Iraq Successfully Defends Sovereign Immunity in English Court of Appeal

November 3, 2011

Cleary Gottlieb has successfully defended the Republic of Iraq’s sovereign immunity in the English Court of Appeal, in relation to a $35 million claim by a Saddam era creditor.

The claim arose in the context of the liquidation of Rafidain Bank. SerVaas Incorporated, a contractual counterparty of Iraq, sought to intercept monies due to Iraq in the liquidation and to enforce a judgment against Iraq’s entitlement to those monies in the English courts. SerVaas applied for a Third Party Debt Order over the monies due to Iraq and an injunction restraining the liquidators from making payments to Iraq.

On November 3, the Court of Appeal affirmed the judgment of Mr. Justice Arnold in the English High Court to the effect that the monies were protected by Iraq’s sovereign immunity. SerVaas has been given permission to appeal to the Supreme Court.