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1961 Supreme(Cal) 69

HIGH COURT OF CALCUTTA
S.C. LAHIRI, R.S.BACHAWAT, JJ.

United Arab Republic - Appellant
Versus
Mirza Ali Akbar Kashani – Respondent
Appeal No : Appeal 115 Of 1960
Decided On : Apr 17, 1961

Advocates Appeared:
Subimal Roy, P.K.Sen, Mukherjee, M.K.Bose

Headnote:

The immunity of a foreign Sovereign State from the civil process of the Courts of our country is recognized under Sections 86 and 87 of the Civil Procedure Code and also under the general principles of private international law. The immunity under Section 86 is a personal privilege of the Ruler of the State and not a privilege of the State itself. A suit against a foreign State is not barred by Section 86 if it is not a suit against the Ruler but against the State. The immunity under the general principles of private international law is absolute in respect of a Sovereign act but not in respect of a commercial act. The distinction between acts jure imperil and acts jure gestionis is not easy to apply or define. The immunity of a foreign State is co-extensive with the immunity of the domestic State. A foreign State does not lose its immunity by entering into a trading contract with a foreigner. The immunity of a foreign State may be waived by an unconditional appearance in the suit. Waiver is an intentional abandonment of a right.

Fact of the Case:

The plaintiff, an Indian company, instituted a suit against the United Arab Republic and the Ministry of Economy, Supplies and Importation Department of the Republic of Egypt claiming damages for breach of a contract dated March 27, 1958 by which the Ministry of Economy agreed to buy tea from the plaintiff upon the term that it would not place further orders in India during the tenure of the contract and that it would give the plaintiff the benefit of the first refusal for its requirements. The defendants entered appearance in the suit and applied for an order that the plaint be rejected on the ground that the Court had no jurisdiction to try the suit. The trial court negatived both the contentions and dismissed the application. The defendants have preferred an appeal from this order.

Finding of the Court:

The Court held that the suit was not barred by Section 86 of the Civil Procedure Code, 1908, as it was not a suit against the Ruler of the United Arab Republic but against the State itself. The Court further held that the suit was also not barred by the general principles of private international law as the immunity of a foreign State is absolute in respect of a Sovereign act but not in respect of a commercial act. The Court also held that the defendants had not waived their immunity by entering unconditional appearance in the suit.

Issues: 1. Whether the suit was barred by Section 86 of the Civil Procedure Code, 1908? 2. Whether the suit was barred by the general principles of private international law? 3. Whether the defendants had waived their immunity by entering unconditional appearance in the suit?

Ratio Decidendi: 1. The immunity under Section 86 of the Civil Procedure Code, 1908, is a personal privilege of the Ruler of the State and not a privilege of the State itself. A suit against a foreign State is not barred by Section 86 if it is not a suit against the Ruler but against the State. 2. The immunity under the general principles of private international law is absolute in respect of a Sovereign act but not in respect of a commercial act. 3. Waiver is an intentional abandonment of a right. The defendants did not by entering appearance and by making the application intend to waive their claim to immunity. On the contrary it always claimed immunity from the suit.

Final Decision: The appeal was dismissed.

JUDGMENT

S.C.Lahiri, CJ.

1. This appeal raises two important questions about the immunity of a foreign Sovereign State from the civil process of the Courts of our country. The plaintiff respondent instituted a suit for recovery of a sum of Rs. 6,07,346/- as damages for breach of a contract for the supply of tea by the plaintiff. There are two defendants in the suit; the first defendant is the United Arab Republic and the second defendant is the Ministry of Economy, Supplies and Importation Department which is a department ot the first defendant and which according to the plaintiff, entered into the contract on behalf of both. Both the defendants entered appearance in the suit through the Vice Consul in charge of the Consulate General of the United Arab Republic in Calcutta and took out a Master's Summons for an order, inter alia, that the plaint be rejected and/or taken off the file. In the petition in support of the Summons it is stated that the first defendant came into existence as a result of the amalgamation of the two Sovereign Republics of Egypt and Syria with the President as its Ruler and that the United Arab Republic has been duly recognised by the Central Government of our country. Though these statements in the petition were not admitted in the affidavit in opposition affirmed by the plaintiff at the time of hearing it was admitted that the first defendant was a Sovereign State recognised by the Central Government of India. Similarly it is admitted that no consent has been obtained from the Central Government under Section 86 Civil Procedure Code to sue the Ruler of the first defendant who according to the definition in Section 87A is the Head of the United Arab Republic.

2. The defendants claim immunity from the civil process of this Court on two grounds. First under Sections 88 and 87 of the Civil Procedure Code and alternative under the general principles of private international law as laid down by certain English decisions which, according to the appellants, should be treated as a part of the municipal law of our country. The learned trial judge has negatived both the claims and dismissed the summons. He has further held that the appellants have waived their right of immunity by entering unconditional appearance is the suit and by filing the present application. Against that judgment the defendants have brought this appeal.

Upon the arguments advanced in this appeal the points that arise for decision are three. (1) Are the appellants entitled to the protection of Section 86 read with Section 87 Civil Procedure Code? (2) If the answer to the first question be in the negative are fey entitled to jurisdictional immunity under the general principles of private international law? (3) In either case have the appellants waived their rights by entering unconditional appearance in the suit?

3. I propose to take up the last point, first because if the appellants waived their right of immunity by submitting to the jurisdiction of this Court no other question arises for consideration. The trial court based its conclusion on the question of waiver on the fact that the defendants entered appearance to the writ and invoked the jurisdiction of the court under Order 7 Rule 11(d) and Section 86 Civil Procedure Code and thereby submitted to its jurisdiction. With great respect I am unable to accept this conclusion as correct The two material prayers in the summons are prayers (a) and (b). By the first prayer the appellants ask for revocation of leave granted, under Clause 12 of the Letters Patent and by the second it is prayed that the plaint be rejected and/or taken off the file. The first prayer is ancillary to the second and so the dominant intention of the appellants in making the application was to have the plaint rejected as disclosing no cause of action. The question therefore is whether the appellants can be said to have submitted to the jurisdiction of this Court by making such an application. I have no doubt in my mind t
































































































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