[2025] UKUT 319 (AAC)

State immunity is an established rule of customary international law which requires states to accord each other immunity from the jurisdiction of their domestic courts in respect of their sovereign acts: per Lord Sumption JSC in Belhaj v Straw [2017] UKSC 3, [2017] AC 964 (“Belhaj”) at [181]. Lord Sumption explained that the rule is derived from the principle of the sovereign equality of states, which is one of the fundamental principles of the international legal order.

The UK originally gave effect to this rule of international law by the common law and, more recently, it has been codified in the State Immunity Act 1978: Belhaj at [182]. Section 14(2) of the Act extends state immunity to “separate entities” (which may be private companies) if the separate entity does anything in the exercise of sovereign authority in circumstances where the state would have been immune had it done the act itself.

Section 14 of the State Immunity Act provides:

“14

States entitled to immunities and privileges.

(1)

The immunities and privileges conferred by this Part of this Act apply to any foreign or commonwealth State other than the United Kingdom; and references to a State include references to—

(a)

the sovereign or other head of that State in his public capacity;

(b)

the government of that State; and

(c)

any department of that government,

but not to any entity (hereafter referred to as a “separate entity”) which is distinct from the executive organs of the government of the State and capable of suing or being sued.

(2)

A separate entity is immune from the jurisdiction of the courts of the United Kingdom if, and only if—

(a)

the proceedings relate to anything done by it in the exercise of sovereign authority; and

(b)

the circumstances are such that a State (or, in the case of proceedings to which section 10 above applies, a State which is not a party to the Brussels Convention) would have been so immune.

…”

Lord Sumption referred to the exceptions which the Act identified for proceedings relating to private, as opposed to sovereign or public acts. He said that the exceptions depended for their application on the nature or subject matter of the action, commenting: “to that extent it may be described as a subject matter immunity”. However, he continued, the basic rule was that state immunity was “a personal immunity from the exercise of jurisdiction, which depends upon the identity of the person sued” (at [182]). Lord Sumption went on to confirm at [183] that, as a matter of both international and domestic law, the categorisation of an act as sovereign depends on its character, not its purpose or underlying motive.

The domestic courts have recognised that a foreign state is entitled to claim sovereign immunity for its servants or agents, just as it could if it were sued itself.

In Jones v Ministry of Interior of Saudi Arabia [2006] UKHL 26, [2007] 1 AC (“Jones”), at [10], Lord Bingham of Cornhill explained that while the State Immunity Act does not provide expressly for a case where a suit is brought against the servant or agent, there was a wealth of authority to show that in such a case, the foreign state was entitled to claim immunity for its servants as it could if sued itself, and its immunity could not be circumvented by suing its servants or agents.

At [12] of Jones, Lord Bingham indicated that international law does not require, as a condition of a state’s entitlement to claim immunity for the conduct of its servant or agent, that the latter should have been acting in accordance with their instructions or authority; a state may claim immunity for any act for which it is, in international law, responsible, save where an established exception applies. Agreeing, Lord Hoffmann observed at [74] of Jones that the cases and other materials on state liability make it clear that the state is liable for acts done under colour of public authority, whether or not they are actually authorised or lawful under domestic or international law. He had confirmed at [69] that the concept of “state” in the State Immunity Act must be construed to include any individual representative of the state acting in that capacity. The official acting in that capacity is entitled to the same immunity as the state itself.

In Koo Golden East Mongolia v Bank of Nova Scotia and others [2007] EWCA Civ 1443, [2008] QB 717 (“Koo”), the claimant deposited unrefined gold with the central bank of Mongolia under a contract governed by Mongolian law. The agreement required the bank to keep the gold in safe custody until the date the claimant sold it to the central bank. The central bank exported a portion of the gold. The claimant believed the refined gold was in the possession of a Canadian bullion bank, so issued proceedings in England against the London branch of that bank. It was accepted that the central bank of Mongolia itself would have state immunity. At [40] Sir Anthony Clarke MR identified the key question as being whether the central bank had entered into the contract with the bullion bank in the exercise of sovereign authority. The Court of Appeal held that the bullion bank was an agent of the central bank of Mongolia for the purpose of the principles in Twycross v Dreyfus (1877) 5 Ch D 605 (“Twycross”), where it was held that it was impermissible to obtain relief against the agents of a foreign state. While in Twycross, the defendants might have been commercial agents for the foreign state in a way different to Koo, the fact that their relationship was between principals did not destroy the immunity. The Court of Appeal emphasised that, as confirmed in Jones, the foreign state’s immunity (here in the form of the central bank) could not be circumvented by suing its servants or agents (at [47] of Koo).

At [199] and [200] of Belhaj, Lord Sumption addressed the foreign act of state doctrine, contrasting it with the rule of state immunity. He distinguished the act of state doctrine as a subject matter immunity, not a personal one. While state immunity and act of state proceed from the same premise (that there is mutual respect for the equality of sovereign states), act of state is entirely created by common law. It requires states to respect the immunity of other states from their domestic jurisdiction. Lord Sumption explained that the foreign act of state doctrine is, at best, permitted by international law, but is not based on it.

Lord Sumption discerned two main considerations underlying the doctrine of foreign act of state. The first consideration is commonly called “comity” but which he preferred to call an awareness that the UK courts are an organ of the United Kingdom. Like any other organ of the UK, the courts must respect the sovereignty and autonomy of other states. Lord Sumption observed that this marks the common law’s adoption of the same policy underlying the doctrine of state immunity. The second consideration is that the act of state doctrine is influenced by the constitutional separation of powers (which assigns conducting foreign affairs to the executive). Lord Sumption observed that this is why the court does not itself examine the sovereign status of a foreign state or government but treats the Secretary of State’s certificate as conclusive (see [225] of Belhaj).