§ 3.50 p.m.
§ The Parliamentary Secretary to the Law Officers' Department (Mr. Arthur Davidson)
I beg to move Amendment No. 1, in page 3, line 1, leave out from 'loan' to 'other' in line 2 and insert'or other transaction for the provision of finance and any guarantee or indemnity in respect of any such transaction or of any'.The purpose of this amendment is to widen the scope for non-immunity with regard to all financing transactions. It is intended to meet a criticism of the existing provisions and of the amendment moved by my right hon. and learned Friend the Solicitor-General in Committee.
The criticisms were voiced by the right hon. and learned Member for Wimbledon (Sir M. Havers). I hope that he will concede that these provisions clearly cover transactions for the provision of finance by means of forward purchase of foreign exchange over the next few years. The right hon. and learned Gentleman specifically mentioned that example in Committee.
I thank the right hon. and learned Member for Wimbledon for the constructive contributions that he has made towards making this a more comprehensive Bill. I also wish to put on record, as the Solicitor-General did in Committee, the great assistance which has been given by the City of London Solicitors' Company. Its advice has also been invaluable. I hope that the right hon. and learned Gentleman will find that this amendment meets his criticisms.
§ Sir Michael Havers (Wimbledon)
The passage of this Bill has been a tribute to the valuable co-operation which has 842 existed between the Lord. Chancellor's Office, Ministers and the City of London Solicitors' Company. Between them they have done much to improve the Bill.
This amendment is another example, following the objections that I raised in Committee, of Government reaction to make improvements, with the assistance of the City of London Solicitors' Company. It covers one example which I raised in Committee because the amendment that was moved then still left open a gap.
I wish that it were possible to remove the doubt about the definition of the exercise of sovereign authority. A solicitor should not be left in a position where he is unable to advise a client whether in certain cases the exercise of sovereign authority may operate and is therefore unable to give a firm a certificate that it will not apply. This could still have a damaging effect. The object of the Bill is to remove that doubt. That doubt still exists for the reasons that I explained in Committee.
It might be worth considering whether it is possible to look at the nature rather than the purpose of the transaction or activity in question so that one could get round the difficulty. As a matter of law, there is support for an amendment on those lines. In Lord Denning's judgment on the famous Trentex case, he held that by entering into a commercial transaction a State waives its immunity as regards proceedings relating to that transaction and that in deciding whether a transaction was a commercial one the intrinsic nature of the transaction rather than its object was the material consideration. In Article 7 of the convention on State immunity there is support for what I say.
In the spirit of co-operation that exists in both Houses I suggest that the Parliamentary Secretary should consider again the amendment which, unfortunately, was a starred amendment and could not be discussed. The Government have a chance to think again and to make the necessary amendments in the Lords.
§ Mr. Arthur Davidson
I thank the right hon. and learned Member for Wimbledon (Sir M. Havers) for what he said. The purpose of the amendment is to ensure that the advice of lawyers to their clients is given with as much clarity and certainty 843 as is reasonably possible. The right hon. and learned Gentleman's suggestions have helped.
I understand what the right hon. and learned Gentleman is getting at. He will appreciate that the determination whether there has been an exercise of sovereign authority will have to be made in the light of the circumstances of each case. It is not easy to foresee how the definition that he suggests would work in the context of the many varied circumstances that would arise.
Establishing what is the nature of a transaction or activity is likely to involve an examination of all aspects of that transaction or activity. It is difficult to see how the amendment suggested by the right hon. and learned Gentleman would assist the court since it would merely impose a limitation on the consideration of the question whether there has been an exercise of sovereign authority. Instructing a court to consider the nature of a transaction would not lead it to consider anything that it would not consider in any event.
Without making any firm assurances that an amendment will be tabled in the Lords, I assure the right hon. and learned Gentleman that I shall look at the matter again on behalf of the Government.
§ Amendment agreed to.
§ Mr. Speaker
I congratulate both the right hon. and learned Member for Wimbledon (Sir M. Havers) and the Parliamentary Secretary on not discussing the other amendment.