Iraq Successfully Defends Sovereign Immunity in UK Supreme Court

August 17, 2012

Cleary Gottlieb has successfully defended the Republic of Iraq’s sovereign immunity in the UK Supreme Court, 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 August 17, the Supreme Court Justices upheld the November 2011 decision of the English Court of Appeal, which in turn 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.