The scholarship and grant exception in s 11(2)(b) of the Foreign States Immunities Act 1985 (Cth) is directed at litigation between foreign States conferring benefits and the recipients of those benefits; it does not extend to commercial arrangements between foreign States and third parties contracted to provide services that form part of scholarship benefits. An agreement by a foreign State to pay for services provided to scholarship recipients' children is a commercial transaction, not a payment in respect of a scholarship. In determining whether a proceeding concerns a commercial transaction under s 11, the focus is on the nature of the transaction which is the subject matter of the proceeding, not on whether the transaction can be proved.
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