By Pravin Aathreya and Lucy Charleston -
Snapshot
- The High Court of Australia has upheld the NSW Court of Appeal decision that foreign state immunity, pursuant to ss 9 and 22 of the Foreign States Immunities Act 1985 (Cth), extends to Indonesia’s national airline which was subject to a winding up proceeding.
- The Court held that, under ss 14(3)(a) and 22, the reference to ‘foreign State’ is the object of the exception from immunity, whereas the reference to ‘body corporate’ is to an entity other than the foreign State, and the winding up of that other entity is the subject matter of the exception from immunity.
- Despite being somewhat of an unsuccessful ‘long shot’ for the applicant, their case has generated some interesting High Court discussion in dissent.
PT Garuda Indonesia Limited (‘Garuda’) is Indonesia’s national airline and a foreign company registered under Div 2 of Pt 5B.2 of the Corporations Act 2001 (Cth) (‘Corporations Act’). Greylag Goose Leasing 1410 Designated Activity Company and Greylag Goose Leasing 1446 Designated Activity Company (together, ‘Greylag’) are companies incorporated in Ireland which leased aircraft to Garuda.
Background and procedural history
The primary judge decision
On 15 August 2022, Greylag applied to the Supreme Court of New South Wales to wind up Garuda pursuant to s 583(c)(i) or (ii) of the Corporations Act on the basis that Garuda was unable to repay its debts under the lease agreement of aircraft from Greylag. In response, Garuda sought a declaration that the Supreme Court had no jurisdiction, as Garuda had immunity as a foreign entity under ss 9 and 22 of the Foreign States Immunities Act 1985 (Cth) (‘FSIA’).
