TOPIC 7

State Immunity
- State immunity or sovereign immunity is the immunity given to sovereign States.
- States are sovereign and they are equal. There is a maxim, Par in parem non habet
imperium: An equal has no power over an equal. Therefore, it is impossible for one
sovereign State to exercise authority (by means of its legal system) over another
sovereign State.
- Rules on State immunity are largely part of customary international law and there are
only a few international treaties in this area of law: the 1972 European Convention on
State Immunity and the UN Convention on the Jurisdictional Immunity of States and
their property.
Absolute and Restrictive Theories of State Immunity
 Absolute Immunity Theory
- Originally, the practice of States was to grant foreign States absolute immunity from
the jurisdiction of their courts. Foreign States were immune from the jurisdiction for
all acts whatsoever. Obviously, such a strict doctrine caused hardship to individual
litigants. There was no remedy for them. They were denied the protection of the law
even in the clearest cases of wrongful act by the foreign State.
- Ideological changes and an expansion in world trade after the First World War caused
an increase in direct State involvement in commercial activities. The result of these
changes led to the development of the doctrine of restrictive immunity.
 Restrictive Immunity Theory
- States can enjoy immunity from the jurisdiction of a municipal court only in respect
of their “governmental acts” not in respect of their “commercial acts”.
- Justification for the restrictive immunity theory: Where a State undertakes
commitments of a private law nature their would-be no-good reason why any dispute
arising from such commitments should not be determined by ordinary courts of law?
- Restrictive immunity is the prevailing doctrine: Although a certain number of States
still accept the principle of absolute immunity, the principle of restrictive immunity is
today adopted by most States. The restrictive immunity theory has a long-standing
history in most continental systems. With the demise of the Soviet Union and the
change from State-owned economy to market economy, the number of former
communist States adhering to the absolute immunity theory has also diminished.
Distinction between “sovereign act” and “commercial act”
- The distinction between a sovereign act and a commercial act is not always easy.
- Purpose of the act (subjective test): Some jurisdictions base the distinction between
sovereign acts and commercial acts on the purpose of the act.
- The application of a purpose test invariably favours the State party and enlarges its
immunity. It is not surprising therefore that it has not found favour with national
courts especially in common law jurisdictions. In the UK, for example, in Trendtex
Trading Corporation v Central Bank of Nigeria, the COA ruled that the purpose of a
 State’s act was immaterial in deciding whether it was governmental or commercial. It
was sufficient if the nature of the transaction itself was of a commercial type, such as
a contract for the supply of goods or services.
- Nature of the act (objective test); Some States base the distinction between
governmental acts and commercial acts on the “nature of the act test”. The basic
criterion is whether the key transaction is a private law relationship, such as a
contract, which can also be made by a private individual without any governmental
authority.
- The nature test also is not free from criticism. Some are of the view that applying the
nature test only is not entirely satisfactory due to the fact that some contracts, which
are prima facie commercial transactions, can only be made by States, as for example a
contract for the purchase of F16 Fighter Aircraft.
- Furthermore, the nature test cannot protect a developing State that sought to develop
its economy, which is a sovereign act, by means of commercial contracts with foreign
investors.
The Contextual Approach
- With the exception of Germany, most civil law courts believe that although the nature
test should be the primary method of determining whether immunity should be
granted, the purpose of a transaction may also be relevant in some circumstances.
- The Canadian courts also have developed the contextual approach in judicial practice.
Thus, in United States v Public Service Alliance of Canada, the US was claiming
immunity in respect of a dispute with its Canadian workers employed on a US
military base in Canada.
Immunity from Jurisdiction
- Diplomatic agents are immune from the jurisdiction of local courts
- Immunity from criminal jurisdiction: Art 31(1) provides that “A diplomatic agent
shall be immune from the criminal jurisdiction of the receiving State”. This immunity
from criminal jurisdiction is absolute and a diplomatic agent cannot under any
circumstances be tried or punished by the local criminal courts of the State to which
he is accredited.
- This does not mean that he must have a right to do what he likes. In fact, he is under
an obligation to respect the laws of the receiving State.
- Immunity from civil and administrative jurisdiction: Diplomatic agents cannot enjoy
absolute immunity. Their immunity is subject to three limitations mentioned in Art
31(1) of the Vienna Convention.
- A diplomatic agent is not obliged to give evidence as a witness. No measure of
execution may be taken in respect of a diplomatic agent except in the three exceptions
for civil jurisdiction mentioned above.
- Waiver of immunity: Art 32 provides that the immunity from jurisdiction of
diplomatic agents may be waived by the sending State. Waiver must always be
express. The initiation of proceedings by a diplomatic agent shall preclude him from
 invoking immunity from jurisdiction in respect of any counterclaim directly
connected with the principal claim.
Persons entitled to diplomatic immunity
- Immunities in respect of persons are provided in Art 29 to 36 of the Vienna
Convention. In all of these articles, the beneficiary of the immunities is mentioned as
a “diplomatic agent”. This means that diplomatic agents are entitled to all these
immunities.
- According to the Vienna Convention, a “diplomatic agent” is the head of the mission
or a member of the diplomatic staff of the mission. The members of the diplomatic
staff are the members of the staff of the mission having diplomatic rank.
Immunity of International Organisations
- The United Nations is the most important international organisation of the present day
and any study on immunity of international organisations should start with the
privileges and immunity of the United Nations. First, Art 104 of the Charter provides
that: The organization shall enjoy in the territory of each of its members such legal
capacity as may be necessary for the exercise of its functions and the fulfilment of its
purpose.