REPUBLIC OF KENYA v. NEDERMAR TECHNOLOGY BV LTD ...

the arbitration provision in the agreement (article 67.3), according to which
disputes between the parties are to be settled by means of arbitration in conformity
with the United Nations Commission on International Trade (UNCITRAL)
arbitration regulations. The parties have designated London as place of arbitration.
1.10 By letter of 8 June 2006, Kenya informed Nedermar that pending an inquiry into
the (corrupt) circumstances under which the contract was concluded, it had
suspended all payments. The Kenya Anti-Corruption Commission (KACC) started
an extensive inquiry in 2005 into 20 security and defence contracts. Furthermore, it
was mentioned in the letter that there was uncertainty in the government of Kenya
as to the identity of Nedermar.
1.11 After having had been granted by the Court in Interlocutory Proceedings on 8
March 2006, prejudgment attachments were made on behalf of Nedermar against
Kenya on three immoveable properties in The Hague and one immoveable property
in Wassenaar.
On 10 March 2006, prejudgment garnishments were made against the bank where
the Embassy of Kenya has its accounts, ABN AMRO Bank N.V. Although
permission was requested and obtained for garnishments against other banks,
Nedermar did not make use of this. Nedermar argued in its application that Kenya
had defaulted in paying the amount of in total € 30,118,629.— as of 1 March 2006.
2. The claims, the grounds therefor and the defence
In the main action
Kenya requests – in brief -:
- lifting of the attachments, at least insofar as ordering Nedermar to lift the attachments
upon penalty of a fine;
- allowing Kenya to annul the registration of the attachments in the public registers of
the Land Registry;
- prohibiting Nedermar from putting into effect the other garnishments previously
authorised, and from making any new attachments, upon penalty of a fine.
Kenya puts the following grounds forward in this respect:
The attachments made by Nedermar are made on goods intended for public service. It is
not allowed to attach goods intended for public service, since the execution of public
duties may not be hampered. This is the rationale of article 703 [Dutch] Code of Civil
Procedure. Said article is also applicable to goods of foreign powers. The attached
buildings concern the chancellery and the residences of the ambassador and the second
and third secretary of the Embassy of Kenya. The establishment, maintenance and
operation of the embassy constitutes an essential part of the government's function and
thus of the public service. Also, monies intended for the financing of this function must
be considered to be goods intended for public service.
The so-called waiver of immunity as laid down in article 75.1 of the agreement does not
detract from this. Kenya has thus not legally waived its immunity in respect of goods
intended for public service. Said article cannot be interpreted so that it extends to
attachment in The Netherlands.