The High Court has substantively dismissed an appeal against the decision of the NSWCA relating to the recognition and enforcement of foreign judgments and sovereign immunities. Firebird sought enforcement by the NSWCA of a Tokyo District Court judgment for ¥1.3 billion relating to Nauru’s refusal to honour its obligations as a guarantor of bonds issued through the Republic of Nauru Finance Corporation, most of which are held by Firebird, under the Foreign Judgments Act 1991 (Cth). The NSWCA declined to require that the debt be paid from Nauru’s accounts at the Westpac Bank on the basis that the Foreign States Immunities Act 1985 (Cth) required that Nauru be served under pt III of that Act; that the immunity under s 9 is a freedom from liabilities or duties imposed by Australian courts and applies to Nauru; and that because these bank accounts were not used for commercial purposes, they are immune from execution of a garnishee order.

The High Court varied the orders to reflect that the NSWCA did have jurisdiction to register the foreign judgment, but otherwise dismissed the appeal, holding that Nauru was not immune from the jurisdiction of Australian courts for the purposes of registering the Tokyo judgment, but that it was immune from execution against its property in the Westpac accounts because those accounts and the money within them are not for commercial purposes.

After rejecting Firebird’s arguments that an application to register a foreign judgment was not a ‘proceeding’ within the meaning of s 9 of the FSIA and holding that it was to be given its widest meaning to give effect to the general principles of state immunity (see [34]–[49]), French CJ and Kiefel J held that a similarly wide meaning should be given to the ‘commercial transaction’ exception in s 11 — under which a foreign state is not immune in a proceeding that concerns as ‘commercial transaction’ — and concluded that s 11 applies to proceedings for the registration of a foreign judgment that relates to a commercial transaction involving the state (see at [50]–[81] and also [186]–[210] (Nettle and Gordon JJ)). French CJ and Kiefel J then rejected Firebird’s submission that the FSIA was inconsistent with the Foreign Judgments Act (see [82]–[88]) as well as Nauru’s arguments that the FSIA require that Nauru first be served before registration of a judgment against it (see [89]–[96]). Finally, French CJ and Kiefel J concluded that Nauru was immune from execution of the garnishee order because the accounts are not commercial property (see [97]–[127] and see [217]ff (Nettle and Gordon JJ)). Gageler J agreed with the reasons of French CJ and Kiefel J on all points except service, preferring the views of Basten JA in the NSWCA, and concluding that s 27(1) of the FISA precludes a court from making an ex parte order for registration partly because it requires a court to make an order inconsistent with the procedural immunity of a foreign state (see at [143]–[148]). Nettle and Gordon JJ issued a separate judgment that agreed with the orders proposed by French CJ and Kiefel JJ. On 23 December, the Court clarified that Firebird pay the respondents costs in the appeal.