Marine Steel Ltd v Government of the Marshall Islands

JurisdictionNew Zealand
Judgment Date15 March 1982
Date15 March 1982
CourtHigh Court
New Zealand, High Court.

(Barker J.)

Marine Steel Ltd.
Government of The Marshall Islands

Sovereign immunity Foreign States and territories Restrictive theory of sovereign immunity Trust Territories Marshall Islands Whether a State Whether Government of the Marshall Islands entitled to sovereign immunity Sovereignty in Trust Territories The law of New Zealand

Summary: The facts:The facts are set out in an earlier phase of the case (above, p. 538). The defendant, the Government of the Marshall Islands, requested that the Court rescind its earlier order (above, p. 000) granting the plaintiff leave to serve notice of process out of the jurisdiction.

Held:The defendant's motion was dismissed.

(1) Since most of the contract was to have been performed in New Zealand, it was a proper case for the grant of leave to serve notice out of the jurisdiction. It was not necessary to show that the contract was also governed by New Zealand law.

(2) Although there were courts in the Marshall Islands, the balance of convenience favoured a hearing in New Zealand.

(3) Although the New Zealand Ministry of Foreign Affairs had not expressly stated whether it recognized the Government of the Marshall Islands, it was clear from the Ministry's letter to the plaintiff that the Marshall Islands were regarded by New Zealand as a Trust Territory. They were not a State, nor did they come under United States sovereignty.

(4) The defendant was not entitled to sovereign immunity as the case arose out of a commercial contract.

(5) The Government of the Marshall Islands was an entity capable of being sued since it clearly regarded itself as having the capacity to contract.

The following is the text of the judgment of the Court:

On 29 July 1981, in a reserved judgment,[1] I gave leave to the plaintiff, on its ex parte application, to serve out of New Zealand a notice of writ under Rule 51A plus a statement of claim against the above-named defendant.

According to an affidavit of service, these documents were served on the Assistant Attorney-General of the Marshall Islands on 1 September 1981; the time for filing a defence was fixed at 42 days; i.e. expiring on 13 October 1981. On 20 November 1981, the defendant filed a motion for an order rescinding the order granting leave to serve out of the jurisdiction upon the grounds:

  • (a) That the order was obtained on an incomplete and misleading presentation of the facts;

  • (b) Having regard to the amount in dispute and to the existence in the place of residence of the defendant a Court, having jurisdiction, and to the comparative cost of proceeding in New Zealand as compared with the Marshall Islands, the Court's discretion ought to be exercised in favour of hearing it in New Zealand.

No affidavits accompanied this motion; it first came before Sinclair J. in the Chambers list on 4 December 1981. On...

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