Enforcement against state-owned art abroad

The Czech government is urgently trying to repatriate its art lent to overseas institutions, to avoid it being seized to enforce a $500m Czech judgment, obtained against the Czech state by a commercial organisation. See Artinfo: http://bit.ly/jQskNk 

Art has already been seized from a gallery in Vienna, and Paris seems likely to follow.  Could it happen in London?

Within the EU, it is relatively easy to get a court of one member state to recognise and enforce a judgment of another member state.  As the Czech Republic is in the EU, it is not surprising that the defendant is concentrating on Czech assets in other EU states.  The Czech government is arguing that the judgment is not yet "final" and, if that is right, it should not be enforceable at all, but some member states are more willing than others to allow "protective measures", that is the freezing or restraining of assets pending the outcome of proceedings.  That is what has happened in Austria, but the English court would be far less willing to do that.

If the judgment is established to be final, or becomes final, would the English court allow enforcement in London?  Here we come to the important question of "sovereign immunity".  The general rule is that one state cannot be sued in the courts of another state, but there is an exception where the matter in dispute relates to a state's commercial activity.  When it comes to enforcement of a foreign judgment against a foreign state, the English court must satisfy itself that it would have allowed the proceedings if the original case had been brought in England, and that the assets to be enforced against are used for commercial purposes.  That gives quite a lot of scope for argument, and there is also the initial question of whether the art really belongs to the Czech state or to some other institution that may be one step or more removed.

Compared to other countries, the English courts are reluctant to reject sovereign immunity defences. This is well illustrated by the Court of Appeal decision last year in Argentina v NML Capital [2010] (see http://bit.ly/jQfU3H ).  Substantial sovereign bank accounts and other assets in the City of London are often targeted by those trying to enforce foreign judgments against states.  That makes the English court very cautious, as financial and diplomatic considerations inevitably have an effect on the court's attitude.

I suspect that the enforcement attempts so far have been made for strategic reasons, to cause a furore, and that potentially difficult proceedings in London are unlikely to be high on the agenda.