This article is authored by Adv. Ishani Samajpati. It discusses the concept of the doctrine of sovereign immunity, including its categories and development. It also gives a detailed view of sovereign immunity under Indian legal provisions and briefly discusses situations where sovereign immunity has no effect and sovereign immunity during the enforcement of awards in legal proceedings.

Introduction

The king can do no wrong, so there is no question of suing him, even in a distant dream. Sounds impossible? In the age of thriving democracy and human rights, it may be unthinkable, but once upon a time, it was considered as true as the gospel. While most of the countries in the world do not have monarchies anymore, the idea that a king can do no wrong has left its mark in modern democracies. Yes, it gave rise to the doctrine of legal immunity – the doctrine of sovereign immunity.

The concept of sovereign immunity has its roots in the British common law doctrine. It was incorporated into the Indian legal scenario with the British Raj in India. In modern times, with the Indian courts emphasising the guarantee of fundamental rights, it has rendered the doctrine of sovereign immunity almost ineffective.

Origin of sovereign immunity in India

The doctrine of sovereign immunity is a centuries-old concept prevalent in Roman law which can be traced back to the time of the Justinian Code of Corpus Juris (6th century BC.) The concept of sovereign immunity can be attributed to the fact that monarchs have absolute and unlimited power. The doctrine became an integral concept of the British Crown, which enjoyed absolute power. A scholarly article published in the Louisiana Law Review suggests that from the 13th century on, there is some historical evidence that Edward I the King might have been sued. As England slowly proceeded towards democracy in the coming centuries, the legality of the doctrine changed thoroughly. 

Unfortunately, not much information is available on the existence or non-existence of the doctrine of sovereign immunity in India during the times of ancient dynasties and Islamic rules. Some researchers suggest that the Indian tribal courts might have used the doctrine. Commonly, it is said that the doctrine came into force with the establishment of the British Raj in India.

In modern times, however, the doctrine has been left almost in fructuous by the enforcement of constitutional values and fundamental rights guaranteed by the Constitution, since both are contradictory to each other. The existence of foreign state immunity is still there and is governed by Section 86 of the Civil Procedure Code, 1908, discussed later in this article.

Features of sovereign immunity

The essential features of sovereign immunity are as follows:

Inviolability 

The doctrine of sovereign immunity is an inviolable doctrine, which means sovereign immunity cannot be infringed, dishonoured or violated. It is a legal doctrine which states that a sovereign state has immunity from being sued. Moreover, it also states that the states can commit no wrong and therefore, they are immune from civil or criminal suits and paying damages. The states often use the doctrine of sovereign immunity to safeguard them from a foreign court exercising its jurisdiction or to pay damages. It sometimes works as a “procedural shield” for the states. States also have immunity from execution under sovereign immunity, and Dautaj notes metaphorically, “Sovereign immunity from execution is said to be “the last fortress, the last bastion of sovereign immunity”.” There is also an almost similar immunity available to states that is only applicable to foreign courts, known as state immunity. The difference between both has been discussed later.

However, there are exceptions to sovereign immunity. There are situations where sovereign immunity is not applicable. There are also criticisms of sovereign immunity. Some term this as a justification of legal wrongs done by a state. The article is just a humble attempt to delve into the doctrine of sovereign immunity, including its definition, forms, origin, historical development, sovereign immunity under international law and in various countries including India, its exceptions and criticisms. 

A form of immunity

In simple words, sovereign immunity is a legal doctrine which states that a sovereign or state can do no legal wrong and therefore is immune from civil suits. By this doctrine, states are also protected from being prosecuted criminally. It is also known as crown immunity because the doctrine originated from British common law. The British common law doctrine states that kings can do no wrong. In a modern context, sovereign immunity states that a government cannot be sued without its consent, or even if the government has been sued, the foreign courts cannot exercise their jurisdiction to rule or make them liable for damages. 

According to the doctrine of sovereign immunity, a state is legally immune to judicial rulings in foreign countries. Sovereign immunity is treated as an important concept in customary international law (unwritten laws, principles, and practices accepted as parts of public international law), and it is also present in the legal provisions of certain countries, including India. 

Sovereign immunity in international law

There is no exact or uniform definition of sovereign immunity. In customary international law, it is commonly termed as an important principle by which a sovereign state is protected from being sued without its consent in the courts of another sovereign state. It can also be defined as an “exemption” of a sovereign state from the jurisdictional authorities of courts in another sovereign state. This doctrine is based on the principle of equality of all sovereign states, as mentioned in the Charter of the United Nations of 1945. 

Related legal maxims

The concept of sovereign immunity is also expressed in the popular legal maxim Par in parem non habet imperium, a Latin maxim which literally means that equal power has no sovereignty over each other. It means that a sovereign state, including its legal bodies, cannot exercise its jurisdiction over another. 

Another important legal maxim relating to sovereign immunity is rex non potest peccare, which states that a king can do no wrong and has its roots in the British common law.

Sovereign and non-sovereign functions of states

The doctrine of sovereign immunity protects a state from lawsuits. It also provides immunity against challenging wrong decisions by the government on grounds of public policy. This doctrine advocates that the state cannot be prosecuted due to its sovereign nature.

However, in India, particularly post-independence, the concept slowly changed, and the courts started accepting legitimate claims against the state so the victim could get remedies. Hence, the scope and applicability of sovereign immunity in the Indian context kept shrinking. In such a way, the sovereign functions of the state also started getting reduced. Now, the application of the doctrine depends on the functions performed by a state, which are divided in terms of sovereign and non-sovereign categories. Let us discuss both under different headings.

Sovereign functions performed by the state

Sovereign functions of a state can be defined as those functions for which the state cannot be sued in a court of law. Sovereign functions of a state include:

• defence-related matters of the state, 
• matters and activities pertaining to the armed forces, 
• declaring peace or war, 
• foreign affairs, 
• retaining or acquiring territories etc. 

The state can perform these functions without being accountable to ordinary civil courts. However, there are some sovereign functions that are not completely inalienable from the jurisdictions of courts. These functions include:

• revenue and taxation, 
• maintenance of law and order, 
• police forces, 
• various legislative functions, including administration of law and implementation of policies, grant of pardon, arrest and detention, etc.

Non-sovereign functions performed by the state

In simple words, a state can be sued in a court of law for its non-sovereign functions. Non-sovereign functions are those functions that a private individual may perform without any specific government authority. The state has tortious liability for any “acts of commission or omission’, which may be either voluntary or involuntary. 

It must be noted that the fine line of differences between the sovereign and non-sovereign functions of a state is extremely difficult to distinguish. Some cases dating from British-ruled India have elaborated on this fact very well. The absolute immunity of the Crown was never well accepted in India, and hence it was challenged multiple times, even during the rule of the East India Company. The John Stuart’s case, 1775 is the first example where the judiciary interpreted state liability during the rule of the East India Company. In another similar case, namely,  Moodaly v. The East India Company (1785), the Privy Council held that the common law doctrine of sovereign immunity has no applicability in India.

The most landmark case in this regard is the case of Peninsular and Oriental Steam Navigation Co. v. Secretary of State for India (1861). In addition to confirming that sovereign immunity has no applicability in India, it also differentiated between the sovereign and non-sovereign functions performed by a state.

The case is clearly a pre-Constitution case and is under Section 65 of the Government of India Act, 1858. An employee of the plaintiff company was travelling in a horse-drawn coach belonging to the plaintiff company in Calcutta. While it was passing through the Kidderpore dockyard, an accident occurred due to the negligence of government employees. The plaintiff company sued the government, claiming compensation and holding the government liable since the government was responsible for maintaining the dockyard.

Peacock, CJ, in this case, gave a landmark judgment in contrast to the doctrine of sovereign immunity. The government was found to be liable since the maintenance of the dockyard was held to be a non-sovereign function of the state.  

Types of sovereign immunity 

In most national infrastructural projects, the awarding authority is a government authority that may benefit from it. There may be some legislation in some sovereign states which waives the sovereign immunity of the said state for a specific infrastructural project. 

However, this is not universal, and private operators should check for it. The state can waive both types of immunities through the presence of a sovereign immunity waiver clause present in the contract between state and private individuals.

In cases of dispute, states generally get the benefit of the two types of immunity as follows:

Immunity to jurisdiction

Immunity to jurisdiction protects a state from being sued in the courts of another foreign state. Hence, the courts in the foreign state have no jurisdiction over the said state. Hence, the state entities have jurisdictional immunity. Only the state in question can waive its immunity.

Referring the disputes to international arbitration may be a form of waiving jurisdictional immunity by states. According to the World Bank, some states may hesitate to go for international arbitration due to the apparent dominance of western principles, which may not give them a chance of a fair hearing. In such cases, they can opt for arbitration under the UNCITRAL Rules, which are comparatively culturally neutral.

Immunity from execution 

When a state has immunity from execution, the courts of another country cannot seize their properties and assets. The state can also waive this immunity, though it is comparatively complex compared to waiving state immunity. Therefore, the general proposition for immunity from execution is that certain assets of the state are not made available to satisfy the arbitration award, such as the foreign embassies or consular possessions of the said state.

Categories of sovereign immunity 

The issue of sovereign immunity is itself complex. It gets more complex because there is no uniform jurisdictional approach to this. These issues have also been acknowledged by the Organization for Economic Cooperation and Development (OECD). In a research paper published by the OECD titled “Foreign Government-Controlled Investors and Recipient Country Investment Policies: A Scoping Paper”, it was noted that the diversity of different national laws and their jurisprudence makes it harder for foreign government investors to predict “the extent of foreign sovereign immunity.” According to the OECD, the doctrine of sovereign immunity is not only available to the sovereign state; it can also be used to protect the various organs of a state, such as the executive, legislature, and judiciary.  

Clearly, the doctrine of sovereign immunity protects a sovereign state from the legal and judicial proceedings taking place in the national courts of another sovereign state.

Sovereign immunity can be categorised jurisdictionally into local and foreign sovereign immunity. Based on the extent of sovereign immunity, it can also be categorised into absolute sovereign immunity and restrictive sovereign immunity. 

Sovereign immunity based on jurisdiction

Sovereign immunity is available both locally and internationally, i.e., it is available within the territories of a state and outside the territories of a state. Based on jurisdiction, sovereign immunity is of two types.

Local sovereign immunity

The concept of local sovereign immunity is more common in the US. It is a form of sovereign immunity that protects local governments from federal lawsuits. It is also known as state sovereign immunity. Even when the government or its agents violate federal constitutional rights, a very stringent causation is required to file a suit against the government. This requirement often prevents or prohibits recoveries from local governments. The requirement of stringent causation is rooted in state sovereignty jurisprudence. Additionally, local state actors also have qualified and absolute immunities, which originated from the doctrine of sovereign immunity.

Under the doctrine of state sovereign immunity, a person cannot bring a federal lawsuit for damages against a state without its consent. In the case of Alden v. Maine, 527 U.S. 706 (1999), it was held that a plaintiff cannot bring a federal lawsuit in a state court when sovereign immunity would prevent him from filing a lawsuit in federal court. The Eleventh Amendment of the US Constitution mentions state sovereign immunity. State sovereign immunity also contains “anti-commandeering,” which means that the federal government cannot  “commandeer” state resources or personnel for federal purposes. The Tenth Amendment of the US Constitution affirms this.

The US has the Federal Tort Claims Act (FTCA) of 1946. The FTCA allows private individuals to file suits against the US for torts committed by officials acting on behalf of the US government. It waives the sovereign immunity of the US government by allowing its citizens to pursue tort claims against the government. 

Foreign sovereign immunity

Foreign sovereign immunity is the immunity available to a foreign sovereign state. States often claim this defence to prevent a court of another foreign state from using its jurisdictions or from attaching or executing against its property. Thus, the factor of foreign sovereign immunity is one of the important factors a state considers before dealing with commercial activities with foreign states or any of its entities. Otherwise, if any commercial dispute arises with the foreign state, the state may suffer serious harm. Another point the states must note before entering into a commercial agreement is that there are different jurisdictional approaches by different states to sovereign immunity. So the factor of jurisdiction regarding sovereign immunity should be considered.

Foreign sovereign immunity may act as a bar to executing international arbitral awards. In such a case, it acts as a jurisdictional doctrine which prevents the national courts of a sovereign state from exercising their jurisdiction over another state. 

Sovereign immunity based on extent

As already mentioned, sovereign immunity based on extent is mainly of two types. They are absolute immunity and restrictive sovereign immunity. Absolute sovereign immunity provides immunity to the acts done by a sovereign state or its organs from any type of judicial or arbitral proceedings against the state, hence making the sovereign immunity absolute. On the other hand, restrictive immunity does not provide immunity to the state from all judicial or arbitral proceedings. It only guarantees that the commercial activities and related agreements of a sovereign state are immune from judicial or arbitral proceedings.

Absolute sovereign immunity

It is a form of sovereign immunity in which all actions of a state or its agencies, irrespective of the nature of dispute, transaction, or purpose, are protected by immunity. Under the principle of absolute sovereign immunity, a sovereign state cannot be sued for its own actions or those of its agencies. Consequently, a sovereign state seeks this defence when it defaults on a commercial agreement made with a foreign private person or with a state. The only exceptional situation where one can bring a suit against the state is when the state waives its immunity. The state may consent to waive its immunity. Otherwise, it cannot be sued in a foreign court.

The principle of absolute sovereign immunity can be traced back to the 18th and 19th centuries. It was logical at that time since the role of sovereign states was purely administrative and political, and they engaged in little interstate commercial activity, particularly agreements with warranties to enforce commercial contracts. So, it was considered that irrespective of the circumstances, a sovereign state is not answerable for its actions in foreign courts, and the courts have no jurisdictional authority.

Two landmark cases where judicial pronouncements were made in favour of this principle are Schooner Exchange v. McFaddon, 11 U.S. 116 (1812), a US case,  and the English case of Parlement Belge (1878). Both cases are related to a vessel of war and a Belgian ship, respectively. In the first case, it was held that a vessel of war of a foreign state is exempted from the jurisdiction of US courts. Similarly, in the English case, the Belgian ship was protected by the principles of absolute immunity, and English courts had no jurisdiction over it. Thus, both commercial and non-commercial activities of a state were held to be protected by the doctrine of absolute immunity.

In modern times, instead of absolute sovereign immunity, the concept of restrictive sovereign immunity is used, which offers immunity to particular activities of a state, and most developed states have adopted this doctrine. However, jurisdictions like China still use the doctrine of absolute immunity, even though there has been a recent change in its policy.

Restrictive sovereign immunity

Socialist states and state-owned entities began emerging at the end of World War II. Till then, the doctrine of absolute sovereign immunity was in use. However, as the sovereign states started taking part in global trade and became parties to several commercial activities, absolute immunity posed a problem in cases of disputes arising between them. So, the principles of absolute sovereign immunity were considered impractical. Thus, there was a dire need for a new theory which would benefit the commercial activities of the sovereign states. It resulted in the doctrine of restrictive sovereign immunity to emerge.

The theory of restrictive sovereign immunity states that the sovereign immunity of a state will not be applicable to commercial agreements made with private individuals or with another sovereign state. So, if a state enters into a commercial agreement with such entities, the state can be sued if there is a breach of the commercial agreement on the part of the state.

Sovereign states may enact certain statutes regarding their stance on restrictive immunity. For example, in the US, the Foreign Sovereign Immunities Act of 1976 (FSIA) mentions the conditions under which a foreign state should be immune from lawsuits. On the other hand, 28 U.S. Code § 1605 of the Act also mentions the exceptions where the foreign state will be immune from being sued in the US courts, particularly in situations regarding commercial transactions in the US or transactions which have a direct effect on the US. The State Immunity Act of 1978 (SIA) of the UK is another example of such an Act.

Even though many countries have separate statutes regarding restrictive immunity, India does not have any comprehensive statutes, though it has been briefly mentioned in some of the legal provisions discussed in this article. 

Qualified immunity

Another type of immunity which is available in the US is qualified immunity. It has roots in the doctrine of sovereign immunity. It provides government officials (particularly law enforcement officials such as police) with optional or discretionary immunity from lawsuits for damages unless the plaintiff can prove that the official violated “clearly established statutory or constitutional rights of which a reasonable person would have known”, as held in the case of Harlow v. Fitzgerald, 457 U.S. 800, 818 (1982). To determine whether a right was clearly established, the courts analyse the situation hypothetically. It is examined whether the official could have known that his action violated the plaintiff’s rights.

In a lawsuit for qualified immunity, first, the plaintiff files an action against the official under the Civil Rights Act of 1871 (commonly known as Section 1983). The government official, in this case, raises the defence of qualified immunity, which protects him. It is not immunity to pay monetary damages only, but immunity from going through trial at all.

It is only applicable to government officials as individuals; the defence is not available if the plaintiff files a suit for damages against the government for the wrongdoing of its officials. 

The doctrine of qualified immunity was first introduced by the US Supreme Court in the case of Pierson v. Ray, 386 U.S. 547 (1967). According to some legal scholars, the doctrine was introduced to protect law enforcement officials from frivolous cases, particularly in a situation where they acted in good faith or because of larger public interests. In recent times, with many incidents of alleged unjustified acts by law enforcement officials, the doctrine of qualified immunity has become a source of controversy.

Sovereign immunity from legal proceedings

In legal proceedings, particularly those related to international commercial transactions between state parties, they may opt to resolve future disputes in the courts of either party. In such a case, the commercial agreement made between them clearly mentions the law of which country should be applicable. If a sovereign state has laws regarding restrictive immunity, such a state cannot plead the defence of sovereign immunity to stop the courts of another party from exercising their jurisdiction if any dispute arises in the commercial transaction. Countries like the US and UK have addressed the challenge of suing sovereign states in their national courts, and for this, they have specific Acts such as the Foreign Sovereign Immunities Act of 1976 (FSIA) and State Immunity Act of 1978 (SIA), respectively.

In countries like India, where there is no statute which expressly mentions restrictive immunity, India can easily raise the defence of sovereign immunity in foreign courts to prevent it from being sued in the national courts of other sovereign states or from paying damages. One of such noteworthy examples is the case of Cairn Energy PLC and Cairn UK Holdings Limited v. The Republic of India (2015), also known as the case of Cairn v. India. In this case, the international arbitral tribunal held that India had breached its contract under the India – United Kingdom Bilateral Investment Treaty (1994), and the tribunal ordered India to pay Cairn damages of USD 1.2 billion for the losses it suffered. India, even though it refunded the entire amount, raised the defence of sovereign immunity to prevent it from paying the damages. 

Since many countries in the world do not have any expressed statutes on restrictive sovereign immunity, commercial parties who enter into agreements with such states often include a specific clause in their agreements. The clause ensures that the sovereign states waive off their sovereign immunity expressly if any future dispute arises. Such a clause is known as the ‘Sovereign Immunity Waiver Clause.” The objectives of this clause are to ensure that, in case of any possible future disputes with the sovereign state, the foreign court can exercise its jurisdiction and is able to hear the legal proceedings, order reliefs for the involved commercial parties, provide judgements and awards, and also enforce arbitral awards against the foreign state.

The wording or formatting for different types of sovereign immunity clauses has been discussed in detail here.

If the Sovereign Immunity Waiver Clause is included in any commercial agreement, the participating sovereign state cannot claim the defence of sovereign immunity to prevent any legal proceedings in a foreign court. In states with statutes which expressly document the restrictive immunity principle, these clauses serve no practical purpose since they are already implied. However, it is advisable to include such a clause to safeguard against future disputes. Former Attorney-General for India, K. K. Venugopal, is also of the opinion that to avoid any uncertainty, it is prudent to include such a clause on waiver of sovereign immunity.

However, it must be noted that even if a sovereign state allows a foreign court to exercise its jurisdiction in case of any future disputes on the basis of the sovereign immunity waiver clause, it does not necessarily mean that in case of a dispute, if the judgement goes against the state, the state assets (any kind of state infrastructure, real estate property, intellectual property, revenue, payment, or service owned by any state entity and/or public benefit corporation) of that sovereign state can be seized or executed to enforce the judgement. This is because there is a basic difference between the types of sovereign immunity: ‘immunity from jurisdiction’ and ‘immunity from execution.’ 

‘Immunity from jurisdiction’ is the privilege of the sovereign state, where it can refrain from allowing a foreign court to exercise its jurisdictions; conversely, immunity from execution’ ensures the sovereign state that even though the foreign court is allowed to use its jurisdiction over the sovereign state, if the judgements go against the state, its state assets cannot be seized and executed to enforce the said judgement. So, even though a sovereign state lacks jurisdictional sovereign immunity, it can successfully resist the execution of its state assets.

Sovereign immunity and execution of state assets in foreign jurisdictions

Sovereign immunity from execution depends upon the nature of assets upon which execution is to be levied, not upon the nature of claims; the claims can be of a commercial or sovereign nature. To enforce judgements passed by foreign courts for a dispute arising between the parties in a commercial transaction, including a sovereign state as one of the parties, the following conditions must be satisfied:

• The state assets of a particular state must be pledged as security or hypothecated to be executed in the future in that foreign state for any future dispute or default by the state. The sovereign state should consent to the execution of such state assets to satisfy the judgment against the state.
• The particular state asset must have been used or have any connection to the commercial activity based on which the claim against the state is made.

Such provisions are present in both Section 1610(a) of the United States Foreign Sovereign Immunities Act of 1976 and Section 13(2)(b) of the English State Immunities Act of 1978.

Article 19 of the United Nations Convention on Jurisdictional Immunities of States and Their Property states that a sovereign foreign state cannot take any post-judgement measures of constraint, which include attachment, arrest, or execution, against the property of another state unless the state has expressly consented to the measures through the following channels:

• by an international agreement;
• by an arbitration agreement 
• in a written contract; or 
• a declaration given by the state before the court; or,
• by a written communication after a dispute between the parties has arisen; 

The property can also be attached if the state itself allocates or earmarks the said property to satisfy the claim related to the proceeding.

India signed the Convention on 12th January, 2007 but it has not been ratified yet. Expressly, for states like India, which lacks any legislation on restrictive immunity, the execution of state assets is difficult unless India expressly consents to it.

Many scholars opine that if a state has immunity from execution, it does not matter whether the state has immunity to jurisdiction or not.

Another problem regarding the execution of assets that commonly arises is the issue of mixed assets. Mixed assets are those assets which are used for both sovereign and commercial purposes. Axiomatic international laws state that state assets used for sovereign purposes cannot be executed to satisfy a commercial judgment. Again, if the asset is used for both sovereign and commercial purposes, it cannot be used for commercial judgments because it is partially used for sovereign purposes. There are multiple examples of judicial pronouncements regarding the issue of mixed assets.

Challenges in the execution of state assets

Even if the state does not have access to immunity of execution, the foreign state may face some of the following challenges while executing the assets of the state:

• Lack of assets;
• Restrictive nexus requirement;
• Mixed assets;
• The burden of proof on the judgment creditor to prove the nature of state assets sought to be executed is commercial.

Concept of sovereign immunity and Section 86 of the Code of Civil Procedure

Section 86 of the Code of Civil Procedure deals with the law regarding the jurisdiction of foreign states in India. It applies the international law of the inviolability of foreign states in an Indian court, thus upholding the doctrine of sovereign immunity.

Section 86 of the Code of Civil Procedure, 1908

The concept of sovereign immunity is enshrined under Section 86 of the Code of Civil Procedure, 1908. It states that no foreign state can be sued in any court. A foreign state can only be sued if the central government consents, “certified in writing by a secretary to that government”. Hence,  prior written consent from the government is necessary. Section 87A of the Code clarifies that a “foreign state” is any state recognised by the Government of India situated outside the territory of India.

However, the Code does not discuss whether sovereign immunity applies to commercial transactions or not. 

Consent by the Central Government for such suits

To institute a suit against foreign entities in India, Section 86 of the CPC states that unless the Central Government provides written consent through its Secretary, no suit against foreign states (including the Rulers, Ambassadors, and Envoys) can be filed. However, there is an exception to that. A person, as a tenant of immovable property in any foreign state, can sue without such consent. Such a person can institute a suit against the foreign state from whom he holds or claims to hold the property. In other cases, prior written consent from the central government is mandatory.

In other situations, such consent may be given by the Central Government with respect to a specific suit or multiple specific suits. Consent can also be obtained for multiple suits belonging to a specific class or classes. The government may also specify the Court where such foreign states may be sued.

The Central Government shall not provide any consent unless it appears to the Central Government that the foreign state:

• Has itself instituted a suit against the person who is desiring to sue;
• Trades within the local limits where the said court has its jurisdiction;
• Possesses immovable property within such jurisdiction and will be sued regarding such property or money charged on this behalf;
• The foreign state itself has waived the privilege of sovereign immunity through the provisions of Section 86. The waiving of privilege can be either implied or expressed.

No decree can be executed against any property of a foreign state without the written consent of the Central Government through its Secretary.  

Section 86 is applicable to any ruler, ambassador, or envoy of a foreign state and also to any high commissioner of any Commonwealth country.

Section 86 does not have the scope to arrest any ruler, ambassador or envoy of a foreign State or any high commissioner of any Commonwealth country.

The Central Government may reject requests for granting written consent to sue a foreign state or its representatives, but before that, it should provide a “reasonable opportunity of being heard” to the person making such a request. Only after that, the government may decline such a request.

In the case of Qatar Airways vs. Shapoorji Pallonji & Co. (2013), there was a commercial dispute between the parties. The appellant was found to be a legal personality governed by the laws of Qatar. It was asserted that the appellant is a foreign state under Section 86 of the CPC, and a suit filed in the original jurisdiction of the High Court is not maintainable unless permitted by the Central Government. A judgement authored by the Bench of Justice D.Y. Chandrachud and Justice A.A. Sayed of the Bombay High Court held that contractual relationships governed by commercial activities in India are subject to the jurisdiction of a competent court in India. 

In 2021, the Ministry of External Affairs of India granted permission under Section 86 of the CPC to a French company named Ultraconfidentiel Design Private Limited to sue the Spanish Embassy in India.

Sovereign immunity and the Constitution of India

Post-independence, the Indian courts have continued to narrow down the scope of sovereign immunity so that aggrieved citizens can sue the state and may receive fair compensation if they are entitled to it. The Constitution of India does not expressly voice for sovereign immunity, rather it is based on inference. 

Both Articles 294 and 300 under Chapter III of the Constitution of India, which deals with “Property, Contracts, Rights, Liabilities, Obligations and Suits,” contain provisions regarding sovereign immunity of India. Both the Articles have explicit and implicit provisions regarding sovereign immunity.

Article 294 talks about the rights, liabilities and obligations of the central and state governments. Article 294(b) specifically states that all rights, liabilities and obligations of both the central and state governments arise out of contracts or otherwise. The word ‘otherwise” implies any other liabilities, including tortious liabilities. 

Article 300 is a key provision related to the doctrine of sovereign immunity. It deals with the liability of the state and has its roots in Section 176 of the Government of India Act, 1935. This section specifically mentions that “the Federation may sue or be sued by the name of the Federation of India, and a provincial government may sue or be sued by the name of the province.”

Similar to the aforementioned provision, Article 300 considers the central and state governments to have a juristic personality. The Government of India can be sued in a court of law as the Union of India. Similarly, an Indian state government can be sued as “State of X.”

Article 300(1) of the Indian Constitution declares the nomenclature of state parties to suit proceedings, while Article 300(2) underlines the extent of liability of the states.

The first notable case regarding the liability of the state after the Constitution came into force was State of Rajasthan v. Mrs. Vidhyavati (1962), which examined the scope and application of Article 300.

State of Andhra Pradesh v Challa Ramkrishna Reddy & Ors (2000) has examined the relationship between the doctrine of sovereign immunity and the fundamental right of right to life under Article 21 of the Constitution. Article 21 forbids the state to deprive a person of their personal life and liberty “except according to a procedure established by law.” Life under Article 21 has a wide meaning and constitutional provisions deal with the safeguard to negative deeds of the state and positive obligations upon the state under the Directive Principles of State Policy.

Sovereign immunity and the fundamental rights guaranteed by the Constitution contradict each other. Fundamental rights can be enforced by the Supreme Court under Article 32 and by the High Court under Article 226. These Articles not only have overthrown the doctrine of sovereign immunity but also established the defence of the doctrine of sovereign immunity by the states as inapplicable. Hence, the states have tortious liability for violations of Article 21 by their employees or agents.

Conclusion

The doctrine of sovereign immunity originated from the British common law doctrine. With the establishment of the British Raj in India, the doctrine was also incorporated as a part of the legal doctrine in Indian laws. However, the applicability of sovereign immunity in India, even during the rule of the East India Company, was not welcomed. 

With independence and the establishment of constitutional supremacy, the guarantee of fundamental rights became the priority of the Indian judiciary. However, the doctrine of sovereign immunity and the fundamental rights guaranteed by the state contradict each other. Hence, with time, not only was the doctrine overthrown by the judiciary, but the defence of sovereign immunity also became infructuous. However, the Code of Civil Procedure has incorporated provisions for sovereign immunity for foreign states in certain situations, even though they can also be sued with prior written permission of the Central Government.

References

• George W. Pugh, Historical Approach to the Doctrine of Sovereign Immunity, 13 La. L. Rev. (1953) Available at: https://digitalcommons.law.lsu.edu/lalrev/vol13/iss3/5 

• Panday, Ashish, Sovereign State Immunity while Enforcement of Arbitral Award – India (March 5, 2023). Available at SSRN: https://ssrn.com/abstract=4378659 

• Smith, Jr., Fred, Local Sovereign Immunity (March 6, 2016). Columbia Law Review, Vol. 116, No. 409, 2016, Available at SSRN: https://ssrn.com/abstract=3083491 

• https://ijtr.nic.in/articles/art68.pdf