(p. 487) 22 Privileges and Immunities of Foreign States
1. Evolution of the International Law of Immunity1
(A) The Law in Context
State immunity is a rule of international law that facilitates the performance of public functions by the state and its representatives by preventing them from being sued or prosecuted in foreign courts. Essentially, it precludes the courts of the forum state from exercising adjudicative and enforcement jurisdiction in certain classes of case in which a foreign state is a party. It is a procedural bar (not a substantive defence) based on the status and functions of the state or official in question.2 Previously described as a privilege conferred at the behest of the executive,3 the grant of immunity is now understood as an obligation under customary international law.4But although theReferences(p. 488) existence of this obligation is supported by ample authority, no general statement of principle appeared at the international level until 2004: the law developed primarily through domestic case-law and limited treaty practice, supplemented more recently by comprehensive legislation in certain states. Immunity exists as a rule of international law, but its application depends substantially on the law and procedural rules of the forum. Increasingly, however, these issues are being elevated to an international level, including through international litigation.5 This development may tend to the consolidation of the law of immunity at more or less its present phase of development.
(B) Rationales for State Immunity
Derived from the immunity historically attaching to the person of a visiting sovereign, reflected in the Latin maxim par in parem non habet imperium (an equal has no authority over an equal), state immunity operates on twin bases. First, as an immunity ratione materiae, it is a direct inference from the equality and independence of states.6 If organs of the forum state could decide on core questions pertaining to the functioning of a respondent state without its consent, the respondent state’s sovereignty would be to that extent impugned. But this rationale goes only so far; it does not cover matters remote from sovereign authority, notably transactions within the host state, especially those of a commercial or private law character. This provoked the development of the so-called restrictive theory of immunity, which holds that immunity is only required with respect to transactions involving the exercise of governmental authority (acta iure imperii) as distinct from commercial or other transactions which are not unique to the state (acta iure gestionis). But the distinction raises difficulties of application and definition having regard to the range of functions in which states engage.7
The second rationale for immunity (immunity ratione personae) operates on the personal or functional level: foreign state officials should not be impeded in the performance of their functions by a host state’s exercise of adjudicative or enforcement jurisdiction over them. (Immunity does not bar prescriptive jurisdiction, however; foreign officials are not exempt from compliance with the laws of the host state.) This rationale for immunity is pragmatic in nature, analogous to immunities granted to diplomats. Immunity ratione personae covers all acts by the agent during the period of office, whether performed in a private or official capacity, given that the rationaleReferences(p. 489) is to prevent interference with the performance of the official’s role (and by extension with the sovereignty of the sending state). Historically, immunity ratione personae was exemplified in the head of state, who was seen as personifying the state itself.8 However, the law has developed to recognize personal immunities for other high-ranking state officials, including heads of government, foreign ministers, and others.9There are no settled criteria for determining which types of official enjoy personal immunity,10 but it is clear that the immunity belongs to the state and not the individu-al.11 Once the period of office ends, immunity ratione personae will expire; however, immunity ratione materiae continues if the acts concerned are such that state immunity attaches. In all cases the immunity can be waived by the state.
(C) Current State of the Law
In 1978 the ILC took on the task of reconciling the forum state’s territorial jurisdiction with the foreign state’s sovereign authority,12 culminating in Draft Articles of 1991.13 The Sixth Committee, however, had difficulty adopting a consensus text. Upon resuming consideration of the topic in 1999, the General Assembly sought the ILC’s views on five outstanding issues.14 The formation of an Ad Hoc Committee in 200015 finally provided the impetus for agreeing a text. Following the Committee’s final report,16 the General Assembly adopted the UN Convention on Jurisdictional Immunities of States and Their Property on 2 December 2004.17
The Convention closely follows the ILC Draft Articles.18 Like the Draft Articles, it conclusively adopts the restrictive theory of immunity. Like the 1972 European Convention on State Immunity19 and domestic legislation, it does so by asserting a general rule that states and their property benefit from immunity from adjudicative jurisdiction,20 and then enumerating proceedings in which state immunity cannot be invoked21References(p. 490) or is considered to have been waived.22 The Convention treats immunity from adjudicative jurisdiction and immunity from execution as distinct, in accordance with general state practice. It is not applicable to criminal proceedings23 nor to the immunities of a head of state ratione personae.24
Although not yet in force, the UN Convention has been understood by several courts to reflect an international consensus on state immunity.25 It was cited by the Supreme Court of Japan to support its adoption of the restrictive theory of immunity,26 and it has been signed, though not yet ratified, by several states historically opposed to restrictive immunity, such as China and Russia.27
Independently of the UN Convention, the restrictive theory of immunity is now very widely, although not unanimously, accepted.28 But at a certain point, the respondent state’s adherence to ‘absolute’ immunity is not the issue: the question is whether a forum state is free to adopt a regime of restrictive immunity, despite the dissenting views of a few states. Of that there seems no doubt. Though adoption of the restrictive theory does not avoid the problem of determining its precise boundaries, a broad consensus exists as to the type of exceptions. These are reflected in the legislation, the European Convention, and the UN Convention.29
The position in the UK evidences the approach described. Despite its earlier adherence to absolute immunity, English courts applied the restrictive theory of immunity at common law in the 1970s30 and cemented the distinction between acts iure imperii and acts iure gestionis, notably in I Congreso del Partido.31 The State ImmunityReferences(p. 491) Act 1978,32 enacted to ‘bring [the UK’s] law on the immunity of foreign States more into line with current international practice’ and to implement the European Convention, interrupted this process.33 It is broadly consistent with the UN Convention, which the UK signed on 30 September 2005.
The Act does not apply to criminal matters, nor does it affect diplomatic and consular immunities,34 but it extends state immunity to heads of state and separate entities.35 In certain respects (notably visiting forces) it contemplates the parallel operation of the common law.36 The Act also deals with immunity from execution, allowing execution against property used for ‘commercial purposes’, though this exception has a narrow scope.37 It provides for waiver in the same manner as the common law, with separate waiver required for adjudication and enforcement.38
State immunity is treated as a public claim in open court.39 There is a presumption that a state possesses immunity, with the plaintiff bearing the burden of proof to the contrary.40 In the absence of the respondent state, the court has a duty to determine immunity proprio motu.41
(A) Definitional Issues
(i) The sovereign act
Though a US court made an early attempt to deal with the issue by delineating particular categories of exclusively sovereign activity,42 the domestic legislation has primarilyReferences(p. 492) regulated the scope of state immunity through a catalogue of detailed exceptions. This approach does not eliminate the distinction between acts iure imperii and acts iure gestionis, although it reduces its operational significance. In the State Immunity Act 1978, several sections demand factual inquiries into acts done ‘in the exercise of sovereign authority’ and for ‘commercial purposes’;43 others simply call for literal interpretation (e.g. sections 4 (contracts of employment), 5 (local personal injuries and damage to property)).
(ii) Constituent units and political subdivisions
State practice has diverged on whether immunity extends to political subdivisions, for example, the component units of federal states. One school of thought considers the ability of a state to act iure imperii on its own behalf to be decisive.44 The point is that political subdivisions are generally unable to satisfy this requirement. Another view (held by most federal states themselves) is that constituent units exercise governmental authority, even if subordinated to the federal unit, and that immunity is not lost because such authority is exercised locally. The divergence in state practice is reflected in the texts. Under the European Convention, immunity is not accorded to ‘constituent states of a federal state’, unless a contracting state issues a declaration to the opposite effect.45No reference is made to political subdivisions. In the State Immunity Act 1978, ‘constituent territories of a federal state’ are considered to be ‘separate entities’, only enjoying immunity if the requirements of section 14(2) are satisfied (unless an Order in Council is made according immunity to a specific territory).46 The UN Convention takes a different approach, equating constituent units with political subdivisions and extending immunity to those entities ‘which are entitled to perform acts in the exercise of sovereign authority, and are acting in that capacity’.47 By applying the criterion of sovereign authority to both kinds of entity, it is perhaps more reflective of state practice.
(iii) Separate entities
There are also diverse approaches to the question of separate entities like state corporations. In the UK, the legislation enacts a presumption against immunity for ‘separateReferences(p. 493) entities’, only according immunity where two further criteria are satisfied. First, the entity must be separate from the state, that is, ‘distinct from the executive organs of the government of the State and capable of suing or being sued’: these are hardly words of limitation.48 Secondly, the act in question must have been carried out ‘in the exercise of sovereign authority’.49 The focus here is on whether ‘the act in question is of its own character a governmental act, as opposed to an act which any private citizen can perform’.50
An entirely different approach is taken by the US Act. Any ‘agency or instrumentality of a foreign state’ enjoys a presumption of immunity51 and its terms encompass, for example, state-owned corporations.52 Whilst the US courts have also adopted a multifaceted test to determine an entity’s status,53 the analysis of function that occupies the English courts is not called for by the inclusive definition in USC §1603. On the other hand §1603 requires an entity to have some connection to the state, unlike in the UK, where a wholly private corporation could (in theory) be accorded immunity.
The UN Convention attempts to reconcile these competing positions by including both status and functions. It establishes a presumption that ‘agencies and instrumentalities of the state or other entities’ will have immunity ‘to the extent that they are entitled to perform and are actually performing acts in the exercise of the sovereign authority of the state’.54 By including separate entities within the definition of the state, it adheres to the US formulation; by requiring that they exercise sovereign authority, it reflects the UK approach.
In addition to organs and entities of the state, it is important to specify exactly which individuals are entitled to immunity whether ratione personae or ratione materiae. Despite some recent contrary US practice, it seems to be generally settled that state officials acting in their official capacity enjoy the same immunity as the state they represent.55 This position is reflected in UK practice: the common law long consideredReferences(p. 494) state agents to share the immunity of the state and sought (through the concept of indirect impleading) to ensure that state immunity was not circumvented by suing an individual defendant rather than the Crown or a government department.56 No distinction is made between a state official acting as an organ of the state or as an agent.57 Even though it does not expressly refer to officials,58 the definition of ‘state’ has been interpreted expansively by English courts: ‘[s]ection 14(1) must be read as affording to individual employees or officers of a foreign State protection under the same cloak as protects the State itself.’59 The House of Lords endorsed this position in Jones v Saudi Arabia.60 The UN Convention takes a similar approach by extending immunity to state officials, and takes the further step of including ‘representatives of the state acting in that capacity’ within the definition of ‘state’.61
The US Supreme Court recently expressed a contrary position. It had long been understood that the US Act covered individuals,62 but the Supreme Court held that individuals (in that case the former Prime Minister of Somalia) were not included in the definition of ‘foreign state’ or as ‘agencies or instrumentalities’.63 The Court also firmly rejected the petitioner’s argument that the Act covered his claim to immunity due to its purpose and intent to codify the law on the immunity of individual offi-cials.64 Nor was the Court concerned that its interpretation would ‘make the statute optional’.65 The viability of this position is yet to be determined; presumably individuals may be covered to some extent at least at common law. But a dual regime is untidy and undesirable: as observed by the Ontario Court of Appeal, ‘[w]hat is the point of the state having immunity if its personnel have none when carrying out their official duties in the host country?’66
The State Immunity Act 1978 specifically extends privileges and immunities ratione materiae to ‘the sovereign or other head of that state in his public capacity’.67 WhileReferences(p. 495) in office, such officials will also enjoy immunity ratione personae.68 Although the UN Convention does not (along with the European Convention and the US legislation) specify the immunity of heads of state, such individuals are included through article 2(1)(b)(i) and (iv). It must be emphasized, however, that former heads of state occupy a distinct category and enjoy only immunity ratione materiae; absolute personal immunity ceases on termination of office.69
(B) Foreign States as Claimants
Foreign states generally have the capacity to appear in foreign courts as claimants, and quite frequently do so.70 Having submitted to the jurisdiction of the foreign court by instituting proceedings, the state has no immunity from jurisdiction in respect of those proceedings.71 This extends to counterclaims relating to the legal relationship or facts arising from the state’s principal claim,72 but does not entail a waiver of immunity from enforcement jurisdiction.73 In the US, a state may be subject to a counterclaim unrelated to its original claim provided that the counterclaim ‘does not seek relief exceeding in amount or differing in kind from that sought by the foreign state’.74 This principle is said to prevent a foreign state ‘invoking [United States] law but resisting a claim against it which fairly would curtail its recovery’.75
The ‘most significant’76 exception to the rule of immunity from jurisdiction concerns ‘commercial transactions’77or ‘commercial activity’.78 Section 3 of the State ImmunityReferences(p. 496) Act 1978, on which Article 2(1) of the UN Convention is based,79 typifies the list approach adopted for the former category. As well as providing an exception for contracts to be performed in the UK,80 it includes three categories of exceptions under the ‘commercial transactions’ umbrella: contracts for the supply of goods or services; financial transactions; and a residual category covering other acts iure gestionis.81 This residual category has been interpreted as expressing the distinction between acts iure imperii and iure gestionis in respect of transactions generally. It is only for this latter category that the court will have to consider the sovereign character of the act, since section 3(3) extends to all transactions and contracts.82 Further, the relationship between the proceedings and the commercial transaction must also be firmly established. Indeed, it has been held by the majority of the Supreme Court that an enforcement judgment is insufficiently related to the transaction with which the original judgment was concerned.83
A second group of domestic laws relies on a broad reference to ‘commercial activity’ as the basis of the exception, but a precise definition of this term is not provided.84 In the US, the commercial activity must have a sufficient nexus to the US;85 no such territorial link is required under the ‘commercial transaction’ exception in section 3(1)(a) of the UK Act. The US Supreme Court has also placed strict emphasis on the nature of the act as the determinative criterion.86
The exception for ‘contracts of employment’ is likewise subject to diverse approach-es.87 Though the trend towards limiting state immunity in respect of local employment disputes is clear,88 different jurisdictions treat the same subject-matter differently.89 The more significant problem arising from contracts of employment is the inadequacyReferences(p. 497) of the private law criterion in this context.90 Neither this criterion, nor an examination of the ‘nature of the act’, provides any scope for the recognition of sovereign activity. States have also taken different approaches in evaluating which duties of an employee amount to participation in sovereign activity.91
States have essentially resorted to two distinct models, with the differences represented again by the UK and US legislation. The State Immunity Act 1978 excludes employment contracts from the definition of ‘commercial transaction’, with the exclusion of immunity in respect of those contracts depending on a ‘minimum contacts’ approach, rather than requiring a characterization of the breach.92 The commerciality of the arrangement is not a relevant factor; the focus is on meeting the statutory thresholds of connection between the defendant and the forum.93 By contrast, the US Act treats employment contracts under the rubric of ‘commercial activity’.94 The operation of the exception from immunity under this model depends on the characterization of the claim as one arising from a commercial contract between the foreign state and the individual.95 Nationality or residence is not relevant.96 Across the jurisdictions, factors including the employment relationship,97 the duties of the employee,98 and the status of the employer99 have been considered to militate against immunity.100
There are several exceptions from state immunity within the realm of private law. They extend, inter alia, to claims concerning personal injury and damage to property locally occurring,101 ownership, possession, and use of property,102 intellectual propertyReferences(p. 498) rights,103 and membership of bodies corporate.104 Of particular interest is the exception for (ex hypothesi) non-commercial torts. Given that jurisdiction for tort claims is founded on the fact of injury locally caused, the traditional acta iure gestionis/acta iure imperii dichotomy has no place:105 thus torture on embassy premises would be covered, but not defamation. In other words, the exception applies irrespective of the sovereign character of the delictual act.106 However, despite the irrelevance of this distinction in each of the statutes and conventions, common law courts have maintained it,107 in a manner similar to civil law jurisdictions.108
The key criterion is the occurrence of a tortious act or omission within the territory; the fact of damage occurring in the territory is insufficient under UK law. Thus personal injuries inflicted by agents of a foreign state in another jurisdiction have been held to be excluded from the exception.109 This can be contrasted with the position in Canada, where the key criterion is the occasioning of physical injury in Canada,110 and the US, where it appears that both the act and the injury must occur locally.111 Under the UK Act the author need not be present locally, in contrast to the position under the European and UN Conventions. Though the equivalent exception in the Foreign Sovereign Immunities Act 1976 requires that the tortious act or omission have been committed in the US, discretionary decisions, as well as certain claims (such as libel, slander, deceit, and misrepresentation) remain protected by immunity.112 Further, the UK Act concerns physical, rather than mental injury,113 and loss of or damage to tangible property, rather than pure economic loss.114
While exceptions for non-commercial torts were originally directed towards ‘insurable’ personal risks, such as traffic accidents, there has been some controversy over the extent of their application. In particular, there have been contrary findings in cases of war damage.115 Generally, states appear to retain their immunity in theReferences(p. 499) case of tortious acts occasioned by their armed forces.116 For example, in Germany v Italy the International Court concluded that customary international law continues to require that a state be accorded immunity in proceedings for torts allegedly committed on the territory of another state by its armed forces and other organs of state in the course of conducting an armed conflict. The Court held that practice in the form of judicial decisions, opinio iuris, and an almost complete absence of contrary authority supported this position.117This limitation on the exception to immunity has been subject to criticism, particularly in the context of human rights violations causing personal injuries.118
Whether and when state immunity will apply in domestic criminal proceedings is a complex question. In theory it should not matter for the purposes of immunity under international law if the conduct is classified by the forum state as civil or criminal. The European Convention impliedly endorses the absolute immunity of the state from foreign criminal jurisdiction.119 The UN Convention and the domestic statutes arguably implicitly allow a distinction on the basis of the domestic characterization of the act by excluding criminal proceedings from their scope.120
The scope of immunity from foreign criminal jurisdiction is yet to be conclusively determined.121 Customary international law in principle extends immunity ratione materiae to acts of state officials undertaken in their official capacity; but there is practice supporting an exception if the act was committed in the territory of the forum state.122
The situation is even more complex if the conduct in question amounts to an international crime.123 It is well established that serving heads of state enjoy immunityReferences(p. 500) ratione personae from foreign criminal jurisdiction for international crimes as they do for domestic crimes.124 Other ‘holders of high-ranking office in a State’ are also now recognized as enjoying this same immunity,125 although given the functional basis for recognition of immunity ratione personae the category of officials enjoying immunity on these grounds has no obvious limit. It appears that this privileged group extends to heads of government,126 defence ministers,127 and ministers for commerce and international trade.128 The International Court was not prepared to extend personal immunities to the Djiboutian Procureur de la République and Head of National Security, though the lack of clarity in Djibouti’s submissions on this point may have affected the Court’s position.129
It is less clear whether international crimes committed by former officials before or during their period of office will be covered by immunity ratione materiae, given that immunity ratione personae will have ceased to apply. There are increasing examples of state practice denying immunity in such circumstances,130 and some jurists go so far as to suggest that there is an emerging norm of customary international law denying immunity ratione materiae for international crimes.131 The starting point for such arguments is normally the decision of the House of Lords in Pinochet (No 3), refusing to uphold the immunity ratione materiae of a former head of state in a prosecution for torture at international law.132 However, despite the common assumption that immunity was denied because torture was considered not to be an official function subject to immunity ratione materiae, most of the Law Lords put forward other rationales for not allowing immunity; the case ultimately turned on the specific circumstances of Chile’s treaty obligations.133 There is a striking contrast between what the case narrowly decided and the far-reaching influence it has had. However, practice is not yet sufficiently widespread or consistent, whatever the position may be de lege ferenda, to assert that a customary norm has crystallized denying immunity ratione materiae in prosecutions of international crimes in domestic courts.
This is not necessarily inconsistent with the practice of international criminal tribunals denying immunity to those accused of having committed international crimes.References(p. 501) Individual state agents can commit crimes intuitu personae, and their status as agents generally will not be a defence against individual responsibility for international crimes in an otherwise competent international forum.134 But the matter is heavily dependent on the structure and legal foundation of the relevant tribunal, including whether or not the UN Security Council is involved.135 In the case of the International Criminal Court, for example, states parties have consented to the waiver of immunity for their nationals.136 The entitlement of nationals of non-parties to personal immunity is not obviously eroded, particularly in the light of Article 98(1) of the ICC Statute.137 However, the Pre-Trial Chamber holds a firm opinion to the contrary.138