Sovereign immunity and appealability of refusal to dismiss a suit in limine were discussed under jurisdictional principles.
An order refusing to dismiss a suit in limine on sovereign immunity grounds was treated as a judgment because it finally determined the jurisdictional objection and affected the substantive controversy over the defendant's liability to answer the suit. The commentary also states that a foreign State recognised by the Government of India retained immunity under international law unless it submitted to jurisdiction or waived the privilege, and that Section 86 of the Code of Civil Procedure only modified that doctrine by adding a requirement of prior Central Government consent. On the stated facts, no waiver or consent was shown, so the suit against the foreign State was liable to be dismissed.
Issues: (i) whether the order dismissing the motion, to the extent it refused dismissal in limine of the suit against the foreign State, amounted to a judgment appealable under Clause 15 of the Letters Patent; (ii) whether the foreign State was entitled to sovereign immunity under international law, and whether Section 86 of the Code of Civil Procedure displaced that immunity in the circumstances.
Issue (i): whether the order dismissing the motion, to the extent it refused dismissal in limine of the suit against the foreign State, amounted to a judgment appealable under Clause 15 of the Letters Patent.
Analysis: An order is a judgment if it affects the merits of a substantial controversy or determines a right or liability, including a question of jurisdiction, and is not merely procedural. The refusal to dismiss the suit in limine finally negatived the defendant's claim that it could not be compelled to answer the suit in the forum, and it therefore affected the whole subject-matter of the controversy so far as immunity and jurisdiction were concerned.
Conclusion: The order, to the extent it rejected dismissal in limine, was a judgment and was appealable.
Issue (ii): whether the foreign State was entitled to sovereign immunity under international law, and whether Section 86 of the Code of Civil Procedure displaced that immunity in the circumstances.
Analysis: The settled rule of international law recognised immunity of a foreign sovereign from municipal jurisdiction unless it submitted to the court or waived the privilege. Recognition by the Government of India could be established from authoritative governmental communications and conduct. The materials on record were treated as showing de facto recognition of the foreign State by the Government of India. Section 86 was held to modify the operation of international law by creating an additional statutory exception where prior consent of the Central Government is required, but it did not abolish the underlying doctrine of sovereign immunity. Since no waiver was shown and no consent under Section 86 was obtained, the statutory and international bars were not available to defeat the immunity claim.
Conclusion: The foreign State was entitled to immunity, and the suit against it was liable to be dismissed.
Final Conclusion: The appeal succeeded because the defendant's immunity claim was upheld and the motion ought to have been granted, resulting in dismissal of the suit against the foreign State.
Ratio Decidendi: A refusal to reject a suit in limine on sovereign immunity grounds is a judgment when it finally determines jurisdictional immunity, and a foreign State recognised by the Government of India retains international-law immunity subject only to the statutory modification created by Section 86 of the Code of Civil Procedure.
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