P L D 1965 (W (PLP)

English Law on this point is further explained by Lord Atkin in 1938 A. C. 720 as follows: "The foundation for the application to set aside the writ and arrest of the ship is to be found in two propositions of international law engrafted on our domestic law which seems to me to be well‑established and to be beyond dispute. The first is that the Courts of a country will not implead a foreign sovereign. That is, they will not by their process make him against his will a party to legal proceedings, whether the proceedings involve process against his person or seek to recover from him specific property or damages. The second is that, they can not by their process, whether the sovereign is a party to the proceedings or not, seize or detain property which is his, or of which he is in possession or control." Lord Macmillan (p. 723) had expressed the view in the same case "It is a recognised prerequisite of the adoption in our municipal law of a doctrine of public international law that it shall have attained the position of general acceptance by civilized nations as a rule of international conduct, evidenced by international treaties and conventions, authoritative text books; practice and judicial decisions. It is manifestly of the highest importance that the Courts of this country, before they give the force of law within this realm to any doctrine of international law, should be satisfied that it has the hall‑marks of general assent and reciprocity." He had further observed that this concession i. e., immunity is allowed on the grounds of dignity, equality and independence of foreign sovereigns which the Community of Nations enjoyed. "It is only in modern times that sovereign states have so far condescended to lay aside their dignity as to enter the competitive markets of commerce, and it is easy to see that different views may be taken as to whether an immunity conceded in one set of circumstance, should to the same extent be enjoyed in totally different circumstances", and Lord Wright observed in the same case: "The rule may be said to be based on the principle par in parem non habet imperium; no state can claim jurisdiction over another sovereign state. It may also be rested on the circumstances that in general the judgment of a municipal Court could not be enforced against a foreign sovereign state, or that the attempt to enforce might be regarded as an unfriendly act, or it may be taken to flow from reciprocity of each sovereign state within the community of nations accepting some substraction from its full sovereignty in return for similar possession on the side of the others." The next English case relied upon by the defendants is of Rahimtola v. Nizam of Hyderabad and another (Law Reports Appeal Cases 1958 p. 79). In that case sovereign immunity was granted to the High Commissioner for Pakistan in the United Kingdom on the plea that he had acted as agent of the foreign state of Pakistan. In the case of Kahan v. Pakistan Federation (1951 L R 11 K B D 1003) the same view was expressed and it was held that: "a state can resile from its agreement to submit to the jurisdiction and claim and secure immunity". The facts of that case are that Pakistan Federation had entered into a written agreement and had, in express terms, agreed to submit, for the purpose of this contract, to the jurisdiction of the English Court. It shows that a foreign State does not lose its immunity by entering into a trade contract with a foreigner. Case reported in 21 B L R 351 is based on the old section 433, Civil Procedure Code (Act XIV of 1882) and it was held that a consent given by the Governor‑General after the commencement of a suit against a ruling Chief was not a sufficient consent. According to Dularai & Co. v. Pokerdas Mengraj (A I R 1952 Bom. 335) which is based on the provisions of section 86 Civil Procedure Code "immunity conferred upon the Ruler is absolute and it is not limited to any particular class of suits or in respect of his public dealings." The next case relied upon by the defendant is United Arab Republic v. Mirza Ali Akbar Kashani (A I R 1962 Cal. 387) It has been held in that case that a foreign State does not enjoy any immunity under section 86, Civil Procedure Code and further that it is exempt from the civil process of Courts in India under the general principles of International Law which has been adopted as part of Municipal Law of that country. It is clear from the Text Books and cases referred to above that Courts in England allow immunity to foreign States on the basis of International Law which is engrafted into their domestic law which appears to be well established and beyond doubt. Unanimous view, therefore, is that foreign sovereign enjoys absolute immunity in personal actions unless it submits to the jurisdiction. Indian Courts have held that section 86, Civil Procedure Code does not allow immunity to foreign States though they are allowed to or are exempted from the Civil Process of Courts under the general principles of International Law which has been adopted as part of Municipal Law in that country. On the other hand, it was argued by Mr. Sharifuddin Pirzada on behalf of the plaintiff that section 86, Civil Procedure Code is statutory recognition of the International Law; that a foreign ruler and not the foreign State is allowed partial immunity under the provisions of Civil Procedure Code, that principles of International Law do not apply where Municipal Law applies; that now even in England there is conflict of opinion, that statutory law should prevail and lastly reciprocity and Mutuality must be taken into consideration before a Court in this country allows immunity to a foreign State. In this connection he had referred me to Diplomatic Immunities Act 1963 (Act 11 of 1963), Diplomatic Immunities (Commonwealth Countries Representatives) Act, 1957 and the United Nations (Privileges and Immunities) Act, 1948, and had argued that our Legislature had deliberately not exempted or given immunity to foreign States. Elaborating this argument he had further urged before me that the Municipal Law should be given preference to the general principles of International Law which under the modern times are not being' strictly followed, that there is no reciprocity and lastly distinction is being made between the two acts of the State. (The sovereign and non‑sovereign acts of a State), i.e., Jure Impirii and Jure Gestionis. Foreign State, according to him enjoys immunity in respect of the former, it does not do so in respect of the latter. This rule that a foreign State does not enjoy immunity in respect of a commercial act can be accepted as a sound rule of International Law applicable to our country though English Courts do not recognize this distinction. According to him, even in England there is no absolute immunity. He had referred me to a case of Sultan of Johore v. Abubakar (1952 All E L R 1261). In that case proceedings were started originally by the Sultan of Johore to determine the validity of two deeds executed by him. When this decree was reviewed he took the plea of immunity but it was disallowed. By International Law a State cannot be sued in the Courts of another State but the Municipal Law of different States differ considerably in giving effect to this broad rule. If the rule of International Law laid down in the case: Duff Development Co. Ltd. v. Kelantan Govt. and another, were held applicable to the facts of the present matter I would have been constrained to hold the present proceedings bad. But this attempt on my part) would not be justified, i. e., to engraft upon the provisions of Civil Procedure Code general principles of International law which our Legislature did not think it proper to do so. No judgment of any Court in this country has been brought to my notice in support of the defendant's case. A different view is now held about the basis of immunity. "It is doubtful whether any of these considerations supply a satisfactory basis for the doctrine of immunity. There is no obvious impairment of the rights of equality, or independence, or dignity of a State if it is subjected to ordinary judicial processes within the territory of a foreign State in particular if that State, as appears to be the tendency in countries under the rule of law, submits to the jurisdiction of its own Courts in respect of claims brought against it. The grant of immunity from suits amounts in effect to a denial of a legal remedy in respect of what may be a valid legal claim; as such, immunity is open to objection . . . . Most States, including the United States, have now abandoned or are in the process of abandoning the rule of absolute immunity of foreign States with regard to what is usually described as acts of a private law nature. The position, in this respect in Great Britian must be regarded as fluid. "(Oppenhim's International Law, Vol. 1, para. 115 at p. 272)." Lord Denning in this case (Law Reports Appeal Cases 1958, p. 79) had expressed a different view and had observed that "Sovereign immunity should not depend on whether a foreign Government is impleaded, directly or indirectly, but on the nature of the dispute . . . . If the dispute brings into question, for inst ance, the legislative or international transactions of a foreign Government, or the policy of its executive, immunity from process should be granted, but if the dispute concerns the commercial transactions of a foreign Government and arises properly within the territorial jurisdiction of our Courts, immunity should not be granted." He has further observed that "It is more in keeping with the dignity of a foreign sovereign to submit himself to the rule of law than to claim to be above it, and his independence is better ensured by accepting the decisions of Courts of acknowledged impartiality." Similarly many states now make distinction between the sovereign and non‑sovereign acts of a foreign state i.e. between Jure Imperii and Jure Gestionis

"Many legal systems have retreated from the principle of absolute immunity by distinguishing between acta imerii in respect of which immunity can be demanded and acta gestionis which are freely subject to the jurisdiction of foreign Courts and the State Department at Washington has announced that it will no longer favour claims to immunity with regard to business transactions (Cheshire, p. 97)." Lord Thankerton at p. 723 in 1936 A. C. 720 had observed "I have some doubt as to whether the proposition that the foreign soveriegn state cannot be impleaded is an absolute one, the real criterion being the nature of the remedy sought." But the English Courts as already pointed out, have refused to draw a distinction between the trading and non‑trading activities of the foreign sovereign with regard to his immunity in an action in personam. Reference has already been made to cases where it has been held that a sovereign cannot be personally sued although he has carried on private trading adventure. Similar view has been taken by Indian Courts as reported in United Arab Republic and another v. Mirza Akbar Ali Kashani. This view was taken as it has adopted the rule of English law as a rule of private International Law applicable to that country (Para graph 17 at p. 394). In this connection reference has already been made to the views expressed by Lord Denning and eminent international jurists like Lauterpacht who has edited the latest edition of Oppenheim's International Law and another writer of international law, namely, Sompong Sucharit Kul in his book styled "State immunities and trading activities". Their views are that in recent years there has been enormous increase in the trading activities of modern states and when a sovereign state engages in commercial undertaking it sheds its sovereign character and in the words of Lord Mac Milian in the Cristina case (1938 C 485) enters "competitive markets of commerce", Therefore no legitimate claim of sovereignty is violated if one State assume jurisdiction over another in respect of commercial undertaking; In an article by Professor Lauterpacht published in the British Year Book of International Law (1951) at page 220 under the heading "the problem of jurisdictional immunities for foreign States", the learned author points out that the doctrine o immunity has been abandoned by judicial practice in countries other than Great Britain. As regards the United States o America is concerned the view expressed by Cheshire at p. 9' reads as follows:

"Many legal systems have retreated from the principle o absolute immunity by distinguishing between acta imperil it respect of which immunity can be demanded and acta gestionis which are freely subject to the jurisdiction of foreign Courts; and the State Department at Washington has announced that it will no longer favour claims to immunity with regard to business transactions." It is clear from these Text Books that all the authors have expressed that no sovereign State is entitled to immunity in respect of its commercial transaction and there appears great force in this opinion. This view is also expressed by Lord Thankerton at p. 723 in 1938 A. C.

720. The next point urged before me on behalf of the plaintiff is the rule of reciprocity. I have referred to the opinion of various jurists on this point. It was not accepted by the Indian Court in a case reported in A I R 1962 Cal. 387 for the same reason but it had expressed itself (para. 26 at p. 396) as follows‑‑ "If the respondent had established that the Courts of the United Arab Republic administer the same law as the Egyptian Mixed Courts prior to 1947, the question of reciprocity would have been a very important issue in the present appeal, particularly in view of the conflict in the opinions of Lord Wright, Lord Maugham, Lord Porter and Prof. Lauterpacht Having regard to the fact that the respondent did not raise this point in the trial Court I would prefer not to express any opinion on it." The views of the United States of America on the principles of reciprocity have already been referred to above. This principle was even followed by the Calcutta High Court in an earlier case reported in A I R 1959 Cal.

762. This view was differed and opinion was expressed that the case is no authority for the general proposition that reciprocity is the foundation of immunity of foreign State. Dignity, equality and independence are said to be the foundation of this immunity. Lord Denning in the case Rahimtoola v. Nizam of Hyderabad referred to above has expressed his view in the following terms: "And why, I ask, should sovereign immunity depend on the finer points of our domestic law? . . Such are the difficulties in the existing rules. I can see no satisfactory answer to them. They are so great that I think we should go back and look for the principles which lie behind the doctrine of sovereign immunity. Search as you will among the accepted sources of international law and you will search in vain for any set propositions. There is no agreed principle except this that each State ought to have proper respect for the dignity and independence of other States. Beyond that principle there is no common ground. It is left to each State to apply the principle in its own way; and each has applied it differently. Some have adopted a rule of absolute immunity which, if carried to its logical extreme, is in danger of becoming an instrument of injustice. Others have adopted a rule of immunity for public acts but not for private acts which has turned out to be a most elusive test. All admit exceptions. There is no uniform practice. There is no uniform rule. So there is no help there. Search now among the decisions of the English Courts and you will not find them consistent. They seem to have different rules about "property" according to the subject‑matter. On the one hand there are the cases about ships and other specific chattel. In these cases, the Courts have tended to apply the rule of absolute immunity. This rule was formed in the days when no action lay against the save reign in any circumstances. It was thought to offend the dignity of a sovereign and to impugne on his independence if his subjects were allowed to sue him in his own Courts. Likewise if he were sued in the Courts of another country. Proper respect for sovereign power, therefore, required that a sovereign should not be impleaded, directly or indirectly, in the Courts of his own or any other country without his consent. These cases have received a check lately by Sultan of Johore v. Abubakar Tunku Aris Bendahara (1 All E R 1261 at p. 1268). Where the Privy Council rejected the notion that there was any absolute rule about not impleading a foreign government." It is thus clear that the foreign sovereign does not enjoy absolute immunity. There is no rule that a foreign sovereign can never be impleaded in a legal proceeding or that his property cannot be seized or detained under all circumstances. He does not lose his dignity, independence or equality if he appears in the Court of a compe tent jurisdiction and answers to the claim which in many cases may be just. Judges stand in the place of sovereign in whose name they administer justice. The English doctrine of immunity originally was writ in the personal immunity of foreign princes and their ambassadors. Subsequently it was extended to sovereigns also and the personal immunity enjoyed by a foreign prince was later on extended. to foreign States. The modern theory is that the immunity enjoyed by a foreign prince is only derivative of the immunity of the State which he represents. I With the passage of time views have changed. Distinction is now being made between sovereign and non‑sovereign acts because States have entered into market with a competitive speed. Rule of reciprocity has been made applicable. Different States have expressed different views, on this point. I have also referred to Municipal Law of this country, i.e., the provisions of section 86, Civil Procedure Code and three Acts viz., United Nations (Privileges and Immunities) Act, 1948, Diplomatic Immunities "Commonwealth countries representation" Act, 1957 lastly Diplomatic Immunities Act, 1963. It is thus clear that our Legislature has conferred or given immunity to foreign rulers in respect of suits only and not to foreign States. Taking all these factors into consideration I hold that the defendant is not entitled to immunity even under the general principles of International Law. His application is accordingly dismissed with costs. I have already pointed out that no objections have ken filed by the defendant under section 30 of the Arbitration Act by filing an application under section 33 of the Act challenging the award. I, therefore, allow the application filed under section 14(2) of the Arbitration Act and order that the award be made the rule of the Court. K.B.A. Award made rule of the Court.