Emma Beechey recently appeared leading Elly Phelan in the New South Wales Court of Appeal for the respondent, PT Garuda Indonesia Limited, successfully maintaining the airline’s foreign state immunity against a winding up application.
Two Irish companies (Greylag Goose) had applied to have Garuda wound up under s 583 of the Corporations Act 2001 (Cth) as a foreign company registered in Australia. Greylag Goose contended that Garuda was not protected by foreign state immunity because s 14(3)(a) of the Foreign States Immunities Act 1985 (Cth) (FSIA) provides that:
A foreign State is not immune in a proceeding in so far as the proceeding concerns … bankruptcy, insolvency or the winding up of a body corporate …
They primary judge (Hammerschlag CJ in Eq) had found that Garuda was entitled to foreign state immunity despite the exception in s 14(3)(a), because the “bankruptcy insolvency or winding up of a body corporate” referred to in s 14(3)(a) when properly construed refers to the bankruptcy, insolvency or winding up of some entity other than the foreign state.
The Court of Appeal affirmed the decision below. The judgment was written by Bell CJ, with Meagher and Kirk JJA agreeing.
The Court of Appeal found that on its proper construction, s 14(3)(a) relates to a bankruptcy, insolvency or winding up in which a foreign state has or claims an interest in property with which the relevant proceeding is concerned. In reaching this conclusion, Bell CJ adopted the reasoning of the primary judge and went on to observe that the Australian Law Reform Commission Report, Foreign State Immunity (Report No 24, 10 October 1984) (ALRC Report) supplied important context by reference to which the FSIA and s 14(3) is to be interpreted. The judgment also considered the ALRC Report in light of the work of the International Law Commission, to which the ALRC Report referred, and the application of that work in comparable foreign statutes.
Bell CJ observed that there was no hint in the ALRC Report of “what would have been a quite radical legislation initiative” to make emanations of foreign states susceptible to winding up, insolvency or bankruptcy proceedings in Australia. The primary judge had observed that if the legislature had intended to achieve this, it would clearly have said so. Bell CJ observed that had the ALRC intended to recommend this, the thorough and scholarly ALRC Report written by Professor Crawford would also clearly have said so.
Ms Beechey and Ms Phelan were instructed by Baker McKenzie.
Greylag was represented by Alec Leopold SC and Christine Trahanas, instructed by K&L Gates.
A case note on the decision below can be found here.Back to all