In this short video in our Observations series, Andrew Cannon, Partner in our International Arbitration and Public International Law practices, considers state immunity issues. Andrew discusses the restrictive doctrine of immunity enshrined in the State Immunity Act 1978 and describes the steps a party should take in dealing with a state to ensure an effective of waiver in respect of jurisdiction and enforcement.
For more information on state immunity, please contact Andrew Cannon, Partner, Hannah Ambrose, Professional Support Consultant, Vanessa Naish, Professional Support Consultant or your usual Herbert Smith Freehills contact.
In a recent decision in the case High Commissioner for Pakistan In the United Kingdom (“Pakistan“) v National Westminster Bank (the “Bank“), the English High Court considered the scope of sovereign immunity provided by section 1 of the English State Immunity Act 1978 (the “1978 Act“).
The case concerned competing claims by India, descendants of an Indian Prince (together, the “Interested Parties”), and Pakistan on a sum of money deposited into a bank account in 1948, following the end of British rule in India.
It was not necessary for the court to decide the question of whether Pakistan had waived sovereign immunity in order to answer the questions before it. However, the Court took the opportunity to examine whether Pakistan’s conduct in the proceedings had amounted to a waiver of immunity under s.2 of the 1978 Act with respect to the Interested Parties as well as the Bank.
The Court considered that once sovereign immunity is waived by a State instituting proceedings, it is waived for the duration of those proceedings, including any new claims that the State could have predicted would arise from the original proceedings.
The Court’s discussion in this case sheds some light on the boundaries of an area of law that has seen limited judicial consideration. It remains to be seen whether Pakistan will appeal, and so give a higher court an opportunity to provide further guidance.