HL Deb 28 June 1978 vol 394 cc322-5

[No. 13A.]

In subsection (3), line 4, leave out ("3, 4 and 9 do not apply in the case of any") and insert ("2(2), 3, 4, and 9 do not apply in the case of any written agreement,").

The noble Baroness said: My Lords, I am even more grateful for the agility of the noble Lord opposite which has allowed me to move my Amendment No. 13A before a decision is taken on Amendment No. 13. With the permission of your Lordships' House, I think it is important very briefly to enter into a short history of this Amendment in order that it should not be thought in another place that we are trying to improve on something they have produced when we are almost going back to the status quo of the Bill as it left your Lordships' House. An Amendment was moved by myself at the Committee stage of this Bill in this House to prevent the effect of the Bill being retrospective. This Amendment was powerfully and convincingly supported at the time by the noble Lord, Lord O'Brien of Lothbury, and the noble and learned Lord on the Woolsack did take into account what was said during the Committee State of the Bill.

I withdrew my Amendment owing to the defects in drafting, and the noble and learned Lord on the Woolsack himself produced an Amendment at the Report Stage of the Bill. If I may quote, he said at the Report stage in the Official Report on 23rd March, column 1940: It was put—and I fully sympathise with the argument—that the United Kingdom should not be seen to be acting in a way that would alter retrospectively the terms and conditions of existing agreements, or upset the basis on which foreign States might have taken past decisions". Those were his words when he moved his Amendment at the Report stage of the Bill. I should say that we had a very short time in which to consider all these Amendments; we had something like two working days between the Committee stage and the Report stage, and the full effects of both my Amendment and the Amendment of the noble and learned Lord were not fully taken into account. When the Bill went to another place, the Government submitted a further Amendment, which is now in effect Amendment No. 13, which is for our consideration.

The effect of my Amendment would be that written agreements which were made before the passing of this Act would fall within the matters which would be excluded. My Amendment would remove any element of retrospection, which I believe to be in conformity with fundamental principles of the English system of law as we know it. This matter was debated in another place and, as I understand it from my reading of both the Committee stage and the Report stage in another place, it was left for the noble and learned Lord on the Woolsack to reconsider this particular Amendment and possibly to take into account further Amendments. I should like to add here that not only is any retrospective legislation contrary to accepted principles within our system but that I believe it would be contrary to the spirit of the Convention whose Article 35 we are seeking to implement.

Furthermore—and this is one of the most important points in my argument for putting forward this Amendment—it could be detrimental to the good name of legal advisers who, when the agreements were drawn up, could say with safety, and indeed in truth, that this clause has no legal effect because in the United Kingdom the rule of absolute immunity obtains. If Section 2, or Clause 2 as it is now, is retained in 3A of the Commons Amendments, this would not only no longer be true but would have a retrospective effect on those written agreements which had been entered into between either an individual or a body corporate and a foreign State; and I am quite certain that your Lordships would agree that this would have a most undesirable effect. There are very large sums involved in agreements which have been negotiated between authorities and corporations in the City of London and foreign States. Based on the good name of Britain, and as the law stood at the time the agreements were made, it was always assumed that undertakings of States to waive immunity could never be enforced.

The purpose of this Amendment is to remove any retrospective effect of this Bill, when it comes into force, on those written agreements. If this Amendment is accepted, legal advisers, who not only now but in the future have to advise States on the question of immunity, will be able to say that we do not pass retrospective legislation, and nothing will affect the present contract which we are making. I would add that this is often apparently a major element in this kind of negotiation. Which system of law should apply, and where these contracts should be made, is considered according to whether a State is likely to pass retrospective legislation. I think we have a good name for this in our own system of law, and I should therefore like to ensure that these Amendments are accepted in order to uphold that legal tradition. I beg to move.

The LORD CHANCELLOR

My Lords, I have given consideration to this highly technical matter. I do not think that there is any real element of retrospection involved in the Bill as it now stands, but as it appears that not only the noble Baroness but other distinguished people in the City seem to take a different view, I certainly would not want to sully the reputation of the City. Nevertheless, I ought to point out that, even if the Amendments now proposed are agreed to, they will not necessarily have the effect of preserving the ability of foreign States who disregard past written agreements of theirs to submit to the jurisdiction of our courts.

The effect of those agreements will continue to be determined at common law. Since the Court of Appeal majority decision in the Trendtex case, it is at least probable that all the types of contracts, in which these agreements to submit are found, are themselves of a commercial character which allows no State immunity; so I do not think the occasion to rely on the invalidity of the written agreement will arise. However, I do not quarrel with the view of some that the impression at any rate may be created that we are engaged in retrospective legislation, and if the noble Baroness wishes to press these Amendments I shall certainly not seek to gainsay her.

On Question, Amendment to the Amendment agreed to.

Baroness ELLES moved Amendment No. 13B as a Lords Amendment to Commons Amendment No. 13: