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Suits Against Foreign States And Interests In India As Doctrine Of Sovereign Immunity

This paper will be looking at the facet of Sovereign Immunity. The paper would like to shed some light on the philosophical dimensions of the Doctrine and to explore what it is attempting to mean. Doctrine is only governed by section 86 of the 1908 Code of Civil Procedure (CPC). It essentially states that the sovereign or foreign State is to be free from all civil and criminal activities. Proceedings and are assumed to be illegal.

This section throws light on the sovereign immunity rule, which certifies that no legal action can be taken against a foreign state without the Government's prior written consent. It is also stated that the organization would be defined as a Foreign State depending on the existence of its Constitution and the degree of control exerted on that specific entity by the Government.
This paper will also address some decisions in which the Central Government's assent to sovereign immunity is necessary.

Mirza Ali Akbar Kashani vs. the United Arab Republic
and was the very first case that entered the rule in Section 86 of the CPC. Where the claim has been brought in order to recover the damages arising from the violation of the contract between the two sovereigns.

Further, the paper would throw some light on the different aspects like when the government consent is required? Furthermore, when there is a choice of waiver of the consent? through different case laws like: Kenya Airways vs. Jinibai B. Kheshwala[1], Ethiopian Airlines vs. Ganesh Narain[2], Saboo Qatar Airways vs. Shapoorjipallonji Co.[3] etc.
And at the end, the paper would deal with the justification of the Doctrine of Sovereign Immunity and a comparative analysis of the Doctrine in India and outside India.

Section 86 of the CPC, 1908, encompasses India's notions of sovereign immunity or crown immunity as available to foreign islands and rulers. The law basically states that the sovereign or a foreign country cannot perpetrate a judicial misdeed while simultaneously is resistant to civil proceeding.

The Doctrine is based on the judicial principle rex non potest peccare[4] that means, the King can do no mistake and on a common law governed by British case law.
The Doctrine of sovereign immunity is entirely based on a proposal of the Common Law whose idea is shared by British Jurisprudence that states that the King cannot do any wrong, that individual negligence or misconduct cannot be blamed on him.

Another aspect of this Doctrine is that without its consent, there was an accreditation of immunity from prosecution in its own courts. From the middle of the 19th century until lately, this Doctrine is used in the Indian Courts. If a genuine claim is made for vandalization and is rejected by the courts on the ground that the Doctrine is ancient and has not found that traces of it were to be applied in this era, the same has been assessed. Indian courts have come up with a solution to this problem as authentic demands are not overpowered, which would lead to a reduction in sovereign functions ultimately aimed at compensating the victims of the case and at serving them fairly.

In its first report, the Law Commission of India had also made a suggestion to override this archaic Doctrine, but due to some reasons or another, the bill to override that Doctrine has not been passed and therefore it is up to courts to determine its affinity in accordance with Indian Constitution.

International Law and Immunity

Few subjects are more perplexing in the development of international legislation except the extent to which of the Sovereign Nation's exemption from within the jurisdiction of domestic courts of a different state. It is widely accepted that in the domestic courts of another state a foreign state has certain jurisdictional immunity.

This judiciary practice, however, has increasingly been seen as 'artificial, unjust and archaic,' in the light of the evolving nature of international law and the context of changing international, political, economic, and social factors. It is a common experience that a State frequently undertakes business activities with transnational effects in contemporary international trade. States participating in international trade shall either be owned or controlled by their government departments or by an entity without separate legal personality (hereinafter referred to as State).

Enterprise or a company or corporation having separate and distinctive juridical personality from that of the State itself. A country's social, political, and economic policy and perceptions clearly dictate the reliance upon either of those forms.

In comparison to their participation in international trade by a state undertaking through a business entity with a separate legal personality, state participation in international trade gives rise to several particular legal problems if the State undertaking refuses to fulfill the contractual obligations.

A few pertinent among them are the determination of the law applicable (involving a difficult choice between the applicable rules of conflict of law or law intended by the parties or of national law of the state enterprise or of the private parties or lex mercatoria (merchant law) or ex aequo et bono (from equity and conscience) ); application of the Doctrine of Act of State as force majeure to the state enterprise (involving lifting of corporate veil); and it's jurisdictional immunity (involving enforcement of arbitration agreement).

Types of Sovereign Immunity:

Immunity Provided to Foreign State in India
India has no comprehensive immunity law, but a chapter is entitled Suits by and against humans, Ambassadors and Foreign Rulers.
Among other things, the CPC conducts litigation against a foreign nation in India. Section 86(1) of the CPC stipulates;

That foreign State, which has launched a lawsuit against the person who wanted to go to court:

  • by itself or other, trade within the competence of the Court,
  • is in possession of the land in which the house is located within the limits and is to be tried in respect to this Possession or money spent on it, or
  • has expressly or implicitly exempted the privilege granted under Section 86 (1) to it.
The situations mentioned in Section 86, clause (2), but ultimately analyzes correspond with widely accepted international law concepts, waiver of immunity, but section 86(1) leaves it solely to the Central Government's decision to grant or reject its permission to sue Global Policy or International Policy, and when the Central Administration gives such an agreement, foreign State cannot rely on international law rules concerning States' jurisdictional immunity.

Section 86, therefore, not only empowers the government to ascertain the jurisdiction of suits against an External Policy in India but also the relevant values of Sovereign immunity in international law. Furthermore, neither the CPC nor any other statutory instrument lays down procedures for the Central Government to be followed by granting (or denying) the Required penalty.

This highlights the fact that a jurisdictional immunity to the State comes from the confidence that one State's court would not call out any other State under their jurisdiction. Hence, the State's organizations, institutions etc. are to be considered immune from the jurisdictional proceedings or any kind of suits in the other State.

Immunity execution

Such immunity speaks to the fact that the State should still be prohibited from conducting its property or agencies or bodies and that courts in one State are often deemed illegal to seize the property of the other State. Similarly, freedom from execution may be relinquished. The other maxim under consideration is Par in parem non habet empire, implying that one sovereign state is not subject to the authority of another state.

The theory of sovereign immunity covers in itself the entire legal process by bringing the other states to trial before the final order is passed and even enforced.

India endorsed on 12 January 2007 a United Nations Convention on the Jurisdictional Immunities of States and their Properties.[5] However, India has neither endorsed nor ratified the promulgated treaty nor acceded to it. Therefore, unlike other nations, such as the United Kingdom and the United States, India has no specific legislation on this matter.

In India, the dominance of foreign countries is generally recognized but anomalies are degraded under Section 86 of the Code of Civil Procedure, 1908, where any individual may bring proceedings against a foreign State before any court with the Central Government's consent. The definition starts by the ordinary rule that no external state can be sued in any court and then an error in the approval of the central Government has been struck down by a written certificate of the Secretary of State.

Another phenomenon that has been sculpted or graved is that, an owner of a property may sue the foreign State from the country from which the property has been purchased.

The section further addresses the conditions under which the Central Government may grant permission, they are the following:
  • Where the foreign State has taken the claimant to court.
  • If, by itself or another, the foreign State is trading within the local Indian court limits.
  • If the immovable foreign States for which the claimant wants to sue are located in India.
  • If the foreign State has paved the privilege mentioned under Section 86 Foreign Nation/State Meaning

The CPC, unlike the overseas immunity Acts, either offers an elaborate definition of the term foreign state or enumerates constituting elements.

It defines a foreign state as any State outside of India that the Central Government recognizes. And it commands each court in India to take judicial note of the fact that the central Government has or has not recognized a State. A court, therefore, has to obtain necessary information pertaining to recognition of a foreign State from the Government of India and the information supplied by it is conclusive.

The same meaning for the judgment on the immunity of a foreign state is de facto and de jure recognition.

Jurisdictional immunity to Foreign Enterprise

In the absence of an integral definition of a foreign country in CPC, various organs and instruments are difficult to classify and describe for their freedom in India, of a foreign Power.
The following three related questions are not only important, but also significant and impressible:
  1. FIRST, which is a foreign state's organ or organization or instrumentality, a State part for immune purposes and hence a sovereign subject. India's Immunity Law?
  2. SECONDLY, the Central Government's permission is required to sue for this person or instrumentality, particularly if the suit is ex facie not against a foreigner State, which is not an action against an individual or agency that is part of an International country? And what about?
  3. THIRDLY, when does the state body assert immunity or instrumentality?
  1. Which foreign state entity or instrumentality may claim immunity?

    In India, the restrictive theory in vogue gives a foreign State immunity, and its units or organs, which for their jure imperii acta form an integral part of the State.
    National immunity Acts of various states, in detail definition of the word 'foreign State' for the purpose of protection, has described and specified the 'units' of a foreign State. For example, the International Sovereign Immunity Act of 1976, which constitutes the first attempt in the United States to codify laws regulating foreign countries and their instruments, describes a foreign country as its political subdivisions; agencies and means. The term, as described in the Act, a foreign state agency or instrumentality, also covers the entity of a foreign state with separate legal personality; an organ of a foreign country or of a political subdivision, and an organ in which the majority of the shares are owned by a foreign country or its political subdivision.

    The Sovereign Immunity Act, 1978, of the United Kingdom applies to the term foreign state (including: a monarch or other foreign head in his or her public capacity; his or her government and government departments for the immunities and privileges bestowed upon him by the Act). The Act does not grant state status to an agency of a foreign country that is separate from that Government's executive bodies and is free to sue or prosecute. However, it extends its immunity to such an organization for acts under its constitutional power.
    Nevertheless, the CPC does not imply Immunity in India either directly or indirectly to a foreign State institution or organization or instrumentality. That leads to two relevant questions, namely what 'forms' or 'units' of a foreign state are to be recognized as 'subjects' to India's immunity law, and which foreign State entities or organs are to be considered 'part' of the State for immunity purposes?

    The other idea was that a suit does not lie against a foreign State department. Even if an agency is a State Department, pure incorporation does not deprive it of immunity. According to its Lordship, an incorporated entity with a legal personality is outside the protective shield of immunity. Similarly, a company which is organized for commercial purposes by a foreign government does not share sovereign immunity.

  2. The prior consent of the central Government is required to sue in India

    Instrumentalities of State or company? A simple reading of Section 86 fails to specify whether or not an approval clause by the Central Government is required for the implementation of the proceedings against an agent or authority of a foreign State, including a foreign trade company.

    In the High Court of Calcutta in Monorama[6] case, the issue was decided whether permission to open an action against the foreign trading company Royal Nepal Airline Corporation in India for losses caused by a pilot's death in an air crash was required. The proceedings were opened without the permission of the Indian Government. The airline operates, controls and tracks the Government of Nepal.

    Monorama case which dismissed these claims, said the Government of Nepal was not a party to the proceedings, so in reality the proceedings were not against the foreign State, so the central Government did not need to consent to take action.

    Bose C.J. said that the Airline Corporation was a Nepal government department, which therefore was authorized by the then leading English authorities to have jurisdictional immunity following an exhaustive review.

  3. When can an entity claim immunity or instrumentality?

    Even if a government entity or body corporate or an agency of a foreign country fall under the 'protective net' of immunity, consideration is always required as to whether it has the right to immunity for all its acts, both 'private' (acta jure managementis) and 'public' (acta jure imperii).

    Judicial statements, though scarce, have a conflicting approach. Mitter J., as previously stated, held that the corporate body operating in business is outside the protective framework of immunity. However, in recent years the New Central Jue Mills Case [7] took a stand against a Calcutta High Court Division Bench, speaking through Sabyasachi Mukharji J.
    In the absence of definite transactions, declined to consider argument. Similarly, Mody J. of the Bombay High Court referred to the prevailing view in international law which favors non-extension of the Immunity of the State or its agency for its commercial transactions and was unable, in lack of a judicial pronouncement of the Supreme Court, to re-examine this consequence.

    However it is important to note that Mukharji J., before being brought to the Bench, argued vehemently (but unsuccessfully) before the Calcutta high court and the Supreme court that, in its own historical context and in the light of the new developments in international law, section 86 does not preclude suits against foreign governments as regards the changing circumstances.

    It is surprising that the learned judge, who has favored the narrow theory of immunity from 1960 onwards and advocated its incorporation into Indian law by judicial interpretation, missed a unique opportunity to do so by resorting to a mechanical judicial approach. In 1966, not only have the rules of international law regulating the jurisdictional Immunity of a foreign State and its instruments undergone drastic changes, but also a number of countries, by the laws, have excluded a foreign State department or instrument for immunity.

Therefore, the propriety of the Mody J. petition for a direct judgment by the Supreme Court is not free of doubt.

This highlights to the fact that a jurisdictional immunity to the State comes from the confidence that one State's court would not call out any other State under their jurisdiction. Hence, the State's organizations, institutions etc. are to be considered immune from the jurisdictional proceedings or any kind of suits of the other State.

Contracts Of Employment As An Exception Under Indian Law

A national or permanent Indian citizen on a foreign mission except in very limited cases, does not enjoy privileges or immunity, depending on his employment status. Only to the extent admitted by the receiving State shall a diplomatic agent who shall be national or permanent residents enjoy privileges and immunities.

Indian nationals or permanent residents who work as technical and administrative staff have been granted functional immunity, while local personnel recruited do not have any immunity. A thorough review of Section 86 is therefore warranted. As noted earlier, the Central Government may waive immunity for all or any class of cases under section 86(1).

However, paragraphs (a) to (d) below limit this waiving immunity authority to only four classes of cases. Of these four cases, it is only in two cases that the role of the Government is crucial to determine the nature of the activity, since the other two involve a requirement for foreign state consent itself. The two contexts in which the central Government can exercise its discretion are foreign trade and countries that have real estate in India.

Nevertheless, neither of the two paragraphs mentions the inclusion, let alone its scope and applicability of 'employment contracts' as an exception to foreign state immunity. The executive was entirely left to interpret this as an exception to foreign state immunity.

Immunity of the Sovereign Property from seizure by a Foreign Court

The Immunity of the Sovereign Property from seizure by a Foreign Court is relevant in our discussion, whether conservatory or executory, because the proponents of absolute immunity from jurisdiction, to a large extent, justify their opinion on the grounds that a decision against a sovereign cannot be executed forcefully. The majority of writers and courts, including multiple proponents for a professional doctrine of legal immunity, claim that every sovereign 's property is subject to some kind of judicial seizure.

The majority of the reasons given are similar to those given to jurisdictional immunity, e.g., seizure would be in violation of nation law and would lead to serious diplomatic complications and dignity of the external sovereign jeopardize international relations because execution of a judgment is far more serious than a judgment. In sum, whether dealing with immunity from jurisdiction or immunity from seizure, there are two principal methods of treating the problems of sovereign immunity and state trading organizations.

One represents an attempt to retain the original dogma unchanged, by employing fiction after fiction to avoid its logical consequences. Changed conditions and the demands of modern commerce make this approach antediluvian.

The other approach, that of qualified immunity, although based on rather tenuous jurisprudential foundations, generally, if haltingly, reaches a result much more consonant with present and future requirements of world trade. A reduction in the total volume of trade works to the disadvantage of all parties concerned. Restrictive domestic measures almost invariably lead to countermeasures.

The whole problem is analogous to that of tariff barriers, one of the chief causes for the stagnation of international trade. The refusal of the largest trading countries to open their courts for quick and efficient justice in an important and growing branch of international commerce may also impede trade between nations.

India definitely espouses a restrictive view on foreign state immunity, and it is now very well settled that a foreign state having its presence in India could be sued in the local court. However, there are certain preconditions prescribed under � 86 of CPC and its subsections that should be fulfilled, and it is the Central Government's prerogative to determine the acceptability of a claim in accordance with this provision and the principles of international law.

While this provision has provided considerable discretion for the Central Government in waiving foreign state immunity, their determination had been varied from case to case and/ or depending on the policies and the attitude of India towards a particular country or countries or other political considerations. Hence, there exist lack of clarity and transparency in the entire administrative process prescribed under � 86, which in many cases could perpetrate injustice and lack due process.

The two judgments of the Supreme Court, though did not lay down the rules pertaining to foreign state immunity and its exceptions applicable in India, had the effect of bringing in transparency in the procedure and norms pertaining to granting of consent by the Central Government.

Despite these developments, Indian position on foreign state immunity and its exceptions remains unsettled. Neither section 86 nor any other rules or practice in India have established legal clarity in the determination of acts jure imperii and acts jure gestionis. Also, there exists ambiguity about the applicability of Indian social security legislations which provide for terminal benefits, insurance, pension etc., and the responsibility of the missions as an employer to pay towards these contributions. Non applicability of social security legislations and lack of clarity in these areas would cause great hardships to the nationals and permanent residents working in foreign state missions.

There is an urgent need to enact an Indian Foreign State Immunity Act to represent both domestically and internationally their legal status on State immunity. The purpose of the laws is to transfer the determination of sovereign immunity from the executive to the judiciary, thus the external policy consequences of the determination of immunity and ensuring that these critical decisions are made for strictly legal reasons and according to procedures.

That ensures that the process is proper. It is believed that an Indian law on foreign state immunity, which is so long overdue, would be established by the United Nations Convention on Jurisdictional Immunities and Their Property 2004, of which Indian countries are already a signatories and the practices established in the US, Australia or continental Europe.

  • Crouch, Dennis. Two Question Sovereign Immunity Survey. Patently-O, 26 Feb. 2019, from
  • How the sovereign immunity is being decided through case is being studied.
  • Jain, Nikhil. Sovereign Immunity. Academike, 14 Mar. 2019, from
  • Meaning and types of sovereign immunity and the history of sovereign immunity is being studied
  • Law Times Journal. 2020. Rex Non Potest Peccare - Law Times Journal.
  • Oxford Reference. 2020. Par In Parem Non Habet Imperium.
  1. [(AIR i1998)Bom i287]
  2. [(2011) i8 iSCC i539]
  3. 2013 i3 iBomCR i65
  4. Rex non potest peccare - Law Times Journal, Law Times Journal (2020), (last visited May 2, 2020).
  5. par in parem non habet imperium, Oxford Reference (2020), (last visited May 3, 2020)
  6. AIR 1966 Cal 319
  7. AIR 1976 Cal 178

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