CYIL Vol. 4, 2013

ADDRESSING THE RELATIONSHIP BETWEEN STATE IMMUNITY AND JUS COGENS of whether international law gives one of them priority, exempts one from the legal effects of another or allows for some alternative settlement of such a conflict will be considered. II. Legal grounds and rationale of State immunity and jus cogens 1. Notion of State immunity Traditionally, the rationale of State immunity was often explained by the maxim par in parem non habet jurisdictionem demonstrating the equality of States and thus absence of one’s authority above another. Accordingly, States could not be sued before a foreign court. 4 The United States Supreme Court’s decision in The Schooner Exchange 5 is usually cited as the first statement of the foreign State immunity doctrine, wherein the Court was called upon to decide on the restitution claim of two owners of a commercial schooner that was seized by the French navy and converted into a warship. Although international law normally granted the U.S. authority to adjudicate a dispute over property present within its territory, Chief Justice John Marshall accepted the submission of France that the schooner – as a warship – was entitled to the immunity, as if it had been the emperor himself, and did not go on to inquire the validity of title to the Exchange. This classical ‘absolute’ approach to State immunity had already been altered in the early twentieth century in response to the increased participation of States in international trade, and now appears to exist in a restricted form. The basis of the restricted theory is the differentiation between acta iure imperii , acts of State that in nature reflect the sovereign authority, and acta iure gestionis , linked to any other activity in which the State involved does not act as a sovereign but as a mere legal person. Accordingly, a State is immune for all sovereign acts and, conversely, is not entitled to immunity when it purchases, rents or sells property, concludes labor contracts or is conducting another non-sovereign activity. Thus, whether a State is precluded from being sued before a foreign court depends on the nature of the act in question. The distinction between the two categories of acts, however, is not always so clear in practise and the line between public and private State conduct is often blurry. 6 The restricted approach to State immunity was employed in drafting the European Convention on State Immunity (“the Basel Convention”). 7 The Basel Convention has expressly taken into account the fact that “there is in international 4 Orakhelashvili, A., Peremptory Norms in International Law . Oxford University Press, 2009, p. 322. 5 The Schooner Exchange v. McFaddon and others , 11 U.S. 116 (1812), Judgment of 24 February 1812. 6 Caplan brings up an example of a contract between a foreign State entity and a private manufacturer for the purchase of army boots; see Caplan, L.M., State Immunity, Human Rights and Jus Cogens. In AJIL , Vol. 97 (2003), p. 758. 7 The European Convention on State Immunity, a Council of Europe instrument, entered into force on 11 June 1976 after its ratification by three States. It has now been ratified by eight States (Austria, Belgium, Cyprus, Germany, Luxembourg, the Netherlands, Switzerland and the United Kingdom) and signed by one other State (Portugal).