Is the Singapore Government right in raising Sovereign Immunity in relation to the Terrex infantry carrier vehicles detained in Hong Kong?  I don’t want to address the political question of whether it was the right move to raise this issue.  This piece is on the question of whether there is a sound basis for Singapore’s position under International law.

On 28 June 1937, in the midst of the Spanish Civil War, the Republican government in Spain issued a decree to requisition all civilian vessels registered at the port of Bilbao.  At that time, “Cristina”, a privately owned Spanish vessel was docked at Cardiff.  The ship was registered at Bilbao.  The Spanish consul at Cardiff boarded the ship and claimed the ship in the name of the Spanish government.  By official decree the Cristina was now an asset of the government of Spain.

The private company that previously owned the vessel commenced proceedings in the English courts.  2 questions naturally arose:

  1. Can a claim be brought against a foreign government in the English courts?
  2. Can the assets of a foreign government be seized or detained by any legal process in England?

The case addressed the issue of Sovereign Immunity which was then (as it is now) seen as a feature of customary international law.

Lord Atkin (in Compania Naviera Vascongado v steamship “Cristina”) stated that there are two principles of Sovereign Immunity recognised under international law and accepted by the common law:

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 will 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. There has been some difference in the practice of nations as to possible limitations of this second principle as to whether it extends to property only used for the commercial purposes of the sovereign or to personal private property. In this country it is in my opinion well settled that it applies to both.

 

To put it simply (1) you can’t sue a foreign government in your domestic court, and (2) you can’t seize the assets of a foreign government through legal process in your domestic court.

Most cases involving sovereign immunity that have gone to the court in many countries around the world have centred around claims against foreign governments which local courts have dismissed upon assertion of sovereign immunity by the foreign state.

The Cristina case involved a mixed issue of a claim made in the English Courts against the Spanish government as well as an attempt to take possession of a vessel over which the Spanish government had asserted ownership.  The House of Lords accepted the Spanish Government’s argument of Sovereign immunity.

This principle has been overwhelmingly accepted by nation states as a principle of customary international law.  One interesting development has been the recognition over time of a concept of restrictive sovereign immunity.  Some countries believe in absolute sovereign immunity while others accept restrictive immunity.

How does restrictive immunity apply?  Let’s say that a government department from Country A enters into a contract for providing consultancy services to Country B’s port service provider.  If the port service provider wants to claim against that government department of Country A, Country B’s courts would allow a claim in Country B if they accept the idea of restrictive immunity.  If they adopt absolute immunity, then they will not allow the claim.

Lord Denning in Trendtex Trading Corporation v. Central Bank of Nigeria observed:

“In the last 50 years there has been a complete transformation in the functions of a sovereign state. Nearly every country now engages in commercial activities. It has its department of state – or creates its own legal entities – which go into the market places of the world. They charter ships. They buy commodities. The issue letters of credit. This transformation has changed the rules of international law relating to sovereign immunity. Many countries have now departed from the rule of absolute immunity. So many have departed from it that it can no longer be considered a rule of international law. It has been replaced by a doctrine of restrictive immunity. This doctrine gives immunity to acts of a governmental nature, described in Latin as jure imperii, but no immunity to acts of a commercial nature, jure gestionis. In 1951 Sir Hersch Lauterpacht showed that, even at that date, many European countries had abandoned the doctrine of absolute immunity and adopted that of restrictive immunity – see his important article, ‘The Problem of Jurisdictional Immunities of Foreign States’ in The British Year Book of International Law, 1951, vol.28, pp. 220-272. Since that date there have been important conversions to the same view. Great impetus was given to it in 1952 in the famous ‘Tate letter’ in the United States. Many countries have now adopted it. We have been given a valuable collection of recent decisions in which the courts of Belgium, Holland, the German Federal Republic, the United States of America and others have abandoned absolute immunity and granted only restrictive immunity.”

Most Commonwealth countries have adopted this restrictive sovereign immunity.  Hong Kong had similarly adopted this approach under the common law prior to the handover to China.  After the handover, there was some question of whether Hong Kong would continue to adopt the common law approach.  In 2011, the Hong Kong judiciary abandoned restrictive immunity in favour of absolute immunity.  In Democratic Republic of the Congo and Ors v FG Hemisphere Associates LLC, the Hong Kong Court of Appeal reasoned that there must be a unified approach to foreign policy that is consistent with the policy of the central government in Beijing.  The court ruled in favour of absolute immunity as the PRC government adopts the absolute sovereign immunity approach.

In the course of the court proceedings, the Office of the Commissioner of the Ministry of Foreign Affairs of China had communicated with the court.  In no uncertain terms it set out the position of the government of PRC “that a state and its property shall, in foreign courts, enjoy absolute immunity, including absolute immunity from jurisdiction and from execution”

“The consistent principled position of China to maintain absolute immunity on the issue of state immunity is not only based on the fundamental international law principle of ‘sovereign equality among nations’, but also for the sake of protecting the security and interests of China and its property abroad. If the principle of ‘restrictive immunity’, which is not consistent with the principled position of the state on absolute immunity, were to be adopted in the Hong Kong Special Administrative Region, the states concerned may possibly adopt reciprocal measures to China and its property (which are not limited to the Hong Kong Special Administrative Region and its property), thus threatening the interests and security of the property of China abroad, as well as hampering the normal intercourse and co-operation in such areas as economy and trade between China and the states concerned.”

Considering that China adopts the absolute immunity approach and would therefore extend immunity to assets of foreign states even in commercial transactions, one would expect that she would be even more respectful of the rights of foreign nations where such nations assert direct ownership over their assets in their capacity as a state.

So, it is the legal position in Singapore, Hong Kong and China and under customary international law that Singapore can rightfully assert sovereign immunity.

(Give us back our Terrex.)

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