NO FREE PASS
The doctrine of immunity for foreign state entities, particularly as concerns commercial or employment matters, is slowly being eroded in law
The doctrine of state immunity, which bars litigation against representatives of foreign states, continues its decline, with two new African decisions applying it less restrictively.
These two examples line up with others to illustrate that it might now be less risky to contract with some foreign state entities than it was in even the recent past.
Just a decade ago, for example, the highest court in Hong Kong found it had to follow the approach of China and apply “absolute immunity” to matters involving other states, unless the state concerned waived immunity.
At the end of May, the Botswana high court decided a claim by a local hotel against the Namibian high commission, to which the hotel had leased property in 2016. The Fig Tree Hotel was claiming about R500,000 for unpaid rent and services.
The high commission claimed it could not be sued because of diplomatic or sovereign immunity. Furthermore, the lease indicated that the commission was an agent for a “disclosed principal”, namely the Namibia Students Financial Assistance Fund (NSFAF), and the hotel should have sued the fund.
Presiding judge Michael Leburu made quick work of the argument that the commission was acting for a disclosed principal: crucial sections of the lease were signed without reference to the NSFAF and so this argument could not hold.
On state immunity, he quoted an earlier decision by Key Dingake, a former judge of Botswana, now of Seychelles and Papua New Guinea, who held that the doctrine of absolute immunity in international law “is no more”.
In the past, a sovereign state was immune, regardless of the facts of the matter and whether the litigation concerned governmental or commercial issues. However, such an approach is “offensive to modern thinking” and is being replaced with more “restricted” immunity.
In the Fig Tree case, the dispute concerned a commercial transaction and the high commission was therefore “not immune from the jurisdiction of this court”, Leburu found. He thus dismissed the high commission’s preliminary objections to the matter and ordered that the case should continue.
A month earlier, Uganda’s Constitutional Court considered a case from the Democratic Republic of Congo asking that five properties be returned to it. Some were forfeited following a court decision that they should be sold to meet various claims; others were lost through fraud, the embassy said.
Nonpayment of rent was involved in some cases, but the embassy did nothing in response to the claims, and was not represented in court when the matter was heard.
Now, having lost five properties to Ugandan claimants, the embassy asked the judges for help, saying that court-ordered forfeiture of its properties was contrary to the doctrine of immunity.
But the Constitutional Court found the embassy had approached the wrong forum. No constitutional matter was raised; the embassy was simply questioning whether the high court correctly ordered the property forfeiture.
‘Genuine grievances’
A major problem for the embassy was that it had ignored the earlier high court process and failed to show up in court, the court noted.
While the embassy’s “faith in [Uganda’s] courts [was] gratifying”, its claims could be resolved by the high court, the judges said. One added that the embassy had “genuine grievances” that raised serious allegations, and that courts could not be seen to aid fraud.
Asked by the FM for his view on the way courts are developing their response to claims of state immunity, Dingake says while much depends on the laws of a particular country, cases in Southern Africa and elsewhere tend to confirm that immunity on employment claims and private commercial transactions is not absolute and can be successfully challenged.
A major problem for the embassy was that it had ignored the earlier high court process