Evidence and Burden of Proof in Foreign Sovereign Immunity Litigation: A Guide for International Lawyers and Government Counsel (7)
©2015 Peter Fritz Walter. Some rights reserved.
Creative Commons Attribution 4.0 International License.
Publication Table of Contents
- Acknowledgments. Preface. Introduction.
- Evidence and Burden of Proof in Common Law Jurisdictions
- Foreign Sovereign Immunities Act, 1976 (United States)
- State Immunity Act, 1978 (United Kingdom)
- State Immunity Act, 1979 (Singapore)
- State Immunity Ordinance, 1981 (Pakistan)
- Foreign States Immunities Act 87, 1981 (South Africa)
- State Immunity Act, 1982 (Canada)
- General Conclusion and Summary Theses
- Postface. Abbreviations. Precedents. Bibliography.
- Statutes. Annex 1. Annex 2.
Immunity from Jurisdiction
Immunity from Execution
South Africa, as well as other jurisdictions already reviewed that enacted statutes on foreign sovereign immunity, closely followed up to the British example, and British case law. This can be seen exemplarily in De Howorth v. The SS ‘India’, 1921 CPD 451, a 1921 decision, that was considerably influenced by British case law.
— See Gerhard Erasmus, Proceedings Against Foreign States — The South African Foreign States Immunities Act, SOUTH AFRICAN Y.B.INT’L L. 92–105 (1982), at 92.
As a result, South Africa also overtook the absolute immunity doctrine from Britain for a while, fully in accord with the Crown on a tight handling of those matters.
However, the remarkable opinion of Lord Denning in Trendtex Trading, rendered in 1977, didn’t remain without influence upon the satellites of the British Commonwealth. In South Africa, this important change followed in 1980, with the case Inter-Science Research and Development Services (Pty) Ltd. v. Republica Popular de Mocambique, 1980 2 SA 111 (T), 64 ILR 689 (1983). This decision was the starting point of the restrictive immunity doctrine in South Africa.
The plaintiff, a South African company had concluded a contract with ETLAL, a company from Mozambique, for the surveillance and planning of agricultural development in Mozambique.
After the independence of Mozambique, the new government declared as void all contracts concluded under the old government. The plaintiff claimed damages against the new government of Mozambique in a court in South Africa.
The court, after the South African government certified to have officially recognized the new government of Mozambique, rendered a decision favorable to the plaintiff, denying immunity to Mozambique by applying the restrictive immunity doctrine.
— See, more in detail, the case note of John Dugard, International Law in South Africa: The Restrictive Approach to Sovereign Immunity Approved, 1980 SOUTH AFRICAN L.J. 317.
The precedent Kaffraria Property Co. (Pty) Ltd. v. Government of the Republic of Zambia, 1980 2 SA 709 (E), 64 ILR 708 (1983), goes in the same sense, upon which Inter-Science was favorably received by the South-African government. And we may have some right to ask why nonetheless an immunity statute was enacted?
The argument brought forward by the South-African government was that special directives were lacking in that field of the law and a statute would be more obviously informative than case law for certain interested circles who wish to know South-Africa’s precise position in matters of foreign sovereign immunity.
— See Gerhard Erasmus, Proceedings Against Foreign States — The South African Foreign States Immunities Act, SOUTH AFRICAN Y.B.INT’L L. 92–105 (1982), at 93–94.
Following this intention, the Foreign States Immunities Act 87, 1981 (FSIA 87) was enacted and entered into force on the 20th of November 1981. In its structure and drafting technique, the FSIA 87 is ‘for all practical purposes, a copy of its British counterpart.’
— See also Neville Botha, Some Comments on the Foreign States Immunities Act 87 of 1981, XV COMP. & INT’L L.J. SOUTHERN AFRICA 334 (1982), at page 335, note 7: ‘The South African Act has generally been taken over word for world from the British Act.’
Immunity from Jurisdiction
In South-African civil procedure, there is, like in India and Pakistan, a presumption in favor of jurisdiction.
As a result, the burden of proof is upon the party that seeks to oust jurisdiction.
— See Hoffmann & Zeffert, South African Law of Evidence (1983), 397.
As for the other immunity acts examined in the present study, the question comes up if the rule of immunity under the FSIA 87 has reversed this presumption of jurisdiction?
The general rule of immunity is to be found in §2 FSIA 87 and is literally identical with the immunity rule in the British act. Also, the immunity exceptions are literally the same as those enumerated in the STIA 1978.
— See the synopsis provided by Neville Botha, Some Comments on the Foreign States Immunities Act 87 of 1981, XV COMP. & INT’L L.J. SOUTHERN AFRICA 334 (1982), at 325, n. 7, who writes on p. 324: ‘In South Africa, the question of sovereign immunity followed a course strikingly similar to that of the British doctrine.’ See also Hansard, Parliamentary Debates, Republic of South Africa, House of Assembly Debates, 1981, Foreign States Immunities Bill, 2R, col. 5384 ff. (1st of October, 1981), col. 5388: ‘South African courts have displayed an almost slavish adherence to English authority on sovereign immunity …’
That is why our conclusions on the subject of the British Act can without hesitation be validated also for South Africa’s FSIA 87. The burden of proof cannot differ from the schema that is valid under the British act. Gerhard Erasmus confirms this result:
The Act also creates the impression that the onus throughout will be on the Foreign state to prove the existence of those facts on which it relies for its claim of immunity. Although it starts with a reaffirmation of the principle of immunity, the general tenor is definitely one of emphasizing the exceptions, i.e. the cases where immunity does not apply. In most instances the reinvocation of immunity will have to take the form of a rebuttal of the existence of one of the exceptions. (Erasmus, op.cit., at 101).
The argument provided by Gerhard Erasmus is similar to what Francis A. Mann wrote about the burden of proof under the British act. As to the rule-and-exception principle in the construction of the FSIA 87, Erasmus noted:
The Act itself contains a few uncertainties, but is relatively well drafted. Despite the fact that it speaks of the ‘general immunity from jurisdiction’ in section 2, the end result is that foreign states can now claim immunity in only a limited number of instances. The denial of immunity is, in fact, so far-reaching that it would be more realistic to treat the exceptions as the rule. (Id., 105).
We can thus conclude that under South Africa’s FSIA 87, 1981, the burden of proof generally is upon the foreign state with regard to the facts that are at the basis of its immunity claim, which in most cases means the proof that the activity in question was one of public, governmental authority.
The Precedent I Congreso del Partido
Section 4(3) FSIA 87
In subsection (1), ‘commercial transaction’ means:
(a) any contract for the supply of services or goods;
(b) any loan or other transaction for the provision of finance and any guarantee or indemnity in respect of any such loan or other transaction or of any financial obligation, and
(c) any other transaction or activity of a commercial, industrial, financial, professional or other similar character into which a foreign state enters or in which it engages otherwise than in the exercise of sovereign authority, but does not include a contract of employment between a foreign state and an individual.
In explaining the notion of ‘commercial activity’ in the FSIA 87, Gerhard Erasmus noted:
Even in those cases where the breach of the terms of a commercial contract arises from a sovereign act (including an act of state) such a state will not be entitled to immunity. (Id., 97).
As we have seen earlier in this study, the British precedent I Congreso is distinct from previous precedents in that for the first time a breach of contract, and the contract itself, were seen as two separate actions, which could potentially have different natures.
In that case, the breach of the original contract was based upon a government act relating to the foreign policy of the defendant state, the Republic of Cuba, and that action also was based upon a national law of that country. Thus, that was a quintessential act of state. And yet, the judgment of the House of Lords, rendered under the restrictive immunity doctrine, confirmed the essential principle of this doctrine, viz. the qualification of the act in question by its nature, and not by its purpose, be that purpose sovereign and governmental.
The developments of Gerhard Erasmus show that this precedent is of equal importance for South Africa, and would be decided on the same grounds, that is, a refusal to grant immunity to a foreign state acting in that way.
As under the British act, separate entities of a foreign state enjoy foreign sovereign immunity only under particular conditions. Section 15(1) FSIA 87 states:
Section 15(1) FSIA 87
A separate entity shall be immune from the jurisdiction of the courts of the Republic only if:
(a) the proceedings relate to anything done by the separate entity in the exercise of sovereign authority; and
(b) the circumstances are such that a foreign state would have been so immune.
Despite the minimal editorial modification — ‘only if’ in the FSIA 87, instead of ‘if and only if’ in the STIA 1978 — we can admit here a presumption of jurisdiction, or a rule of nonimmunity regarding separate entities, from which immunity would be the exception. Hence, the separate entity bears the burden of proof to refute the presumption of jurisdiction by conclusive proof that it has acted ‘the the exercise of sovereign authority’ and that ‘the circumstances are such that a foreign state would have been so immune.’
This is a considerably heavy burden, and prima facie evidence will not suffice to discharge it.
Immunity from Execution
The general rule of immunity from execution is to be found in section 14(1)(b) FSIA 87. It is literally identical with the analogous rule under the British act, including the exceptions from the rule.
— See, for example, §14(2) FSIA 87 and §14(3) FSIA 87: ‘Subsection (1)(b) shall not prevent the issue of any process in respect of property which is for the time being in use or intended for use for commercial purposes (usibus destinata).’
However, a provision similar to §13(5) STIA 1978 is lacking in the South-African act. This means that the foreign state does not enjoy the proof facilitation of §13(5) STIA 1978 where a simple certificate from a head of embassy suffices as proof for the fact that the property, or bank account, was at least in part destined for governmental purposes. Now we might ask what the absence of that provision means?
Does it mean that the foreign state is required to submit more evidence than a simple certificate? Let us begin from the other side and ask if the absence of this provision can possibly have an impact upon the burden of proof? A facilitation of proof, however, only relates to the standard of proof, reducing that standard, but does generally not affect the allocation of the burden of proof.
Under the British act, the Ambassadorial certificate is conclusive proof that the property in questions serves at least in part governmental purposes, ‘unless the contrary is proved.’
The House of Lords, in Alcom Ltd. v. Republic of Colombia,  2 Lloyd’s Rep. 24 (H.L.), 23 ILM 719 (1984), stated that the certificate erects a presumption that the plaintiff has to overcome if he is to win and seize the property. Thus, the burden of proof is clearly upon the plaintiff.
There is no doubt about the importance of this proof facilitation in favor of foreign states, to protect the governmental assets in their embassy’s bank accounts; this is so because the seizure of an account always hits the whole account, whatever the destination of the credit balance on such an account. That is why a protection by such a proof facilitation is necessary: it serves to keep an embassy running by practically prohibiting the seizure of funds that is destined to serve governmental purposes. This is an accordance with international law.
Such cases are daily practice with international law firms who are specialized in litigating against foreign states, and who are interested to not just get a verdict, but execute that verdict, to actually satisfy their clients. But international law poses a halt in cases where the governmental activity of foreign states would be touched.
To repeat it, as bank account assets cannot be divide in ‘executable’ and non-executable’ because the judgment creditor cannot beforehand know what part of the money is destined for what purpose, the whole account must be protected, and will be so when the Ambassadorial certificate is issued.
There is an exception only for central bank accounts, where the rule is still more absolute. Property or assets of a central bank are not considered to be destined for commercial purposes, §15(3) FSIA 87. Any measure of execution against those accounts is prohibited.
— See also §14(4) STIA 1978, §16(4) STIA 1979, §15(4) STIO 1981, and compare that with §1611 FSIA and §11(4) STIA 1982.
Apart from that particular case, the lacking of a provision similar to §13(5) FSIA 1978 in the South African enactment is hard to understand. There is no single word on this issue to be found in the parliamentary debates.
— Hansard, Republic of South Africa, House of Assembly Debates, 1981, 1R (25th of August, 1981), col. 1852, 2R (1st of October 1981), col. 5384 ff., 3R, col. 5409.
In the Singapore act and the Pakistani ordinance, analogous clauses as in the British act are to be found. In view of these facts, there is quite a high probability, in our opinion, that in any such case, South African judges will consider the British leading case Alcom and will close this lacuna in the FSIA 87.
As to the burden of proof in matters of immunity from execution, there is not so far a leading case at hand. However, the situation under the FSIA 87 is hardly different from that under the other immunity enactments that are subject of this study. Contrary to the domain of jurisdictional immunities, where the immunity rule is but a residual concept, and where it is rather the numerous exceptions that represent the rule, this is not the case in matters of immunity from execution where the rule is much tighter and exceptions are few. In fact, there are only two exceptions to the general rule of immunity from execution, that is stated in §14(1) FSIA 87:
— written consent to the seizure or attachment, §14(2) FSIA 87;
— commercial usage of the property, §14(3) FSIA 87.
— §14(3) FSIA 87 states: ‘Subsection 1(b) shall not prevent the issue of any process in respect of property which is for the time being in use or intended for use for commercial purposes (usibus destinata).’
In all other cases, the general rule of immunity applies. The burden of proof for an exception to this rule to apply is upon the plaintiff or judgement creditor.
The fact that the FSIA 87 does not require an Ambassadorial certificate, as does §13(5) STIA 1978 does not have an influence on the burden of proof; it merely affects the standard of proof, representing a proof facilitation. It does not for that matter affect the burden of proof.
The results we have reached in this study earlier on are not to be modified after scrutiny of the FSIA 87.
This statute, just as those enacted by Singapore and Pakistan, is tightly drafted after the British model. This fact can be seen in the almost identical texts of those statutes, but is also confirmed by the international law literature; last not least it has been confirmed, expressly, by the South-African legislator. In the parliamentary debates, the Minister of Foreign Affairs and Information explained:
The British Act is particularly illuminating since it not only represents the latest schools of thought on this subject, but is also the first law that tries to regulate the subject of State immunity in its entirety. The principles contained in this Act, have been accepted in a report on the subject (VN DOC A/C/4/323 of 18 June 1979), published at the request of the International Law Commission, as being a guidepost for the future codification of the rules of international law in this field. It is as a result of these considerations that the Bill at present before this House, is cast in the British mould. (Hansard, Republic of South Africa, House of Assembly Debates, 1981, 2R (1st of October, 1981), col. 5387).
For that reason that we can by and large refer to our conclusions under the British act. In addition, the South African juridical literature, discussing the new statute, confirms the result that the burden of proof is upon the foreign state for providing some basis of its immunity claim by evidence to the court.
This is a fortiori the case when not the foreign state itself, but a separate entity from such foreign state is the defendant in the suit. Such an entity must produce full conclusive proof to the court that it can benefit from the privilege of foreign sovereign immunity, and prima facie evidence will not suffice for that purpose.
The burden of proof is reversed in matters of immunity from execution. There are only two tight exceptions from the general rule of immunity from execution in the FSIA 87. Consequently, the burden of proof is upon the plaintiff for demonstrating to the court that an exception is applicable.
Property of a foreign central bank is particularly privileged, as no measure of execution can be brought forward against it, even if factually the assets are used for commercial purposes.
In this point, the British, Singapore, Pakistan and South African enactments are identical and distinct from how the American and Canadian acts provide for that problem.
©2015 Peter Fritz Walter. Some rights reserved.
Creative Commons Attribution 4.0 International License.