Aziz v. Republic of Yemen

Neutral Citation Number: [2005] EWCA Civ 745
		Case No: A2/200411901

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE EMPLOYMENT APPEAL TRIBUNAL
MR .JUSTICE MITTING (PRESIDING)

 

		Royal Courts of Justice Strand. London. WC2A 2LL
		17 June 2005

B e f o r e :LORD JUSTICE PILL
LORD JUSTICE SEDLEY
LORD JUSTICE GAGE
____________________

Between:

	FAROUK ABDUL AZIZ	Appellant
	– and –
	REPUBLIC OF YEMEN	Respondent

____________________

MR J LADDIE (instructed by Messrs Webster Dixon) for the Appellant
MR M WESTGATE (instructed by Messrs Lloyd & Associates) for the Respondent
Hearing date: 20 April 2005
____________________

HTML VERSION OF JUDGMENT
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Crown Copyright ©

Lord Justice Pill:

1. This is an appeal against a decision of the Employment Appeal Tribunal, (“EAT”), Mitting J presiding, sent to the parties on 20 September 2004. An extension of time has been granted. The EAT allowed an appeal by the Republic of Yemen (“the respondents”) against a decision of an employment tribunal held at London Central sent to the parties on 8 January 2004. The employment tribunal held that it had jurisdiction to consider the complaints of Mr Farouk Abdul Aziz (“the appellant”) . against the respondents.

 

1. The appellant had for many years been employed as a member of staff at the respondents’ embassy in London. He was an accounts assistant. When his employment was terminated on 30 June 2003 he made a complaint to the employment tribunal that he had been unfairly dismissed. By a notice of appearance dated 20 November 2003, signed by solicitors, Salfiti and Co, the respondents stated that they intended to resist the application. It was claimed that a sum had been paid to the appellant in settlement of an agreement made between the parties on 16 September 2003.

 

1. In the course of the hearing before the employment tribunal on 19 December 2003, the respondents, by counsel appearing on their behalf, claimed state immunity under the State Immunity· Act 1978 (“the 1978 Act”). That submission was rejected by the employment tribunal but accepted by the EAT on appeal.

 

 

The Statute

4. Sections 1 and 2 of the 1978 Act provide:

“General immunity from jurisdiction

1) A state is immune from the jurisdiction of the courts of the United Kingdom except as provided in the following provisions of this Part of this Act.

2) A court shall give effect to the immunity conferred by this section even though the state does not appear in the proceedings in question.

2 Submission to jurisdiction

(1) A State is not immune as respects proceedings in respect of which it has: submitted to the jurisdiction of the courts of the United Kingdom.

(2) A State may submit after the dispute giving rise to the proceedings has arisen or by a prior written agreement; but a provision in any agreement that it is to be governed by the law of the United Kingdom is not to be regarded as a submission.

(3) A State is deemed to have submitted-

(a) if it has instituted the proceedings; or

(b) subject to subsections (4) and (5) below, if it has intervened or taken any step in the proceedings.

(4) Subsection (3)(b) above does not apply to intervention or any step taken for the purpose only of –

(a) claiming immunity; or

(b) asserting an interest in property in circumstances such that the State would have been entitled to immunity if the proceedings had been brought against it

(5) Subsection (3)(b) above does not apply to any step taken by the State in ignorance of facts entitling it to immunity if those facts could not reasonably have been ascertained and immunity is claimed as soon as reasonably practicable.

(6) A submission in respect of any proceedings extends to any appeal but not to any counter-claim unless it arises out of the same legal relationship or facts as the claim.

(7) The head of a State’s diplomatic mission in the United Kingdom, or the person for the time being performing his functions, shall be deemed to have authority to submit on behalf of the State in respect of any proceedings; and any person who has entered into a contract on behalf of and with the authority.- of a State shall be deemed to have authority to submit on its behalf in respect of proceedings arising out of the contract. “

Section 22(1) of the Act provides that ‘court’ includes any tribunal or body exercising judicial functions.

1. The appeal potentially raises important points on the law of state immunity and the construction of the 1978 Act. It is unfortunate that it is only as a result of extensive post-hearing written submissions, instigated by the court, that some of the relevant authorities and arguments of the parties have been brought to the attention of the court. It is also unfortunate that the direction given when permission to appeal was granted: “Time estimate [one day] subject to change following discussion between counsel. Counsel to contact the listing office” was ignored by the parties. We are grateful for the additional material and argument but they should have been supplied sooner.

 

The background and the hearings below

1. Before the legal issues can be addressed, however, and to consider the context in which they. are to be addressed, it is necessary to set out the sequence of events which led to the EA T’ s decision. To set the scene, it is necessary to consider the material before the court in some detail while deferring any ruling as to its admissibility before the court or either of the tribunals.

 

1. The hearing before the employment tribunal. commenced at 10am on 19 December 2003. The respondents were represented by counsel instructed by the solicitors who had served the notice of appearance and grounds of defence. The appellant was also represented by counsel.

 

1. At 1 0:20am, counsel for the respondents stated that the respondents relied on Section 2(5) of the 1978 Act. She accepted that the respondents had, by serving the notice of appearance, taken a step in the proceedings within the meaning of Section 2(3 )(b) of the Act. Counsel’s submission was that the step had been taken by the State in ignorance of facts entitling it to immunity, within the meaning of Section 2(5) and the facts could not reasonably have been ascertained. Counsel staled that, in order to establish that proposition, she needed to call Mr Alkhader, an attaché at the embassy, and possibly one other witness. However an interpreter would be required and no arrangements had been made by the respondents for one to be present. Counsel applied for an adjournment.

 

1. Refusing the application, the tribunal considered prejudice to the appellant and also stated: “‘We find it difficult to accept that any foreign embassy could be completely ignorant of the ability of foreign embassies to claim immunity from civil process”. Reference was also made to the fact that solicitors had been instructed by the respondents. The employment tribunal stated that it considered the argument based on Section 2 (5) to be “‘extremely weak”. Having given that ruling, the tribunal granted a longer than usual midday adjournment “‘in order to allow the respondents’ counsel to take further instructions”.

 

1. After the break, the tribunal heard further submissions. Reference was made to the case of Arab Republic of Egypt v Gamal-Eldin [1996] ICR 13, [1995] UKEAT 482_94_0203 ; to which I will refer later. The tribunal concluded that “by entering their notice of appearance through their properly instructed solicitors who clearly have ostensible authority to act on behalf of the respondents, the respondents have pursuant to Section 2 of the [1978 Act] waived their sovereign immunity”.

 

1. The respondents then applied, by counsel, to amend their notice of appearance to claim that the reasons for this dismissal were misconduct and/or incapability of the appellant. Having :considered the arguments,· the tribunal granted the application. That made it necessary to adjourn consideration of the merits of the case and the costs wasted as a result of the amendment were granted to the appellant. Directions were given, including as to disclosure of documents and exchange of witness statements. An amended “Particulars of Grounds Resisting the Application” was served by the solicitors on 9 January 2004 making detailed allegations about the appellant’s performance of his duties. Following complaints about the respondents’ failure to comply with orders for disclosure, there was a hearing for directions on 16 February 2004.

 

1. New solicitors were instructed by the respondents in early February 2004 and Notice of Appeal was given.

 

1. t the hearing before the EAT on 28 July 2004, the respondents were represented by the new solicitors and by new counsel, Mr Westgate, who also appeared for them before this court. At the EAT, the appellant was not present or represented. The EAT stated that the combined effect of Sections 4, 1″6(1) and the Schedule to the 1978 Act. is that the respondents could have claimed immunity in relation to the appellant’s claim against them .. That is not in issue.

 

1. The EAT admitted evidence from the Yemeni Ambassador in London, His Excellency Mutahar Abdullah Al Saeed, in which, as the EAT put it, “the Ambassador says, in terms, that he did not authorise the taking of any step in the proceedings before the employment tribunal and did not authorise the waiver of the immunity to which the Republic of Yemen was entitled.” In admitting the evidence, the EAT relied on the observations of Mummery J in Gamal-Eldin:

” If the industrial tribunal fails to give effect to an immunity in fact enjoyed by the Arab Republic .of Egypt as a result of not having all the relevant evidence, it is, in our view, the duty of the appeal tribunal to correct this error and give effect to this immunity, even if that means departing from the rules which normally apply to the admission of new evidence on appeal”.

1. The Ambassador had at all material times been within the jurisdiction, it was stated. The EAT concluded:

 

“In our view, it is perfectly clear that the only person who has the authority to submit to proceedings on behalf of the State is the head of the State’s diplomatic mission, or, in his absence, the person performing the functions of the head of the State’s diplomatic mission for the time being. Neither the Ambassador, nor Dr Hajar [the Minister Plenipotentiary], gave any authority, therefore this appeal must be allowed.”

1. In relation to what had occurred earlier, the EAT stated:

“What then occurred reflects no credit on the internal organisation of the Embassy, nor upon the solicitors who were instructed by officials within the Embassy, because by a series of un-thought-out mishaps a Notice of Appearance was entered purportedly on behalf of the. Embassy. That led to the Employment Tribunal deciding that the Republic of Yemen had thereby submitted to the jurisdiction of the Tribunal for the purpose of the proceedings.”

That categorisation :’of events is not accepted by the appellant or by the solicitors referred to.

1. Reference has also been made to the obiter statement of Peter Gibson LJ in Ahmed v Government of the Kingdom of Saudi Arabia [1996] ICR 25 at 34 that in circumstances such as the present it would have to be shown that the head of mission had submitted. The respondents do not seek to uphold that approach and accept that

 

Section 2(7) of the 1978 Act does not have the effect that only a submission by the head of mission would suffice.

1. On behalf of the appellant, Mr Laddie submits that the further evidence should not have been admitted by the EAT and, secondly, that, if admitted, it should in the circumstances have been subjected to critical analysis and not merely accepted at face value. Submissions are made upon the effect of Sections 1 and 2 of the 1978 Act in the present circumstances. The appellant also seeks to rely on the making of the application, on 19 December 2003, to amend the Notice .of Appearance, and the subsequent submission of amended grounds, as further steps in the proceedings within the meaning .of Section 2(3 )(b) .of the 1978 Act. These steps followed the employment tribunal’s decision as to jurisdiction.

 

1. F or the respondents, Mr Westgate accepts that appeal from an employment tribunal to the EAT (and to this court) is possible .only on a point .of law. He also accepts that en ordinary principles of admitting fresh evidence, the additional evidence before the EAT would not have been admitted. What was challenged before the EAT was, however, the jurisdiction .of the employment tribunal and that is a point .of law. Evidence was admissible to demonstrate that the employment tribunal had no jurisdiction because a state is immune from the jurisdiction .of the domestic courts. Moreover, relying on the statement of Mummery J in Gamal-Eldin, it was the duty of the EAT to correct the employment tribunal’s error in accepting jurisdiction. The respondents were entitled to call fresh evidence to permit the jurisdictional error to be corrected, even if the decision of the employment tribunal to refuse to adjourn to allow fresh evidence was within their discretion.

 

1. The point taken by the respondents at the hearing before the employment tribunal was not that Section 1 of the 1978 Act granting general immunity from jurisdiction applied. The provision relied en was Section 2(5). It was net disputed that a step had been taken in the proceedings. The respondents, it was submitted, were not to have been deemed to have submitted to the jurisdiction under Section 2(3) because the step was taken in the circumstances specified in Section 2(5). The primary point taken before the EAT was that the state had not submitted at all because the state had taken no step in the proceedings. The step, or steps, taken by solicitors instructed by Embassy staff was not a step by the state. While the respondents’ Ambassador in London had authority under Section 2(7) to submit en behalf of the state, he had not exercised that authority, it was submitted.

 

1. The EAT had before them two statements from the Ambassador, Dr Al Saeede and two statements from Mr Alkhader. The Ambassador stated:

 

“As Ambassador, I did not at any time instruct Salfiti & Co to defend the present proceedings en behalf of the Yemen Embassy. I am the .only person at the Embassy who has authority to instruct Salfiti & Co in this way.

I did not give any person instructions to submit to the jurisdiction and take any steps in this matter which would result in the Embassy waiving its immunity. In any event, in order for the Yemen Embassy to waive their State Immunity in any proceeding permission has to be .obtained from the Minister .of Foreign Affairs in Yemen. This authorisation is obtained by way of ministerial decree. The decree would be issued and would refer to that ministerial decision and be directed to the respective authority of the country. I did not at any time make any such application to the Minister of Foreign Affairs.”

1. In his supplementary statement, the Ambassador stated that he was aware that a lawyer had been contacted to advise the Embassy on a settlement with the appellant in August/early September 2003. He was not aware of the identity of the lawyer. He was aware that the Embassy had received documents which he understood related to the settlement agreement reached in September 2003. His understanding was that this was not a legal process but some form of mediation. The Ambassador said that he had never met Mr Salfiti of Salfiti & Co. The Ambassador added:

 

“I was aware that Mr Alkhader and Mr Hajar had an appointment with Mr Salfiti in December after he had ‘declined repeatedly t6 come to the Embassy. I was not going to attend but was told by my driver that I was in the area and had just finished a previous appointment. When I went into Salfiti & Co’s offices, I was offended at the way they were treated. They were kept waiting in the basement and when I asked they were called to the upper floor to be seen by a receptionist who told them she was going to see them instead. I told Mr Alkhader and Mr Hajar to leave. I left but later found out that they had returned to Mr Salfiti’s office later on.”

“I was out of the country from 10 July to 11 August 2003 and during this period, Mr Hajar was only authorised to act on routine matters and was not authorised to deal with any serious matters. The Embassy is a diplomatic institution. It had administrative and diplomatic ranks. Mr Alkhader is not a member of the diplomatic staff of the mission”.

1. The Ambassador instructed Mr Alkhader to put a stop on the payment on a cheque to Mr Salfiti. The Ambassador added that he did not delegate authority to Mr Hajar or Mr Alkhader to instruct Salfiti and- Co to take a step in the proceedings. If he were able to delegate that authority to Mr Hajar, he would have to obtain written authority from Yemen and that authority would be specific and clear. He described Mr Alkhader’s position in the Embassy as the “financial and administrative attaché”.

 

1. In his statement, Mr Alkhader stated that Salfiti and Co had no authority to take any steps in the proceedings. He thought that the employment tribunal was a conciliatory body only. Salfiti and Co did not advise him at any time that the issue of state immunity would arise and the first time the question arose was when counsel instructed by Salfiti and Co raised it on the morning of the hearing on 19 December 2003.

 

1. Mr Hajar also said that he did not authorise Salfiti and Co to take a step in the proceedings and he was not empowered to issue such authorisation in any event. Mr Salfiti had advised on the agreement made between the parties in September 2003. Correspondence had been received from Salfiti and Co in early December 2002 but he considered the matter had been settled. His understanding was that the tribunal hearing was some kind of procedure to resolve the dispute with Mr Aziz. Mr Salfiti, who was the principal in Salfiti and Co, advised him that there was little or no chance of claiming state immunity and that the Embassy should settle the matter.

 

1. In relation to the Ambassador’s statement that Mr Alkhader was not a member of the diplomatic staff of the mission, the Foreign and Commonwealth Office have since certified that Mr Alkhader was notified to them as an attaché at the respondents’ Embassy and had been received as such. Mr Alkhader’s name appears in the London Diplomatic List in each of the years 2002 to 2004. The respondents’ response, in a letter of 19 April 2005 was to make a distinction:

 

“To explain there is a distinction between the Embassy staff members enjoying diplomatic status and immunity in any country because their presence in that country is related to the presence of their country’s diplomatic Mission and those among them who are members of the diplomatic Staff of the Mission and do conduct actual diplomatic functions.”

While Mr Alkhader has diplomatic status and immunity, it is said, his functions are administrative and not diplomatic. Inclusion in the diplomatic list “does not automatically imply neither [either?] diplomatic rank or responsibility.”

1. The EAT also had before them Mr Salfiti’s account of the relevant events, his attendance notes and his correspondence with the Embassy, the tribunal ⁰ and the appellant’s solicitors. The question of legal professional privilege does not appear to have been raised. Mr Salfiti said that his firm received instructions to deal with the appellant’s complaint in the employment tribunal as per the Embassy’s instructions. A care letter was sent to the Embassy on 19 November 2003 confirming that “we are able and willing to advise and assist with aspects of this employment matter, namely defending Mr Aziz’s claim against you in the employment tribunals”. The correspondence is of a routine nature for a solicitor instructed as Mr Salfiti claims his firm was. A list of documents to be disclosed was supplied by the Embassy. A letter to the Embassy in relation to the· exchange of witness statements with the appellant’s solicitors included the statement: “We informed them that the Ambassador is away and that we are seeking instructions from our client and that it is a short notice anyway to prepare the witness statements, therefore we suggested Monday 4:30pm or Tuesday morning if we get your instructions by tomorrow”.

 

1. Mr Salfiti said that there were many telephone calls with people at the Embassy, Mr Alkhader, Mr Hajar and Ms Kramer, a secretary. The Embassy were informed of steps taken by the solicitors and “on no occasion did the Embassy dispute their instructions or state :that the firm was acting from its own motion”. Embassy officials attended Mr Salfiti’ s offices on 18 December 2003 to meet with Mr Salfiti. Mr Alkhader submitted his witness statement which was duly served. Working on the file was not easy because of the lack of co-operation from the clients. Their attitude was that the appellant had no grounds for complaint. On no occasion did the Embassy state that they were unaware of the steps taken in the employment tribunal. Mr Salfiti said that he is unable to understand how Embassy staff can say that they did not instruct his firm to defend the complaint. They continued to maintain that position up to the date of the hearing. He does not understand how they can say that they had no knowledge of what the hearing on 19 December 2003 was about.

 

1. Mr Laddie submits that the EAT should have asked whether the witness statements they relied on were inherently credible and whether they were consistent with the documentation. They should have considered whether the solicitors did act without instructions, as Embassy staff have claimed. Solicitor and counsel had been . instructed by the respondents. They appeared at the hearing before the employment tribunal on 19 December 2003 with Mr Alkhader, the administrative attaché at the Embassy, whose English, Mr Salfiti says, is good. When the question of immunity was raised at the hearing, it was not on the basis that the solicitors lacked instructions to take a step in the proceedings but on the basis that the respondents were unaware of the facts. It is inconceivable, submits Mr Laddie, that Embassy staff were unaware of the respondents’ right to immunity under Section 1 of the 1978 Act. The Ambassador was clearly involved in the case and, on the day before the hearing, had visited the solicitor’s offices. On the facts, the respondents must be deemed to have taken a step in the proceedings and thereby to have submitted to the jurisdiction. Alternatively, it was necessary to resolve the major dispute of fact which had arisen.

 

State immunity

1. The classical statement of the rationale of jurisdictional immunity is that of Marshall CJ in the United States Supreme Court in The Schooner Exchange v McFaddon [1812] 7 Cranch 116:

 

“This full and absolute territorial jurisdiction being alike the attribute of every sovereign, and being incapable of conferring extra-territorial power, 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 or 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.

This perfect equality and absolute independence of sovereigns, and this common interest compelling them to mutual intercourse, and an interchange of good offices with each other, have given rise to a class of cases in which every sovereign is understood to waive the exercise of a part of that complete exclusive territorial jurisdiction, which has been stated to be the attribute of every nation.”

1. Commenting on Marshall CJ’s analysis, Professor Brownlie QC stated in Public International Law (6^th Edition, 2003):

 

“The rationale rests equally on the dignity of the foreign nation, its organs and representatives, and on the functional need To Whom It May Concern: leave them unencumbered m the pursuit of their mission.”

1. The doctrine of state immunity was considered by the European Court of Human Rights in Fogarty v United Kingdom (2002) 34 EHRR 12, where it was argued that the 1978 Act violated Article 6 of the European Convention of Human Rights. The court stated, at paragraph 26:

 

“It notes that an action against a State is not barred in limine; if the defendant State does not choose to claim immunity; the action will proceed to a hearing and judgment, as occurred with the first discrimination action brought by the applicant.”

and at paragraph 34:

“The court must first examine whether the limitation pursued a legitimate aim. It notes in this connection that sovereign immunity is a concept of international law, developed out of the principle par in parem non habet imperium, by virtue of which one State shall not be subject to the jurisdiction of another State. The Court considers that the grant of sovereign immunity to a State in civil proceedings pursues the legitimate aim of complying with international law to promote comity and good relations between States through the respect of another State’s sovereignty.”

1. The Court went on to consider whether the restriction on a right of action was proportionate to the aim pursued, deciding that United Kingdom practice did not fall outside “any currently accepted international standards” (paragraph 37). By sixteen votes to one, it was held that there was no violation of Article 6 ..

 

1. As to the 1978 Act, Lord Diplock, in Alcom v Republic of Columbia [1984] 1 AC 580 at 587 stated:

 

“The Act, as its short title indicates, deals primarily with relations between sovereign states, though its provisions are capable of extension by Order in Council to relations between the United Kingdom and the constituent territories of federal states. Accordingly its provisions fall to be construed against the background of those principles of public international law as are generally recognised by the family of nations.”

and, at p 600:

“The State Immunity Act 1978, whose long title states as -its first purpose to make new provision with respect of proceedings in the United Kingdom by or against other states, purports in Part I to deal comprehensively with the jurisdiction of courts of law in the United Kingdom both (1) to adjudicate upon claims against foreign states (“adjudicative jurisdiction”); and (2) to enforce by legal process (“enforcement jurisdiction”) judgments pronounced and orders made in the exercise of their adjudicative jurisdiction.”

1. In R v Bow Street Magistrate. Ex p. Pinochet (No.3) [2000] 1 AC 147, 1999] UKHL 17 ; Lord Goff of Chieveley, at p209, stated that “there can be no doubt, in my opinion, that the [1978] Act is intended to’ provide the sole source of English law on this topic [state immunity]” and in Al-Adsani v Government of Kuwait 107 ILR 536, at p542, Stuart Smith LJ described the Act as “a comprehensive code.”

 

1. Of course I accept those statements of principle but the word ‘state’ is not defined in the 1978 Act. Section 2 does not condescend to ·detail on how it is to be determined whether the “state”, and the statehood of the Republic of Yemen is not of course in question, is deemed to have submitted to the jurisdiction under section 2(3 )(b).

 

1. Sections 2(1)(3) and (5) reflect Article 3(1) of the European Convention of State Immunity (1972) which provides:

 

“A Contracting State cannot claim immunity from the jurisdiction of a court of another Contracting State if, before claiming immunity, it takes any step in the proceedings relating to the merits. However, if the State satisfies the Court that it could not have acquired knowledge of facts on which a claim to immunity can be based until after it has taken such step, it can . claim immunity based on these facts if it does so at the earliest possible moment.”

1. That provision does not throw light on the present issue. It is necessary to look to pre1978 Act authority to seek guidance on what amounts to a step in the proceedings by a state, the point not being dealt with in the Convention or the statute.

 

1. The International Law Commission’s (“ILC”) Final Draft Articles and Commentary on Jurisdictional Immunity of States and their Properties (1991) provide in Article 1 that “the present articles apply to the immunity of a State and its property from the jurisdiction of the courts of another State”. Article 2 provides:

 

” 1. For the purposes of the present articles:

(a) …

(b) “State” means:

(i) the State and its various organs of government;

(ii) the constituent units of a federal State;

(iii) political subdivisions of the State which are entitled to perform acts in the exercise of the sovereign authority of the State;

(iv) agencies or instrumentalities of the State and other entities, to the extent that they are entitled to perform acts in the exercise of the sovereign authority of the State;

(v) representative of the State acting in that capacity; “

1. The ILC’s commentary on Article 2 states that the first of the above categories includes “missions representing the state, including diplomatic missions” and category (v) is said to include “ambassadors, heads of mission, diplomatic agents and consular officials in their representative capacity”. This definition does not deal with the mechanism by which the authority of the state is exercised but it does not suggest that there should be. a restrictive approach to the actions of diplomatic missions or agents.

 

1. In Baccus S.R.L v Servicio Nacional Del Trigo [1958] 1 QB 438, the defendant organisation carried on business from Spain and was sued in England for damages for breach of a commercial contract. An appearance was entered by their solicitors in London and a consent order made for security for the organisation’s costs. These steps were taken on the instructions of the head of the organisation, Mr Cavero, who was a senior civil servant, without the Minister of Agriculture knowing of them. Eighteen months after the writ was served, steps were taken to stay proceedings on the ground that the organisation was a department of the Spanish Ministry of Agriculture.

 

1. It was held in this court, by a majority, first, that the defendants were a department of the State of Spain and entitled to claim immunity and, secondly, that there could be no submission to the jurisdiction unless it were made by a person with knowledge of the right to be waived and with the authority of the foreign sovereign.

 

1. Dealing with the second point, Jenkins LJ referred to the The Jassy [1906] P 270 where process by way of arrest in a damages action in rem was taken against a vessel the property of a foreign state. Proceedings were stayed and no waiver of the state’s privilege assumed even though agents of the state, under a misapprehension, and in order to procure the release of the vessel, had given an undertaking to put in bail and had entered an absolute appearance. The action was dismissed.

 

1. Jenkins LJ also referred to the decision of Astbury J in In re Republic of Bolivia Exploration Syndicate Ltd [1914] 1 Ch.139. That was a case under the Diplomatic Privileges Act 1708 but Jenkins LJ commented that “if anything the protection afforded to diplomatic personnel under the Act cannot be regarded as superior to the degree of protection afforded to the foreign sovereign”. Astbury J stated at p142:

 

“Even if it were conceivable that a diplomatic agent can waive his privilege, which is really the privilege of his sovereign, he can only do so intentionally, with full knowledge of his rights, and with the sanction of his sovereign or legation.”

Having referred to those cases, Jenkins LJ stated:

“Applying those authorities to the present case it seems to me that the evidence here, and in particular the evidence of the ambassador, .makes it reasonably plain that Mr Cavero knew nothing about sovereign immunity, or at all events, had no idea that by entering an appearance the defendants would· be giving up any advantage or; in particular, any right to claim immunity which they might otherwise have. Furthermore, Mr Cavero’s superiors knew nothing about the matter at all until after the acts relied on as submissions to the jurisdiction had taken place. It seems to me, therefore, that what was done here was done by Mr Cavero without the knowledge of any of his superiors, in ignorance of his rights and without actual authority inasmuch as I think the evidence shows that the authority of the Minister of Agriculture would in fact have been necessary to enable Mr Cavero to submit to the jurisdiction.”

Parker LJ stated, at p4 73:

“Like Jenkins LJ, I confess that at first impression it seemed to me remarkable if the true view was that the State of Spain had not submitted to the jurisdiction. Not only was there an unconditional appearance entered on the instructions of the head of this body, Senor Cavero, himself a senior civil servant, but again on his instructions security for costs was asked for and obtained; and it was not until the writ had been served for some 18 months that any steps were taken to stay the proceedings. I am satisfied, however, as the result of Mr Kerr’s argument and the cases to which he has referred, that there can be no submission in such a case as this unless it is made by a person with knowledge of the right to be waived, with knowledge of the effect of our law of procedure, and with the authority of the foreign sovereign. As Mr Kerr pointed out, proceedings against a foreign sovereign are wholly void.”

1. Parker LJ referred to Brett LJ’s statement in the Parlement BeIge 5PD 197, which, by reference to Lord Campbell in De Haber v The Queen of Portugal(1951) 17 QB 171, stated that “the immunity of the sovereign as is as least as great as the immunity of an ambassador,” Parker LJ added, at p474:

 

“In those circumstances it does seem to me that it requires some solemn act of the foreign sovereign to bring to life something which is otherwise completely dead; and, without referring to the cases, I think that The Jassy and the case before Astbury J., In re Republic of Bolivia Exploration Syndicate Ltd., support that view. So far as this case is concerned, it is true that we have not had the benefit of an affidavit from Senor Cavero, but for my part I cannot impute to him knowledge of the effect of entering an unconditional appearance. Quite apart from that, it seems to me that the evidence is clear that although he is the person, the intermediary, to pass on instructions to English solicitors to deal with a case in England, he is bound to consult the appropriate minister as to whether sovereign immunity should be waived or not. It is true this does open up the rather alarming prospect that a foreign sovereign may allow proceedings to continue for years in this country before taking the point; but for my part I think that that is a theoretical difficulty. I do not think any person, even though he be a foreign sovereign, would be likely to be believed if in such an extreme case he were to come forward and assert that he had had no knowledge whatever of the proceedings. So far, however, as this case is concerned, I am satisfied that the point has been properly taken and that there has been no waiver.”

1. Singleton LJ dissented on the ground (P464) that the state had created the organisation as a legal entity to trade with citizens and corporate bodies in other countries and that Mr Carvero was acting in the ordinary course of business left to him. That being so, he had, on behalf of the state, waived the state’s right to claim immunity.

 

1. The decision in Baccus was taken upon a consideration of the evidence. Jenkins LJ referred to the evidence of the Ambassador. Parker LJ considered the possibility of a defence of sovereign immunity being raised after proceedings had continued for years and stated that a foreign sovereign who asserted that he had had no knowledge of the proceedings was unlikely to be believed, a conclusion which could be reached only after having considered the evidence. In Krajina v The Tass Agency [1949] 2 All ER 274, Tucker LJ stated, at p281H, that the certificate of the Ambassador of the state claiming immunity through an organisation “is not conclusive of the matter, though, no doubt, it is evidence of very high evidential value, and, in a matter of this kind, I think it is probably the best kind of evidence that can be procured”. Moreover, both in Baccus and in Trendtex Trading Corporation v Central Bank of Nigeria [1977] QB 529, evidence of the status and function of the relevant organisation was considered in detail before a decision was taken as to whether it was an emanation or department of the state.

 

1. In R v Madan [1961] QB 1, a clerk on the staff of the High Commissioner for India, who was entitled to diplomatic immunity, purported to waive his immunity when charged with attempting to obtain a sum of money by false pretences. He was convicted at the County of London Sessions. His conviction was quashed in the Court of Criminal Appeal on the ground that there had been no valid waiver of diplomatic immunity and the proceedings had been without jurisdiction and were a nullity. In that context, Lord Parker CJ, Chief Justice, stated, at page 7:

 

“Certain things are, we think, clear. In the first place, it is not for someone who is entitled to diplomatic immunity to claim it . in the courts. It is unnecessary to refer to the authorities, but we think it is clear that proceedings brought against somebody, certainly civil proceedings brought against somebody entitled to diplomatic immunity, are, in fact, proceedings without jurisdiction and null and void, unless and until there is a valid waiver which, as it were, would bring the proceedings to life and give jurisdiction to the court. Moreover, it is clear that that waiver must be a waiver by a person with full knowledge of his rights, and a waiver by or on behalf of the chief representative of the State in question. In other words, it is not the. person entitled to a privilege who may waive it, unless, of course, he does so as agent for or on behalf of the representative of the country concerned; it must be the waiver of the representative of the State.

That was stated in the context of diplomatic immunity under the Diplomatic Immunity (Commonwealth Countries & Republic of Ireland) Act 1952 but in my judgment is of general application, including upon a consideration of waiver of state immunity under the 1978 Act.

1. The other principle to be considered is the principle that the discretion of the EAT to allow a new or conceded point of law to be raised before it should be exercised only in exceptional circumstances. When stating in Jones v Governing Body of Burdett Coutts School [1999] ICR 38,[1998] EWCA Civ 602, at page 47, that “if a point of law goes to jurisdiction, that may be a good reason,” Robert Walker LJ cited the judgment of Widgery LJ in Wilson v Liverpool Corporation [1971] 1 WLR 302, at p307. The court should follow:

 

“the well known rule of practice that if a point is not taken in the court of trial, it cannot be taken in the appeal court unless that court is in possession of all the material necessary to enable it to dispose of the matter finally, without injustice to the other party, and without recourse to a further hearing below.”

1. That principle cannot override the right of a state to claim before the higher court that what might have appeared to be a submission to the jurisdiction was not a submission because the step or steps in the proceedings were not taken by the state. Further, whether the state has taken a step in the proceedings and thereby submitted can, in present circumstances, only be decided upon a consideration of evidence.

 

1. The following principles emerge:

(a) When state immunity is claimed in appellate proceedings, the court may consider evidence called to substantiate such claim because, if substantiated, the court below had no jurisdiction to hear the case.

(b) In a case where the other party claims that there has been a waiver of immunity, the court should scrutinise the available evidence.

(c) Whether the issue is as to the status of the entity claimed to be an emanation of the state or as to a claimed· waiver of immunity, the evidence of the Ambassador, as representative of the state, is important but not necessarily conclusive evidence of the relevant matters.

1. That finding does not involve criticism of the employment tribunal for proceeding as they did in the circumstances known to them. Solicitors normally act on instructions from their client and the tribunal were entitled to proceed on the basis that the solicitors and counsel had instructions from the state that, subject to section 2(5) of the 1978 Act, a step in the proceedings had been taken.

 

The alleged waiver

1. I agree with the analysis of Section 2(7) in Dickinson, Lindsay and Loonam’s ‘State Immunity: Selected Materials and Commentary’ (2Q04) at paragraph 4.024:

 

“This deeming provision appears to have been intended to resolve doubt as to whether the persons listed have authority to submit. In other cases, the authority of the State’s representatives must be established by evidence, if challenged. In such cases, there can be no question of ostensible authority, this being a species of estoppel and incapable therefore of extending the court’s jurisdiction.”

1. It is necessary to consider how the deemed authority of the head of mission may be exercised. The decision in Propend Finance Ltd v Sing (1996-97) 111 ILR 611, cited in a footnote to the. passage, did not involve consideration of the role of a head of mission

 

1. Section 1 (2) of the 1978 Act demonstrates the importance which the law attaches to the principle of state immunity from jurisdiction but, beyond that, does not bear upon the meaning to be ascribed to the word “state” in Section 2 of the Act. The issue turns upon the meaning to be given to that word in Section 2(3). Section 2(7) throws light on the meaning of the word “state” in that sub-section to the extent that the head of the state’s diplomatic mission shall be deemed to have authority to submit on behalf of the state in respect of any proceedings. By deeming the existence of authority in the head of mission, the statute has clarified a point which may previously have been uncertain, though it does not follow that there is no other way in which a state can submit to the jurisdiction. That is common ground. However, if it is to be a step by the state in the proceedings, as contemplated in Section 2(3 )(b), action taken by a member of the diplomatic mission (or solicitors instructed by the mission), must in my view be taken with the authority of the head of mission or the person for the time being performing his (or her) functions. The head of mission has deemed authority to submit under Section 2(7) and that includes authority to delegate, in my view. What arises from the head of mission’s own authority to submit, provided by the subsection, is that action by a member of the mission authorised by him is the action of the state, within the meaning of Section 2. The head of mission may confer authority on a member of his mission or a solicitor instructed by the mission. I do not accept that, for the purposes of section 2(3) he could do so only on the specific instructions of his government. That would be to derogate from the authority which section 2 deems him to have. The relevant action need not be taken personally by the head of mission; he (or she) need only have authorised it.

 

1. Section 2(3) should, however, be read in the light of authority of long standing establishing the importance of state immunity and the importance of its not being waived except with appropriate authority. The fact that the step in proceedings alleged to constitute the waiver is taken by solicitors instructed by the Embassy does not conclude the matter. A. solicitor acting without authority cannot waive the immunity. The solicitor’s actions establish a waiver only if they have been authorised by the state, which includes authority exercised or conferred by the head of the State’s diplomatic· mission. That would include a step authorised by the head of mission himself or herself .. Authority may be conferred on the solicitors either directly or, in my view, indirectly by a member of the mission authorised by the head of mission to do so.

 

1. The issue is not in my view concluded against the appellant by his failure to appear before the EAT. Had he appeared before the EAT in person, it is most unlikely that he could have taken any effective action. The duty to scrutinise the fresh material admitted by the EA T arose even though the respondent was not present or represented, and that duty was not performed.

 

1. I do not consider that the doctrine of ostensible authority applies either to the solicitors or to Mr Alkhader or that jurisdiction can be created by an estoppel. The state has protection against unauthorised action taken by a solicitor or member of the mission. The respondents were entitled, in the circumstances, to assert before the EAT that there had been no waiver of immunity under section 2, and hence no jurisdiction because the earlier steps in the proceedings were not steps taken by the state. As already noted, it is necessary to determine the factual issue arising in order to decide whether there has been a waiver under section 2. It would be open to the fact-finding tribunal to infer from all the circumstances that Mr Alkhader was acting with the authority of the head of mission in his dealings with the solicitor and to infer that, through Mr Alkhader, the solicitor was authorised to act as he did. If that happened, the state has taken the step or steps and is deemed to have submitted.· The same process of reasoning applies to the steps taken after the employment tribunal’s decision as to jurisdiction as to the steps before the decision. The court is entitled to expect that a state which does not wish to have its authorisation procedures enquired into by the fact-finding tribunal will put in place readily ascertainable procedures for waiver.

 

1. I do not read Mummery 1’s statement in Gamal-Eldin as discharging the higher court from all obligation to make enquiry into the facts, including whether there has been a submission to jurisdiction. Mummery J referred to immunity “in fact enjoyed” by the state and to “all the relevant evidence”. On the material before the EAT there was an issue as to whether the immunity was “in fact enjoyed” or had been waived and as to whether “all the relevant evidence” had been provided. There was a duty to enquire .. That possible issue does not arise in the present case.

 

1. I would add that the duty of the courts under the 1978 Act to enquire is not confined

to whether, under section 2, the state has submitted to the jurisdiction of the courts. Under section 1(2) effect must be given to the immunity conferred by section 1(1) even though the state does not appear in the proceedings. It follows that where a party to proceedings may be a state, within the meaning of the statute, enquiry is necessary into whether the entity party to the proceedings, though ·not present, has that status.

Conclusions

1. The EAT should in my view have remitted for decision by the fact-finding tribunal the preliminary point as to whether immunity had been waived. They had substantial material before them, including the proceedings before the employment tribunal, at which the respondents were represented by solicitor and counsel, with a member of the mission present. The Ambassador had been at the solicitor’s office on the previous day. On the material before them, there was a real issue as to whether there had been a waiver of immunity under Section 2 of the 1978 Act. They should not have concluded that it was so obvious that immunity applied that enquiry into the facts was unnecessary. Enquiry should have been made even though the appellant, who had a decision in his favour, was not present or represented at the hearing.

 

1. Thus:

a) When state immunity was claimed before the EAT, the EAT was correct t9 enquire into whether the state had taken a step in the proceedings under Section 2(3) and (5).

b) In doing so, the approach to be adopted is that of the majority in Baccus.

c) The EAT was entitled to consider fresh evidence to decide whether the immunity granted by section 1 of the 1978 Act had been waived by such a step.

d) On the material before the EAT, the position was far from clear and a fact-finding exercise was required.

e) The employment tribunal was the appropriate fact-finding tribunal and the case should have been remitted to that tribunal.

f) On the facts of this case, the step or steps in the proceedings were steps taken by the state if, but only if, taken or authorised by the head of mission, directly or indirectly as explained in paragraphs 55 and 56 above.

1. I would allow the appeal and remit the case to an employment tribunal to consider the evidence on waiver afresh on the basis of the principles stated.

 

Lord Justice Sedley:

1. I agree.

Lord Justice Gage:

1. I also agree.