1965 (8) TMI 82 - SC - Indian Laws

Supreme Court: Central Govt consent needed for foreign state suits

MIRZA ALI AKBAR KASHANI Versus UNITED ARAB REPUBLIC

The Supreme Court held that Section 86(1) of the Code of Civil Procedure applied to the suit against the United Arab Republic, requiring the Central ... - Issues Involved:1. Applicability of Section 86 of the Code of Civil Procedure.2. Immunity under International Law.Issue-Wise Detailed Analysis:1. Applicability of Section 86 of the Code of Civil Procedure:The appellant filed a suit against the United Arab Republic and the Ministry of Economy, Supplies, Importation Department of the Republic of Egypt at Cairo, claiming damages for breach of contract. The respondents contended that the suit was barred under Section 86 of the Code of Civil Procedure, which requires the consent of the Central Government to sue a foreign Ruler. The appellant did not obtain such consent. The trial Judge held that Section 86 did not bar the suit, as it applied only to Rulers of foreign States, not to foreign States themselves. The Court of Appeal upheld this finding but reversed the trial Judge's conclusions on immunity under International Law and waiver.The Supreme Court examined the relevant sections (83-87B) of the Code, focusing on the distinction between a foreign State and its Ruler. Section 86(1) states, 'No Ruler of a foreign State may be sued in any court otherwise competent to try the suit except with the consent of the Central Government certified in writing by a Secretary to that Government.' The Court noted that Section 87A(1)(b) defines a 'Ruler' in relation to a foreign State as the person recognized by the Central Government to be the head of that State, regardless of the form of government.The Court concluded that the term 'Ruler' in Section 86(1) includes the head of any foreign State, whether monarchical or republican. Therefore, the suit against the United Arab Republic required the consent of the Central Government. The absence of such consent barred the suit under Section 86(1).2. Immunity under International Law:The respondents also claimed immunity under International Law, arguing that a foreign sovereign State enjoys absolute immunity from being sued in foreign courts. The appellant countered that the trend in recent International Law suggests that such immunity is not absolute, especially for commercial transactions. The Court of Appeal had upheld the respondents' plea of absolute immunity, but the Supreme Court did not find it necessary to address this issue directly.The Supreme Court emphasized that Section 86(1) of the Code of Civil Procedure modifies the doctrine of immunity under International Law by allowing suits against foreign States with the consent of the Central Government. Since the statutory provision governs the competence of the suit, the Court concluded that the suit could not be entertained without the required consent, rendering the question of immunity under International Law moot.Conclusion:The Supreme Court held that Section 86(1) of the Code of Civil Procedure applied to the present suit, and the absence of the Central Government's consent barred the suit. Consequently, the appeal was dismissed, and the parties were directed to bear their own costs throughout. The Court did not address the issue of absolute immunity under International Law, as the statutory provision was determinative.