§ [References are to Bill No. 100 as first printed for the Commons.]
§ [No. 1.]
§ Clause 3, page 2, line 40, leave out from 'means' to end of line 8 on page 3 and insert—
- '(a) any contract for the supply of goods or services;
- (b) any loan or other transaction for the provision of finance and any guarantee or indemnity in respect of any such transaction or of any other financial obligation; and
- (c) any other 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;'
§ The LORD CHANCELLORMy Lords, I beg to move that this House doth 315 agree with the Commons in their Amendment No. 1. It may be convenient for me to remind the House that this Bill restricts the immunity which sovereign States can claim from the jurisdiction of civil courts and tribunals in the United Kingdom. Its broad effect will be that, in future, States will not be able to claim immunity in respect of any act which could also have been done by a private individual, and the provisions of the Bill will be advantageous to this country.
The purpose of the first Amendment, which is the most important of the series to be moved, is to expand in two respects the general exception from immunity of all commercial transactions entered into by a State. In the definition of "commercial transactions" in Clause 3(3)(b) of the Bill, the words:
any loan raised by a State irrespective of the purposes for which the borrowed money is to be appliedare expanded by the Amendment to:any loan or other transaction for the provision of finance and any guarantee or indemnity in respect of any such transaction or of any other financial obligation".That means that there will be no immunity in respect of loans regardless of whether the State is the lender, as sometimes happens in the case of States with surplus oil revenues, or the borrower. There is also to be no immunity where the State gives a guarantee or an indemnity. Secondly, Clause 3, as amended, will ensure that there is no immunity in the case of supply of goods or services by, as well as to, a State. I beg to move.
§ Moved, That this House doth agree with the Commons in the said Amendment.—(The Lord Chancellor.)
§ Baroness ELLESMy Lords, I thank the noble and learned Lord the Lord Chancellor for this Amendment. It goes some way to meet many of the objections that were raised in your Lordships' House and during the debates in another place. In particular, it takes into account the comments made by my right honourable friend Sir Michael Havers that a State should not have a right to claim immunity when it is acting as guarantor. That has been included in paragraph (b) of the Amendment—and for this we are grateful.
It is, of course, clear that the difficulty of defining the exercise of sovereign 316 authority is not entirely removed by this new clause, but my noble friends and I feel that the clause has gone as far as it can in any practical terms. Obviously the question of whether the exercise of sovereign authority is in fact used will have to be a matter for the courts when they look into the nature and purpose of the transaction itself. However, so far as it goes, we welcome this Amendment.
§ The LORD CHANCELLORMy Lords, I am grateful for that information from the noble Baroness. These Amendments—indeed the Bill itself—are the product of much consultation. I am happy that there is reasonable assurance about it in a highly technical field.
§ On Question, Motion agreed to.