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When the State Taketh and the State Giveth

Published online by Cambridge University Press:  17 January 2008

Malcolm D. Evans
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Extract

The recent decision of the House of Lords in Kuwait Airways Corporation v. Iraqi Airways Company1 has done little to help resolve one of the most difficult questions relating to the practical application of the 1978 State Immunity Act. Indeed, it highlights the near intractable nature of the question at the heart of the case: was the seizure and subsequent operation by the respondent (IAC) of ten aircraft belonging to the applicant (KAC) an act—or action (and the distinction is important)—which attracted immunity under the Act? The answer to such a question is difficult enough when the acts involved are done by a State. When, as in this case, they are done not by the State but at the behest of the State, it becomes even more difficult to resolve and the principal problem with the decision of the majority in the House of Lords is that it fails fully to appreciate the full effect of this point of difference. Moreover, in order to return to the position abandoned by their interpretation of the Act, the majority raise the spectre of justiciability, which not only introduces additional complications but also distorts the frame of reference.

Type
Shorter Articles, Comments and Notes
Information
International & Comparative Law Quarterly , Volume 45 , Issue 2 , April 1996 , pp. 401 - 408
Copyright
Copyright © British Institute of International and Comparative Law 1996

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References

1. [1995] 1 W.L.R. 1147.

2. See Fox, (1994) 43 I.C.L.Q. 193, 196–202; Marks, (1994) 53 C.L.J. 213.

3. [1995] 1 Lloyd's Rep. 25. See Fox, (1994) 110 L.Q.R. 199; Talmon, (1995) 15 O.J.L.S. 295.

4. Supra n.1, at pp.1155B–1156D. S.12 of the SIA 1978 provides: “Any writ or other document required to be served for instituting proceedings against a foreign State shall be served by being transmitted through the Foreign and Commonwealth Office to the Ministry of Foreign Affairs of the State and the service shall be deemed to have been effected when the writ or the document is received at the Ministry.” KAC had argued that service on the Embassy was tantamount to service on the Ministry but Evans J considered that “In no sense is a diplomatic mission in a foreign State the same as the Ministry of Foreign Affairs of the sending State.” This confirms the approach taken by Peter Gibson, J in Westminster City Council v. Government of the Islamic Republic of Iran [1986] 3 All E.R. 284.Google Scholar

5. If it had been forwarded, then the service would have been effective: it must take place “through” the Foreign and Commonwealth Office and be received “at” the relevant ministry. It can, it seems, pass through any number of hands en route.

6. It is, however, true that, because the focus of the current action related to immunity, the issue of justiciability had not been fully pleaded and Lord Goff justified the decision to remit the case on this ground (supra n.1, at p.1165F–G).

7. Trendtex Trading Corpn. v. Central Bank of Nigeria [1977] Q.B. 529.

8. The enforcement of judgments against States does, of course, raise very different issues and is subject to considerable limitations. See SIA, ss.12 and 13. It is ironic that the common law provided for a more liberal regime of enforcement than the Act: e.g. a Mareva injunction, available to the court in I Congreso del Partido, is not available under the SIA (s.13(2)(a)) and the position of a central bank, the object of the proceedings in the Trendtex case, is safeguarded by SIA (s.13(2)(b)).

9. [1983] 1 A.C. 244, 263–264 and 267. See also Littrell v. USA (No.2) [1994] 4 All E.R. 203, 211–212 (Rose LJ) and 216 (Hoffman LJ). The language used by Lord Wilberforce does, however, suggest that acts which can be done by private persons are “commercial” in nature whilst those which cannot are “sovereign”. This brings one closer to the “purpose” test than seems either necessary or desirable and encourages a mild degree of “slippage” when addressing this central issue.

10. In I Congreso del Partido e.g. the House of Lords was agreed that the acts of Cuba in relation to the vessel Playa Larga were of a “private” character, whilst their finding that the actions of the Marble Islands in diverting to Haiphong and disposing of its cargo were also “private” in nature was by a 3–2 majority.

11. Supra n.1, at p.1156F–G.

12. Idem, p.1163A.

13. Idem, p.1163B.

14. Idem, p.1163C.

15. Cf. Lord Mustill: “I cannot detect any change in the character of the successive events. Put at its bluntest and most colourful, the plaintiff's complaint is that the Republic of Iraq stole the aircraft and IAC is unlawfully in possession of them … IAC was not acting autonomously but in harness with the Republic of Iraq, and under the shadow of the sovereign authority by which the latter was acting, so that its acts were a manifestation of that authority.”

16. This should be contrasted with the approach taken by Evans J. He also adopted a “holistic” approach, but saw a series of acts which—as acts—were of an essentially commercial nature (or. at least, were acts of the type that IAC engaged in in a commercial context) and allowed this to determine his view of the nature of the entire event. Trie views of Lords Slynn and Mustill are substantially the same as that of the Court of Appeal: [1995] 1 Lloyd's Rep. 25, 26 (Nourse LJ), 33 (Leggatt U) and 37 (Simon Brown LJ).

17. Support for a “broad-brush” approach in which a series of acts are characterised as having a single, governing nature is found in Littrell, supra n.9, at p.213 (Rose LJ).

18. Supra n.1, at p.1159B–D. He thought that this difficulty had resulted from the manner in which the SIA had reflected the provisions of the 1972 European Convention on State Immunity. S.14(2)(a) of the SIA reflected Art.27(2) of the Convention, which required that immunity be granted to separate entities acting “in the exercise of sovereign authority (acta jure gestionis)” whereas S.14(2)(b) of the SIA reflected Art.27(3), which provided for proceedings against such entities whenever the courts would have had jurisdiction against a State. The 1972 Convention did not include the “commercial transaction” exception embodied in s.3(3)(c) of the SIA and therefore the SIA used the jure imperillgestionis distinction in two places, and, by implication, “twice” in S.14(2). Even if this is so, it does not explain his preference for an interpretation of the SIA which reinforced rather than ameliorated the results of this.

19. At first instance Evans J had rejected the IAC's submission concerning justiciability because he did not see it as having any application to situations in which the SIA failed to provide immunity to a commercial transaction. Lord Goff rejected this opinion: supra n. 1, at p.1165D–F.

20. Fuller a in Underhill v. Hernandez (1897) 168 U.S. 250,252 and see Buttes Gas and Oil Co. v. Hammer [1981] 3 All E.R. 616, 629–630.

21. Buttes, Idem, p.628g.

22. Supra n.1, at p.1166C–E, in which reference was made to Re Helbert Wagg [1956] Ch. 323, 346–349 (Lord, Upjohn)Google Scholar; Oppenheimer v. Cattermole [1976] A.C. 249, 277–278 (Lord, Cross)Google Scholar and Banco Nacionale de Cuba v. Sabbatino (1964) 376 U.S. 398.Google Scholar

23. This is rendered even more difficult on the facts of Kuwait Airways by Iraq having rescinded RCC Res.369 and it being unclear whether this renders the original resolution void ab initio. Such a finding would, presumably, mean that, since ownership would not be deemed to have passed to IAC at all, the entire incident would be immune as an act jure imperil.

24. The recent decision of Mantell J in the case of AI-Adsani v. Government of Kuwait is illustrative of this. The case concerned alleged acts of torture inflicted upon the plaintiff in Kuwait which engaged the responsibility of the Kuwait government. In the course of proceedings to determine whether there should be leave to serve the government of Kuwait the view was expressed that there was an arguable case that the SIA did not grant immunity in respect of acts of torture in contravention of public international law (judgment of Evans LJ, 21 Jan. 1994). When fully examined in the context of the SIA this argument was rejected (Mantell J, 3 May 1995). There are, however, many factors—including the (arguably) jus cogens nature of the outlawry of torture in international law—which would suggest that a State ought not to be able to shelter behind the doctrine of Act of State or considerations of justiciability.

25. E.g. it was suggested before the House of Lords in Kuwait Airways (supra n.1, at p.1166D) that resolutions of the UN Security Council could be taken to provide an indication of public policy.

26. He said that the purpose of the Act was to: “prevent sovereigns or sovereign states from avoiding foreign courts investigating their activities in what were plainly the sort of commercial transactions which could equally be carried out by other sorts of persons. What happened here was totally different. Iraq is not being sued for carelessly flying an aircraft … It is being sued because of the direct consequences of its act of aggression towards Kuwait, the seizure of KAC's aircraft and their subsequent detention and use. That is not in any sense the kind of commercial transaction contemplated by the restricted immunity doctrine.” It should be noted in passing that this reinforces the view that a tortious act can attract immunity only if it arises out of a commercial transaction.

27. Established under Security Council Res.692 of 20 May 1991.