DOCTRINE OF SOVEREIGN IMMUNITY

Doctrine of Sovereign Immunity



Doctrine of Sovereign Immunity

Introduction

Sovereign immunity, the principle derived from the ancient truism that the "king can do no wrong" and holding that nations are immune from the jurisdiction of other nations' courts, is recognized by virtually every nation in the world. Despite the principle's universality, however, its application differs across states. Some states extend sovereign immunity as a matter of comity, while others have codified the doctrine in their jurisdictional statutes. Some states, such as China, afford foreign states absolute immunity, while the majority of nations, including the United States, have adopted a more restrictive approach that immunizes foreign states from suit in connection with sovereign acts but leaves them subject to suit in connection with commercial acts.

Sovereign immunity grants to the sovereign or sovereign owned entity immunity from (a) the jurisdiction of the English courts; and (b) measures to enforce a judgment or award through the English courts. Both are traps for the unwary draftsmen. The United Kingdom implemented the European Convention on State Immunity 1972 by the State Immunity Act 1978. The 1978 Act, which is a codification of English law, is wider in its scope than the European Convention. First, Part I of the Act applies to any proceedings by or against any state (except the United Kingdom, proceedings against which are governed by the Crown Proceedings Act 1947), not merely a signatory state of the Convention. Secondly, the exceptions from immunity under section 3 of the Act are wider than those in the Convention .

Section 1 (1) provides that "A state is immune from the jurisdiction of the courts of the United Kingdom" except as provided by subsequent provisions. Section 2 sets out the circumstances in which a state will be regarded as having submitted to the jurisdiction e.g. by prior written agreement, by instituting the proceedings, etc. Section 3 provides that: "A state is not immune as respects proceedings relating to (a) a commercial transaction, entered into by the state; or (b) an obligation of the state which by virtue of a contract (whether a commercial transaction or not) falls to be performed wholly or partly in the United Kingdom" Section 3 (3) defines commercial transactions, e.g. contracts for the sale of goods or services, loans and "any other transaction or activity (whether of a commercial, industrial, financial, professional, or other similar character) into which a state enters or in which it engages otherwise than in the exercise of sovereign authorities".

As well as the state, the government or separate entities may be immune, but only if the proceedings relate to something done in the exercise of sovereign authority and in similar circumstances the state would be immune. Section 14(4) specifically grants immunity to the state's central bank or other monetary authority if it be a separate entity. Assistance may be found in various cases for the meaning of the phrase "in the exercise of sovereign authority".

Thus, Lord Wilberforce in I Congreso del Partido ...