HRH Prince Abdulaziz Bin Mishal Bin Abdulaziz Al Saud and Another v Apex Global Management Ltd

JurisdictionEngland & Wales
JudgeLord Justice Briggs,Lord Justice Richards,Lord Justice Maurice Kay
Judgment Date11 June 2013
Neutral Citation[2013] EWCA Civ 642
Docket NumberCase No: A2/2013/0803
CourtCourt of Appeal (Civil Division)
Date11 June 2013
Between:
(1) HRH Prince Abdulaziz Bin Mishal Bin Abdulaziz Al Saud
(2) HRH Prince Mishal Bin Abdulaziz Al Saud
Appellants
and
Apex Global Management Limited
Respondent

[2013] EWCA Civ 642

Before:

Lord Justice Maurice Kay

Lord Justice Richards

and

Lord Justice Briggs

Case No: A2/2013/0803

IN THE COURT OF APPEAL (CIVIL DIVISION)

ON APPEAL FROM THE HIGH COURT OF JUSTICE

CHANCERY DIVISION

COMPANIES COURT

MR JUSTICE VOS

10850/2011

Royal Courts of Justice

Strand, London, WC2A 2LL

Mr A Jones QC and Mrs R Zaffuto (instructed by Irwin Mitchell LLP) for the Appellant

Mr Robert Howe QC and Ms Shaheed Fatima (instructed by HowardKennedyFsi) for the Respondents

Hearing dates: 13, 14 May 2013

Approved Judgment

Lord Justice Briggs

Introduction

1

This is an appeal (with the leave of the judge) by two Saudi Arabian princes (the "Princes") from the decision of Vos J dismissing their applications claiming sovereign immunity from claims made against them in an unfair prejudice petition under section 994 of the Companies Act 2006 by Apex Global Management Limited ("Apex") in relation to the affairs of an English company Fi Call Limited ("Fi Call"). Due to the need for the parties to know the outcome of the appeal ahead of an imminent further hearing in the Chancery Division, we announced our decision dismissing the appeal on 15 May, shortly after the end of the hearing. These judgments set out our reasons for doing so.

2

The Princes asserted sovereign immunity on the ground that, within the meaning of section 20(1)(b) of the State Immunity Act 1978 (the "SIA"), they were each members of the family of the head of state of Saudi Arabia, "forming part of his household". It is common ground that both the Princes are members of the family of the present King of Saudi Arabia, King Abdullah bin Abdulaziz Al Saud ("King Abdullah"). The main question raised by the Princes' applications is whether either of them formed part of King Abdullah's household. As the Judge recognised, that issue raised an important question of construction of section 20 of the SIA which had not been addressed in any reported (or other) authority. It also raised significant issues of fact because, notwithstanding the judge's written request, the Secretary of State for Foreign and Commonwealth Affairs declined to provide a certificate as to the status of either of the Princes under section 4 of the Diplomatic Privileges Act 1964 ("the DPA"), on the ground that his department did not have the material with which to form any sufficient view about the relevant facts.

3

Apex's opposition to the applications for immunity raised a second question of construction, about the extent of the exclusion from immunity in respect of actions relating to any professional or commercial activity exercised by the head of state or his household, which arises from the indirect applicability of Article 31 of the Vienna Convention on Diplomatic Relations to head of state immunity, subject to "any necessary modifications". In short, Apex submitted both to the judge and on this appeal that, even if the Princes were to be regarded as part of King Abdullah's household, the matters alleged against them in its s.994 petition arose out of commercial activity on their part. It is common ground that none of the alleged commercial activity took place in the United Kingdom. The application of Article 31 of the Vienna Convention to foreign diplomats excludes only commercial activity within the United Kingdom. But nonetheless, Apex submitted that, as the result of a necessary modification, the exclusion should be construed in relation to heads of state (and family members of their households) as extending to commercial activity exercised by them anywhere in the world. I shall refer to the two issues of construction which I have summarised as "the household issue" and "the commercial exception issue" respectively.

4

On the household issue, the judge's construction fell between those contended for by the parties. Nonetheless, on his findings of fact, neither of the Princes discharged the burden of proving that they were part of King Abdullah's household. Accordingly, the question as to the ambit of the commercial exception to head of state immunity did not arise. But since it had been argued and was an important unresolved question, the judge decided it, broadly in accordance with Apex's submission. Accordingly, even if the Princes had been part of King Abdullah's household, the alleged activities relied upon in Apex's petition would have fallen within an exception to head of state immunity.

5

On this appeal, the Princes challenged both the judge's conclusions on interpretation, and they also mounted a sustained attack on the judge's findings of fact. In addition Mr Alun Jones QC (who did not appear below) advanced for the first time in this court a submission that, as a matter of law, the judge should have treated a letter from the ambassador of Saudi Arabia, stating that the Princes both formed part of King Abdullah's household, as conclusive upon that question, there being no certificate, one way or the other, from the Secretary of State. For its part, Apex submitted on appeal that the judge ought to have adopted its narrower submission as to the scope of the concept of the head of state's household, with the result that, if correct, the Princes would not on any view of the evidence have formed part of it.

6

For reasons which will become apparent, I have found it convenient to address all the legal issues first, leaving the challenge to the judge's findings of fact to the end.

Head of State immunity

7

Prior to the coming into force of the SIA in 1978, the ambit and extent of head of state immunity from suit in the courts of England and Wales was governed by customary international law. The SIA entirely replaced that regime in relation to immunity from suit in the courts of the United Kingdom by making new provision. Section 1 makes general provision for state immunity subject as provided in Part 1 of the Act. Section 3(1)(a) provides a general exclusion from immunity as respects proceedings relating to a commercial transaction entered into by the State, and "commercial transaction" includes any transaction or activity, whether of a commercial, industrial, financial, professional or other similar character, into which a State enters or in which it engages otherwise than in the exercise of sovereign authority: see section 3(3)(c). Section 8 contains a specific exception from immunity as respects proceedings relating to a State's membership of a body corporate which (a) has members other than States; and (b) is incorporated or constituted under the law of the United Kingdom, being proceedings between the State and the body or its other members: see section 8(1).

8

Section 14 provides that references in Part 1 of the SIA to a State include references to the sovereign or other head of that State in his public capacity. Thus Part 1 affords a form of immunity to heads of states when, but only when, acting in their public capacity. This is traditionally described as immunity ratione materiae. It provides nothing for any members of their family, and nothing in respect of their private activities.

9

Part III of the SIA headed " Miscellaneous And Supplementary" begins with section 20, headed "Heads of State", and provides as follows:

"(1) Subject to the provisions of this section and to any necessary modifications, the Diplomatic Privileges Act 1964 shall apply to—

(a) a sovereign or other head of State;

(b) members of his family forming part of his household; and

(c) his private servants,

as it applies to the head of a diplomatic mission, to members of his family forming part of his household and to his private servants.

(2) The immunities and privileges conferred by virtue of subsection (1)(a) and (b) above shall not be subject to the restrictions by reference to nationality or residence mentioned in Article 37( 1) or 38 in Schedule 1 to the said Act of 1964.

(3) Subject to any direction to the contrary by the Secretary of State, a person on whom immunities and privileges are conferred by virtue of subsection (1) above shall be entitled to the exemption conferred by section 8(3) of the Immigration Act 1971.

(5) This section applies to the sovereign or other head of any State on which immunities and privileges are conferred by Part I of this Act and is without prejudice to the application of that Part to any such sovereign or head of State in his public capacity."

10

Finally section 21, headed Evidence by Certificate, provides so far as is relevant:

"A certificate by or on behalf of the Secretary of State shall be conclusive evidence on any question —

(a) whether any country is a State for the purposes of Part I of this Act, whether any territory is a constituent territory of a federal State for those purposes or as to the person or persons to be regarded for those purposes as the head or government of a State;…"

11

The main purpose of the DPA referred to in section 20 of the SIA, was to make specified parts of the Vienna Convention on Diplomatic Relation part of the law of the United Kingdom. Section 4, headed Evidence, provided:

"If in any proceedings any question arises whether or not any person is entitled to any privilege or immunity under this Act a certificate issued by or under the authority of the Secretary of State stating any fact relating to that question shall be conclusive evidence of that fact."

12

For present purposes the relevant provisions of the Vienna Convention incorporated into UK law are as follows:

" Article 1

For the purpose of the present...

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