Sovereignty and Immunity- A Short Note

Using a cautionary approach as a segway, I would like to circle my paper on the discussion on changes to international law and the state practice of the United Kingdom (UK) in special reference to diplomatic laws and immunity. In the recent past, diplomatic and sovereign immunity has been used as veils to hide criminal and civil wrongdoings. To understand the current predicament faced by the English tommies in of the Bench, one must study the historical underpinnings of immunity.

Due to its vast empire at the height of Colonialism, the British influenced the ‘progressive’ development of legal systems in a large number of countries. It is rather unsurprising to note that the principles of sovereign immunity that were first developed in the UK have influenced the development of the principles of sovereign immunity in its erstwhile colonies.

The UK, historically, propounded and supported the ideals of an absolutist sovereign immunity mechanism.[1] The British practice of immunity found solace in ‘rex non potest peccare’ which means that the king can do no wrong; and ‘par in parem non habet imperium’ which means that one sovereign state is not subject to the jurisdiction of another state.

The Court of Appeal in the Parlement Belge case[2] had enunciated the doctrine of 'sovereign immunity’ as elucidated by relevant precedents.  The Court of Appeal had held that every sovereign state refuses to exercise territorial jurisdiction over the person or property of another sovereign state which is destined for public use even if such person of property is found within its territorial jurisdiction. In the case Porto Alexandre[3] the Court constrained by the dictum of the Parlement Belge case extended sovereign immunity to the commercial property of foreign sovereigns. The House of Lords ruled in the favour of the absolutist construction of the doctrine of sovereign immunity with regards to the sovereign property of the foreign sovereign in the Cristina case.[4]

A gradual shift towards a restrictive approach to sovereign immunity witnessed a shift in the form of sovereign property of the sovereign. Lord Denning in the case of Rahimtoola v. Nizam of Hyderabad[5] distinguished the sovereign property engaged in public acts and sovereign property engaged in commercial acts. According to Lord Denning, when States or their instrumentalities act like commercial entities, they ought to be treated as commercial entities. However, in the case of Trendtex v. Central Bank of Nigeria[6] the principle of sovereign immunity for the sovereign property was not extended to the commercial property of a foreign government entity.

British commercial value compelled its legislators to finally act. The emergence of the UK as a preferred seat of international commercial arbitration led to the adoption and codification of a restrictive approach about the state immunity for the property of foreign sovereigns. The State Immunity Act of 1978 (SIA) was enacted to deal with the extension of state immunity to foreign sovereigns. The SIA follows a restrictive approach with recognized, nevertheless, has exceptions. Firstly, written consent to an execution, and secondly, the state property is being used for commercial purposes. The written consent should be for the execution of court orders and not mere submission to the jurisdiction of British Courts.

The Commercial Court had to consider the meaning of the words ‘use for commercial purposes’ in the case of LR Avionics Technologies Limited v The Federal Republic of Nigeria.[7] The court distinguished that between the primary and incidental purpose for which a property was occupied. If the commercial purpose was merely incidental and the primary function of the property was an engagement in the conduct of sovereign functions, then the property would be immune from the jurisdiction of municipal courts. In this case, the premises owned by the Republic of Nigeria were leased out as part of a commercial contract. However, the contract was for outsourcing the consular activities such as the issuance of visas and passports. The Court found that the consular activities outsourced as part of the contract are essentially sovereign functions, and thus the leasing out of the premises would not be treated as 'use for commercial purposes'. The British Law is designed with keeping in mind the high multitude of international commercial arbitrations in the UK and the prominence of the City of London as global banking and financial hub. The assets of foreign Central Banks and financial institutions are immune from execution irrespective of their purpose or source.[8]