provisions of objective law, they must be observed and, in line with their constituent elements and regulatory content, be applied by all law-making and law-applying bodies of the Federal Republic of Germany. This is an ex officio obligation. While thus not a requirement for this obligation to apply, private individuals as well as foreign states can – in accordance with the respective procedural regulations – also ‘invoke’ this second type of general rules of international law, just as other objective laws, within the sovereign territory of the Federal Republic of Germany. Depending on their content and usually by way of preliminary question, these general rules of international law may, as provisions of objective law, affect an individual’s legal claim and thus be of relevance to the decision. In this sense, they can also produce legal effects for and against the individual. Excluding this type of general rules of international law from the referral obligation under Art. 100(2) of the Basic Law would, for the vast majority of these rules, frustrate the guarantee function that Art. 100(2) in conjunction with Art. 25 of the Basic Law seeks to achieve in favour of the general rules of international law (cf. also BVerfGE 23, 288 [317]). It need not be decided here whether and in which cases Art. 25 second sentence of the Basic Law extends the group of addressees of such general rules, which at the level of international law are exclusively addressed to states or other subjects of international law but not directly to private individuals, by establishing or changing additional subjective rights or obligations of the private individual (cf. Doehring, Die allgemeinen Regeln des völkerrechtlichen Fremdenrechts und das deutsche Verfassungsrecht, 1963, p. 54 ff.). The admissibility of the referral does not depend on this.

C.

53

There is a general rule of international law which stipulates:

54

It is impermissible for a forum-state judgment against a foreign state’s non-sovereign conduct (acta iure gestionis) to be executed ‒ without the foreign state’s consent ‒ against assets which that state maintains in the forum state’s territory if these assets serve sovereign purposes of the foreign state at the time execution measures commence. Receivables on a general current bank account that the embassy of a foreign state maintains in the forum state to cover the expenses and costs of the embassy are immune from execution by the forum state.

55

This rule is part of German federal law.

I.

56

1. The Federal Constitutional Court has ruled that, under currently applicable general international law, a state is not required to grant foreign states immunity from jurisdiction for non-sovereign conduct (BVerfGE 16, 27 ff.). This case-law is based on the doctrine of limited immunity. The number of states and courts that follow this doctrine has grown in the meantime ([...]).

57

2. Many states, however, continue to in principle grant foreign states unlimited immunity from execution ([...]); in terms of state practice, several states restrict immunity from execution in the following cases:

58

immovable assets located in the executing state are secured or executed against on the basis of enforceable rights to these assets ([...]),

the foreign state’s assets that are secured or executed against arose by way of succession and are located in the executing state,

the assets secured or executed against are those of state-owned or state-controlled commercial enterprises and arose from claims relating to their commercial activities ([...]);

in line with the Brussels Convention for the Unification of Certain Rules relating to the Immunity of State-owned Vessels of 10 April 1926 ([...]), immunity from execution is limited among the contracting states when state-owned vessels are secured or executed against on the basis of claims relating to the commercial operation of such ships; non-contracting states generally refrain from asserting immunity in this respect ([...]).

59

Those states that generally grant unlimited immunity from jurisdiction, as a de facto result also grant immunity from execution. This means that it is not possible to obtain an enforceable execution order unless the foreign state does not submit to the forum state’s jurisdiction. However, even many of those states that only grant foreign states immunity from jurisdiction for sovereign conduct (acta iure imperii) generally grant foreign states immunity from execution, irrespective of whether the judgment whose enforcement is being considered in the forum state relates to the foreign state’s non-sovereign conduct or whether the assets against which enforcement is being considered serve non-sovereign or exclusively commercial purposes that would also be pursued by private individuals ([...]). This practice is in accordance with international law since general international law does not preclude granting foreign states unlimited immunity from jurisdiction or unlimited immunity from execution. On its own, the fact that under general customary international law, there is a minimum obligation to grant foreign states immunity from jurisdiction for acta iure imperii does not exclude that general customary international law may require immunity from execution be granted to foreign states also for acta iure gestionis (commercial conduct). This is because, compared to judicial rulings, measures to secure or execute against assets generally interfere much more directly and drastically with the exercise of the foreign state’s sovereignty. It must therefore be examined separately whether and to what extent general rules of international law preclude execution proceedings.

60

3. In order to constitute a general rule of international law within the meaning of Art. 25 of the Basic Law, the aforementioned practice of many states when it comes to execution proceedings would have to be an established practice that is general and supported by states’ conviction that they are obliged to act in that manner under international law ([...]).

61

The determination of the norms of customary international law must be primarily based on acts that are relevant under international law and are carried out by those state bodies that are called upon by international law or domestic law to represent the state in international legal relations. In addition, such practice may also include acts of other state bodies, such as the legislator or the courts, at least insofar as their conduct is directly relevant under international law, for example to fulfil an obligation under international law or to exercise discretion granted under international law. This applies to decisions of national courts in particular where, as regards judicial immunity of foreign states, domestic law allows national courts to apply international law directly.

62

4. In the area at issue here, however, there is no established state practice that is sufficiently general and accompanied by the necessary legal conviction, both of which would be necessary to establish a general rule of customary international law according to which the forum state would be barred per se from enforcing its judgment against a foreign state. An assessment of the relevant state practice shows that quite a number of states permit measures to secure and execute against assets of foreign states, albeit under certain conditions and restrictions with regard to the legal nature of the substantive law underlying the execution order, the assets against which execution is permitted and the manner in which the measures of execution are carried out.

63

a) Italian case-law has long permitted measures of execution against foreign states with regard to acta iure gestionis. As early as 1887, in the case of Hamspohn c. Bey di Tunisi ed Erlanger ([...]), the Lucca Court of Appeal held that an attachment order against assets held by the Tunisian state in Italy was permissible. In the same vein, in 1926 in the case of Stato di Rumania c. Trutta ([...]), the Court of Cassation of the Kingdom of Italy ruled that there was no doubt that, with exception of assets that are indispensable for the functioning of the public administration of the foreign state, all public property was subject to execution.

64

Decree-law no. 1621 of 30 August 1925 ([...]), which, in amended form, was incorporated into Law no. 1263 of 15 July 1926 ([...]), stipulates that the permissibility of measures to secure and execute against assets of foreign states is contingent on the prior consent of the Minister of Justice, thereby indicating that such measures must not be regarded as per se contrary to international law.

65

The Italian Constitutional Court dealt with the question of the constitutionality of this law in the case of Amministrazione del Governo Britannico e Comune di Venezia c. Guerrato. [...] The Tribunale di Venezia ([...]) had doubts about foreign states’ unlimited immunity from execution under international law and referred the question of the constitutionality of the Law of 15 July 1926 to the Constitutional Court. It considered this law to violate Art. 10 of the Italian Constitution [...] in the event that international law prohibits execution proceedings against foreign states per se. By decision of 13 July 1963 ([...]), the Constitutional Court held that the law at issue did not violate Art. 10 of the Constitution because there was no consensus in the legislation, case-law and doctrine of the various countries as to the trends and systems concerning exemption from proceedings to secure and execute against assets belonging to foreign states and not intended for sovereign purposes.

66

b) Similarly, Swiss case-law has for a long time permitted the seizure of a foreign state’s assets to enforce private law claims (iure gestionis) if these assets do not serve the sovereign purposes of the foreign state. Seizure proceedings are abridged court proceedings assessing facts and legal claims with res iudicata effect and already allowing for preliminary measures to secure claims ahead of execution proceedings.

67

In its decision of 13 March 1918 ([...]) in K. k. österreichisches Finanzministerium v. Dreyfus, the Swiss Federal Supreme Court ruled that, in order to enforce payment of the face value of matured treasury bonds, it was permissible to seize assets held by the Austrian state at a Swiss bank. The Court ruled that, in issuing the treasury bonds, the Austrian Ministry of Finance had acted iure gestionis and that the Austrian state was therefore not immune from Swiss jurisdiction, ‘including from measures to secure enforcement, such as a seizure order’ [original quote in German].

68-70

[…]

69

In the case of Hellenic Republic v. Walder and others, the Swiss Federal Supreme Court reiterated in its judgment of 28 March 1930 ([...]) that measures to secure enforcement, such as asset seizure, were permissible for claims arising from acta iure gestionis, but did not consider Swiss international jurisdiction to apply in the pending proceedings (due to the lack of a sufficient connection between the subject matter of the dispute and Swiss sovereign territory).

70

In its decision of 30 September 1937 ([...]), the Zurich Court of Appeal ruled that the seizure of assets held by the Romanian state at the Swiss National Bank was permissible. There were no legal provisions hindering the seizure and subsequent execution proceedings, nor was there any judicial practice to that effect in Switzerland.

71

On 24 October 1939, after the outbreak of the Second World War, the Swiss Federal Council again adopted a decree which was based on the Federal Council Decree on the Protection of the Country and the Maintenance of Neutrality and according to which property belonging to a foreign state could only be seized or subjected to execution with the consent of the Federal Council ([...]). This decree was repealed after the end of the war by Federal Council Decree of 3 September 1948 ([...]).

72

In line with its earlier case-law, the Swiss Federal Supreme Court ruled in the case of Royaume de Grèce c. Banque Julius Baer & Cie on 6 June 1956 ([...]) that the seizure of all accounts and assets of the Greek state and its ministries at various Geneva banks was not impermissible due to lack of jurisdiction. The ruling expressly rejects the view that unlimited immunity from execution must be granted under international law. Rather, the entire development of international law is increasingly moving towards authorising execution when it comes to acta iure gestionis.

73

In the case of République Arabe Unie c. dame X, the Swiss Federal Supreme Court ruled on 10 February 1960 ([...]) that the seizure of assets and letters of credit of the United Arab Republic at a Swiss bank was permissible. Since the seized assets were no longer dedicated to a specific purpose at the time of the seizure, this enforcement measure was not impermissible under international law.

74

c) For a long time, Belgian courts, without exception, granted foreign states unlimited immunity from execution ([...]). However, the Brussels Civil Court, in a decision of 30 April 1951, declared the attachment of assets of the Greek State and the Bank of Greece in banks and companies in Belgium to be permissible. [...] The Brussels Civil Court did not consider that either international law or comity (comitas gentium) prevented it from allowing the attachment measures (according to Colliard, Revue Critique de Droit International Privé 41 [1952] p. 124, the attached assets originated from Marshall Plan aid funds for Greece and were later released for other reasons).

75

d) In the case of Societé Européenne d'Etudes et d'Entreprises en liqu. vol. (SEEE) c. Yugoslavia ([...]) the Dutch Supreme Court held, in accordance with the Court of Appeal in The Hague ([...]), that the execution of an arbitral judgment on a foreign state’s acta iure gestionis would only conflict with international law if international law mandated that foreign states be granted absolute immunity from execution against their assets. The Court ruled that no such rule of international law existed. (Execution was later declared impermissible by the Court of Appeal on other grounds, [...]).

76

e) In a ruling of 13 January 1954 ([...]), the Austrian Supreme Administrative Court dismissed the assertion of immunity against the confiscation order issued by the tax authorities in administrative proceedings for the confiscation of unlawfully marketed spirits originating from a company that was under the administration of the Soviet Union. The Court based its decision on the following grounds: ‘It is true that it is a generally recognised principle of international law that foreign states, insofar as they act in their sovereign capacity, are not subject to the jurisdiction of the territorial state’s courts and administrative authorities. However, it is not generally recognised either in doctrine or in the practice of international law or in the jurisprudence of the state bodies of the members of the international legal community that a foreign state, if it acts as a holder of private rights within a state, in particular if it maintains economic operations there, should be immune from the national courts’ jurisdiction in matters that concern these private-law transactions and these economic operations’ [original quote in German]. According the Austrian Supreme Administrative Court, the same must also apply in relation to the jurisdiction of the administrative authorities.

77

f) It can also be inferred from recent French case-law that French courts no longer consider it impermissible under general international law to secure and execute against foreign states’ assets on the basis of claims arising from acta iure gestionis. While in earlier years the French government and the French courts predominantly followed the doctrine of absolute immunity from execution ([...]) and deviations from this practice probably constituted exceptions that did not change this general mindset ([...]), the decisions of the Court of Cassation in the cases of Englander c. Statni Banka Ceskoslovenska ([...]) and Clerget c. Représentation commerciale de la République démocratique du Viet-Nam ([...]) can be interpreted as meaning that the Court of Cassation does not recognise measures to secure and execute against assets of a foreign state or its bodies as barred by general international law if it was found in the proceedings that the origin and intended use of these assets are of a commercial nature.

78

g) Greek courts have authorised measures of execution against foreign states, provided that the claims were based on private law; [...]. Similar to the legislation of Switzerland and Italy, the Greek law of 17 December 1938 ([...]) made the domestic permissibility of execution measures against foreign states subject to the prior consent of the Minister of Justice.

79

h) The recent turn taken by the United States of America on the issue of foreign sovereign immunity with the enactment of the Foreign Sovereign Immunities Act of 1976 is significant. In the United States, too, execution proceedings fall within the courts’ jurisdiction ([...]). [...] Following the Tate letter of 19 May 1952, the State Department transitioned to the doctrine of only affording foreign states limited immunity from jurisdiction (Department of State Bulletin 26 [1952] 984; see BVerfGE 16, 27 [48 f.]). Even after that, however, US courts continued to generally grant foreign states unlimited immunity, at least for execution proceedings in the strict sense, until the Foreign Sovereign Immunities Act of 1976 came into force ([...]). Under the Foreign Sovereign Immunities Act of 1976, foreign states no longer enjoy unlimited immunity before the courts of the United States, even in execution proceedings. Sec. 1604 and Sec. 1609 stipulate that foreign states, in principle, be granted immunity from both jurisdiction and execution. However, Sec. 1605 ff. and Sec. 1610 f. provide for extensive exceptions in this regard. Accordingly, no immunity from jurisdiction is to be granted

80

‘in any case in which the action is based upon a commercial activity carried on in the United States by the foreign state; or upon an act performed in the United States in connection with a commercial activity of the foreign state elsewhere; or upon an act outside the territory of the United States in connection with a commercial activity of the foreign state elsewhere and that act causes a direct effect in the United States’ (Sec. 1605 [a] [2])

81

and generally in cases in which actions for monetary damages are sought against the foreign state for tortious conduct (including strict liability) of the foreign state, its officials or employees, insofar as they act within the scope of their office or employment (Sec. 1605 [a] [5]).

82

The exceptions to foreign states’ immunity from execution are laid down in Sec. 1610(a) which reads:

83

‘(a) The property in the United States of a foreign state, as defined in section 1603 (a) of this chapter, used for a commercial activity in the United States, shall not be immune from attachment in aid of execution, or from execution, upon a judgment entered by a court of the United States or of a State after the effective date of this Act, if-

 (1) the foreign state has waived its Immunity from attachment in aid of execution or from execution either explicitly or by implication, notwithstanding any withdrawal of the waiver the foreign state may purport to effect except in accordance with the terms of the waiver, or

 (2) the property is or was used for the commercial activity upon which the claim is based, or

 (3) the execution relates to a judgment establishing rights in property which has been taken in violation of international law or which has been exchanged for property taken in violation of international law, or

 (4) the execution relates to a judgment establishing rights in property -

 (A) which is acquired by succession or gift, or

 (B) which is immovable and situated in the United States: Provided, [t]hat such property is not used for purposes of maintaining a diplomatic or consular mission or the residence of the Chief of such mission, or

 (5) the property consists of any contractual Obligation or any proceeds from such a contractual Obligation to indemnify or hold harmless the foreign state or its employees under a policy of automobile or other liability or casualty insurance covering the claim which merged into the judgment.’

84

Sec. 1610 (b) extends these exceptions to immunity from execution against an ‘agency or instrumentality’ of a foreign state to the extent that it does not make the permissibility of execution contingent on the connection required under Sec. 1610 (a) (2) between the property executed against, the commercial activity and the underlying claim.

85

The provisions of this Act thus certify that the United States of America has turned to the doctrine of only affording foreign states limited immunity from both jurisdiction and execution, particularly in in personam proceedings in which claims are asserted directly against the foreign state either as a party in the proceedings assessing facts and claims with res iudicata effect or as a debtor in the subsequent execution proceedings. [...] [W]ith regard to the provisions now stipulated in the Foreign Sovereign Immunities Act of 1976, all the evidence seems to suggest that they were deliberately enacted with a view to the minimum obligations imposed by general international law, even if the structure of the Act sometimes goes beyond this and places the foreign state in a more favourable position than is required by general international law. This is reflected, firstly, in the fact that, following the entry into force of the Act, it is now solely up to the courts to decide on issues of immunity in accordance with legal provisions. […]

86

i) German case-law prior to 1945 generally granted foreign states unlimited immunity from execution, as a matter of principle, because a rule of customary international law required this ([...]). This view was not least a consequence of generally granting foreign states unlimited immunity from jurisdiction (cf. the references in BVerfGE 16, 27 [34 f.]).

87

The relevant judgments handed down after 1945, insofar as they have become known, relate almost without exception to questions of immunity from jurisdiction in court proceedings other than execution proceedings (cf. BVerfGE 15, 25ff.; 16, 27ff. in each case with references) or the personal immunity of persons within the meaning of §§ 18, 19 of the former version of the Courts Constitution Act (Gerichtsverfassungsgesetz – GVG) ([...]).

88

In addition to the decisions of the Bonn Local Court mentioned in the order of referral, the Stuttgart Regional Court (Landgericht) ([...]) also had to rule on questions of the foreign states’ immunity from execution. In this case, the creditor had obtained an attachment and transfer order against the Spanish state from the judicial officer on the basis of an enforceable default judgment, by which the alleged present, future and contingent claims of the Spanish state against Deutsche Bank, Stuttgart, and Banco Espanol en Alemania, Frankfurt, were attached and transferred to the creditor for collection. The Stuttgart Local Court had cancelled the attachment and transfer order; the Regional Court dismissed the creditor’s immediate appeal because the attachment of the accounts contradicted a general rule of international law which prohibits the execution against the assets of a foreign state that are used for sovereign purposes. It can be inferred from the grounds for the decision that the Regional Court does not consider measures of execution against foreign states to be prohibited per se by virtue of general international law. Rather, the Regional Court follows the doctrine of doubly limited immunity, according to which international law does not exclude execution in cases in which judgments on non-sovereign conduct are executed against objects that do not serve sovereign purposes of the foreign state. In the case before it, the Regional Court assumed that the attached accounts, which were held in the name of the Spanish Consulate in Stuttgart and the Spanish Consulate General in Frankfurt am Main, served sovereign purposes of the debtor.

89

In its judgment of 2 December 1975 ([...]), the Frankfurt am Main Regional Court found in favour of German jurisdiction to issue an in rem seizure order against the Central Bank of Nigeria. The Regional Court did not decide on whether the defendant should be regarded as a legally dependent authority of the Nigerian state or as an independent legal entity. Given that the applicant’s claim that was to be protected arose from a legal transaction of the bank, the court held that the defendant could not successfully claim immunity from German jurisdiction even as a dependent authority of the state of Nigeria. The Regional Court further held: The foreign state only has limited immunity from being held liable as debtor in the forum state also with respect to the assessment of the permissibility of the in rem seizure proceedings as summary court proceedings assessing facts and claims with res iudicata effect and with respect to the execution of the in rem seizure order sought by the creditor. Within the limits of jurisdiction, in rem seizure of domestic assets of a foreign state is also permissible. Only items that are dedicated as such to the public service of the foreign state are exempt from execution under a seizure order. In the case at hand, however, the application for seizure is directed against the defendant’s cash and securities accounts in the Federal Republic of Germany, i.e. assets that are not ‘in the public service’ of the defendant. The Regional Court concluded that a possible future use of these assets to finance state functions could not justify any substantive immunity.

90

5. The treaty practice of quite a number of states indicates that execution against assets of foreign states by the forum state is not considered to be per se incompatible with general international law. A number of multilateral and many bilateral treaties contain provisions on jurisdiction, including jurisdiction for execution, with respect to state-owned or state-operated merchant ships, state-owned or state-operated commercial enterprises with or without legal capacity, and with respect to state trade missions. These provisions generally permit execution against the debtor’s assets that do not serve sovereign purposes if such execution is based on a court judgment with res iudicata effect, deciding claims against the state or state-controlled debtor arising from private commercial activities. In some cases, a factual connection between the substantive, judicially enforceable right and the asset against which execution is to be levied is required; in some cases, there are restrictions with regard to measures to secure enforcement, insofar as they are issued without a prior ordinary court judgment assessing facts and claims with res iudicata effect.

91

a) The Brussels Convention for the Unification of Certain Rules relating to the Immunity of State-owned Vessels of 10 April 1926, which has been ratified by Germany ([...]) and is in force for 21 states ([...]), distinguishes between government merchant vessels and other government vessels. Pursuant to Art. 1 of this Convention, seagoing vessels owned or operated by states, cargoes owned by them, and cargoes and passengers carried on government vessels, and the states owning or operating such vessels, or owning such cargoes, are subject ‒ in respect of claims relating to the operation of such vessels or the carriage of such cargoes ‒ to the same rules of liability and to the same obligations as those applicable to private vessels, cargoes and equipments. According to Art. 2, such liabilities and obligations are subject to the same rules regarding the jurisdiction of the courts, the same legal actions and the same procedure as in the case of privately owned merchant vessels or private cargoes or of their owners. This means that measures to secure execution and measures of execution are also permissible in that regard.

92

The Geneva Convention on the High Seas of 29 April 1958, binding on 55 state parties as of 31 December 1976 ([...]), and the Geneva Convention on the Territorial Sea and the Contiguous Zone of 29 April 1958 ([...]) also make a distinction between government merchant ships and other government ships. Pursuant to Art. 9 of the Geneva Convention on the High Seas, ships owned or operated by a state and used only on government non-commercial service shall, on the high seas, have complete immunity from the jurisdiction of any state other than the flag state; rules under international law or domestic law thus remain effective with regard to any other government ships. Art. 21 of the Geneva Convention on the Territorial Sea and the Contiguous Zone clarifies that immunity cannot be claimed for government ships operated for commercial purposes in respect of state measures authorised in connection with the rules on innocent passage. The Federal Constitutional Court has interpreted these provisions as reflecting the widespread conviction that states are only entitled to immunity from jurisdiction for their sovereign acts (see BVerfGE 16, 27 [52f.]). This generally also applies in execution proceedings.

93

In Art. 1 to Art. 14, the European Convention on State Immunity excludes any immunity from jurisdiction for a wide range of acta iure gestionis. According to Art. 23 of the European Convention on State Immunity, no measures to secure or execute against assets of a contracting state may be taken in the territory of another contracting state unless the latter has consented accordingly. However, this rule does not express a legal conviction of the contracting states that such measures would be prohibited by general international law. Rather, this rule results from the special structure provided for by the European Convention on State Immunity. In accordance with Arts. 20 ff., the contracting states shall give effect to judgments given against them by another contracting state’s court with res iudicata effect. If this obligation is not complied with, the party concerned is entitled to initiate special judicial declaratory proceedings before a court of the contracting state against which the judgment was rendered or before the European Tribunal in matters of State Immunity, which is to be established (Art. 21 of the European Convention on State Immunity and Arts. 1 ff. of the Additional Protocol to the European Convention on State Immunity). The provision on immunity from execution under Art. 23 must therefore be interpreted in light of this special provision ([...]). However, this special provision does not express a legal conviction on the part of the contracting states that measures of execution are impermissible by virtue of general international law. This is also supported by the optional provision of Art. 26 of the European Convention on State Immunity, according to which, notwithstanding the provision under Art. 23, a judgment rendered against a contracting state in proceedings relating to an industrial or commercial activity, in which the state is engaged in the same manner as a private person, may be enforced in the state of the forum against property of the state against which judgment has been given, used exclusively in connection with such an activity, provided that both states have made declarations in accordance with Art. 24 of the European Convention on State Immunity.

94

b) Many bilateral treaties provide that state-owned or state-controlled commercial enterprises cannot claim immunity from jurisdiction and execution, with respect to their commercial activities and their assets serving commercial purposes. […]

95-104

[…]

105

While such treaty provisions may also be interpreted as a contractual waiver of immunity, they nevertheless reflect the general development of the understanding of immunity under international law in areas in which states act in a non-sovereign, in particular commercial, capacity.

106

c) The Asian-African Legal Consultative Organization, which included representatives from Burma, Ceylon, India, Indonesia, Iraq, Japan, Pakistan, Sudan, Syria and the United Arab Republic, examined the question of state immunity in 1960. In terms of commercial and other transactions, the report of the Organization’s Committee on State Immunity states that all delegations accept that a judgment against a foreign state may not be executed against its public property. However, the property of a national trading organisation, which has separate legal capacity, may be subjected to execution ([...]). The report’s restriction to public property means that it is not possible to infer a legal opinion of the Committee to the effect that measures of execution against foreign states beyond such assets are prohibited per se by general international law.

107

6. This overview shows that there is no established practice that is sufficiently general and supported by the necessary legal conviction to establish a general rule of customary international law according to which the forum state would be barred per se from executing against a foreign state’s assets located in the forum state. There is a group of states which, as evidenced by their case-law, legislation or treaty practice, do not exclude measures to secure and execute against a foreign state’s assets, at least when such measures are taken to enforce judgments on a foreign state’s acta iure gestionis against assets that serve non-sovereign purposes. This group of states is so large that there can currently be no question of a general practice of considering execution proceedings to be excluded by virtue of international law, regardless of how the requirement of the generality of a practice must be determined for it to establish a rule of customary international law. The conduct of the said group states is not merely a case of practice that a state can rely on to successfully refuse the application of an existing general rule of international law by persistently asserting its rights ([...]); rather, a corresponding general rule of international law cannot be assumed to exist at present.

108

7. This legal position is also confirmed in the statements of recognised scientific associations and scholars of international law.

109-115

[…]

II.

116

While general rules of international law thus do not per se preclude a forum state from executing against a foreign state’s assets, they nevertheless impose specific limits on execution measures.

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1. There is a well-established general practice of states, based on legal conviction, according to which, by virtue of international law, forum-state judgments against a foreign state’s acta iure gestionis cannot ‒ without the foreign state’s consent ‒ be executed against assets of the foreign state that are located in the forum state and serve sovereign purposes of the foreign state.

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It is true that there is no completely uniform state practice on the scope and nature of the assets protected by state immunity. Under the Foreign Sovereign Immunities Act of 1976 of the United States of America, only those assets are subject to execution that are or have been used for the foreign state’s commercial activity upon which the asserted substantive legal claim is based ([...]). By contrast, Italian and Swiss case-law focus on whether the assets against which execution is to be levied actually serve or are intended to serve non-sovereign or sovereign purposes of the foreign state. These distinctions and their legal consequences under German law need not be conclusively assessed in the present proceedings. This is because the general consensus and established state practice is that assets in the forum state that actually serve the sovereign purposes of the foreign state are not subject to execution pursuant to general international law. […]

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2. The Federal Constitutional Court has ruled that, in determining whether a foreign state enjoys immunity from jurisdiction, courts must generally base their assessment of whether state activity, according to its legal nature, qualifies as sovereign or non-sovereign on applicable national law, given that international law, at least as a rule, does not contain any criteria for this differentiation (BVerfGE 16, 27 [62f]). The Court did not fail to recognise that, basing this assessment on national law, makes the application of general international law more difficult and counteracts the desired legal harmonisation. However, this disadvantage is mitigated by the fact that international law imposes limits on the qualification of a state activity as an act iure gestionis under national law. International law mandates that national law may only be applied in this respect with the proviso that state acts which, according to the view predominantly held among states, belong to the sphere of state authority in the narrower and true sense may not be excluded from the sovereign sphere and thus from immunity. In exceptional cases, it may be necessary under international law to qualify the activity of a foreign state as an act iure imperii because it is attributable to the core area of state authority, although under national law it would have to be regarded as an activity under private law and not under public law (BVerfGE 16, 27 [63 f.]).

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In the present proceedings, in which only the permissibility of execution measures against receivables on the current general account of the embassy of a foreign state is at issue, it can be left open whether the qualification of an asset as serving sovereign purposes must generally be assessed in line with according principles. This is because, with regard to the qualification of an asset as serving to fulfil the official functions of a foreign state’s diplomatic mission in the forum state, special rules of international law apply, which, without prejudice to their partial codification in the Vienna Convention on Diplomatic Relations of 18 April 1961, constitute general rules of international law within the meaning of Art. 25 of the Basic Law. They arise both from the principle of the inviolability of diplomatic missions and from the judicial immunity of the foreign state with regard to the official functions of its diplomatic missions.

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3. It is the well-established view, emerging already prior to Grotius ([...]) and Bynkershoek ([...]), that international law requires measures to secure or execute against a foreign state’s assets be not extended to those assets that the foreign state’s diplomatic mission is using for the performance of its official functions ([...]). The ne impediatur legatio rule of international law excludes such measures to the extent that they might impair the fulfilment of diplomatic functions. Accordingly, the Federal Constitutional Court has thus ruled that German jurisdiction for proceedings against a foreign state in which an action is brought seeking an approval to correct the land register with regard to the ownership of a property used for diplomatic purposes is not excluded by a general rule of international law because this does not impair the ability of the diplomatic mission to function (BVerfGE 15, 25 [43]).

122

Due to the difficulties in differentiation when assessing a threat to a diplomatic mission’s ability to function and due to the latent possibilities for abuse, general international law affords the foreign state a very broad scope of protection and focuses on the typical, abstract danger, but not on the specific threat to the ability of the diplomatic mission to function caused by measures of the receiving state ([...]). For example, Art. 22(3) of the Vienna Convention on Diplomatic Relations, which codifies general international law in this respect, stipulates that the premises of the mission, their furnishings and other property thereon and the means of transport of the mission shall be immune from search, requisition, attachment or execution. However, this provision of inviolability is not exhaustive, meaning that these and other assets could also enjoy the full scope of immunity that international law affords to the official functions of the diplomatic mission of the sending state. It would appear that, apart from an amendment proposed by Sir Gerald Fitzmaurice, which was withdrawn for other reasons ([...]), this question of inviolability was not discussed in detail in the United Nations International Law Commission, whose draft formed the basis of the Vienna Conference on Diplomatic Relations. It would further appear that this question was not dealt with in detail at the Vienna Conference itself either, which, however, also means that no decision was made in favour of excluding a more extensive immunity ([...]). Yet, the preamble to the Vienna Convention on Diplomatic Relations states that the rules of customary international law continue to apply to all matters not expressly dealt with in the Convention. For example, the last paragraph of Art. 4 of the Annex to the Agreement on General Questions of Trade and Maritime Navigation between the Federal Republic of Germany and the Union of Soviet Socialist Republics of 25 April 1958 excludes from execution proceedings not only the premises and facilities of the Soviet trade representation, but generally all assets which, according to international custom, are intended exclusively for the exercise of political and diplomatic rights in the Federal Republic of Germany.

123

These and similar treaty provisions confirm the general rule of international law that assets used by the sending state in the exercise of its diplomatic functions enjoy immunity even if they do not fall within the material or territorial scope of the inviolability provision of Art. 22 of the Vienna Convention on Diplomatic Relations ([...]).

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4. a) The special purpose of the protection that general international law affords to diplomatic missions answers the question as to whether such protection extends to receivables on a general, current bank account, which the sending state maintains for its diplomatic mission in the receiving state to cover and settle the expenses and costs of the embassy. The purpose of inviolability and immunity in this respect is to ensure the unimpeded functioning of the diplomatic mission of the sending state in the receiving state in order to fulfil its diplomatic functions ([...]). According to Art. 3 of the Vienna Convention on Diplomatic Relations, which describes general international law in this respect, the functions of a diplomatic mission consist, inter alia, in:

125

a) Representing the sending state in the receiving state,

b) Protecting in the receiving state the interests of the sending state and or its nationals, within the limits permitted by international law,

c) Negotiating with the government of the receiving state,

d) Ascertaining by all lawful means conditions and developments in the receiving state, and reporting thereon to the government of the sending state,

e) Promoting friendly relations between the sending state and the receiving state, and developing their economic, cultural and scientific relations.

126

It is obvious that the use of financial resources is essential for the fulfilment of these functions. The maintenance of such financial resources in the context of these functions as well as the organisation and financial management by the sending state regarding any expenditures and costs incurred by the diplomatic mission are a direct part of a diplomatic mission’s activities and functions ([...]).

127

It need not be decided here whether, pursuant to general international law, the receiving state is required to grant the sending state the option of maintaining bank accounts in the receiving state, allowing the sending state to handle the expenses and costs of its embassy. However, should the receiving state offer this option and the sending state make use of it in accordance with the laws of the receiving state, the immunity of the sending state does not cease to apply to its receivables and other assets on such an account if the legal relationship between the sending state and the bank must be qualified as non-sovereign under the law of the receiving state. It should be borne in mind here that the sending state is generally not in a position to, by virtue of its own sovereignty, declare as sovereign any things or rights that directly serve the exercise of its diplomatic functions or the maintenance of the operations of its diplomatic mission with effect for the legal system of the receiving state. This, for example, includes declaring a property to be public property as defined by the legal system of the receiving state. In this case, the sending state is largely dependent on the legal system of the receiving state. Should this legal system, for instance, exclusively categorise any acts of the sending state in this respect as matters of private law, this must not, however, curtail the protection of immunity that international law affords to the sending state to ensure the functioning of its diplomatic mission. The financial settlement of an embassy’s expenses and costs via a general current account that the sending state maintains with a bank in the receiving state is directly part of the maintenance of the diplomatic functions of the sending state. This applies irrespective of the fact that any goods or services financed via such an account may, in relation to the bank or to third parties, be provided in the context of legal relationships or other acts which, depending on their legal nature, may qualify as acta iure gestionis. The sending state’s rights to payment connected to such an account therefore, fall within the scope of immunity that general international law affords to diplomatic missions in the event of execution proceedings.

128

Otherwise, the execution authorities of the receiving state would have to ascertain, where necessary, whether there is a credit balance on such an account and identify the purpose of the credit balance or parts thereof, as defined by the sending state. One aspect that may appear questionable under German law in the case of a general, current account, is whether the asset that is to be attached is sufficiently determinable. More specifically, it is questionable whether it would be possible for the execution authorities to ascertain criteria that are relevant to determining the permissibility of attaching parts of the credit balance, for example ([...]). In the event that in some cases this is possible also in relation to receivables on such an account, this will usually entail the risk of an intrusion into the internal functions of the diplomatic mission of the sending state. Without the consent of the sending state, any such intrusion is categorically forbidden under the international law of diplomacy. Moreover, it would constitute an interference with the exclusive affairs of the sending state and violate international law, if the receiving state’s execution authorities required that the sending state, without its consent, provide details as to the existence or any past, present or future uses of funds in such an account. On the other hand, general international law does not preclude requiring the sending state to furnish credible evidence that an account serves to maintain the functions of its diplomatic mission. As to the content and form of this evidence, however, the forum state will have to accept it as sufficient under international law if an appropriate body of the sending state provides a due and proper assurance.

129

b) Neither the practice of state bodies engaged in foreign affairs, the case-law of the national courts nor international legal scholarship give rise to any serious objections against this conclusion.

130

To date there appear to be no cases which permitted the execution against receivables on a current, general bank account that a foreign state maintains to settle its embassy’s expenses and costs. Yet, in terms of examining a foreign state’s credit balance or account to distinguish between its sovereign or non-sovereign origin and purpose, there are individual decisions that may not consider this beyond the realms of possibility – albeit mostly in relation to other accounts not specifically set up for embassy purposes ([...]).

131

According to Schaumann ([...]), the foreign state is able, in the context of its general state immunity, to successfully claim immunity in the case of a general bank account – and, to a limited extent, also in relation to other assets – simply by designating a sovereign purpose; only rarely will it be possible to prove the opposite. Schaumann states that this results from diplomatic immunity and cannot be changed by any view of state immunity that protects foreign states’ sovereign functions. If, for example, instead of a mere specification as to an asset’s sovereign purpose, one were to require proof of its actual use for this purpose, the protection of the sovereign functions of the state in the foreign sphere would remain incomplete. According to Habscheid ([...]), the specification as to the purpose of the asset which is to be attached must suffice in this regard. The ministry named as the holder of the account, for example, might be a reference point in providing such specification.

132

c) The Senate of the Federal Constitutional Court does not fail to recognise that the immunity from execution against receivables on a general, current account of the embassy of a foreign state could, in some cases, be used to settle expenses that are not directly related to the tasks of a diplomatic mission. Should such a case arise – and there are no indications of this in the initial proceedings –, it would be a matter for the relevant bodies of the Federal Republic of Germany to adopt diplomatic and other means permissible under international law in order to address any improper use of the immunity of diplomatic missions. Private individuals who wish to enter into commercial relations with a foreign state are free to protect their interests as far as possible, for example by means of agreements on the manner in which the services are to be provided, on dispute settlement procedures – in particular by means of an immunity waiver which is generally irrevocable ([...]) – or by means of collateral.

133

d) It need not be decided here whether and according to which standards it is necessary to qualify those receivables and other assets as sovereign or non-sovereign that are connected to other accounts that a foreign state maintains with banks in the forum state including special accounts for procurement or bond issues or accounts without a special purpose. Consequently, it also need not be decided which limits under international law, if any, must be observed here in terms of evidentiary requirements.

134

5. The question of the sending state’s immunity in favour of its diplomatic mission does not depend on the economic situation of the sending state, i.e. whether, for example, it would be in a position to maintain the embassy’s operations through financial contributions or services provided by other means despite the attachment of receivables on a general current account of its embassy. The only decisive criterion in this respect is whether this kind of execution measures pose an abstract threat. Such an abstract threat is posed by the legal effects that an attachment and transfer order triggers under German law to the detriment of the execution debtor and third-party debtors. Moreover, applying distinctions based on the sending state’s economic situation could lead to differential treatment of foreign states in terms of diplomatic immunity, which would contradict the international law principle of sovereign equality of states. It is irrelevant in this case whether this legal principle, as reflected in Art. 2(1) of the United Nations Charter ([...]), only concerns relations between member states of the United Nations. The principle of sovereign equality of states is also a constitutional principle of current general international law which for the most part, at least when it comes to diplomatic relations between the states, requires formal equal treatment ([...]). Affording different levels of diplomatic immunity to states depending on their respective economic capacity would be incompatible with this requirement.

III.

135

1. The general rule of international law established under C. above is part of federal law (Art. 25 first sentence of the Basic Law and § 83(1) of the Federal Constitutional Court Act (Bundesverfassungsgerichtsgesetz – BVerfGG)).

136

2. This general rule of international law only establishes rights and obligations in the relationship between states under international law, but does not establish or change subjective rights or obligations of private individuals within the sovereign territory of the Federal Republic of Germany, not even pursuant to Art. 25 second sentence of the Basic Law. It does not give rise to a subjective right of private individuals to pursue execution proceedings against foreign states within the sovereign territory of the Federal Republic of Germany to the extent permitted by general international law, nor does it establish a subjective obligation not to pursue execution proceedings against the foreign state to the extent that it is prohibited under general international law. At present, rights and obligations of this nature follow, if at all, from other national law.

137

3. As set out above, this must be distinguished from the fact that, by virtue of Art. 25 first sentence of the Basic Law, the established general rule of international law, with its respective scope under international law, is part of the objective law applicable within the sovereign territory of the Federal Republic of Germany, and depending on the circumstances, can have legal effects for or against private individuals. For instance, in determining whether immunity from execution is to be granted or not, the established general rule of international law may be decisive as to whether execution proceedings initiated by an individual or the manner in which an execution measure is carried out are permissible or not. In such cases, the Federal Constitutional Court’s ruling pursuant to § 83(1) of the Federal Constitutional Court Act is limited to a finding that the general rule of international law is part of federal law.

IV.

138

This decision was taken unanimously.