HL Deb 23 March 1978 vol 389 cc1928-41

11.38 a.m.

Report received.

Clause 2 [Submission to jurisdiction]:

Baroness ELLES had given Notice of her intention to move Amendment No. 1: Page 2, line 2, leave out from ("agreement") to end of line 4.

The noble Baroness said: My Lords, I do not intend again to enter into a long argument on the subject. We discussed this matter quite fully during the Committee stage, but for two reasons I should like to draw the attention of your Lordships' House to my Amendment. First, the noble and learned Lord said in his reply, which is to be found at col. 1494 of Hansard, that he imagined that the effect of the Amendment is intended to be that an agreement by a foreign State that a contract is to be governed by the law of the United Kingdom is to be treated as an agreement to waive immunity from the jurisdiction of the United Kingdom courts. The point of my Amendment, which removes the two lines and the "but", is a question of submission to the jurisdiction and not a question of waiver of immunity.

Where a contract contains a provision agreeing the law governing the contract, whether it is municipal or international law, I believe it is correct to say that the choice of that law would influence the courts or the tribunal to be set up to decide the validity and interpretation of the particular agreement in question. So I think that this particular subsection (2) referring to waiver of immunity would be very much improved if those last two lines were deleted. I believe this causes more confusion than assistance in giving a guide to individuals entering into contracts with foreign States as to the submission to jurisdiction of that foreign State.

I am fortified in what I say by the support given to my original Amendment by the noble and learned Lords, Lord Denning and Lord Wilberforce. If the lines are to remain, I think this has considerable competence in international law. As I say, I do not think this is the time to go into it, but I should be most grateful if the noble and learned Lord would look into it and possibly at some stage I could have a written reply and, if my right honourable friend in another place considers that it is justified, the matter could be raised again in the Commons. On that basis, I shall not seek to move the Amendment.

Clause 3 [Commercial transactions and contracts to be performed in United Kingdom]:

11.41 a.m.

The LORD CHANCELLOR moved Amendment No. 2: Page 3, line 1, leave out ("or other similar character) in which a State") and insert (", professional or other similar character) into which a State enters or in which it").

The noble and learned Lord said: My Lords, the purpose of this Amendment is to make it clear that proceedings relating to a commercial transaction in respect of which a State enjoys no immunity under Clause 3 include proceedings relating to professional services such as those which may be given by a physician or a surgeon, a lawyer or an architect. Where a State engages the services of such persons it is clearly acting in the same way as a private individual and should not be entitled to immunity. I hope that the Amendment meets the point raised by the noble Baroness, Lady Elles, at the Committee stage, when she questioned whether the present wording would be adequate to cover professional services sought in anticipation of a commercial transaction which is later abandoned. I have looked at the wording to see if it was possible to enlarge their scope, and the words that I now propose will, I think, not only meet the example given by the noble Baroness but also embrace other activities like medicine and accountancy which ought to be covered. I beg to move.

Baroness ELLES

My Lords, I am most grateful to the noble and learned Lord for meeting my point and for going even wider. I notice that he took very great care not to define too closely the word "professional" but he certainly meets the point that I made at the Committee stage.

On Question, Amendment agreed to.

Clause 4 [Contracts of employment]:

11.44 a.m.

Baroness ELLES moved Amendment No. 3: Page 3, line 13, after ("where") insert ("the employee was recruited in the United Kingdom and was ordinarily resident there when recruited.").

The noble Baroness said: My Lords, first I should like to express my gratitude to the noble and learned Lord for accepting the second half of my original Amendment in the Committee stage in relation to this clause, but as he may remember I was very concerned with cases where individuals are recruited in the United Kingdom and where the contract is not necessarily made in the United Kingdom. Earlier, we were discussing in your Lordships' House the question of United Kingdom citizens who are working in Uganda where there is difficulty in the matter of payment and the fact that there is no action that these individuals can take against the Government in such circumstances.

I should like to draw the attention of the House to the fact that many people are recruited from this country. The contracts are not always completed in the United Kingdom and I believe that this is something which the Government should look at very much more closely than they have hitherto done. They should either accept the Amendment as it stands or at some stage give some kind of undertaking that the individual cases which have arisen, are arising and undoubtedly will arise in the future will have some kind of guarantee from our own Government. I beg to move.

Lord WILBERFORCE

My Lords, should like briefly to reaffirm my support for the Amendment moved by the noble Baroness. This is a type of transaction which is becoming more and more current, and I certainly agree that Clause 4(1) is a little too restrictive. One would like to see Clause 4(1) adjusted in the positive form so as to correspond to the negative which appears in subsection (2)(b). This states that the subsection does not apply if, at the time when the contract was made the individual was neither a national of the United Kingdom nor habitually resident there". Of course that is quite right. I should like to see the counterpart of that introduced into subsection (1), so that if the individual is a national of the United Kingdom or habitually resident in the United Kingdom or, to use the compendious expression, recruited by a foreign State, the immunity should not attach. The immunity is removed by the clause as drafted only, where the work is to be performed wholly or partly in the United Kingdom", which is quite often not the case in these recruitment contracts. Without prolonging the discussion I would very much support what the noble Baroness has said and hope that at some stage, if not today, Clause 4(1) could be enlarged.

The LORD CHANCELLOR

My Lords, I shall shortly be moving Amendment No. 4 to Clause 4, and if that is approved a State will not be immune in relation to proceedings concerning contracts of employment made between the State and an individual where the contract was either made in the United Kingdom or the work is to be wholly or partly performed in the United Kingdom. The Amendment we are now discussing would add another class of contract which venture to think must be very exceptional, although both noble Lords have indicated that such contracts are becoming more common, which would lead me to give another thought to what is proposed. These are contracts which are not made in the United Kingdom nor are to be performed in the United Kingdom, and which recruit an employee in the United Kingdom at a time when he was ordinarily resident there.

I find it a little difficult to see justification for our courts entertaining litigation in those circumstances, even if the employer is a private individual and not a foreign State. The plaintiff's residence is universally considered insufficient, even unacceptable, as a ground for assuming jurisdiction and, equally, recruitment in the United Kingdom seems to me to be no adequate ground for giving jurisdiction to our courts. If our courts could not in any event entertain litigation there can be little point in providing that a foreign State is not to enjoy immunity in our courts in that litigation. It would appear that the only instance where a contract of this kind could be litigated in an English court would be where it contains provision that it is to be governed by English law.

The courts have a discretion to entertain proceedings relating to such a contract and in those proceedings, if the Amendment now proposed were adopted and its criteria applied, the foreign State could not claim immunity. But I venture to think that those cases must be rare. I doubt whether even the combination of English law, local recruitment and residence of the plaintiff in the United Kingdom establish sufficient links to justify removal of immunity; and I am afraid that in relation to Member States of the European Convention a provision of this kind could probably not be legitimated even by a declaration under Article 24. There are many difficulties in the way but if the noble Baroness would be good enough to withdraw the Amendment at this stage I shall certainly see that further consideration is given to this matter, either by further proceedings in this House or in another place.

Baroness ELLES

My Lords, I am very grateful to the noble and learned Lord for what he has said. I think it should be borne in mind that those of us who read our daily newspapers from one end to the other see an enormous number of advertisements by foreign governments for professors, technologists and scientists. These are in fact recruiting advertisements, but since, as I understand it, it is the foreign government itself which is offering these posts, the contract is actually finalised in the foreign State itself and these advertisements merely act as recruiting formulae. This is just to give one example to support my earlier statement that I do believe that there are an increasing number of instances where people are being recruited from this country and where the contract itself is actually made abroad. In view of what the noble and learned Lord has said, I should be most grateful if he would look at this again, and we could perhaps have it pursued in another place if seen fit. I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

The LORD CHANCELLOR moved Amendment No. 4: Page 3, line 13, leave out from (" where ") to end of line 14 and insert (" the contract was made in the United Kingdom or the work is to be wholly or partly performed there.").

The noble and learned Lord said: My Lords, the purpose of this Amendment, to which I have already referred briefly, is to provide that a State is not to be immune as respects proceedings relating to a contract of employment between a State and an individual where the contract was made in the United Kingdom. At present, Clause 4 removes immunity from contracts of employment only where the work is to be wholly or partly performed in the United Kingdom. This Amendment meets some of the criticism that was made at the Committee stage. Then, the noble Baroness, Lady Elles, referred to an increasing number of cases of contracts of employment, generally made in the United Kingdom and involving British citizens, where persons are recruited by reason of their specific and special scientific or technical knowledge or their administrative capability, or for other specific reasons which, I am happy to think, send our fellow countrymen to all parts of the world. They are invited to render services abroad, particularly in less developed countries and, after themselves incurring heavy expenditure, they may find when they get there that their services are not wanted after all.

The noble Baroness quoted a case of an officer in the Armed Forces who was pressed to take such a job, but who, after waiting three months in the country concerned, was informed that there was no post for him. The noble Baroness properly, if I may say so, urged that such a person should have a remedy in the courts of this country. He cannot rely on Clause 4 as it is now, and accordingly this Amendment is now made. I hope it meets the point that was raised. I think it is a helpful improvement. I beg to move.

Baroness ELLES

My Lords, I am most grateful to the noble and learned Lord for having met this point, and of course I strongly support the Amendment that he has put down.

On Question, Amendment agreed to.

Clause 10 [Ships used for commercial purposes]:

The LORD CHANCELLOR moved Amendment No. 5: Page 5, line 28, at end insert ("or").

The noble and learned Lord said: My Lords, it may be convenient to consider with this Amendment Amendment No. 6. In each case, the word "or" is added. This is a minor drafting point which was raised by the noble Baroness at the Committee stage. The insertion of the word "or" does not affect the meaning of the subsections concerned, but I think that the following of the wording of the clause will be improved by the insertion of the word "or". As the clause is concerned with shipping, perhaps an additional "or" is not out of place. I do apologise for that terrible pun. I beg to move.

On Question, Amendment agreed to.

The LORD CHANCELLOR moved Amendment No. 6: Page 6, line 2, at end insert ("or").

On Question, Amendment agreed to.

Clause 13 [Other procedural privileges]:

Lord WILBERFORCE moved Amendment No. 7: Page 7, line 22, leave out ("in an action in rem").

The noble and learned Lord said: My Lords, I do not want to take up a lot of time on this because it was fairly well discussed when the House was in Committee. It really should be considered together with Amendment No. 8, which was the one I moved at the Committee stage and on which some debate took place. Both Amendments, which are alternatives, concern the remedying of an injunction, which both I and my noble friend Lord Denning thought was an important head of relief to be available in certain cases. The anxiety expressed by the noble and learned Lord on the Woolsack, which, if I may say so, I fully understand, is against the granting of an injunction against a State which may involve difficulties when it comes to enforcement. But I do not think that that is really a danger which is brought about by either of my Amendments. It is certainly not one into which I would desire to run the country. What I think both my noble and learned friend Lord Denning and I were concerned about was that the court should be empowered, where there is property in this country, to grant interim interlocutory relief of a kind which would prevent that property being removed. What very often happens is that property is held by some bank or third party and one wishes to secure that the money in that bank shall be held there and not removed pending determination of the dispute.

At the Committee stage I sought to achieve this by inserting (a) before (b) in line 33, where it says "Subsection (2)(b)", so as to read "Subsection (2)(a) or (2)(b)". I think the noble and learned Lord still felt that that might involve proceedings against a State itself, although subsection (4) merely refers to process in respect of property and does not refer to any process against the State itself. If the noble and learned Lord still thinks that that is a difficult Amendment, I venture to suggest an alternative here which would consist of removing from line 22 of subsection (2)(b) the words, "in an action in rem". If one deleted those limiting words, one would have in (2)(b) as it would then appear, a provision for the arrest, detention or sale of property which I should have thought was harmless, since it does not bring about a direct collision between the courts of this country and a sovereign State.

Having said that, which briefly repeats what I said at Committee stage, I just wanted it to be clear, in case the matter comes to be considered again in another place, that I do think this an important subject and one which will have to be dealt with somehow and at some time. I believe that the courts ought not to be deprived of the power to freeze assets in this country where there is a genuine and properly constituted dispute in which a State may be involved. So, formally, I beg to move Amendment No. 7 at this stage.

The LORD CHANCELLOR

My Lords, I fully understand that the noble and learned Lord is mainly concerned with preventing States from invoking immunity against court orders designed to preserve the property in dispute in the litigation before the court. The noble and learned Lord has indicated that he is not aiming at interlocutory injunctions generally, and in particular the kind of injunction which has come to be known as the Mareva injunction, a matter about which I learned much for the first time during our earlier discussion of these highly technical matters.

It was pointed out in Committee, and I think it remains valid, that the Government see very serious difficulties if court orders which are subject to personal sanctions were to be allowed against foreign States. I have a good deal of sympathy with the more limited objectives, but even orders for the detention or preservation of the subject matter of the litigation present, I think, some difficulties. Those orders, although they relate to particular property, nevertheless normally can be enforced only by a contempt process, which noble Lords may think is the kind of sanction which is inappropriate against States.

My own view, as at present advised, is that neither of the noble and learned Lord's Amendments will satisfactorily achieve his objective. The first, I venture to think, would leave the clause in a form which a court might find somewhat bewildering. References to "arrest" or "sale" of property are unaccustomed except in connection with actions in rem for ships. The second Amendment, I venture to think, would be so wide as to let in injunctions of a personal nature.

Accordingly, I am afraid that I still see difficulties in regard to these Amendments, but I am very willing to respond to the suggestion of the noble and learned Lord that the matter should be further considered. We shall certainly do that, and I shall seek the best advice available to see whether we can find some way of meeting what the noble and learned Lord has in mind.

Lord WILBERFORCE

My Lords, I am grateful for the noble and learned Lord's sympathy, though I would sooner have had his support. I should like to make it clear that the process I have in mind does not involve any process against the State—it would be a process against the third party, whoever it is is holding money. Thus, in the well-known case against the Bank of England, the company which I was then representing took out an injunction against the Bank of England from parting with certain gold bars. It was very effective and had very beneficial results when it was found that the Bank of England had miscounted the bars. There were a certain number which ultimately the plaintiffs in the case were able to recover. Therefore, it is not really quite so dangerous as the noble and learned Lord suggests.

However, with the support of his sympathy for the objective—I quite agree that my two Amendments are probably technically inadequate—I am happy to let the matter go, and hope that perhaps some more skilled tool than I have been able to bring to bear may produce the right sort of Amendment to give the courts the right remedy, and one which will not involve us in diplomatic incon- veniences. I beg leave to withdraw Amendment No. 7.

Amendment, by leave, withdrawn.

[Amendment No. 8 not moved.]

Clause 15 [Restriction and extension of immunities and privileges]:

12.3 p.m.

The LORD CHANCELLOR moved Amendment No. 9: Page 9, line 12, after ("any") insert ("treaty, convention or other").

The noble and learned Lord said: My Lords, I beg to move Amendment No. 9. This Amendment is linked with Amendment No. 11, which concerns the meaning of the expression "agreement" in Clause 2(2) and Clause 13(3), and includes in it a treaty, convention or other international agreement. As the international agreements mentioned in Clause 15 cover an identical class of international instruments it is necessary to use the same language here. I beg to move.

On Question, Amendment agreed to.

The LORD CHANCELLOR moved Amendment No. 10:

Page 9, line 17, at end insert— (" ( ) Any statutory instrument containing an Order under this section shall be subject to annulment in pursuance of a resolution of either House of Parliament.").

The noble and learned Lord said: My Lords, I beg to move Amendment No. 10. This Amendment implements an undertaking which I gave in Committee. Its effect will be to make Orders in Council restricting or extending the immunities accorded under the Bill subject to annulment by a resolution of either House of Parliament. I beg to move.

Baroness ELLES

My Lords, I am grateful once again to the noble and learned Lord for having listened sympathetically to my Amendment on this particular matter. As he will recall, I had proposed an Affirmative Resolution rather than a Negative Resolution, but I thought that the noble and learned Lord gave very convincing reasons why it might be difficult in certain circumstances to have an Affirmative Resolution. For my part, I should be very happy to accept his proposed Amendment. However, perhaps I may be allowed to make a reservation. Should my right honourable friend in another place decide that he would prefer an Affirmative Resolution, I should like to leave the matter open. So far as I personally am concerned, I am fully satisfied that this would be sufficient guarantee in the circumstances.

On Question, Amendment agreed to.

Clause 17 [Interpretation of Part I]:

12.6 p.m.

The LORD CHANCELLOR moved Amendment No. 11:

Page 10, line 9, at end insert— (" ( ) In sections 2(2) and 13(3) above references to an agreement include references to a treaty, convention or other national agreement.").

The noble and learned Lord said: My Lords, I beg to move Amendment No. 11. This is a somewhat modified version of a Government Amendment moved during the Committee stage. Clause 2(2) of the Bill provides that the immunity of a foreign State may be waived by prior written agreement. Clause 13(3) provides that relief by way of injunctions and various other remedies and certain processes of enforcement are to be available against States with the written consent of the State concerned, and that any such consent may be contained in a prior agreement.

It is intended that these prior agreements should include not only agreements entered into for the purpose of a particular transaction or litigation by the parties, but also instruments by which the State involved has undertaken to waive its immunity in a manner binding that State in its international relations.

The new subsection makes it apparent that not only contracts are involved but also instruments like treaties and Conventions which are binding in public international law. I hope that this Amendment will deal with the questions that were raised by the noble and learned Lord, Lord Wilberforce, in Committee. I beg to move.

Lord WILBERFORCE

My Lords, I should just like to say that I would regard this as an important Amendment and one which makes a significant addition to the Bill. We should be very grateful to the noble and learned Lord on the Woolsack for having proposed it.

On Question, Amendment agreed to.

Clause 23 [Short title, repeals, commencement and extent]:

12.8 p.m.

The LORD CHANCELLOR moved Amendment No. 12: Page 13, line 41, leave out from ("proceedings") to ("and") In line 1 on page 14 and insert ("in respect of matters that occurred before the coming into force of this Act;").

The noble and learned Lord said: My Lords, I beg to move Amendment No. 12. If this Amendment is adopted the Bill will not apply to proceedings in respect of matters that occurred before the coming into force of the Bill. This Amendment meets the objective of an Amendment moved in Committee by the noble Baroness, Lady Elles, and strongly supported, as I recollect, by the noble Lord, Lord O'Brien of Lothbury, who thought that it was necessary and said that he was speaking not only on his own behalf but for others in the City who had expressed a view. 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. I beg to move.

Baroness ELLES

My Lords, once again I should like to express my gratitude to the noble and learned Lord on the Woolsack for having met this point. It was a very important point and, as the noble and learned Lord rightly said, strongly supported by the noble Lord, Lord O'Brien of Lothbury. Perhaps in this connection I may be allowed to ask the noble and learned Lord whether he can give any indication under subsection (4) of the clause as to when he envisages that the Bill might come into force.

Lord O'BRIEN of LOTHBURY

My Lords, may I thank the noble and learned Lord on the Woolsack for this Amendment, which I believe to be a wise one.

The LORD CHANCELLOR

My Lords, I thank the noble Baroness, Lady Elles, and the noble Lord, Lord O'Brien of Lothbury, for their support for this Amendment. I am afraid that I cannot answer the question posed by the noble Baroness. It is a matter of urgency that the Bill should be enacted. That is why we have forced the pace a little upon noble Lords and the noble Baroness in trying to get this matter through so quickly. It was comforting to hear from the noble Lord, Lord O'Brien, that the City attaches great importance to this. I hope, therefore, that in another place the Bill will receive as speedy and sympathetic treatment as it has received here.

On Question, Amendment agreed to.

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