Professor Alexander Orakhelashvili
[This is a follow-up on earlier posts on the same subject-matter, available here and here.]
The Supreme Court’s decision on Shehabi v Bahrain, delivered after eight months have passed since hearings before the Supreme Court took place, was no doubt expected with great interest by parties as well as legal professionals dealing with this area of law. The Court has dismissed, with three votes to two, Bahrain’s appeal that it had immunity in the UK for allegations that persons acting on behalf of Bahrain hacked or infected their computers with a spyware programme. The Judgment focuses on the territorial tort exception under section 5 of the 1978 State Immunity Act (SIA), discussed in particular context of its relation to the 1972 European Convention on State Immunity (ECSI) as well as customary international law.
The appellant’s case was, in relevant aspects, focused on the difference between international law and national law. Article 11 ECSI suggests removing immunity “if the facts which occasioned the injury or damage occurred in the territory of the State of the forum, and if the author of the injury or damage was present in that territory at the time when those facts occurred”. In line with this, the appellant pointed “to the difference in wording between article 11 of the ECSI and section 5 of the SIA”, and argued that section 5 SIA had to interpreted so as to incorporate the perpetrator’s territorial presence requirement. Otherwise, the Court’s decision would breach Article 11 ECSI. The Court’s majority disagreed and held that “the principle of consistent interpretation has no application here because the departure from the treaty scheme is deliberate.” This was “determinative of the appeal”, given that the UK “was entitled to apply wider exceptions to immunity than those in the ECSI” (para. 74). This has followed a more general point, framed on “dualist” terms, that “the SIA was not intended to implement precisely the ECSI rules on immunity” (para. 63). More peculiarly, however, all that was said in the context of the UK’s declaration pursuant to what was permitted to States-parties to ECSI under its Article 24(1). Hence, it could appear on its face that this was not one of the ordinary cases in which a conflict between national legislation and international agreements had to be dealt with, because the ECSI allegedly allowed the UK courts to proceed that way.
But all that sounds rather tenuous and incoherent if the content of Article 24(1) ECSI is taken into account. This provision allows States-parties to “declare that, in cases not falling within Articles 1 to 13 [ECSI], its courts shall be entitled to entertain proceedings against another Contracting State to the extent that its courts are entitled to entertain proceedings against States not party to the present Convention. Such a declaration shall be without prejudice to the immunity from jurisdiction which foreign States enjoy in respect of acts performed in the exercise of sovereign authority (acta jure imperii).” In other words, Article 24(1) does not relate to litigation against Bahrain who is not a party to ECSI, and in no respect could the UK ever violate ECSI in relation to Bahrain by denying immunity to it for any act or conduct whatsoever. Nor is Bahrain entitled to rely on ECSI in any proceedings in the UK. Even if SIA was adopted to implement (to whatever extent) the ECSI, the latter is, quite simply, neither here nor there for the purposes of this case. If, however, one adopts the premise that the SIA applies to all States whether party to the ECSI or not, then one might assume that the SIA has extended the ECSI regime to all States sued in the UK. It is here that the Court’s reliance on Article 24(1) ECSI becomes obsolete, because Article 24(1) is not about a State-party to ECSI such as the UK declaring anything in relation no non-parties such as Bahrain. Even if, arguendo, customary international law were to regard Bahrain’s relevant activities as performed jure imperii, that would still not be an issue arising under the ECSI, for a simple reason that Bahrain and ECSI have nothing to do with each other. Whether the SIA deliberately departs from ECSI requirements has nothing to do with Bahrain either.
Customary international law is a source of law distinct from ECSI in origin as well as in substance. Here, the Supreme Court raises the issue of whether customary international law requires that immunity is granted to Bahrain or characterises its underlying conduct as one of sovereign character (jure imperii) (para. 74). When dealing with the issue of whether customary international law admits the territorial tort “exception”, the Supreme Court examines a rather wide ground of State practice, legislation and judgments, as well as the process of codification that led to the adoption of the 2004 Jurisdictional Immunities Convention that has not entered into the force. Anything said and done during that codification process has to be treated with caution, for a rather simple reason that the outcome of that codification was not taken up by States.
On the basis of the material available to it, the Supreme Court refuses to “to express a concluded view” on whether “the practice referred to above is sufficient to establish as a rule of customary international law a territorial tort exception applicable to sovereign acts”. The Court’s majority simply says that “It certainly appears that state practice has moved in the direction of accepting such an exception.” The Court reiterates again that “It is not necessary … to express a view as to whether the point has yet been reached at which divergence from an established norm has gained sufficient support from state practice to become established as a new rule of customary international law” (para. 93), having pledged, few paragraphs above, the allegiance to the dicta of Lords Bingham and Hoffmann in Jones v Saudi Arabia that “national courts should exercise restraint and not force the pace by recognising new rules of customary international law where there is no consensus among states.” (para. 81) If customary international law does not admit the so-called territorial tort exception, then what could possibly be “a basis on which the United Kingdom could reasonably conclude that it could, in conformity with customary international law, enact a territorial tort exception of general application which applies where a relevant act took place in the United Kingdom” (para. 93)? Rather curiously, evidence of the evolution of customary international law is not provided but the decision in question is still pretended to be “in conformity with customary international law”.
The above inconsistency in the Supreme Court’s reasoning renders somewhat obsolete its detailed analysis of whether the perpetrator’s presence requirement needs to be implied in Article 5 SIA. The Court’s conclusion on section 5 is certainly right, but it does not resolve the issue of contradiction between national legislation and sources of international law. It is true that national legislation discards the distinction between acts jure imperii and jure gestionis, but that does not clarify whether and to what extent that distinction applies to Bahrain’s underlying activities as a matter of international law. Leaving the nature of the act issue and the sources of the law issue unresolved, the Supreme Court has not taken the matter much further than the earlier Al-Masarir case, and as a result of that, as a matter of international law the UK remains exposed to claims from Bahrain as well as Saudi Arabia that the UK court have wrongfully denied immunity to them.
The problem with today’s decision of the Supreme Court is not its outcome, but its framework narrative of the law of State immunity and of the sources of international law. Unfortunately, hands of the Judiciary are still considered to be tied by a number of counter-factual findings endorsed by the House of Lords in Jones twenty years ago (discussed, among others, here, here and here), including the false narrative on customary international law of State immunity and on the scope of acta jure imperii. This has prevented the Supreme Court from adopting a more coherent approach to State immunity, one that would have better placed the outcome reached in this case as one consistent with international law.