Duff Development Company v Kelantan Government

JurisdictionUK Non-devolved
CourtHouse of Lords
JudgeViscount Cave,Viscount Finlay,Lord Dunedin,Lord Sumner,Lord Carson
Judgment Date10 April 1924
Judgment citation (vLex)[1924] UKHL J0410-1
Docket NumberCase No. 65
Date10 April 1924

[1924] UKHL J0410-1

House of Lords

Viscount Cave.

Viscount Finlay.

Lord Dunedin.

Lord Sumner.

Lord Carson.

The Duff Development Company, Limited,
and
The Government of Kelantan and the Attorney General (On Behalf of His Majesty).

After hearing Counsel, as well on Tuesday the 12th, as Thursday the 14th, Friday the l5th, and Monday the 18th, days of February last, upon the Petition and Appeal of the Duff Development Company, Limited, whose Registered Office is at 24, Rood Lane, in the City of London, praying, That the matter of the Order set forth in the Schedule thereto, namely, an Order of His Majesty's Court of Appeal, of the 17th January 1923, might be reviewed before His Majesty the King in His Court of Parliament, and that the said Order might be reversed, varied, or altered, or that the Petitioners might have such other relief in the premises as to His Majesty the King in His Court of Parliament might seem meet, as also upon the printed Case of the Government of Kelantan, lodged in answer to the said Appeal; and due consideration had this day of what was offered on either side in this Cause:

It is Ordered and Adjudged, by the Lords Spiritual and Temporal in the Court of Parliament of His Majesty the King assembled, That the said Order of His Majesty's Court of Appeal, of the 17th day of January 1923, complained of in the said Appeal, be, and the same is hereby, Affirmed, and that the said Petition and Appeal be, and the same is hereby, dismissed this House: And it is further Ordered, That the Appellants do pay, or cause to be paid, to the said Respondents the Costs incurred by them in respect of the said Appeal, the amount thereof to be certified by the Clerk of the Parliaments, and such Costs to be set off against any sum which may be owing by the said Respondents to the Appellants.

Viscount Cave .

My Lords,

1

On the 15th July 1912 the respondents the Government of Kelantan (acting by the Crown Agents for the Colonies) entered into an agreement under seal with the appellants, the Duff Development Company, Limited, whereby the Government of Kelantan granted to the Company certain rights of mining, timber cutting and road making and other rights to be exercised in that State. The deed contained an arbitration clause which incorporated the Arbitration Act, 1889. Disputes having arisen as to the meaning and effect of the deed, the disputes were referred in accordance with the provisions of the arbitration clause to an arbitrator, who, on the 12th November 1921 made an award whereby he made certain declarations in favour of the Company and directed an enquiry as to damages and directed the Government of Kelantan to pay the costs of the arbitration and award. On the 22nd December 1921 the Government moved the Chancery Division of the High Court of Justice in England, under section 11 of the Arbitration Act, 1889, to set aside the award on the ground of error in law appearing on the face of it; but this application was on the 22nd March 1922 dismissed with costs—a decision which was afterwards affirmed by the Court of Appeal and by this House ( L.R. 1923, A.C. 395). On the 12th June 1922 the Company applied to the King's Bench Division of the High Court by originating summons under section 12 of the Arbitration Act for leave to enforce the award, and an order to that effect was made by Master Bonner. On the 7th July 1922 Master Ball, on the application of the Company, made a garnishee order whereby certain monies said to be owing to the Government of Kelantan from the Crown Agents for the Colonies were attached for payment of the taxed costs of the arbitration. On the 12th December 1922 Master Jelf made an order whereby he set aside the order made by Master Bonner and all proceedings under it, including the garnishee order made by Master Ball, and stayed all further proceedings in the matter on the ground that the Sultan of Kelantan was an independent sovereign ruler and the State of Kelantan was an independent sovereign state, and that the Court had no jurisdiction over the Sultan or the Government of Kelantan. An appeal against the order of Master Jelf was allowed by Roche, J.; but on an appeal to the Court of Appeal that Court reversed the decision of Roche, J., and restored the order of Master Jelf. Hence the present appeal.

2

On the hearing of the appeal before your Lordships two points were argued on behalf of the appellant Company.

3

First it was argued that the Government of Kelantan was not an independent sovereign state so as to be entitled by international law to the immunity against legal process which was defined in ( The Parlement Belge L.R. 5 P.D. 197). It has for some time been the practice of our courts, when such a question is raised, to take judicial notice of the sovereignty of a state, and for that purpose (in any case of uncertainty) to seek information from a Secretary of State; and when information is so obtained the court does not permit it to be questioned by the parties. Information of this character was obtained from a Secretary of State and accepted without question in ( Taylor v. Barclay 1828 2 Sim. 213) and ( Mighell v. Sultan of Johore L.R. 1894, I.Q.B. 149); and those cases were followed in ( Foster v. Globe Syndicate L.R. 1900 I. Chancery 811) and in ( The Gagara L.R. 1919 P. 95). In the present case the requisite enquiry was addressed by Master Jelf (while the summons to enforce the award was pending before him) to the Secretary of State for the Colonies, and in answer to this enquiry the Under Secretary replied as follows:—

"Downing Street,

9th October, 1922.

Sir,

With reference to your letter of the 31st July, I am directed by Mr. Secretary Churchill to inform you, in reply to your letter of the 18th July, that Kelantan is an independent State in the Malay Peninsula and that His Highness the Sultan Ismail bin Almerhum Sultan Mohammed IV. is the present Sovereign Ruler thereof.

2. Prior to the year 1909 the relations between Siam and Kelantan were regulated by an agreement signed in 1902 a copy of the English text of which is enclosed. Such rights as the King of Siam possessed over Kelantan were transferred to His Majesty the King by a treaty signed at Bangkok on the 10th of March 1909. A copy of this treaty is enclosed.

3. Not all the rights possessed by the King of Siam were ever exercised by His Britannic Majesty, and the present relations between His Majesty the King and the Sultan of Kelantan which are those of friendship and protection are regulated by an agreement signed on the 22nd of October 1910. A copy of this agreement is enclosed. His Majesty the King does not exercise or claim any rights of sovereignty or jurisdiction over Kelantan.

4. I am to explain that in 1910 the Rajah of Kelantan with His Majesty's approval assumed the title of Sultan and is now Sultan and Sovereign of the State of Kelantan.

5. The Sultan in Council makes laws for the Government of the State, and His Highness dispenses justice through regularly instituted Courts of Justice, confers titles of honour and generally speaking exercises without question the usual attributes of Sovereignty.

I am,

Sir,

Your most obedient servant,

(Signed) J. MASTERTON SMITH.

Master Jelf,

Supreme Court."

4

The documents enclosed in this reply show that Kelantan had formerly been recognised as a dependency of Siam; that the Siamese Government had by the Treaty of Bangkok transferred to the British Government all its rights over Kelantan; and that by the agreement dated 22nd October 1910 referred to in the letter from the Secretary of State, the Rajah (afterwards styled the Sultan) of Kelantan had engaged to have no political relations with any foreign power except through the medium of His Majesty the King of England and to follow in all matters of administration (save those touching the Mohammedan religion and Malay custom) the advice of an adviser appointed by His Majesty. Upon these documents it was argued on behalf of the appellants that, although the Secretary of State had stated in the letter of the 9th October 1922 that Kelantan was an independent State and its Sultan a sovereign ruler, this statement must be held to be qualified by the terms of the documents enclosed with the letter; that, taking the information as a whole, the true result was that Kelantan was not an independent but a dependent State; and accordingly that the Sultan was not immune from process in the English courts.

5

My Lords, in my opinion this argument cannot prevail. Vattel (Droit des Gens, Ed. Pradier-Fodéré 1863, Vol. I., chapter 1) defines a sovereign state as a nation which governs itself by its own authority and laws without dependence on any foreign power (section 4); but he also lays it down (section 5) that a state may without ceasing to be a sovereign state be bound to another more powerful state by an unequal alliance, and he adds—

"Les conditions de ces alliances inégales peuvent varier à l'infini. Mais quelles qu'elles soient, pourvu que l'allié inférieur se réserve la souveraineté ou le droit de se gouverner par lui-même, il doit etre regardé comme un État indépendant, qui commerce avec les autres sous l'autorité du droit des gens.

Par conséquent un État faible qui, pour sa sureté, se met sous la protection d'un plus puissant et s'engage, en reconnaissance, à plusieurs devoirs équivalents à cette protection, sans toutefois se dépouiller de son gouvernment et de sa souveraineté, cet État, dis-je, ne cesse paint pour cola de figurer parmi les souverains qui ne reconnaissent d'autre loi que le droit des gens."

6

No doubt the engagements entered into by a state may be of such a character as to limit and qualify, or even to destroy, the attributes of sovereignty and independence. ( Wheaton, ed. 5, p. 50; Halleck, ed. 4, p. 73); and the precise point at which sovereignty disappears and dependence begins may sometimes be difficult to determine. But...

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