Sovereign Immunity

 Meaning and Origin

Sovereign immunity is a justification for wrongs committed by the State or its representatives, seemingly based on grounds of public policy. Thus, even when all the elements of an actionable claim are presented, liability can be avoided by giving this justification.

The doctrine of sovereign immunity is based on the Common Law principle borrowed from the British Jurisprudence that the King commits no wrong and that he cannot be guilty of personal negligence or misconduct, and as such cannot be responsible for the negligence or misconduct of his servants. Another aspect of this doctrine was that it was an attribute of sovereignty that a State cannot be sued in its own courts without its consent. [2]

This doctrine held sway in Indian courts since the mid nineteenth century until recently. When a genuine claim for damages is brought to the courts, and it is refuted by an ancient doctrine seemingly having no relevance, there is bound to be resentment and demands for review. The Indian courts, in order to not let genuine claims be defeated, kept narrowing the scope of sovereign functions, so that the victims would receive damages.[3] The Law Commission of India too, in its very first report, recommended the abolition of this outdated doctrine. But for various reasons, the draft bill for the abolition of this doctrine was never passed, and thus it was left to the courts to decide on the compatibility of this doctrine in accordance with the Constitution of India.[4]

Before we proceed to discuss the extent of sovereign immunity as it has been carved out over the years, it is necessary to take a look at Article 300 of the Constitution of India which spells out the liability of the Union or State in acts of the Government.

Article 300

Initially in India, the distinction between sovereign and non-sovereign functions was maintained in relation to the principle immunity of the Government for the tortuous acts of its servants. In India, there is no legislation which governs the liability of the State. It is Article 300 of the Constitution of India, 1950, which specifies the liability of the Union or the State with respect to an act of the Government.

The Article 300 of the Constitution originated from Section 176 of the Government of India Act, 1935. Under Section 176 of the Government of India Act, 1935, the liability was coextensive with that of Secretary of State for India under the Government of India Act, 1915, which in turn made it coextensive with that of the East India Company prior to the Government of India Act, 1858. Section 65 of the Government of India Act, 1858, provided that all persons shall and may take such remedies and proceedings against Secretary of State for India as they would have taken against the East India Company. [5] It will thus be seen that by the chain of enactment beginning with the Act of 1858, the Government of India and Government of each State are in line of succession of the East India Company. In other words, the liability of the Government is the same as that of the East India Company before, 1858.

Article 300 reads as:

The Government of India may sue or be sued by the name of the Union of India and the Government of a State may sue or be sued by the name of the State any may, subject to any provision which may be made by Act of Parliament or of the Legislature of such State enacted by virtue of powers conferred by this Constitution, sue or be sued in relation to their respective affairs in the like cases as the Dominion of India and the corresponding provinces or the corresponding Indian States might have sued or been sued if this Constitution had not been enacted.

If at the commencement of this Constitution –

1.        Any legal proceedings are pending to which the Dominion of India is party, the Union of India shall be deemed to be substituted for the Dominion in those proceedings; and

2.      Any legal proceedings are pending to which a Province or an Indian State is a party, the corresponding State shall be deemed to be substituted for the province or the Indian State in those proceedings.

An overview of Article 300 provides that the first part of the Article relates to the way in which suits and proceedings by or against the Government may be instituted. It enacts that a State may sue and be sued by the name of the Union of India and a State may sue and be sued by the name of the State.

The Second part provides, inter alia, that the Union of India or a State may sue or be sued if relation to its affairs in cases on the same line as that of Dominion of India or a corresponding Indian State as the case may be, might have sued or been sued of the Constitution had not been enacted.

The Third part provides that the Parliament or the legislatures of State are competent to make appropriate provisions in regard to the topic covered by Article 300(1).

Types Of Sovereign Immunity:

The State generally benefits from two forms of immunity –

1.      Immunity to jurisdiction –

A state’s immunity to jurisdiction results from the beliefthat it would be inappropriate for one State’s courts to call another State under its jurisdiction. Therefore, State entities are immune from the jurisdiction of the courts of another State. However, this immunity can generally be waived by the State entity. Reference to arbitration is in many legal systems sufficient to demonstrate a waiver of immunity to jurisdiction by the State. However, certain developing countries may be hesitant to submit themselves to international arbitration, believing that arbitration is dominated by Western principles and would not give a developing country a fair hearing. These same developing countries may feel more secure submitting to arbitration under the UNCITRAL rules, which are often considered more culturally neutral than those of the ICC or other Western tribunals.[6]

2.      Immunity from execution–

The State will also have immunity from execution, as it would be improper for the courts of one State to seize the property of another State. Immunity from execution may also generally be waived.

Waiving immunity from execution may be difficult for a government to address. As a general proposition under most legal systems, certain assets belonging to the state should not be available for satisfaction of the execution of an arbitral award; for example, the country’s foreign embassies, or consular possessions. Therefore, some method may have to be made available for the private party to seize certain state assets, possibly through careful definition of those possessions available for seizure.