This note will provide the historical background to the emergence of Immunities from Jurisdiction and lay out the main differences between rationae materiae and rationae personae.
The first principle of “immunity from jurisdiction” appeared before the concept of jurisdiction even existed – certainly among the ancients and even in prehistoric times, the exchange of messages between groups of individuals necessitated a basic understanding of the concept of “don’t kill the messenger”. Early “diplomatic law” was based on the principles of necessity and to some extent, on shared religious beliefs. There is significant evidence of the development of rudimentary diplomatic inviolability and immunity in the writings of the ancient Greeks and Romans, and among subsequent civilisations, including the Byzantine Empire, and the Holy Roman Empire As time passed, the world, or the Western world at least, came more and more to be composed of territories ruled by leaders, or sovereigns, whose interactions with one another were characterised by conflict and separation.
As the concept of the territorial state emerged, so too did the idea of resident ambassadors, who served on a permanent basis in the courts of foreign sovereigns. The immunity to which they were entitled gradually came to be associated not with the necessity and purpose of the role but rather with the sovereignty of the person who sent them. Thus, emerged the concept of representative character as a primary juridical basis on which the law of international immunities rested.
In relation to diplomatic law, this understanding was reflected in the writings of the classical writers of international law. Thus Bynkershoek wrote in 1721 that:
The sole reason why ambassadors are exempted from the power of those to whom they have been sent is that they should not, while performing the duty of their office, change their status and become subject to another while they are acting as the representatives of their prince who is generally rival.
(Bynkershoek, De Foro Legatorum (1721)).
Similarly, according to Vattel:
The respect which is due to sovereigns should reflect upon their representatives and particularly upon an ambassador, as representing the person of his master in the highest degree … It is particularly the duty of the sovereign to whom a minister is sent to afford security to the person of the minister. To receive a minister in his representative capacity is equivalent to promising to give him the most particular protection and to see that he enjoys all possible safety.
(Vattel, Les Droits Des Gens, 1751)
Most importantly, this understanding of the immunity of ambassadors and diplomats was understood as deriving from a more fundamental immunity, that is the immunity of the sovereign or state itself whom the ambassador represented. This understanding is understood to be based on the Latin maxim Par in parem non habet imperium (or “equals have no sovereignty over one another”). This maxim gave rise to the concept of sovereign or state immunity which posits that a sovereign state cannot exercise jurisdiction over another sovereign state.
Once state immunity was established in practice, it was easy to explain it from a theoretical perspective and link it to the long-established principles of diplomatic immunity.
However, I have argued and will make clear in the lecture that it is my understanding that this “reverse engineering” of the idea of the immunity of the state or sovereign from the immunity of the ambassador is highly problematic and has given rise to many of the misunderstandings that we have today in relation to the difference between:
immunity rationae materiaeimmunity rationae personaewhich does indeed originate from the sovereignty of the state and its activities, many of which are carried out by representatives who do derive their immunity directly from the statewhich is a personal immunity related to but separate from the immunity of the state and dependent on the personal status of the individual who is entitled to immunity and the need for that person to be protected from interference in order to be able to do his or her job
State Immunity and the Importance of Sovereignty
Clearly the most important of the rationae materiae immunities is the immunity of the state itself.
Arguably the most important explanation of state immunity is to be found in the dictum of Chief Justice Marshall in United States Supreme Court in 1812 in the case of The Schooner Exchange v McFaddon (1812) 7 Cranch 116.
The case involved a claim against a foreign military vessel visiting a United States post and the Court found that there was no jurisdiction on the basis that the vessel belonged to a foreign sovereign over whom the United States had no jurisdiction. According to the Chief Justice:
“This full and absolute territorial jurisdiction being alike the attribute of every sovereign … would not seem to contemplate foreign sovereigns nor their sovereign rights as its objects. One sovereign being in no respect amenable to another; and being bound by obligations of the highest character not to degrade the dignity of his nation by placing himself of its sovereign rights within the jurisdiction of another, can be supposed to enter a foreign territory only under an express licence, or in the confidence that the immunities belonging to his independent sovereign station though not expressly stipulated are reserved by implication, and will be extended to him.
As you will see, sovereignty and sovereign rights are key to this decision, as are the concepts of equality, independence, and dignity. This is a point to which we will return later, but in the meantime, please consider what you think these four concepts means and how they should be used to protect a state from interference by others or not.
The Development of Absolute State Immunity
At first sight, in relation to the developments mentioned above, it would seem that the immunity of a state from the jurisdiction of another should be absolute – see again the words of Marshall CJ in The Schooner Exchange, laid out in the previous step. This position was reflected in a series of cases in England relating to the state-ownership and operation of ships, something which, during the 18th and 19th centuries was the most obvious example of where sovereign rights might have interfered with the private rights of citizens in the state of jurisdiction.
An early judgment in the English courts highlighted the difficulty of foreign owned ships engaging in trade. In The Charkieh (1873) L.R. 4, Mr Justice Phillimore argued that:
No principle of international law, and no decided case, and no dictum of jurists of which I aware, has gone so far as to authorise a sovereign prince to assume the character of a trader, when it is for his benefit; and when he incurs an obligation to a private subject throw off, if I may so speak, his disguise, and appear as a sovereign, claiming for his own benefit, and to the injury of a private person, for the first time, all the attributes of his character.
Nevertheless, the English courts were increasingly willing to recognise the public character of a ship as attracting immunity regardless of what activities it was engaged in. Thus, in The Parlement Belge (1879) 4 P.D. 129; (1880) 5 P.D. 197, Lord Justice Brett was willing to accord immunity to a mail ship owned by the French Government even though it was partially engaged in trading:
The property cannot upon the hypothesis be denied to be public property; the case is within the terms of the rule; it is within the spirit of the rule; therefore we are of the opinion that the mere fact of the ship being used subordinately and partially for trading purposes does not take away the general immunity.
This rule was further developed some 40 years later in The Porto Alexandre  P. 20. In which it was declared that:
[A] vessel owned or requisitioned by a sovereign independent State and earning freight for the State, is not deprived of the privilege, decreed by international comity, of immunity from the process of arrest by reason of the fact that she is being employed in ordinary trading voyages carrying cargoes for private individuals.
This position of absolute immunity was also apparent in the jurisprudence of the US Courts as confirmed by the United States Supreme Court in the case of Berizzi Bros Co v S.S. Pesaro  271 U.S. 562 in which it was made clear that:
When, for the purpose of advancing the trade of its people or providing revenue for its treasury, a government acquires, mans and operates ships in the carrying on of trade, they are public ships in the same sense that warships are. We know of no international usage which requires the maintenance and advancement of the economic welfare of a people in time of peace as any less a public purpose than the maintenance and training of a naval force.
The outcome was effectively that anything a foreign government chose to do, whether that be purely public, partly private, or even wholly private was considered to be the act of a sovereign and so entitled to immunity even in cases of severe losses to citizens of the state with jurisdiction.
Early Contestation of Absolute State Immunity
As the courts continued to uphold, even strengthen the concept of absolute state immunity, and as states solidified the notions of sovereignty, sovereign equality and non-interference in the United Nations Charter in 1945, academics were beginning to question the concept. Of particular note was the work of Hersch Lauterpacht in the British Yearbook of International Law in 1951. Lauterpacht was critical of the idea that sovereignty of one state could be used to override the sovereignty of another. Thus he argued that:
No legitimate claim of sovereignty is violated if the courts of a State assume jurisdiction over a foreign State with regard to contracts concluded or torts committed in the territory of the State assuming jurisdiction. On the contrary, the sovereignty, the independence and the equality of the latter is denied if the foreign State claims as a matter of right - as a matter of international law - to be above the law of the State within the territory of which it has engaged in legal transactions or committed acts entailing legal consequences according to the law of that State.
(Lauterpacht, “The Problem of Jurisdictional Immunities of Foreign States”, 28 BYIL 220 (1951))
Nor was it clear that the exercise of jurisdiction by one state over another should adversely affect the equality of the states or their relative independence:
… it is not easy to see why the principle of independence and equality should preclude the courts of a State from exercising jurisdiction over another State and its property so long as the State exercising jurisdiction merely applies its ordinary law, including its rules of private international law, and so long as it applies it in an unobjectional manner not open to the reproach of a denial of justice or of the disregard of the legislative and administrative sovereignty of the foreign State.
For Lauterpacht, the most problematic concept was that of dignity and the claim that states are somehow above the law. As he noted:
…the development of the doctrine of immunity of foreign States from jurisdiction shows that it is perhaps not so much the principles of independence and equality which have nurtured the soil in which the doctrine has flourished, but factors of a different kind … These have been: (a) considerations of the dignity of the sovereign State and (b) the traditional claim, transposed into the international arena, of the sovereign State to be above the law and to claim, before its own courts, a privileged position compared with that enjoyed by the subject.
(Lauterpacht, “The Problem of Jurisdictional Immunities of Foreign States”, 28 BYIL 220 (1951))
Ultimately Lauterpacht could not see sovereignty, equality and independence as justifying immunity and, given that all that remained, were the somewhat nebulous concepts of dignity and superiority/privileges, they did not form a firm justification of the law of State immunity.
Nevertheless, the positive law of State immunity continued and states still sought to claim as much immunity from foreign jurisdiction as they could – and these claims continued to be upheld by the courts. As is often the case, it took politics and a clash of political ideologies to about substantial change.
Free Trade vs State-Owned Enterprises
As Western states continued to interact with one another on the basis of free trade principles, the Soviet Union and its satellites were increasingly operating through state-owned enterprises.
Put simply, where Western states were uninvolved in the majority of commercial transactions in their own and others territories, a significant amount of foreign trade, if not all, was carried out by state-owned entities which, on the basis of the absolute theory of state immunity, were entitled to immunity from the jurisdictions in which they were operating.
In the United States, a new policy was announced in a letter from Acting Legal Adviser at the State Department, Jack B Tate, to the Acting Attorney General Phillip B. Pearlman, May 19, 1953.
The letter stated:
“The reasons which obviously motivate State trading countries in adhering to the [absolute] theory with perhaps increasing rigidity are most persuasive that the United States should change its policy. Furthermore, the granting of sovereign immunity to foreign governments in the courts of the United States is most inconsistent with the action of the Government of the United States in subjecting itself to suit in these same courts in both contract and tort. And with its long established practice of not claiming immunity in foreign jurisdictions for its merchant vessels. Finally, the Department feels that the widespread and increasing practice on the part of governments of engaging in commercial activities makes necessary a practice which will enable persons doing business with them to have their rights determined in the courts. For these reasons it will hereafter be the Department’s policy to follow the restrictive theory of sovereign immunity in the consideration of requests of foreign governments for a grant of sovereign immunity.” “with the possible exception of the United Kingdom little support has been found except on the part of the Soviet Union and its satellites for continued full acceptance of the absolute theory of sovereign immunity.” 26 Department of State Bulletin 984 (1952).
Effectively what the US government was doing was distinguishing between official acts of a state, or acts jure imperii which should continue to attract immunity, and commercial acts of foreign states, acts jure gestionis, which should not. For an analysis of how successful this was see J M Niehuss “International Law – Sovereign Immunity – The First Decade of the Tate Letter Policy” 60 Michigan Law Review 1142 (1962).
In the United Kingdom there was not such political declaration (and nor could there have been) and the rule of absolute immunity was confirmed in the House of Lords in The Cristina  A.C. 485 Although bound by the House of Lords decision in The Cristina, courts came increasingly to assert their dissatisfaction with such a rule, including in cases such as and others such as Dollfus Mieg et Compagnie SA v Bank of England  1 Ch 333; Krajina v Tass Agency  2 All ER 274; and Sultan of Johore v Aris Bendahara Abubakar  [All ER 1261]. In the latter case, the Privy Council declared:
“[T]heir Lordships do not consider that there has been firmly established in England any rule that a foreign independent sovereign cannot be impleaded in our courts in any circumstances”.
In another shipping case where the question was whether or not to follow the earlier decision of the House of Lords in The Parlement Belge, the Privy Council in The Philipine Admiral 1976 2 WLR 214 indicated that:
1. the Court of Appeal in the Porto Alexandre wrongly felt that they were bound by the decision in The Parlement Belge
2. that the House of Lords in The Cristina had been divided on the question of immunity for state owned vessels engaged in commerce
3. the trend of opinion was against the absolute immunity doctrine
4. it was “wrong” to apply the doctrine since States could in the Western world be sued in their own courts on commercial contracts, there was no reason why foreign States should not be equally liable to be sued.
The most important case in the UK on this point of trying to move away from the absolute doctrine of state immunity occurred in the case of Trendtex Trading Corporation v Central Bank of Nigeria  ON 529, that was a case involving the buying of cement for the construction of military barracks in Nigeria. Clearly the underlying transactions in this complex case were commercial but the purpose of buying the cement was public. In his judgement, Lord Denning who had previously expressed great frustration with the absolute doctrine of stage immunity relied on suggested changes in the customary international law relating to state immunity, to reject the immunity of the Central Bank of Nigeria. He noted that:
The doctrine of sovereign immunity is based on international law. It is one of the rules of international law that a sovereign state should not be impleaded in the courts of another sovereign state against its will. Like all rules of international law, this rule is said to arise out of the consensus of the civilised nations of the world. All nations agree upon it. So it is part of the law of nations. [*364] To my mind this notion of a consensus is a fiction. The nations are not in the least agreed upon the doctrine of sovereign immunity. The courts of every country differ in their application of it. Some grant absolute immunity. Others grant limited immunity, with each defining the limits differently. There is no consensus whatever. Yet this does not mean that there is no rule of international law upon the subject. It only means that we differ as to what that rule is. Each country delimits for itself the bounds of sovereign immunity. Each creates for itself the exceptions from it. It is, I think, for the courts of this country to define the rule as best they can, seeking guidance from the decisions of the courts of other countries, from the jurists who have studied the problem, from treaties and conventions and, above all, defining the rule in terms which are consonant with justice rather than adverse to it. Seeing that the rules of international law have changed – and do change – and that the courts have given effect to the changes without any Act of Parliament, it follows to my mind inexorably that the rules of international law, as existing from lime to time, do form part of our English law. It follows, too, that a decision of this court – as to what was the ruling of international law 50 or 60 years ago – is not binding on this court today. International law knows no rule of stare decisis. If this court today is satisfied that the rule of international law on a subject has changed from what it was 50 or 60 years ago, it [*366] can give effect to that change – and apply the change in our English law – without waiting for the House of Lords to do it. Although Denning somewhat overstepped his power as a judge in the Court of Appeal, his decision was effectively upheld by the House of Lords in a separate case of I Congresso Del Partido  1 A.C. 244 some six years later.
In the meantime the United Kingdom had formally adopted the restrictive theory through legislation in the form of the State Immunity Act 1978
1978 Act, s. 3:
(1) A State is not immune as respect proceedings relating to - (a) a commercial transaction entered into by the State; …
(3) In this section “commercial transaction” means (a) any contract for the supply of goods or services, (b) any loan or other transaction for the provision of finance and any guarantee or indemnity in respect of any such transaction or of any other financial obligation; and (c) any other transaction or activity (whether of a commercial, industrial, financial, professional or other similar character) into which a State enters otherwise than in the exercise of sovereign authority.
International Law and State Immunity
United Nations Convention on the Jurisdictional Immunities of States and their Property 2004 (not yet in force) tries to balance the interests of states that favour a restrictive approach to State Immunity with those that prefer a more absolute approach.
Article 2(1)(c) definition of commercial contracts Article 2(2)
2. In determining whether a contract or transaction is a “commercial transaction” under paragraph 1 (c), reference should be made primarily to the nature of the contract or transaction, but its purpose should also be taken into account if the parties to the contract or transaction have so agreed, or if, in the practice of the State of the forum, that purpose is relevant to determining the non-commercial character of the contract or transaction.
International Law Commission’s Commentary on the Draft Articles:
“This two-pronged approach, which provides for the consideration not only of the nature, but in some instances also of the purpose of the contract or transaction, is designed to provide an adequate safeguard and protection for developing countries, especially in their endeavours to promote national economic development. Defendant States should be given an opportunity to prove that, in their practice, a given contract or transaction should be treated as non-commercial because its purpose is clearly public and supported by raison d’Etat such as the procurement of food supplies to feed a population, relieve a famine situation or revitalize a vulnerable area, or supply medicaments to combat a spreading epidemic, provided that it is the practice of that State to conclude such contracts or transactions for such public ends.”