Sovereign Immunity in Commercial Matters?

Scope of Sovereign Immunity:

Business or commercial activities carried out by one Country in the territory of another country ordinarily not entitled to plead sovereign immunity.

Principle of sovereign Immunity

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 chattels. 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 sovereign in any circumstances. It was thought to offend the dignity of a sovereign and to impinge 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 the case of Sultan of Johore v. Abubakar Tunku Aris Bendahar, (43 [1952] A.C. 318, 343-344; [1952] 1 T.L.R. 1106; [1952] 1 All E.R. 1261.) where the Privy Council rejected the notion that there was any absolute rule about “not impleading a foreign Government.”

[Source: Rahimtoola vs. Nizam of Hydrabad (HL) [1958] A.C. 379.

Jurisdiction of Consumer Forum:

The Consumer Protection Act, 1986 is a comprehensive and self-contained piece of legislation, and its object is to decide consumers’ complaints expeditiously, via summary procedure. The Consumer Protection Act, 1986 also permits authorized agents to appear on behalf of the complainants in order to ensure that they are not burdened with the heavy professional fees of lawyers.

….the Carriage by Air Act, 1972 explicitly provides that its rules apply to carriage performed by the State or by legally constituted public bodies under Chapter 1, Section 2, Sub-section 1. Thus, it is clear that according to the Indian Law, Ethiopian Airlines can be subjected to suit under the Carriage Act, 1972. It may be pertinent to mention that the Carriage by Air Act, 1972 (69 of 1972) is an Act to give effect to the Convention for the unification of certain rules relating to international carriage by air signed at Warsaw on the 12th day of October, 1929 and to the said Convention as amended by the Hague Protocol on the 28th day of September, 1955 and to make provision for applying the rules contained in the said Convention in its original form and in the amended form (subject to exceptions, adaptations and modification) to non-international carriage by air and for matters connected therewith.

In effect, by signing onto the Warsaw Convention, Ethiopia had expressly waived its Airlines’ right to immunity in cases such as that sub judice. Therefore, the Central Governments of both India and Ethiopia have waived that right by passing the Carriage by Air Act, 1972 and by signing onto the Warsaw Convention.

[Source: Ethiopian Airlines vs. Ganesh Narain Saboo, (SC)]


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