Uganda Company (Holdings) Ltd v Government of Uganda
| Jurisdiction | England & Wales |
| Judgment Date | 30 November 1978 |
| Date | 30 November 1978 |
| Court | Queen's Bench Division (Commercial Court) |
(Donaldson J.)
Sovereign immunity — Absolute and restrictive theories — Which theory applicable to actions in personam in England — Extent of restrictive theory — Whether permitting inquiry into meaning and effect of foreign State's legislation in case to which that State is a party — Act of State doctrine
International law in general — Relation to municipal law — Whether customary international law part of the law of England — Whether doctrine of binding precedent applicable to decisions on international law — Irreconcilable decisions of Court of Appeal — The law of England
Summary: The facts:—On 30 May 1977 the plaintiffs applied for an injunction to restrain the defendants from disposing of a quantity of tea situated in a London warehouse. A writ was issued on 31 May 1977 and served upon the defendant by post from London. The plaintiffs claimed an indemnity in respect of £240,185 paid by them as guarantors of the obligations of a borrower, one of their Ugandan subsidiaries. The plaintiffs also claimed half of that sum as a contribution between co-guarantors because they had paid the whole sum and the co-guarantor, a Ugandan subsidiary of the borrower, had paid nothing. The defendant, the Government of Uganda, was sued in place of the borrower and the co-guarantor, because it was alleged that it had succeeded to the liabilities of those companies by virtue of compulsory acquisition legislation. The defendant applied for an order setting aside both the writ and all subsequent proceedings on the grounds that the defendant, as the government of a foreign sovereign State, was entitled to sovereign immunity.
Held:—The writ and subsequent proceedings were set aside.
(1) The restrictive theory of sovereign immunity did not apply to actions in personam in English law. The decisions of the Court of Appeal in Trendtex Trading Corporation v. Central Bank of Nigeria1 and Thai-Europe Tapioca Service v. Government of Pakistan2 were irreconcilable on this point, so that the Court had to choose which to follow. The Court elected to follow Thai-Europe Tapioca, because that decision was based upon a number of earlier cases and, as a decision which asserted the importance of precedent, it was of more value as
a precedent than was Terndtex, which denied that the doctrine of binding precedent applied to questions of international law.(2) Even if the restrictive theory adopted in Trendtex were applied, the present case fell outside its scope. The case could not be resolved without judicial inquiry into the meaning and effect of Ugandan domestic legislation in a suit to which the Government of Uganda was a party. The restrictive theory did not extend that far.
The following is the text of the judgment of the Court:
This summons raises issues of some general importance and it is for that reason, and because the parties have requested it, that I am giving judgment in open court. The primary issue is whether the defendants, as the government of a foreign sovereign State, can be impleaded in the English courts without their consent. But this has led to a consideration of whether the absolute or restricted concepts of sovereign immunity apply under the law of England to actions in personam. And this in turn has raised fundamental questions concerning the doctrine of precedent and the duty of a trial Judge if faced with conflicting decisions of the Court of Appeal.
The action has an unusual history which should be summarized, even though it is no longer directly material. On 30 May 1977, the plaintiffs applied ex parte for a Mareva injunction restraining the defendants from disposing of a quantity of tea warehoused in London. This application was coupled with another seeking leave to issue a writ for service out of the jurisdiction and to serve notice of it on the defendants in Uganda. Both applications were granted.
The writ was issued on 31 May 1977. Solicitors in Uganda were instructed to serve notice of the writ on the Ugandan Attorney General personally as the proper officer of the defendants. The solicitors were unable to do so. The plaintiffs' London solicitors then served notice of the proceedings on the Ugandan Attorney General by post from London and in due course received advice of delivery cards from the Post Office.
By the terms of the writ, the plaintiffs claim an indemnity in respect of the sum of £240,185.48 paid by them as guarantors of the obligations of a Ugandan company, to which I will refer as ‘the borrower’. The plaintiffs are an English company and the borrower was a Ugandan subsidiary. The plaintiffs also claim half this sum as a contribution due between co-guarantors, they having paid the whole sum guaranteed and the co-guarantor having paid nothing. The co-guarantor was a Ugandan subsidiary of the borrower. The defendants are sued in place of the borrower and of the co-guarantor because, it is said, they have succeeded to the liabilities of those companies upon and by virtue of a compulsory acquisition under the Ugandan Properties and Businesses (Acquisition) Decree 1972 (Decree no. 32 of 1972), the Ugandan Properties and Businesses (Acquisition) Order 1972 (S.I. 1972 no. 189) and the Properties and Businesses (Acquisition) Decree 1975 (Decree no. 11 of 1975).
The proceedings first came to my attention when I was asked to give leave to the plaintiffs to sign judgment in default of appearance. The application was made in the usual way by leaving it with my clerk. I asked the plaintiffs' solicitors for an explanation of how it was possible to sign against the government of a foreign sovereign State in these circumstances. Mr. Stagg, a very experienced legal executive with the plaintiffs' London solicitors, attended and explained the circumstances. He also said that he had taken advice from counsel. I asked to see counsel or an opinion from counsel and in due course was provided with a most helpful joint opinion by Mr. Anthony Evans, Q.C., and Mr. M. G. Collins.
This opinion, inter alia, referred me to the course adopted by Sir Robert Phillimore in The Parlement BelgeELR, (1879) 4 P.D. 129 at pp. 144 to 145 when the question of sovereign immunity arose in that case. Following this precedent, I inquired whether H.M. Attorney General wished to intervene and was told that he did not. However, he pointed out that if I required assistance on the law, counsel could be instructed by the Treasury solicitor to act as an amicus. I directed that the plaintiffs' application be renewed on motion and Mr. Peter Webster, Q.C., and Mr. Nicholas Bratza were instructed as amici curiae.
When the motion came on for hearing it emerged that there was considerable doubt whether the defendants had been properly served, bearing in mind in particular the fact that no order had been made for substituted service by post. However, it appeared that the defendants might be aware of the proceedings and might, if served or further served by post with notice of the proceedings, wish to enter a conditional appearance. The matter was adjourned to enable this to be done. In anticipation of the hearing, Mr. Webster and Mr. Bratza had prepared a memorandum of...
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