When Can a State Claim Immunity from Foreign Courts, and How Has the Doctrine of Sovereign Immunity Evolved?

Japanese Attorney at Law - Bengoshi L.L.

• 12 min read

The principle of state immunity, also known as sovereign immunity, is a cornerstone of international law that traditionally shields a state from being sued in the courts of another state without its consent. This doctrine stems from the fundamental concept of sovereign equality, encapsulated in the Latin maxim par in parem non habet imperium – an equal has no dominion over an equal. However, as states increasingly engage in commercial activities that mirror those of private entities, the scope and application of this immunity have undergone a significant evolution. This article explores the circumstances under which states can claim immunity, traces the historical shift from absolute to restrictive immunity, and examines contemporary challenges, including the controversial question of immunity for violations of peremptory norms of international law (jus cogens).

The Historical Trajectory: From Absolute to Restrictive Immunity

Historically, the doctrine of absolute sovereign immunity prevailed. This principle held that a foreign sovereign could not be subjected to the jurisdiction of another state’s courts for any reason whatsoever, regardless of the nature of the activity in question. Early landmark cases, such as The Schooner Exchange v. M’Faddon (U.S. Supreme Court, 1812), articulated this broad concept, emphasizing the perfect equality and absolute independence of sovereigns. This approach reflected a world order where interactions between states were primarily diplomatic and political, and direct state involvement in commercial enterprise was limited.

The 20th century, however, witnessed a dramatic increase in states participating directly in commercial and industrial activities, often competing with private businesses. This expansion of state economic activity began to strain the rationale for absolute immunity. It became increasingly incongruous for a state to claim immunity when engaging in ordinary commercial transactions, such as purchasing goods or operating a state-owned airline, while private parties undertaking identical activities were fully subject to local jurisdiction. This led to a gradual but decisive shift towards a more nuanced approach: restrictive sovereign immunity.

Key Milestones in the Shift:
Several factors and developments spurred this transition:

  • Emergence of Restrictive Practice: European courts, particularly in Italy and Belgium, began to adopt the restrictive theory as early as the late 19th and early 20th centuries, distinguishing between a state’s public acts (acta jure imperii) and its private or commercial acts (acta jure gestionis).
  • The Tate Letter (1952): In the United States, a significant turning point was the issuance of the "Tate Letter" by the Acting Legal Adviser of the State Department. This letter announced that the U.S. would henceforth follow the restrictive theory of sovereign immunity, a policy later codified.
  • National Legislation: Several influential common law countries enacted national legislation to implement the restrictive approach:
    • The U.S. Foreign Sovereign Immunities Act (FSIA) of 1976 provided a comprehensive statutory framework for determining when foreign states are amenable to suit in U.S. courts, explicitly adopting the restrictive theory and enumerating exceptions to immunity.
    • The UK State Immunity Act (SIA) of 1978 similarly moved British practice from absolute to restrictive immunity. Other Commonwealth countries followed suit.
  • International Conventions:
    • The European Convention on State Immunity (1972), adopted by Council of Europe member states, was an early regional effort to codify the restrictive principle.
    • The United Nations Convention on Jurisdictional Immunities of States and Their Property (2004) (hereinafter "UN Convention") represents a significant global effort to harmonize rules on state immunity. Although not yet in force (requiring 30 ratifications, a threshold not yet met as of mid-2025 ), its provisions are highly influential and often reflect existing customary international law.

The Core of Restrictive Immunity: Sovereign Acts vs. Commercial Acts

The restrictive theory of immunity hinges on the distinction between a state's activities undertaken in its sovereign capacity (acta jure imperii) and those of a private law or commercial nature (acta jure gestionis). Sovereign acts continue to benefit from immunity, while private/commercial acts do not.

Differentiating Between Sovereign and Commercial Acts:
The critical challenge lies in drawing a clear line between these two categories of acts. Two primary tests have been developed:

  1. The "Purpose" Test (Ratione Materiae): This test looks to the purpose for which the state is performing the act. If the act is undertaken for a public or governmental purpose (e.g., maintaining armed forces, conducting diplomacy), it is considered sovereign, even if the means employed are commercial (e.g., purchasing boots for the army).
  2. The "Nature" Test (Ratione Naturae): This test focuses on the nature or character of the transaction itself. If the act is one that a private individual or corporation could undertake (e.g., entering into a contract for goods or services, operating a transport service), it is considered commercial, regardless of the ultimate public purpose it might serve.

International practice has increasingly favored the "nature of the act" test. This is because the "purpose" test can be overly broad and subjective, potentially allowing states to claim immunity for a wide range of activities by simply asserting a public motive. The UN Convention, for example, in defining "commercial transaction" for the purpose of an exception to immunity, states that "reference should be made primarily to the nature of the contract or transaction, but its purpose should also be taken into account if the parties to the contract or transaction have so agreed, or if, in the practice of the State of the forum, that purpose is relevant to determining the non-commercial character of the contract or transaction" (Article 2(2)). This suggests a primary emphasis on nature, with purpose playing a secondary, contextual role.

The UN Convention on Jurisdictional Immunities of States and Their Property (2004):
The UN Convention generally affirms state immunity (Article 5) but then enumerates specific categories of proceedings in which immunity cannot be invoked. These exceptions largely reflect the restrictive doctrine and include:

  • Commercial transactions (Article 10): This is a cornerstone of restrictive immunity.
  • Contracts of employment (Article 11): Immunity is generally denied for employment contracts between a state and individuals for work performed in the forum state, with certain exceptions (e.g., for employees recruited to perform duties in the exercise of governmental authority).
  • Personal injuries and damage to property (Article 12): Immunity cannot be invoked for proceedings concerning pecuniary compensation for death or injury to a person, or damage to or loss of tangible property, caused by an act or omission attributable to the state, if the act or omission occurred in whole or in part in the territory of the forum state and if the author of the act or omission was present in that territory at the time of the act or omission (the "territorial tort" exception).
  • Ownership, possession, and use of property (Article 13).
  • Intellectual and industrial property (Article 14).
  • Participation in companies or other collective bodies (Article 15).
  • Ships owned or operated by a State (Article 16): Immunity is limited for state-owned or operated ships engaged in commercial service.

National Approaches: The Example of Japan

The application of state immunity principles is primarily determined by the domestic law of the forum state, albeit guided by international law.

Japan's Journey from Absolute to Restrictive Immunity:
For many years, Japanese courts adhered to the principle of absolute sovereign immunity. A key precedent was the Daishin'in (Great Court of Cassation, the highest court at the time) decision in Matsuyama & Sano v. The Republic of China (December 28, 1928), which unequivocally upheld absolute immunity.

However, in line with international trends, Japanese jurisprudence began to evolve. While lower courts showed some divergence over the decades, a definitive shift occurred with the Supreme Court of Japan's judgment in Tokyo Sanyo Trading Co., Ltd. v. Islamic Republic of Pakistan (July 21, 2006). In this landmark case, the Supreme Court explicitly overturned the Matsuyama precedent and adopted the restrictive theory of immunity. The Court held that a foreign state is not immune from the jurisdiction of Japanese courts with respect to its private law or commercial/managerial acts (shihōteki matawa gyōmu kanriteki kōi), unless there are special circumstances where the exercise of jurisdiction would infringe upon the sovereignty of that foreign state. The judgment indicated a preference for the "nature of the act" test in distinguishing sovereign from non-sovereign acts.

The 2009 Act on Civil Jurisdiction of Japan with respect to a Foreign State, etc.:
Following the Tokyo Sanyo Trading decision and in anticipation of acceding to the UN Convention, Japan enacted the Act on Civil Jurisdiction of Japan with respect to a Foreign State, etc. (Act No. 24 of 2009, often referred to as the Taigai Minji Saibanken Hō). This Act came into force in 2010 and provides a statutory basis for restrictive immunity in Japan, largely aligning with the UN Convention.

Key features of the 2009 Act include:

  • General Principle of Immunity: It affirms the general rule that foreign states are immune from Japanese civil jurisdiction (Article 3).
  • Exceptions to Immunity: It then lists specific cases where immunity cannot be invoked, closely mirroring the exceptions in the UN Convention. These include:
    • Commercial transactions (Article 8). The Act specifies that the commercial character of a transaction shall be determined primarily by reference to the nature of the transaction, but its purpose shall also be taken into account if it is relevant in light of an agreement between the parties or the practice in Japan.
    • Contracts of employment (Article 9).
    • Torts causing death, personal injury, or damage to tangible property occurring in Japan (Article 10).
    • Rights related to real property in Japan (Article 11).
    • Intellectual property rights (Article 12).
    • Participation in corporations (Article 13).
    • Operation of ships (Article 14), for ships used for other than government non-commercial purposes.
    • Arbitration agreements (Article 15).
  • Consent: A foreign state is not immune if it has expressly consented to jurisdiction or has initiated proceedings, intervened, or taken any other step relating to the merits (Articles 5, 6, 7).
  • Scope: The Act applies to civil proceedings and does not cover criminal jurisdiction.

This legislation provides greater clarity and predictability for both foreign states and private parties, including U.S. businesses, involved in dealings that might lead to litigation in Japan.

Immunities of State Officials, Heads of State, and Diplomats

Beyond the state itself, international law also grants immunities to certain state representatives, most notably Heads of State, Heads of Government, Ministers for Foreign Affairs, diplomatic agents, and in some contexts, other officials acting in their official capacity. These immunities are essential for the effective conduct of international relations.

A crucial distinction is made between:

  1. Immunity Ratione Personae (Personal Immunity): This immunity attaches to the person by virtue of their high office and covers all acts, whether official or private, performed during their term in office. It is granted to ensure they can perform their official functions without hindrance from foreign legal proceedings. This type of immunity is enjoyed by incumbent Heads of State, Heads of Government, and Ministers for Foreign Affairs, as affirmed by the ICJ in the Arrest Warrant case. Diplomatic agents also enjoy extensive personal immunities under the Vienna Convention on Diplomatic Relations 1961. However, personal immunity ceases once the individual leaves office, although they may continue to enjoy functional immunity for official acts performed while in office.
  2. Immunity Ratione Materiae (Functional or Subject-Matter Immunity): This immunity attaches to official acts performed by state officials in their public capacity. It is based on the principle that such acts are attributable to the state itself, not the individual official, and thus should not be adjudicated by foreign courts. Functional immunity continues even after the official leaves office, but it only covers official acts. Private acts are not covered.

The scope of immunity, particularly for former officials and in cases of serious international crimes, has been the subject of significant legal debate and development.

  • The Pinochet cases before the UK House ofLords (1998-1999) were pivotal. Augusto Pinochet, the former Head of State of Chile, was arrested in the UK pursuant to an extradition request from Spain for acts of torture committed during his regime. The House of Lords ultimately found that a former Head of State does not enjoy immunity ratione materiae for acts of torture, which were considered international crimes prohibited by a treaty (the Torture Convention) to which both Chile and the UK were parties, and that such acts could not be considered legitimate official functions.
  • In the Arrest Warrant of 11 April 2000 (Democratic Republic of the Congo v. Belgium) (Judgment of February 14, 2002), the ICJ held that a sitting Minister for Foreign Affairs enjoys full immunity ratione personae from criminal jurisdiction in foreign states, even when accused of war crimes and crimes against humanity. However, the Court emphasized that "immunity from criminal jurisdiction and individual criminal responsibility are quite separate concepts. While jurisdictional immunity is procedural in nature, criminal responsibility is a question of substantive law". It noted several ways such an official could still be prosecuted: by their own national courts, by waiving immunity, after they cease to hold office (for acts not covered by immunity ratione materiae), or by an international criminal court with jurisdiction.

Immunity from Execution

Even if a foreign state is found not to be immune from the jurisdiction of a court and a judgment is rendered against it, a separate question arises concerning immunity from execution—that is, immunity from measures of constraint against the state's property to satisfy the judgment.

International law generally treats immunity from execution as distinct from and often broader than immunity from jurisdiction. This means that a waiver of jurisdictional immunity does not automatically imply a waiver of immunity from execution. Similarly, the fact that property is used for a commercial purpose that might negate jurisdictional immunity does not necessarily mean it is available for execution.

The UN Convention deals with immunity from execution in Articles 18-21.

  • Article 18 addresses immunity from pre-judgment measures of constraint (e.g., attachment or arrest), which is generally upheld unless the state has expressly consented or has allocated or earmarked property for the satisfaction of the claim.
  • Article 19 deals with immunity from post-judgment measures of constraint. It provides that such measures can only be taken if the state has consented, has allocated property for satisfaction of the judgment, or if it has been established that the property in question is "specifically in use or intended for use by the State for other than government non-commercial purposes" and is in the territory of the forum state, provided certain procedural conditions are met.
  • Article 21 then lists specific categories of state property that are presumed to be for government non-commercial purposes and thus immune from execution, unless the state consents otherwise. This includes property of diplomatic missions, military property, property of central banks or other state monetary authorities, and property forming part of a state's cultural heritage or archives not for sale.

This dual-layered system of immunity—from adjudication and from enforcement—can pose significant challenges for private parties seeking to recover against a foreign state.

The Contested Frontier: Jus Cogens Violations and State Immunity

One of the most debated and evolving areas of state immunity concerns whether states should be entitled to immunity in foreign civil proceedings for alleged violations of peremptory norms of international law (jus cogens), such as torture, genocide, or crimes against humanity.

The argument against immunity in such cases is that jus cogens norms, by their very nature as fundamental principles of international law from which no derogation is permitted, should override conflicting rules of state immunity. Allowing a state to invoke immunity for such egregious conduct, it is argued, would undermine the very essence of jus cogens and deny victims access to justice.

However, international and national jurisprudence on this issue is divided and inconclusive, particularly regarding civil claims for damages:

  • In Al-Adsani v. United Kingdom (Judgment of November 21, 2001), the European Court of Human Rights held, by a narrow majority, that the grant of immunity to Kuwait by UK courts in a civil claim for alleged torture did not violate the applicant's right of access to a court under the European Convention on Human Rights. The ECHR found that, while the prohibition of torture was a jus cogens norm, there was not yet sufficient international practice to support a general exception to state immunity in civil proceedings for alleged acts of torture committed by a foreign state.
  • Conversely, the Italian Court of Cassation in Ferrini v. Federal Republic of Germany (Judgment of March 11, 2004) denied Germany immunity in a civil suit brought by an Italian national for forced labor and deportation during World War II, holding that state immunity could not apply to acts that constituted international crimes and violated jus cogens. This led to the Jurisdictional Immunities of the State (Germany v. Italy: Greece intervening) case before the ICJ.
  • In the Jurisdictional Immunities of the State case (Judgment of February 3, 2012), the ICJ found that Italy had violated Germany's jurisdictional immunity by allowing civil claims to be brought against Germany based on violations of international humanitarian law committed by the German Reich between 1943 and 1945. The ICJ concluded that, under customary international law as it currently stands, a state is not deprived of immunity by reason of the fact that it is accused of serious violations of international human rights law or the international law of armed conflict. It found no conflict between the rules on state immunity and jus cogens norms, viewing them as addressing different matters (immunity being procedural, jus cogens being substantive).
  • The Prinz v. Federal Republic of Germany (U.S. Court of Appeals, 1994) case upheld Germany's immunity under the FSIA in a claim for slave labor during the Nazi era, finding no jus cogens exception to the FSIA's provisions.
  • In Greece, the Prefecture of Voiotia v. Federal Republic of Germany (Distomo massacre) case (Areios Pagos, Judgment No. 137/1997, upheld by Plenary of Areios Pagos, Judgment No. 11/2000) initially denied immunity for war crimes, but this was later effectively overturned in another case by the Special Supreme Court in the Margellos case (2002) which affirmed immunity even for jus cogens violations in the context of armed conflict.

The UN Convention on Jurisdictional Immunities of States and Their Property does not contain an explicit exception to immunity for violations of jus cogens norms in civil proceedings, though some argue that its provisions, particularly on torts, could be interpreted to cover some such situations. The debate highlights a fundamental tension between the principle of state sovereignty, underpinning immunity, and the imperative to ensure accountability for the most serious international crimes and human rights violations.

Conclusion

The doctrine of state immunity is a critical interface between national legal systems and the international legal order. Its evolution from an absolute shield to a more restrictive concept reflects the changing nature of state activity and the growing need to balance sovereign prerogatives with the legitimate expectations of private parties engaging with states in various capacities. While the restrictive theory, distinguishing between sovereign and commercial acts, is now widely accepted, its application continues to present challenges, particularly in categorizing state conduct and in the contentious area of immunity for alleged violations of fundamental international norms. National legislation, like Japan's 2009 Act, and international instruments like the UN Convention, seek to provide greater clarity, but the law of state immunity remains a dynamic and often complex field, requiring careful consideration by those involved in international law and commerce.