Entico Corporation Ltd v United Nations Educational, Scientific and Cultural Organization [QBD (Comm)]
| Jurisdiction | England & Wales |
| Judge | Tomlinson J. |
| Judgment Date | 18 March 2008 |
| Date | 18 March 2008 |
| Court | Queen's Bench Division (Commercial Court) |
Queen's Bench Division (Commercial Court).
Tomlinson J.
Shaheed Fatima (instructed by Gaby Hardwicke) for the claimant.
Christopher Greenwood QC and Jemima Stratford (instructed by the Treasury Solicitor) for the intervener.
The defendant did not appear and was not represented.
The following cases were referred to in the judgment:
Al-Adsani v UKHRC(2001) 34 EHRR 273.
Bankovic v BelgiumINTL(2001) 123 ILR 94.
Downing v Al Tameer Establishment[2002] CLC 1291.
Fiona Trust & Holding Corp v PrivalovUNK[2007] UKHL 40; [2007] 2 CLC 553.
Fogarty v UKHRC(2001) 34 EHRR 302.
Holland v Lampen-WolfeWLR[2000] 1 WLR 1573.
Jones v Saudi ArabiaELR[2007] 1 AC 270.
Kalogeropoulou v GreeceINTL(2002) 129 ILR 537.
McElhinney v IrelandHRC(2001) 34 EHRR 323.
Mendaro v World BankINTL(1983) 99 ILR 92.
Stretford v Football Association Ltd[2007] 1 CLC 256.
Waite and Kennedy v GermanyHRC(2000) 30 EHRR 261.
Contract International organisation Organisational immunity Alleged agreement for claimant to produce calendar for UNESCO Alleged repudiation Whether UNESCO's immunity from suit violated claimant's Convention rights Immunity not dependent on requirement to make provision for appropriate mode of settlement of contractual disputes Compliance with obligations owed in international law of itself pursuit of legitimate aim Appropriate mode of dispute resolution available, if relevant, namely arbitration under UNCITRAL Rules in accordance with terms of alleged contract Domestic legislation conferring immunity compatible with Human Rights Convention Convention on the Privileges and Immunities of the Specialised Agencies 1947 European Convention on Human Rights, art. 6(1) Specialized Agencies of the United Nations (Immunities and Privileges) Order 1974 (SI 1974/1260).
This was a claim by an English publisher against an international organisation (UNESCO) for breach of contract.
Entico alleged that it had concluded a contract with UNESCO pursuant to which Entico was to produce for UNESCO a calendar for 2006. Entico further alleged that in due course UNESCO failed and refused to perform the contract in consequence of which Entico had suffered loss and damage in the shape of costs and wasted expenditure. Entico quantified its loss as 86,484 and claimed that amount from UNESCO. The alleged contract on which Entico relied provided for disputes to be arbitrated under UNCITRAL Rules.
The headquarters of UNESCO were in Paris. The relevant French authorities declined to effect service of the proceedings upon UNESCO, on the basis that UNESCO enjoyed diplomatic immunity in that country. Colman J permitted service to be effected by an alternative method, i.e. first class post, which was done but UNESCO did not acknowledge service. Entico applied for judgment in default of acknowledgement of service, asking the court to set aside UNESCO's immunity from suit and legal process conferred by the Specialized Agencies of the United Nations (Immunities and Privileges) Order 1974 (SI 1974/1260), pursuant to the UK's obligations undertaken by accession to the Convention on the Privileges and Immunities of the Specialised Agencies 1947, on the basis that it violated Entico's rights under art. 6(1) of the European Convention on Human Rights. UNESCO denied that a contract was ever concluded between Entico and UNESCO and took no part in the proceedings.
Entico submitted that in compliance with its interpretative obligation imposed by s. 3 of the Human Rights Act 1998 the court should read art. 6 of the 1974 order in relation to UNESCO as containing a proviso to the effect that UNESCO should have immunity from suit and legal process provided that art. IX, s. 31 of the 1947 Convention, which required a specialised agency to make provision for appropriate modes of settlement of contractual disputes, was satisfied, and that the court should then go on to declare that as regards this claim UNESCO had failed to satisfy the requirements of art. IX, s. 31 and was not as regards this claim immune from suit and legal process.
Held, dismissing Entico's application for judgment in default:
1. There was nothing in the 1947 Convention to make enjoyment of the privileges and immunities conferred by s. 4 and 5 dependent upon compliance with s. 31. Section 31 itself offered no criteria pursuant to which the appropriateness of a mode of settlement was to be judged. Importantly, s. 31 did not say that the mode of settlement for which provision was made had to be effective. It would be wholly inimical to the international scheme envisaged if individual states arrogated to themselves the power to determine whether the provision made by each specialised agency for the settlement of disputes was adequate, whether considered generally or by reference to the facts of a particular case.
2. The 1947 Convention had to be interpreted in accordance with the principles codified in art. 31-33 of the Vienna Convention on the Law of Treaties 1969. Sections 4 and 5 of the 1947 Convention were clear, unequivocal and unconditional. They plainly required the parties to recognise and to give effect to a broad jurisdictional immunity possessed by each specialised agency. There was no room for reading down the provisions of the 1947 Convention in order to take account of the provisions of the subsequent ECHR, a treaty which was binding upon only a minority of the parties to the 1947 Convention.
3. On the assumption that art. 6 was engaged, the grant of immunity to UNESCO pursued a legitimate aim and the restriction was proportionate to the aim pursued. Compliance with obligations owed in international law was of itself pursuit of a legitimate aim. Furthermore, in so far as the 1974 order reflected generally recognised rules of public international law on organisational immunity, it could not in principle be regarded as imposing a disproportionate restriction on the right of access to court as embodied in art. 6(1). The 1974 order was not incompatible with Article 6. (Waite and Kennedy v GermanyHRC(1999) 30 EHRR 261considered.)
4. If it was relevant to take into account the availability of an alternative forum, there was in the present case an available mode of dispute resolution, i.e. arbitration under UNCITRAL Rules, as provided for in the contract which Entico put forward for acceptance. The immunity from execution of UNESCO was not incompatible with art. 6 and was in any event irrelevant, UNESCO having stated that it would comply with any award. (Kalogeropoulou v GreeceINTL(2002) 129 ILR 537applied.)
Tomlinson J:
1. The Claimant to which I shall refer as Entico is an English company carrying on business as a publisher. The Defendant, to which I will refer by its well known acronym UNESCO, is an international organisation which is one of the specialised agencies of the United Nations, hereinafter the UN. It was created in November 1945. The United Kingdom, as one of the founding members of the United Nations, has been a member of UNESCO since its establishment, with the exception of a period between 31 December 1985, when it withdrew from membership, and 1 July 1997, when it rejoined. As of October 2007 UNESCO had 193 Member States and six Associate Members. Under international law, international organisations are granted immunities and privileges before the courts of their member states to enable them effectively to pursue their functions and to operate free from control by any individual Member State (see M Shaw, International Law (5th edition, 2003), p. 1207 and Mendaro v World BankINTL(1983) 99 ILR 92 at 97-99 (US Court of Appeals, DC Circuit).
2. This case concerns a challenge to UNESCO's immunity from legal process, bestowed upon it by United Kingdom legislation pursuant to the UK's obligation undertaken by accession to the Convention on the Privileges and Immunities of the Specialised Agencies, 1947, the 1947 Convention, which has 115 parties, including the UK, which became a party on 16 August 1949. Article III, Section 4 of the Convention provides that:
The specialised agencies, their property and assets, wherever located and by whomsoever held, shall enjoy immunity from every form of legal process except in so far as in any particular case they have expressly waived their immunity. It is, however, understood that no waiver of immunity shall extend to any measure of execution.
In addition, Article III, Section 5, provides that:
The premises of the specialised agencies shall be inviolable. The property and assets of the specialised agencies, wherever located and by whomsoever held, shall be immune from search, requisition, confiscation, expropriation and any other form of interference, whether by executive, administrative, judicial or legislative action.
These provisions apply to UNESCO under Annex IV of the 1947 Convention, to which the United Kingdom has notified its acceptance as a member of UNESCO, in accordance with Article XI, Section 43 of the 1947 Convention.
3. Entico alleges that in October 2005 it concluded with UNESCO a contract pursuant to which Entico was to produce for UNESCO a calendar for 2006. Entico further alleges that in due course UNESCO failed and refused to perform the contract in consequence of which Entico has suffered loss and damage in the shape of costs and wasted expenditure. Entico quantifies its loss as 86,484. In this action Entico claims that amount from UNESCO.
4. The headquarters of UNESCO are in Paris. The relevant French authorities declined to effect service of these proceedings upon UNESCO, observing that UNESCO enjoys diplomatic immunity in that country. Colman J permitted service to be effected by an alternative method, i.e. first class post, which was done but UNESCO has not acknowledged service. Entico by this application seeks judgment in default of acknowledgement of service. Since however as stated above UNESCO enjoys in...
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