This Article has been written by A. Taibah Fathima, a 5th year BA.,LLB student from Government Law College, Villupuram, Tamil Nadu

ABSTRACT:

The rules of state immunity concern the protection which a state is given from being sued in the courts of other states; the rules relate to legal proceedings in the courts of another state, not in a state’s own courts. The rules developed at a time when it was thought to be an infringement of a state’s sovereignty to bring proceedings against it or its officials in a foreign country. But there are now substantial exceptions to the rule of immunity; in particular, a state can be sued when the dispute arises from a commercial transaction entered into by a state or some other non-sovereign activity of a state. The new UN Convention, which is not yet in force, formulates the rules and the exceptions to them. It does not cover criminal proceedings, and it does not allow civil actions for human rights abuses against state agents where the abuse has occurred in another country. These are two of the points discussed in this paper. The rules on state immunity are technical. But they can affect businesses and individuals, and should be more widely known and discussed, in particular at this time, when governments are having to take the decision whether or not to sign and ratify the new Convention.

INTRODUCTION:

States engage in many activities which can end in disputes in other countries: they may enter into contracts with individuals and companies based in other countries; they may own and operate enterprises such as state airlines which offer services to other countries’ citizens; they may employ other countries’ citizens in their embassies; their officials may commit wrongful acts against citizens of other countries. Questions of state immunity can arise when disputes about any such matters are taken to the courts of those other countries.

The rules of state immunity lay down the extent to which a state is protected from being sued in the courts of other states. A successful plea of immunity will prevent a state being made a party to proceedings in the courts of a foreign state and will protect its property from being seized to satisfy a judgment. Immunity can extend to legal proceedings against the state itself, its organs and enterprises and its agents. It is international law that determines the general rules of whether or not a state should be accorded immunity by the courts of another state, but it is national law that interprets and applies those rules. In the United Kingdom, for example, the State Immunity Act 1978 sets out the circumstances under which immunity will be granted to other states in this country.

The question of immunity only arises where courts would otherwise have jurisdiction in a case. In practice, the place where the acts took place, the nationality or place of residence of the parties to the dispute and its subject-matter may all be relevant factors in determining whether a particular national court is the proper place to hear a case. The rules on jurisdiction govern these matters and decide the question of whether or not a national court has power to hear the case. If the answer is yes, the case may proceed unless immunity applies. Immunity is a procedural bar based on the status of the defendant as a sovereign state. It does not mean exemption from the law. If it wishes, the defendant state may waive its right to immunity and the case will then proceed.

THE NEW UN CONVENTION:

The rules on state immunity are rules of customary international law; that is, they originate in the practice and custom of states. But the practice of states in giving immunity to states has not been consistent. The international community tried for many years to agree a treaty on the subject. Disagreements between countries which had adopted a restrictive approach to immunity and those which pursued a more absolutist approach (chiefly the socialist state-trading countries, for example the old Soviet Union and China) made the negotiation of a treaty extremely difficult. Countries which had already adopted their own domestic legislation were anxious that their law should not be seen as incompatible with international law and were reluctant to change their law. Eventually agreement was reached and the Convention was adopted by the United Nations General Assembly in December 2004.

Attempts to resolve the differences among states led to compromises. In some cases, these compromises and the resulting ambiguities in wording were not tackled or fully resolved in the main provisions of the Convention but in annexed understandings and in the statement of the Chairman of the Ad Hoc Committee. In other cases, wording has been included in the Preamble rather than in the Convention’s main provisions.

The Convention draws a line between those situations in which a state may properly claim immunity and those in which immunity has, over the years, been restricted and denied. It lays down a general rule – that a state has immunity, for itself and its property, from the jurisdiction of other states’ courts – but then provides exceptions to that general rule. The Convention is concerned with civil proceedings against a state in the courts of another state.

 HISTORY OF THE CONVENTION:

The rules on state immunity are rules of customary international law; that is, they originate in the practice and custom of states. The first comprehensive multilateral treaty to be concluded on the matter was the European Convention on State Immunity, which was adopted in 1972 and came into force on 11 June 1976. It was agreed among Council of Europe countries and is generally thought to reflect the broad principles of customary international law, if not all the details. However, only eight states (Austria, Belgium, Cyprus, Germany, Luxembourg, the Netherlands, Switzerland and the United Kingdom) are parties. Around the world there continued to be differences in the practice of states, and it was this diversity and consequent uncertainty in the law that prompted the decision of the United Nations General Assembly in 1977 to include the topic of state immunity in the work programme of the International Law Commission (ILC). Discussion within the ILC and among state representatives in the UN Sixth (Legal) Committee over subsequent years revealed deep divisions among states. The Convention on the Jurisdictional Immunities of States and Their Property is the culmination of nearly 27 years work within the ILC, the UN General Assembly Sixth Committee and the Ad Hoc Committee which was established by the General Assembly in its resolution 55/150 of 12 December 2000. In 2003, the Ad Hoc Committee was reconvened under General Assembly resolution 58/74 with a mandate ‘to formulate a preamble and final clauses, with a view to completing a convention’. The Committee then succeeded in reaching agreement on a finalized version of the 1991 Draft Articles on Jurisdictional Immunities of States and their Property and it is this text, accompanied by a set of annexed understandings, that was finally adopted by the UN General Assembly. The Convention provides that it shall enter into force after it has been signed and ratified by 30 states. To date the Convention has been signed by Austria, Morocco, Portugal and Belgium.

EXCEPTIONS TO IMMUNITY:

Commercial transactions;

 A large quantity of cement was supplied by a private contractor in the UK to the Nigerian Defence Ministry. Following a change of regime, the Nigerian government decided it no longer required the cement and refused to pay for it. The supplier brought proceedings against Nigeria in the UK courts. Nigeria’s claim of state immunity was eventually dismissed and the action allowed to proceed.

A state cannot claim immunity from the jurisdiction of another state in legal proceedings which arise from a commercial transaction. This rule does not apply to commercial transactions between states or where the parties to the transaction have explicitly agreed otherwise. At the heart of this major exception to state immunity is the question of what is a ‘commercial transaction’. The term as defined in the Convention includes any commercial contract or transaction for the sale of goods or supply of services, any contract for a loan or other transaction of a financial nature and ‘any other contract or transaction of a commercial, industrial, trading, or professional nature, but not including a contract of employment’. The term ‘transaction’ is much wider than ‘contract’ and is capable of covering a broader range of activities. But it is the commercial character of a transaction that is likely to be at issue and it was this that caused most difficulty in reaching agreement among states on the text of the Convention.

Contracts of employment ;

An Irish national formerly employed as an administrative assistant at the American Embassy in London sought re-employment with the Embassy by applying for two vacant posts. Both applications were unsuccessful and she brought a claim against the United States before a UK employment tribunal alleging sex discrimination. The US government’s claim of immunity was allowed.9 An Austrian national working at the United States Embassy in Vienna in its information service was dismissed on unspecified security grounds and began proceedings before the Austrian courts claiming severance pay but not reinstatement. The Austrian Supreme Court held that the United States did not have immunity.

Employment contracts are treated as a separate exception to immunity under the Convention and are not included within the term ‘commercial transaction’. Unless otherwise agreed between the states concerned, a state is not entitled to immunity in proceedings which relate to a contract of employment between the state and an individual for work performed in the state where the proceedings are started. At first sight this might seem like quite a large exception to state immunity but there are many exceptions to the exception. First, the exception does not apply to employees who are nationals of the employing state unless they are permanently resident in the state where proceedings take place. Secondly, the Convention excludes from this exception proceedings relating to the recruitment, renewal of employment or reinstatement of an individual. Thirdly, the exception does not apply where the employee is a diplomatic agent, a consular officer or any other person enjoying diplomatic immunity. Fourthly, the exception does not apply where legal proceedings would interfere with the security interests of the employer state. Finally, it does not apply where the employee has been ‘recruited to perform particular functions in the exercise of governmental authority’.

ARBITRATION AGREEMENTS:

Questions of immunity often arise in connection with arbitration agreements entered into by states. Under the Convention, unless the arbitration agreement provides otherwise, immunity cannot be claimed by a state which has agreed with a foreign entity to submit to arbitration a dispute relating to a commercial transaction. The proceeding in question must be before a court which would otherwise have jurisdiction and the proceeding must relate to the validity, interpretation or application of the arbitration agreement, the arbitration procedure, or the confirmation or setting aside of the award. The term ‘commercial transaction’ is defined (in one of the understandings annexed to the Convention) as including investment matters. If a state agrees to arbitrate a dispute but then disagrees with the result of the arbitration procedure (the award), is it immune in legal proceedings in a domestic court to enforce the award? The Convention does not entirely preclude a claim of immunity at the stage of judicial enforcement of the award. A later provision of the Convention says that no measures to enforce may be taken unless a state has consented, and that one way in which a state may give such consent is by an arbitration agreement. To come within this exception it is likely that enforcement measures would need to be very precisely described in the agreement.

OTHER EXCEPTIONS TO IMMUNITY:

A state does not enjoy immunity in legal proceedings connected with immovable property (land or buildings) in the state where legal proceedings are brought, or relating to other kinds of property where the rights arose from succession or gift. Additional exceptions relate to legal proceedings concerning a state’s intellectual or industrial property rights or any alleged infringement by that state of rights protected in the other state; participation by a state in companies or other bodies incorporated or constituted under the law of the state where proceedings are brought; and the operation of commercial ships. All are well recognized exceptions to state immunity although, in all cases, immunity will be retained if the states concerned agree.

CONCLUSION:

The Convention has been many years in the making. Now that it has been adopted, governments around the world have to decide whether to bring it into force by signing and ratifying it. 42. It is a great achievement that countries have agreed on a treaty which does not allow states to have absolute immunity in the courts of other countries. The Convention’s basic approach is a very good one, and it ought to be followed. Countries without their own domestic laws will be able to use its rules as a model for new legislation. The UK already has its own legislation, the State Immunity Act, and the courts have acquired wide experience in interpreting and applying its provisions. Some of the wording of the new Convention discussed in this paper gives rise to doubts as to whether UK ratification of the Convention would improve the legal position of people or companies wanting to start proceedings in the UK against states. So far as proceedings in other countries are concerned, the important thing is for litigants to be confident that courts will follow the same basic approach across the world. But the Convention is unlikely to lead to exact uniformity.

REFERENCE:

• The Antiterrorism and Effective Death Penalty Act of 1996 amended the Foreign Sovereign Immunities Act .
• The Alien Tort Claims Act (ACTA) and the Torture Victims Protection Act (TVPA) make provision for claims to be brought in US courts.
• State Immunity Act ,1976
• General Assembly 16 December 2004 Resolution adopted by the General Assembly 59/38.
• United Nations Convention on Jurisdictional Immunities of States and Their Property.