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Report No. 54

Position in England

1G.12. The position in England on the subject has been stated as follows:

"In accordance with the maxim par in parem non habet imperium, the English Courts are fully committed to the view that they will not exercise jurisdiction over the person or the property of a foreign sovereign state unless it is willing to submit to process."1

However, from time to time proposals have been made for the reform of the existing rules.2

1. Cheshire Private International Law, (1971), p. 96. See also the Christina, 1938 AC 485, and the Arntzazu Mendi, (1939) 1 All ER 719.

2. Lauterpacht Jurisdictional Immunities of Foreign States, (1951) 28 B.Y.B.I.L. 220 Lyons in (1956) 42 Grotius Society 61.

Practice in other countries-countries favouring restrictive immunity

1G.13. The practice in other countries also varies. Some States make a distinction between acts in the exercise of the sovereign power, i.e., jure imperil, and acts like a private person, i.e. jure gestionis.1 The immunity is allowed in the former case, but not in the latter. Examples of States which follow such practice are Austria, Belgium, Egypt, France, Greece, German Democratic Republic, Italy and Switzerland. In Canada, however, so far as non-commercial acts are concerned, the English rule is followed. The position regarding commercial activities is undecided.2

1. Mann in, (1964) 27 Mod LR 81.

2. Referencere Powers of City of Ottawa, 1943 SCR 208 (Canada); Flota Maritima Browning de Cuba S.A. v. Republic of Cuba, 1962 SCR 598 (602) (Canada).

Soviet practice

1G.14. The position in Soviet Russia, as provided in Fundamentals of Soviet Civil Procedure,1 is that a suit can be filed against a foreign country only with the consent of the country concerned. Regarding diplomatic representatives, they are subject to the jurisdiction of Soviet courts in civil cases within the limits determined by the rules of international law or agreements with the countries concerned. The principle of reciprocity is also followed. For commercial activities, except maritime commerce, through a number of agreements, the Soviet Union has submitted its trade transactions to foreign jurisdiction, like a private merchant.

1. Section 61, Fundamental of Soviet Civil Procedure; See also Grzybowake Soviet Public International Law, (1970), p. 222.

1G.15. In the U.S.A., a distinction is made between 'sovereign or public acts' and 'private acts'. Immunity as of right is available only in the former case.1

1. Cardozo Sovereign Immunity, (1954) 67 Hary LR 608.

1G.15A. In a statement of the policy1 of the United States State Department, limiting sovereign immunity in a far more sweeping manner than ever before attempted, Professor Jack Bernard Tate,2 Acting Legal Adviser to the Department of State, wrote:3

"The Department of State has for some time had under consideration the only question whether the practice of the Government in granting immunity from suit to foreign Governments made parties defendant in the Courts of the United States without their consent should not be changed. The Department has now reached the conclusion that such immunity should no longer be granted in certain types of cases...."4

The type of cases excluded from immunity mainly concerned commercial transactions.

1. Letter of May 5, 1952, popularly known as the "Tate letter".

2. Jack B. Tate, (Associate Dean of Yale University Law School), Department of St. Bull, Vol. 26, p. 984, June 23, 1952, a letter to the Acting Attorney General.

3. See also cases referred to in Starke International Law, (1972), p. 255, foot note 3, and in Greig International Law, (1970), p. 196, foot notes 7-8.

4. See also William W. Bishop Jr. New United States Policy Limiting Sovereign Immunity, (1953) 47 A.J.L.L., p. 83 et seq.

1G.15B. It may be noted that a few years ago, the subject of immunity of foreign States was fully discussed, and a project for its reform prepared, by the Institute of International law.1

1. Annuaire .de 1 Institute de droid International (1952), Vol. 1, pp. 1-136, ibid., (1953), pp. 112, 121. (Sir H. Lauterpacht).

1G.16. With reference to their attitude in respect of the immunity of foreign States, the various countries may be broadly classified as follows

(i) Countries accepting the classical or virtually absolute theory of sovereign immunity-The classical or virtually absolute theory (of immunity) has generally been followed by most countries of the British Commonwealth, Czechoslovakia, Estonia and probably Poland.1 Apparently, the decisions of the courts of Brazil, Chile, China, Hungary, Japan, Luxembourg, Norway and Portugal may also be deemed to support the classical theory of immunity; but the decisions are scanty, and are anterior to the development of the restrictive theory.

(ii) Countries probably accepting absolute immunity--In Netherlands, Sweden and Argentina, constant reference to the distinction between public and private acts of the State indicate an intention to leave the way open for a possible application of the restrictive theory of immunity if and when occasion arises.

(iii) Countries adopting the restrictive theory-Presently, the restrictive theory (resting on the distinction between sovereign acts and other acts) is followed in Austria, Belgium, Egypt, prance, Greece, Italy and Switzerland.

(iv) Countries where position is fluid-The position,. in England appears to be fluid.

1. Greig International Law, (1972), pp. 218, 219.

Lauterpacht's view

1G.17. Lauterpacht has made certain suggestions,1 for reform of the law. According to him, "In the first instance, immunity must remain the rule with respect of the legislative acts of a sovereign State and of measures taken in pursuance thereof". "Secondly, there must be immunity from jurisdiction in respect of the executive and administrative acts of the foreign State within its territory". "Thirdly, the principle of immunity must continue with respect to contracts made with or by the foreign State except those concluded in the U.K." "Fourthly, no action should lie or execution be levied against a foreign State contrary to the accepted principles of international law in the matter of diplomatic immunities".

Arguments against absolute immunity-The arguments advanced in support of restricted immunity are that the sovereign who engages in ordinary commerce should be held to have waived his immunity, and that the tendency in municipal law is to place the State and State corporations on an equal footing with other legal persons.

1. Lauterpacht Jurisdictional , (1951) B.Y.B.L.L. 220, 237, 238.

Decision involving change of policy to be avoided

1G.18. A decision to alter the scope of immunity involves delicate matters of policy, and we do not think it proper to make recommendations altering its scope. Moreover, it is not possible to say with certainty how far the restrictive immunity will be adopted (in substitution of unqualified immunity), in the near future. In this state of affairs, an alteration in the policy behind these sections is not easy to recommend.

Recommendation for change in terminology

1G.19. But one defect of section 86 should be remedied. This defect lies in its over emphasis on the concept of the "Ruler" of a foreign State. Primarily, it is the State which ought to be immune; the personal immunity of the Ruler, if any, ought to be secondary, at least in modem times. The Supreme Court has held that section 86 applies to all foreign States1-whether the form of Government be monarchial or not. And this interpretation should now be carried out by primarily making "foreign States" immune. The immunity "for Rulers" may be, of course, preserved for exceptional cases.

1. Ali Akbar v. U.A.R., AIR 1966 SC 230.

Recommendation relating to execution

1G.20. Another point relates to section 86(3) which prohibits execution, against the property of the Ruler of a foreign State. The Supreme Court has, with reference to this provision, observed1-

"The provision that a decree passed against the Ruler of a foreign State shall not be executed against the property of such Ruler, rather tends to show that what is exempted is the separate property of the Ruler himself and not the property of the Ruler as the head of the State. A distinction is made between the property belonging to the State of which the Ruler is recognised to be the head, and the property belonging to the Ruler individually".

On this point also, opportunity may be taken to make the section more comprehensive, so as to exempt the property of the State also.

1. Ali Akbar v. U.A.R., AIR 1966 SC 230 (236).

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