The Government of the Republic of Nauru

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High court of Australia rules in favour of Nauru in Firebird case

1. On the 3 September 2014, Firebird Global Master Fund sought to garnishee or freeze funds belonging to Nauru in Australian bank accounts. Firebird had obtained judgment against Nauru for a sum in excess of $30 million arising from the issuance of bonds by the Nauru Finance Corporation close to two decades ago. Government guaranteed those bonds in the event of a default by the Corporation.

 

2. On 10 September 2014, the Common Law Division of the Supreme Court of NSW issued a Garnishee Order against Nauru.  The legal effect of the Garnishee Order was that it caused all funds in the name of Nauru held in Westpac bank accounts in Australia to be frozen.

 

3. In September 2014, Nauru applied to have the registration of the Japanese judgment set aside in the Supreme Court. In October 2014, Justice Peter Young ruled in favor of Nauru and set aside the registration of the Japanese judgment.

 

4. Firebird subsequently appealed to the NSW Court of Appeal against the decision of the Supreme Court in favor of Nauru. On 23 October 2014, the NSW Court of Appeal handed down its decision in favour of Nauru. It dismissed Firebird's appeal against the decision of the Supreme Court.

 

5. In September this year Firebird appealed to the High Court of Australia against the decision that went against it in the Supreme Court and Court of Appeal of NSW.

 

6. In a lengthy 74 page judgment handed down today 2 December 2015 in Canberra, a Full Bench of the High Court of Australia (comprising 5 Judges headed by Chief Justice Robert French) dismissed Firebird's appeal and ruled that Nauru is "immune from the jurisdiction of Australian courts" subject to various exceptions in the Immunities Act.

 

7. The High Court found that Nauru is immune from execution against its property and bank accounts Australia because they had been earmarked for government, and not commercial purposes.

 

8. It is noteworthy that the High Court reaffirmed and accepted the evidence of the Minister for Finance Hon. David Adeang as to the purposes to which various Government accounts were to be applied.

 

9. Mr Robert Dick SC, Darrell Barnett and Naomi Oreb of Banco Chambers (Sydney) acted as Counsel for the Government of Nauru. John Lobban and Meredith Bennett of Ashurst Lawyers Brisbane briefed Counsel. The Department of Justice in Nauru provided support to the Australian lawyers.