Al Saud & Anor v Apex Global Management Ltd [2013] EWCA Civ 642

[2013] EWCA Civ 642

Case No A2/2013/0803

IN THE COURT OF APPEAL (CIVIL DIVISION)

ON APPEAL FROM THE HIGH COURT OF JUSTICE

CHANCERY DIVISION

COMPANIES COURT

MR JUSTICE VOS

10850/2011

Venue Royal Courts of Justice, Strand, London, WC2A 2LL

Date 11/06/2013

Before

LORD JUSTICE MAURICE KAY

LORD JUSTICE RICHARDS

LORD JUSTICE BRIGGS

Between

(1) HRH Prince Abdulaziz Bin Mishal Bin Abdulaziz Al SaudAppellants

(2) HRH Prince Mishal Bin Abdulaziz Al SaudAppellant

APEX GLOBAL MANAGEMENT LIMITEDRespondent

Mr A Jones QC and Mrs R Zaffuto (instructed by Irwin Mitchell LLP) for Appellant

Mr Robert Howe QC and Ms Shaheed Fatima (instructed by HowardKennedyFsi) for Respondents

Hearing Hearing dates: 13,14 May 2013

Judgment

Introduction

[1]This is an appeal (with the leave of the judge) by two Saudi Arabian princes (the “Princes”) from the decision of Vos J dismissing their applications claiming sovereign immunity from claims made against them in an unfair prejudice petition under section 994 of the Companies Act 2006 by Apex Global Management Limited (“Apex”) in relation to the affairs of an English company Fi Call Limited (“Fi Call”). Due to the need for the parties to know the outcome of the appeal ahead of an imminent further hearing in the Chancery Division, we announced our decision dismissing the appeal on 15 May, shortly after the end of the hearing. These judgments set out our reasons for doing so.

[2]The Princes asserted sovereign immunity on the ground that, within the meaning of section 20(1)(b) of the State Immunity Act 1978 (the “SIA”), they were each members of the family of the head of state of Saudi Arabia, “forming part of his household”. It is common ground that both the Princes are members of the family of the present King of Saudi Arabia, King Abdullah bin Abdulaziz Al Saud (“King Abdullah”). The main question raised by the Princes’ applications is whether either of them formed part of King Abdullah’s household. As the Judge recognised, that issue raised an important question of construction of section 20 of the SIA which had not been addressed in any reported (or other) authority. It also raised significant issues of fact because, notwithstanding the judge’s written request, the Secretary of State for Foreign and Commonwealth Affairs declined to provide a certificate as to the status of either of the Princes under section 4 of the Diplomatic Privileges Act 1964 (“the DPA”), on the ground that his department did not have the material with which to form any sufficient view about the relevant facts.

[3]Apex’s opposition to the applications for immunity raised a second question of construction, about the extent of the exclusion from immunity in respect of actions relating to any professional or commercial activity exercised by the head of state or his household, which arises from the indirect applicability of Article 31 of the Vienna Convention on Diplomatic Relations to head of state immunity, subject to “any necessary modifications”. In short, Apex submitted both to the judge and on this appeal that, even if the Princes were to be regarded as part of King Abdullah’s household, the matters alleged against them in its s.994 petition arose out of commercial activity on their part. It is common ground that none of the alleged commercial activity took place in the United Kingdom. The application of Article 31 of the Vienna Convention to foreign diplomats excludes only commercial activity within the United Kingdom. But nonetheless, Apex submitted that, as the result of a necessary modification, the exclusion should be construed in relation to heads of state (and family members of their households) as extending to commercial activity exercised by them anywhere in the world. I shall refer to the two issues of construction which I have summarised as “the household issue” and “the commercial exception issue” respectively.

[4]On the household issue, the judge’s construction fell between those contended for by the parties. Nonetheless, on his findings of fact, neither of the Princes discharged the burden of proving that they were part of King Abdullah’s household. Accordingly, the question as to the ambit of the commercial exception to head of state immunity did not arise. But since it had been argued and was an important unresolved question, the judge decided it, broadly in accordance with Apex’s submission. Accordingly, even if the Princes had been part of King Abdullah’s household, the alleged activities relied upon in Apex’s petition would have fallen within an exception to head of state immunity.

[5]On this appeal, the Princes challenged both the judge’s conclusions on interpretation, and they also mounted a sustained attack on the judge’s findings of fact. In addition Mr Alun Jones QC (who did not appear below) advanced for the first time in this court a submission that, as a matter of law, the judge should have treated a letter from the ambassador of Saudi Arabia, stating that the Princes both formed part of King Abdullah’s household, as conclusive upon that question, there being no certificate, one way or the other, from the Secretary of State. For its part, Apex submitted on appeal that the judge ought to have adopted its narrower submission as to the scope of the concept of the head of state’s household, with the result that, if correct, the Princes would not on any view of the evidence have formed part of it.

[6]For reasons which will become apparent, I have found it convenient to address all the legal issues first, leaving the challenge to the judge’s findings of fact to the end.

Head of State immunity

[7]Prior to the coming into force of the SIA in 1978, the ambit and extent of head of state immunity from suit in the courts of England and Wales was governed by customary international law. The SIA entirely replaced that regime in relation to immunity from suit in the courts of the United Kingdom by making new provision. Section 1 makes general provision for state immunity subject as provided in Part 1 of the Act. Section 3(1)(a) provides a general exclusion from immunity as respects proceedings relating to a commercial transaction entered into by the State, and “commercial transaction” includes any 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: see section 3(3)(c). Section 8 contains a specific exception from immunity as respects proceedings relating to a State’s membership of a body corporate which(a) has members other than States; and

(b) is incorporated or constituted under the law of the United Kingdom, being proceedings between the State and the body or its other members: see section 8(1).

[8]Section 14 provides that references in Part 1 of the SIA to a State include references to the sovereign or other head of that State in his public capacity. Thus Part 1 affords a form of immunity to heads of states when, but only when, acting in their public capacity. This is traditionally described as immunity ratione materiae. It provides nothing for any members of their family, and nothing in respect of their private activities.

[9]Part III of the SIA headed “Miscellaneous And Supplementary” begins with section 20, headed “Heads of State”, and provides as follows:

“(1) Subject to the provisions of this section and to any necessary modifications, the Diplomatic Privileges Act 1964 shall apply to— (a) a sovereign or other head of State; (b) members of his family forming part of his household; and (c) his private servants, as it applies to the head of a diplomatic mission, to members of his family forming part of his household and to his private servants. (2) The immunities and privileges conferred by virtue of subsection (1)(a) and (b) above shall not be subject to the restrictions by reference to nationality or residence mentioned in Article 37(1) or 38 in Schedule 1 to the said Act of 1964. (3) Subject to any direction to the contrary by the Secretary of State, a person on whom immunities and privileges are conferred by virtue of subsection (1) above shall be entitled to the exemption conferred by section 8(3) of the Immigration Act 1971. … (5) This section applies to the sovereign or other head of any State on which immunities and privileges are conferred by Part I of this Act and is without prejudice to the application of that Part to any such sovereign or head of State in his public capacity.” (a) a sovereign or other head of State; (b) members of his family forming part of his household; and (c) his private servants, as it applies to the head of a diplomatic mission, to members of his family forming part of his household and to his private servants. (2) The immunities and privileges conferred by virtue of subsection (1)(a) and (b) above shall not be subject to the restrictions by reference to nationality or residence mentioned in Article 37(1) or 38 in Schedule 1 to the said Act of 1964. (3) Subject to any direction to the contrary by the Secretary of State, a person on whom immunities and privileges are conferred by virtue of subsection (1) above shall be entitled to the exemption conferred by section 8(3) of the Immigration Act 1971. … (5) This section applies to the sovereign or other head of any State on which immunities and privileges are conferred by Part I of this Act and is without prejudice to the application of that Part to any such sovereign or head of State in his public capacity.”

[10]Finally section 21, headed Evidence by Certificate, provides so far as is relevant:

“A certificate by or on behalf of the Secretary of State shall be conclusive evidence on any question – (a) whether any country is a State for the purposes of Part I of this Act, whether any territory is a constituent territory of a federal State for those purposes or as to the person or persons to be regarded for those purposes as the head or government of a State;…” (a) whether any country is a State for the purposes of Part I of this Act, whether any territory is a constituent territory of a federal State for those purposes or as to the person or persons to be regarded for those purposes as the head or government of a State;…”

[11]The main purpose of the DPA referred to in section 20 of the SIA, was to make specified parts of the Vienna Convention on Diplomatic Relation part of the law of the United Kingdom. Section 4, headed Evidence, provided:

“If in any proceedings any question arises whether or not any person is entitled to any privilege or immunity under this Act a certificate issued by or under the authority of the Secretary of State stating any fact relating to that question shall be conclusive evidence of that fact.”

[12]For present purposes the relevant provisions of the Vienna Convention incorporated into UK law are as follows: “Article 1 For the purpose of the present Convention, the following expressions shall have the meanings hereunder assigned to them: … (e) a “diplomatic agent” is the head of the mission or a member of the diplomatic staff of the mission; … (h) a “private servant” is a person who is in the domestic service of a member of the mission and who is not an employee of the sending State; Article 31 “1. A diplomatic agent shall enjoy immunity from the criminal jurisdiction of the receiving State. He shall also enjoy immunity from its civil and administrative jurisdiction, except in the case of:(a) a real action relating to private immovable property situated in the territory of the receiving State, unless he holds it on behalf of the sending State for the purposes of the mission;

(b) an action relating to succession in which the diplomatic agent is involved as executor, administrator, heir or legatee as a private person and not on behalf of the sending State;

(c) an action relating to any professional or commercial activity exercised by the diplomatic agent in the receiving State outside his official functions. Article 37 1. The members of the family of a diplomatic agent forming part of his household shall, if they are not nationals of the receiving State, enjoy the privileges and immunities specified in Articles 29 to 36. Article 39 1. Every person entitled to privileges and immunities shall enjoy them from the moment he enters the territory of the receiving State on proceeding to take up his post or, if already in its territory, from the moment when his appointment is notified to the Ministry for Foreign Affairs or such other ministry as may be agreed.. 2. When the functions of a person enjoying privileges and immunities have come to an end, such privileges and immunities shall normally cease at the moment when he leaves the country, or on expiry of a reasonable period in which to do so, but shall subsist until that time, even in case of armed conflict. However, with respect to acts performed by such a person in the exercise of his functions as a member of the mission, immunity shall continue to subsist.” (e) a “diplomatic agent” is the head of the mission or a member of the diplomatic staff of the mission; … (h) a “private servant” is a person who is in the domestic service of a member of the mission and who is not an employee of the sending State; (a) a real action relating to private immovable property situated in the territory of the receiving State, unless he holds it on behalf of the sending State for the purposes of the mission; (b) an action relating to succession in which the diplomatic agent is involved as executor, administrator, heir or legatee as a private person and not on behalf of the sending State; (c) an action relating to any professional or commercial activity exercised by the diplomatic agent in the receiving State outside his official functions.

Article 39

[13]Returning for a moment to section 20 of the SIA, the uninitiated reader could be forgiven for wondering at this stage why Parliament thought fit to create for the first time a form of statutory immunity for a head of state (in excess of that available under Part I when acting as such), by the cross-application “subject to any necessary modifications” of a form of statutory immunity already conferred upon diplomats. The reason lies buried in the history of the drafting, and debate upon, the bill. In its original form, the bill extended a quasi-diplomatic immunity to heads of state only when visiting the United Kingdom at the invitation or with the consent of the UK Government: see per Lord Brown Wilkinson in R v Bow Street Metropolitan Stipendiary Magistrate ex parte Pinochet Ugarte (No 3)

[2000] 1 AC 147

, at 203. That was changed by Government amendment because its original form was thought to leave “an unsatisfactory doubt about the position of heads of state that are not in the United Kingdom”. The amendment was introduced to ensure that heads of state would be treated like heads of diplomatic missions “irrespective of presence in the United Kingdom”.

[14]Having by this simple amendment greatly extended the scope of head of state immunity beyond that which might be regarded as comparable with the scope of diplomatic immunity, Parliament evidently thought it sufficient to leave consequential problems of the cross-application of diplomatic immunity to heads of state to be dealt with under the “necessary modifications” formula. The first (and, before this case, only) occasion when necessary modifications fell to be identified arose in the Pinochet case itself. Article 39 of the Vienna Convention provides, broadly, that the immunity of a diplomatic agent begins and ends when he arrives in, and leaves, the receiving state. In the Pinochet case, at page 209-210, Lord Goff said:

“At first this seems very strange, when applied to a head of state. However, the scales fall from our eyes when we discover from the legislative history of the Act that it was originally intended to apply only to a sovereign or other head of state in this country at the invitation or with the consent of the Government of this country, but was amended to provide also for the position of a head of state who was not in this country – hence the form of the long title, which was amended to apply simply to heads of state. We have, therefore, to be robust in applying the Vienna Convention to heads of state “with the necessary modifications”.”

In the Pinochet case, the necessary modification consisted of treating the personal immunity of the head of state as ending when he left office, leaving his immunity for acts done in his official capacity intact thereafter.

[15]The following principles about head of state immunity are, as counsel broadly agreed, established by decisions binding on this court. The first is that, for as long as the head of state remains in office, it is a personal immunity (ratione personae), so that it extends to things done by him in his personal capacity, rather than merely in his official capacity (ratione materiae): see per Lawrence Collins LJ in Aziz v Aziz (Sultan of Brunei intervening)

[2007] EWCA Civ 712

, at paragraph 56, following and applying Mighell v Sultan of Johore

[1894] 1 QB 149

, at 159.

[16]Secondly, the functional basis for head of state immunity is that:

“it has a function in international relations to protect the ability of the head of state to carry out his functions and to promote international co-operation.”

See the Aziz case at paragraph 61. At paragraph 60 Lawrence Collins LJ drew upon the preamble to the Vienna Convention for the purposes of his functional analysis, which states:

“The purpose of such privileges and immunities is not to benefit individuals but to ensure the efficient performance of the functions of diplomatic missions as representing States.”

[17]As Lawrence Collins LJ noted at paragraph 61, this does not mean that the immunity will be granted only where in a particular case the head of state would be prevented from carrying out his or her functions. But it identifies the purpose of the immunity as being to protect the head of state, and no one else, from litigation in the UK which would detract from his performance of his official role.

[18]Thirdly, the extension of head of state immunity to family members of his household is conferred not in any sense for the protection of the performance of any regal functions by those persons, but solely for the protection of the performance of his regal functions by the head of state himself. This is a principle which I regard as being of cardinal importance in relation to the household issue. It appears again from paragraph 60 of Lawrence Collins LJ’s judgment in the Aziz case, where he drew upon the third preamble to the Institute of International Law’s Resolution on Immunities from Jurisdiction and Execution of Heads of Stateand of Government in International Law, Annuaire (2000-2001) vol. 69, p. 743, which provides as follows:

“Affirming that special treatment is to be given to a Head of State or a Head of Government, as a representative of that State and not in his or her personal interest, because this is necessary for the exercise of his or her functions and the fulfilment of his or her responsibilities in an independent and effective manner, in the well-conceived interest of both the State or the Government of which he or she is the head and the international community as a whole.”

In this respect, as will shortly appear, the functional basis of both head of state and diplomatic immunity went hand in hand, as a matter of customary international law.

The Household Issue

[19]The conferral of diplomatic immunity upon family members of an ambassador’s household, by Article 37 of the Vienna Convention, had a pre-history going back to the 17th century, as is eloquently described in Denza on Diplomatic Law (3rd Ed.) in the commentary on Article 37 under the heading Negotiating History:

“The early writers on diplomatic law had mixed views about the desirability of an ambassador being accompanied by his wife. But as during the second half of the seventeenth century permanent missions gradually replaced special missions as the normal form of representation, and diplomats would spend several years in a post, it came to be the practice for an ambassador to bring with him his immediate family as well as a retinue of servants to minister to his comforts and enhance his prestige. Collectively they were known as ‘the diplomatic suite’. Practice in regard to servants was always very varied, but for the wife and minor children it was accepted from the time of Bynkershoek that they were entitled to the same privileges and immunities as the diplomat himself. In consequence there was no dispute either in the International Law Commission or at the Vienna Conference over the principle of extending full diplomatic privileges and immunities to the family of a diplomatic agent. The question which caused difficulty was that of defining which family members should be entitled to this treatment. The writers had always stressed that the privileges and immunities given to members of the family were derivative – his wife and children were regarded as extensions of the person of the diplomat, and their protection was equally necessary in order to ensure his independence. But only close members of the family living in the diplomat’s household were regarded in this way.”

[20]In framing the Vienna Convention the International Law Commission adopted the phrase “forming part of his household” as the basis for a limited extension of personal immunity beyond the ambassador himself to close members of his family because it reflected general practice at the time: see Denza (op cit) at page 392. Attempts during negotiations to agree a more specific definition came to nothing.

[21]The opinion expressed in Denza (op cit) at page 393 is that general state practice has broadly followed a proposal as to the extent of the personal immunity within an ambassador’s family put forward by the United States of America during the negotiations, widely supported but not in the event adopted. It was that:

“A member of the family is the spouse of a member of the mission, any minor child or any other unmarried child who is a full-time student and any such other members of the immediate family of a member of the mission as may be agreed upon between the receiving and the sending states.”

Denza observes:

“What appears to have happened is that the United States’ proposal, having failed to be formally included in the Convention, has been accepted in general state practice. The spouse of a diplomat not legally separate from him or her… is universally accepted as a member of the family, as are children below the age of majority. Beyond this, each receiving state applies its own rules with some degree of flexibility, and unusual cases are settled in negotiation at the time of notification rather than left to any kind of arbitration or adjudication in the context of legal proceedings.”

[22]The practice of the UK Government in this regard was to treat members of the family forming part of the household as including the spouse, civil partner and minor children of the diplomat and, in exceptional circumstances, older children resident with and financially dependent on the diplomat, while in full-time education, and a dependent parent of a diplomat normally resident with him or her: see again Denza (op cit) at page 394. Subject to the amendment necessitated by the entry into force in 2005 of the Civil Partnership Act 2004, this practice had been announced by the Foreign & Commonwealth Office Minister to the House of Lords in June 1978. It may therefore be taken to have been appreciated by Parliament as the UK Government’s understanding of the meaning of the phrase ‘members of his family forming part of his household’ at the time when the SIA was enacted.

[23]More generally, Denza notes that similar practices had been adopted by Canada, Australia and New Zealand, as well as by the USA, Germany, Belgium and also by the Council of Europe. A common theme in all these formulations is that the central criterion for the extension of personal immunity to family members of the diplomat’s household (apart perhaps from spouses) is dependence, rather than the performance by any such persons of diplomatic duties or functions on the diplomat’s behalf.

[24]When Parliament came for the first time to codify head of state immunity in section 20 of the SIA, it chose to define its extension to close members of the head of state’s family by precisely the same formula, ‘members of his family forming part of his household’, as had been used in the Vienna Convention for the same purpose in relation to diplomats, and Parliament must be taken to have understood what had by then become the UK Government’s practice as to its day to day application. Further, the drafter makes that connection between diplomatic and head of state immunity expressly in section 20(1) by using precisely that phrase twice, in sub-section (b) and again in the words following sub sub-section (c). The second use of the phrase is specifically in relation to diplomats. There is no hint of a suggestion that the functional basis for either the immunity itself, or its limited extension to persons other than the head of state, was intended to be any different than it had been understood to be in connection with diplomats and their families. There is in particular no indication that the use of the same phrase was, for the first time, intended to accommodate the notion that close members of a head of state’s family deserved head of state immunity for the better performance of their own royal, governmental or constitutional duties.

[25]As the judge noted in paragraph 76 of his judgment, there is a compelling indication that the UK Government intended no wider meaning when using the phrase ‘members of his family forming part of his household’ in relation to heads of state than in relation to diplomats, in the form of the UK Immigration Directorate’s Instructions, constituting internal guidance to be used by the UK Border Agency for immigration purposes. Section 1 of Chapter 14 of the Instructions contains the following passages:

“2.3 Head of State Under Section 20(3) of the [SIA], Heads of State, members of their families forming part of their household and their private servants enjoy total exemption from control unless otherwise directed by the Secretary of State. … 6. DEFINITION OF “MEMBERS OF HOUSEHOLDS”

The following may be considered as members of households: - spouses (except common law spouses or same sex partners see paragraph 9); - dependent offspring under 18; - dependent offspring over 18 who are still in full time education; - dependent relatives who formed part of the household abroad (e.g. elderly widowed parent); - other close relatives who have no one else to look after them (e.g. young orphaned brothers and sisters); - unmarried partners (common law or same sex relationships) where the relationship is recognised as durable by the sending State and is one that is akin to marriage and that the parties intend to live together in the United Kingdom for the duration of the posting.” - spouses (except common law spouses or same sex partners see paragraph 9); - dependent offspring under 18; - dependent offspring over 18 who are still in full time education; - dependent relatives who formed part of the household abroad (e.g. elderly widowed parent); - other close relatives who have no one else to look after them (e.g. young orphaned brothers and sisters); - unmarried partners (common law or same sex relationships) where the relationship is recognised as durable by the sending State and is one that is akin to marriage and that the parties intend to live together in the United Kingdom for the duration of the posting.”

[26]The significance of these passages, albeit later in time than the passing of the SIA, is that section 20(3) of the SIA extends immunity from immigration control beyond the person of the head of state himself by reference to precisely the same formula as that which is applicable to head of state immunity under section 20(1). In the particularly sensitive context of international relations in which it has been held that the UK Government and courts should speak with one voice, (TheArantzazu Mendi

[1939] AC 256

, at 264), there is thus a direct indication in the form of the Immigration Directorate’s Instructions that the view of the UK Government is that the conventional understanding of the meaning of ‘members of his family forming part of his household’ in relation to diplomats had been applied, mutatis mutandis, to head of state immunity by section 20.

[27]Against this, there is an opinion of the utmost distinction that something broader may be encompassed in the meaning of that phrase when applied to the families of heads of state, in the form of a lecture given by the late Sir Arthur Watts KCMG QC entitled The Legal Position in International Law of Heads of States, Heads of Governments and Foreign Ministers published in Recueil de Cours,Collective Courses of the Hague Academy of International Law vol 247 (1994): (“Sir Arthur’s lecture”). When declining the judge’s request to provide a section 4 certificate as to the facts relevant to the Princes’ status under the SIA, the Secretary of State thought fit nonetheless to draw the judge’s attention to Sir Arthur’s lecture “to the extent that it may assist the Court”, albeit that the letter from the Secretary of State studiously refrained from expressing any view on the merits of Sir Arthur’s opinion.

[28]The judge read Sir Arthur’s lecture in full and we were referred to substantial parts of it. For present purposes the gist of Sir Arthur’s opinion may be found in the following passage:

“There is, in any event, a question as to who is to be considered a member of the Head of State’s family. The term “family” itself clearly covers immediate family members such as a spouse (unless divorced, or perhaps even separated, or formally deprived of status as “First Lady”) and young children, but it becomes more ambiguous if it is to be applied to more remote family members, especially when account is taken of the complications which can arise when there are divorces and remarriages. It is accordingly now usual to limit those entitled to privileges and immunities to those with an appropriately close connection with the person principally entitled. The formula now widely adopted is that the family members must, in order to benefit from immunities and privileges, “form part of the household” of the person principally entitled, although as we have seen, in contexts concerned with temporary travel the test is that they should be “accompanying” family members. These are essentially factual criteria, and their application will depend on all the circumstances of the particular case. It is however, possible that a reference to a person forming part of someone’s “household” does not bear the same meaning in the context of members of a Head of State’s family as it does in relation to the members of an ambassador’s family. In the circumstances of a diplomatic mission membership of an ambassador’s household may be thought to require an element of dependence on the ambassador, and residence under the same roof. But a Head of State’s circumstances may be very different; if a monarch, his household may well be regarded as containing adult members of the immediate Royal family who, although living in a separate establishment from that of the monarch, nevertheless share in and assist with the exercise of certain Royal constitutional and representational functions. These considerations are particularly relevant where a member of the family has a separate constitutional role closely connected to the office of Head of State. Such may well be the case, for example, in respect of an heir to the throne of a monarchy.”

[29]To much the same effect is a footnote in Oppenheim’s International Law (9th Ed.) vol. 1 at page 1040, which the judge set out in full in paragraph 87 of his judgment. Sir Arthur was a co-author of that edition of Oppenheim. This opinion became the sheet anchor of the Princes’ case on head of state immunity, both before the judge and on this appeal. It is concisely identified by the judge in paragraph 86 of his judgment as follows:

“A person “forming part of his household” is not confined to those who live with the sovereign. It is wide enough to extend to “adult members of the family of the sovereign who share with and assist in the exercise of royal constitutional and representational functions”.”

[30]The judge had some, but only limited, sympathy with this submission. At paragraph 99 he said:

“Moreover, Sir Arthur’s argument makes some sense … in an absolute monarchy; the reason for the private immunity allowed by Part III of the SIA is to allow the sovereign to do his job untroubled by criminal or civil proceedings. Logically, those closely assisting him to do that job might properly be expected to attract a similar immunity.”

[31]Sir Arthur relied upon, and the judge was referred to, Kilroy v Windsor (1978) US Dist LEXIS 20419; (1990) 81 ILR 605-606. This was a decision of the United States District Court for the Northern District of Ohio, Eastern Division, about the immunity of HRH Prince Charles to suit in the American courts while on a visit there. The ratio of the decision was that Prince Charles was on a special diplomatic mission and immune for that reason. Nonetheless the court noted the opinion of the US Department of Justice that, as heir apparent to the throne, he was also a member of HM the Queen’s household.

The judge’s conclusion is to be found in paragraphs 106–107 of his judgment, as follows:

“In my judgment, the key is to be found in the word "household" and the meaning of that word already set out. It would be possible for an adult member of a sovereign's or head of State's family exercising Royal or presidential constitutional and representational functions to be regarded in some circumstances as a member of the sovereign's or head of State's household, even though he or she lived apart from the sovereign or head of State. But such a situation would, in my view, be rare. It would arise only, in my judgment, where the person in question was truly an in-house assistant or amanuensis carrying out the sovereign's functions. It would be likely to be restricted to the case of a person broadly exercising the sovereign's or head of State's functions in a full time capacity for him and on his behalf. For all these reasons, whilst the words of section 20(1)(b) do, as it seems to me focus on the sovereign's or head of State's family, and on those members of his family forming part of his household, an heir to the throne or a regent undertaking the offices of state on behalf of the sovereign or head of State might quite properly be regarded as a part of the household, even if he or she lived apart from the sovereign. The immunity granted to a sovereign or head of State by section 20(1) of the SIA is indeed intended to reflect the common law and customary international law position that existed prior to the statute. That pre-existing position would have allowed immunity to another person undertaking the sovereign or head of State's duties.”

[33]On the facts, the judge concluded that neither of the Princes fell within that limited extension of the meaning of the word “household”, as applied to heads of state and their families, essentially because, despite a last minute witness statement from a Ms Santos on their behalf, served on the day of the hearing, to the effect that one of them worked full-time in the performance of royal and constitutional duties on behalf of King Abdullah, that assertion was, on the evidence as a whole, incredible.

[34]The prior question is, however, whether the judge’s resolution of the household issue is correct as a matter of interpretation. For Apex, Mr Robert Howe QC submitted that it went too far, and that there was no warrant for giving any wider meaning to the word household in relation to heads of state than the relatively settled meaning that it had acquired by 1978 in relation to diplomats. For the Princes, Mr Alun Jones QC submitted that the judge was wrong not to have accepted Sir Arthur’s opinion in full and that the limitation of the extension of the meaning of household to those performing royal or constitutional functions for the head of state on a full-time basis was illegitimate.

[35]In my judgment there is no interpretational basis for giving the phrase “members of his family forming part of his household” a wider meaning in relation to heads of state than in relation to diplomats. My reasons follow. First, I have already noted how the phrase had a relatively settled meaning in 1978 and that, when referring to it twice in s. 20(1) of the SIA, Parliament may reasonably be supposed to have understood that meaning or, at least, the understanding of it customarily applied by the UK Government.

[36]Secondly, the essence of the mechanism by which the SIA grafts a form of personal immunity upon the immunity ratione materiae already conferred on heads of state by Part I of the SIA is, precisely and without any specific relevant modification, by reference to diplomatic immunity. Had section 20, as originally intended, been confined so as to confer personal immunity on heads of state only when visiting the UK, then no extension of the nature and ambit (within the head of state’s family) would have been appropriate. When by amendment the restriction of the period of immunity to visits to the UK was removed, and replaced with what the House of Lords in the Pinochet case regarded as an immunity for as long as the head of state remained in office, there was no consideration by Parliament whether this necessitated a broader approach to the meaning of household, as applied to heads of state. The purpose of the amendment was (as is clear from its presentation in Parliament) simply to avoid a misapprehension that personal head of state immunity was limited to the short periods of royal visits.

[37]Thirdly, it is, as the judge recognised, clear that the UK Government did not think that section 20 used the household concept more widely in relation to heads of state than to diplomats, as is evident from the Immigration Directorate’s Instructions. Nothing in the Secretary of State’s letter to the judge seems to me to come near undermining the effect of those Instructions as indicative of the UK Government’s view.

[38]Fourthly, and of high importance in my judgment, the rationale for the identification of some extended meaning of household when applied to heads of state appears both in Sir Arthur’s lecture and indeed in paragraph 99 of the judge’s judgment (quoted above) to be based upon a perception that it would be desirable to extend head of state immunity to those closely assisting the head of state in doing his job, for the protection of the dignity and independence of the assistants themselves, rather than of the head of state. But, as is clear from Lawrence Collins LJ’s analysis in the Aziz case, the extension of immunity beyond ambassadors to close members of their family was never designed for any such purpose, nor is it any part of the functional purpose of head of state personal immunity that it should be.

[39]Fifthly, once some form of extension of the meaning of household beyond spouses, civil partners, dependent children and relatives is contemplated, it is impossible to discern as a matter of interpretation of section 20 where the boundary should be set. The interpreter is cast adrift upon an uncharted sea in which, like the judge, he is forced to make up the rules as he goes along.

[40]In that context I have considerable sympathy for the judge’s view (no doubt illuminated by his consideration of the Kilroy case in relation to Prince Charles), that it would be desirable to find some room within section 20 for the conferring of personal immunity upon a regent, or upon an heir to the throne, both of whom would appear to fall fairly and squarely within the judge’s concept that the extension is limited to those performing royal or constitutional duties full-time. The difficulty lies however in locating an intention that there should be an extension as a matter of interpretation of section 20. The only place where it could be found is in the proviso for “necessary modifications”. As the judge noted in relation to the commercial exception issue, this was a necessity test, and did not extend to modifications which were merely desirable.

[41]In my judgment any attempt to extend the meaning of the household concept in relation to heads of state, along the lines advocated by Sir Arthur and, in much more limited form, adopted by the judge, fails that necessity test. It may be that a regent is to be regarded as the head of state, but there is no basis for regarding a regent or an heir to the throne as part of the head of state’s household, in particular if he has a household of his own.

[42]If that is the correct interpretation of the household concept, then it is not in dispute that both the Princes fall well outside it. HRH Prince Mishal bin Abdul Aziz Al Saud (“Prince Mishal”) is one of the many half brothers of King Abdullah and the third oldest of those who are still alive. Although a very senior member of the Saudi Arabian royal family and a close confidante of the King, who has for many years performed significant royal and constitutional duties, including chairmanship of the Allegiance Council which elects the new Crown Prince, he is clearly a man with his own household, living separately from King Abdullah, with his own wives and children and (probably) dependent relatives. He is neither a child of, nor a dependent relative of, King Abdullah. On the contrary he is a substantial businessman in his own right. No part of that summary involves trespassing in any way upon the factual issues resolved by the judge and raised again on this appeal.

[43]Similarly, HRH Prince Abdulaziz bin Mishal bin Abdulaziz Al Saud (“Prince Abdulaziz”) lies even further outside the household of King Abdullah. He is Prince Mishal’s son. He is by no means as senior a member of the Saudi Arabian royal family as his father, although he appears to perform some royal functions in a representational capacity. He plays an important part in the supervision or management of his father’s businesses and, again, has his own wives, children and household. It is not suggested that, on the most favourable interpretation of the facts, he would qualify as part of King Abdullah’s household if the definition of the relevant phrase in section 20 of the SIA is as I have described it.

The Commercial Exception

[44]The judge concluded, even on his slightly more liberal interpretation of the concept of ‘household’, that neither of the Princes fell within it, so that it was unnecessary for him to determine the additional question whether, if they did, the alleged activities in respect of which they have been joined in the Apex petition fell within the commercial exception in Article 31.1(c), as applied with any necessary modifications to heads of state and members of their household by section 20(1) of the SIA. Nonetheless, against the possibility that this court might take a different view on the household issue, he did so after hearing full argument.

[45]It is common ground that the alleged commercial activities of the Princes relied upon as the basis for their joinder as respondents to the Apex petition took place outside the United Kingdom, so that the commercial exception in Article 31.1(c) is not in terms engaged, since the activities did not take place “in the receiving State”. Nonetheless the judge concluded that the cross-application of the commercial exception from diplomats to heads of state required those words to be removed from the definition of the exception as a necessary modification, so that the personal immunity granted to heads of state and members of their household by section 20 was excluded in relation to their non-official commercial activities anywhere in the world. He said that:

“The modification is, …, a necessary one, because the application of Article 31.1(c) to sovereigns, their families and personal servants makes no sense without it.”

[46]Having concluded that it is unnecessary in the light of my interpretation of the household concept to decide this second issue, and because it was argued in this court less fully than before the judge, I would have been inclined to say nothing about it, were it not for its potentially large importance. The internationalisation of commercial activity, and the propensity for disputes about commercial activity to be justiciable in the United Kingdom without any of the relevant activities having taken place here, makes it important to know whether, thus far, Parliament has legislated so as to confer upon foreign heads of state a personal immunity from suit in the United Kingdom in respect of their personal (i.e. non-official) commercial activities worldwide, or merely commercial activities undertaken by them in the United Kingdom. It is indeed a question likely to be of greater general import than issues as to the precise meaning of the head of state’s household.

[47]Had I been persuaded by the judge’s analysis of this issue, I would have been content to say no more than that. Since I have however not been so persuaded I consider that I should set out my brief reasons for reaching the opposite conclusion, although acknowledging that a binding decision on this important question must await a case where it really matters.

[48]The judge’s view, persuasively set out in paragraphs 135-141 of his judgment, may be summarised as follows. The restriction of the commercial exception to non-official commercial activities of the diplomat in the receiving state by Article 31 of the Vienna Convention was the natural corollary of the fact that his personal immunity was entirely confined to the period of his own presence in the receiving state, it being the judge’s view that “diplomatic agents in post are unlikely to be sued whilst they are in post in the UK in respect of foreign commercial activity”. By contrast, the primary effect of the section 20 personal immunity for heads of state and their households will apply while they are not in the UK, so that to limit the effect of the commercial exception to a tiny part of the ambit of their personal immunity would be anomalous. Further, the conferral upon heads of state of a personal immunity which extended to the vast bulk of their non-official commercial activity would run directly counter to the unambiguous introduction in section 3 of the SIA of an exception from state immunity (and head of state immunity ratione materiae) in respect of commercial activity worldwide, shortly after the recognition by the English court of a similar exception as a matter of customary international law in Trendtex Trading Corporation v Central Bank of Nigeria

[1977] 1 QB 52

[49]These considerations may well be said to have made it logical, desirable and sensible for Parliament to have extended the Article 31 commercial exemption to the commercial activities of a head of state anywhere in the world. But the question is whether that modification of Article 31 satisfies the necessity test. It would do so in my opinion only if the court can be sufficiently sure that this must have been Parliament’s intention, as it appears that the judge was: see paragraph 140 of his judgment. Once satisfied as to Parliament’s intention, then the modification would be necessary to give effect to it.

[50]The question whether the court can be thus satisfied requires a careful consideration and balancing of factors which might suggest that the literal cross-application of Article 31 (with its limited exclusion referable to commercial activity within the UK) was something which Parliament might reasonably have wished to achieve for the protection of heads of state. There are factors pointing in this direction to which I would give more weight than did the judge. The first is that, as the judge noted (at paragraphs 140 and 142(iv)), the extension of the commercial exception in relation to heads of state to activity anywhere in the world would leave a head of state with less immunity while visiting the UK than his ambassador. It is undeniable that Article 31.1(c) makes a diplomat immune from suit in respect of commercial activities outside the UK. Thus his arrival in the UK could not be used by persons wishing to sue him in the English court as an opportunity to invoke the court’s jurisdiction by being able to serve him within it. The presence of a prospective defendant within the jurisdiction is the fundamental basis of the English court’s jurisdiction to adjudicate on disputes about activities abroad, subject to the forum conveniens doctrine and now the Judgments Regulation.

[51]Unlike the judge, I consider it to have been an important aspect of the protection intended to be given by Article 31 to the independent conduct of an ambassador’s affairs that he is given that immunity from suit in relation to commercial activities abroad while present in the jurisdiction, and therefore exposed to service of originating process. It is to my mind entirely understandable that, in adopting Article 31 as part of English law in the DPA, Parliament thought fit to provide only for the much lesser exclusion represented by commercial activity in the UK. If a diplomat chose to engage in private commercial activity while present in the UK, he might be said only to have himself to blame if he got sued in relation to it.

[52]I now consider the position of a head of state. The effect of the excision of the phrase “in the receiving state” from the Article 31.1(c) exception to immunity would be, in exactly the same way, to expose a visiting head of state to being served with originating process while in the UK in respect of his private commercial activity undertaken anywhere in the world, including in his home state, during the relevant limitation period prior to the service of proceedings. Those with disputes which they wished to litigate against him, including his own subjects, might see his temporary presence in the UK as a heaven-sent opportunity to engage in such litigation, with obviously adverse consequences for the dignity of the head of state during his visit, and for the effective performance of his official functions while in the UK.

[53]It is in my judgment no answer to that difficulty to say that, for most of his time as head of state, he will be outside the UK. The purpose of section 20 (before the amendment of the bill) was specifically to provide for personal immunity for foreign heads of state while visiting the UK, equivalent to that of their ambassadors, and that purpose was not itself removed by the amendment which extended the immunity so as to protect the head of state at all times during his holding of that office.

[54]It would, of course, have been possible for Parliament to deal with this difficulty by providing for a full personal immunity subject only to commercial activity in the UK, while a head of state was visiting the UK, and a restricted immunity subject to a full commercial activity exception at all other times. But it does not follow from the fact that Parliament did not engage with these difficulties that it must be assumed to have intended to resolve them by a solution apposite to an immunity to be given to heads of state while absent from the UK, at the expense of creating, for the first time, a derogation from such immunity for visiting foreign heads of state, by comparison with that enjoyed by their ambassadors. It is furthermore not unreasonable for Parliament to have thought that, if the starting point for head of state personal immunity was to be by analogy with that afforded to ambassadors, then an exception by reference to commercial activity in the UK was at least as, if not more, appropriate for heads of state than for ambassadors, having regard to the dignity to be afforded to the office of a head of state when visiting the UK, and the potential for disruption of good relations between states which would be afforded by creating an opportunity for persons aggrieved by a head of state’s private business activity abroad, to have them adjudicated upon as a result of service of process during a head of state’s visit.

[55]Balancing these considerations leaves me with no sufficiently clear view that Parliament must have intended one rather than the other of the two solutions contended for in these proceedings. The result is that, in my judgment, the supposed modification constituted by the excision of the words “in the receiving state” from Article 31.1(c) in its cross-application to heads of state fails the necessity test.

[56]In so concluding I have not lost sight of the fact that, in the Pinochet case, the House of Lords concluded that the private head of state immunity conferred by section 20 had not been intended to go further than that available previously under customary international law. Counsel was unable to enlighten this court as to whether the commercial exception to personal head of state immunity had become a principle of customary international law before the enactment of the SIA. For that purpose, the Trendtex case provides no sure guide. That was concerned with official state immunity rather than personal (ratione personae) head of state immunity, as indeed was its codification into English law by section 3(1)(a) of the SIA.

[57]Mr Howe’s main submission in support of the judge’s conclusion on this issue was that the necessary modification identified in the Pinochet case conferring an ambassadorial type of personal immunity on foreign heads of state when absent from the UK, should be applied by way of compelling analogy. In my judgment the analogy is not compelling. True it is that the House of Lords did recognise the need for a necessary modification in terms of duration, in the search for the termination point of a head of state’s personal immunity, since Article 39 of the Vienna Convention could not possibly be applied to heads of state, in the light of the amendment to the SIA reflected in its preamble. But it by no means follows that the extent of the commercial exception requires necessary modification. The modification identified in the Pinochet case and that identified by the judge in this case are separate and distinct, and they stand or fall by reference to different considerations.

[58]It follows that, had it been necessary for me to decide whether the Princes, as part of King Abdullah’s household, were nonetheless excluded from personal immunity in relation to alleged commercial activity outside the UK, I would have decided that they were not. Nonetheless, a binding decision on this question should await an occasion when the necessity for its determination leads to fuller argument than was deployed on this appeal.

The factual issues

[59]For the reasons which I have already given, it is unnecessary for this court to address those aspects of the appeal. Nonetheless a major plank in Mr Jones’s argument that the judge had got the facts about the Princes wrong was a legal submission, namely that where a Secretary of State’s certificate is either not sought, or is declined, under section 4 of the SIA, the court should fall back upon an unquestioning acceptance of a written statement about the matter in issue from the ambassador of the foreign state concerned, rather than conduct such forensic and evidential analysis of the issue as is proportionate and appropriate when a question of jurisdiction arises at the beginning of proceedings.

[60]The steps in Mr Jones’s argument may be summarised as follows: i) Matters of state (including head of state) immunity raise issues as to which the UK Government and courts should, so far as is possible, speak with the same voice. ii) The question whether the Princes form part of the King of Saudi Arabia’s household raises factual issues within the particular knowledge of the Saudi Arabian state. iii) The Saudi Arabian ambassador is, in relation to a formal written statement to the court, speaking as the mouthpiece of the Saudi Arabian Government. iv) In the absence of a UK Government certificate under section 4 of the SIA, there is nothing to displace a clear statement by the Saudi Arabian ambassador as to the answer to the question whether or not the Princes form part of King Abdullah’s household.

[61]Mr Jones sought to make good this submission by reference to Ahmad and Aswat v Government of United States of America [2007] HRLR 8, Khurts Batv Investigating Judge of the Federal Court of Germany

[2012] 3WLR 180

, R (HRH Sultan of Pahang)vSecretary of State of the Home Department

[2011] EWCA Civ 616

, and an extract from an essay by Elizabeth Wilmshurst (assistant legal adviser in the Foreign & Commonwealth Office) entitled “Executive Certificates in Foreign Affairs: the United Kingdom” (1986) 35 ICLQ 157.

[62]The Ahmad and Aswat case was about Diplomatic Notes. Paragraph 25 of the judgment of Laws LJ in the Divisional Court shows that Diplomatic Notes (or at least those under consideration) are very formal documents issued by the embassy of one state to another. At paragraph 58 Laws LJ accepted the submission that:

“international law recognises the use of Diplomatic Notes as a means of recording binding engagements between States. In the eye of international law such a Note is regarded as binding on the State that issues it. This, and this only, is the sense in which the Notes are indeed “binding”.”

[63]As will appear when I come to describe it, the Saudi Arabian ambassador’s letter in the present case was issued to a partner in Clifford Chance, solicitors for the Princes. Although printed on the embassy’s headed paper, it is plainly not, nor anything like, a Diplomatic Note. Indeed, the evidence suggested (and Mr Jones for the Princes did not submit otherwise) that the ambassador’s letter had been prepared on a Clifford Chance word processor using the firm’s in-house style, before being submitted to the ambassador for signature.

[64]The Khurts Bat case was about a claim to diplomatic immunity which depended upon the recognition of a special mission by the UK Government as receiving state. As appears from paragraph 33 of the judgment of Moses LJ, the grant or withholding of accreditation to a diplomatic mission is a matter within the discretion of the executive of the receiving state and, in the case of the UK, the Royal Prerogative. It followed that the existence or otherwise of accreditation as a diplomatic mission was a matter for the decision of the Government and not for the courts, so that a letter from the FCO in that case was treated as conclusive. The Khurts Bat case says nothing whatsoever about the weight to be given to a letter from the embassy of the sending state, whether about diplomatic status or the status of the Princes as members of King Abdullah’s household.

[65]In the Sultan of Pahang case, the Court of Appeal treated as conclusive against the Sultan’s claim to be immune from immigration control a letter from the FCO certifying, under section 20(1) of the SIA, that the Sultan was not the head of state of Malaysia, but only of a constituent territory within that federated state. Again, the case had nothing to do with a statement from the Government of Malaysia itself, and took Mr Jones’ argument no further.

[66]Finally, the extracts from Ms Wilmshurst’s essay upon which Mr Jones relied (at pages 158-9 and 160-1) were, like the rest of the essay, concerned with the evidential status and effect in the English courts of certificates by the FCO, rather than certificates or statements by ambassadors of foreign states. At page 162 under the heading ‘Rationale’, she concluded:

“Perhaps it is sufficient to say that, since all certificates are concerned with the Crown’s prerogative in foreign affairs, it is reasonable that a declaration by the Crown as to what it has done or what attitude it has taken within its sphere should be treated as conclusive evidence of any such fact by the courts.”

The gulf between the subject matter of Ms Wilmshurst’s essay and the Saudi ambassador’s letter in the present case could not be clearer.

[67]Not only do the authorities relied upon by Mr Jones afford him no support for his submission, but there is the clearest authority against it.

(D) 188 Pill LJ said, at paragraph 51 that:

“Whether the issue is as to the status of the entity claimed to be an emanation of the state or as to a claimed waiver of immunity, the evidence of the Ambassador, as representative of the state, is important but not necessarily conclusive evidence of the relevant matters.”

[68]In the Trendtex case at

[1977] QB 529

, 560 Lord Denning MR said:

“It is often said that a certificate by the ambassador, saying whether or not an organisation is a department of state, is of much weight, though not decisive: see Krajina v Tass Agency [1949] 2 All E.R,274. But even this is not to my mind satisfactory. What is the test which the ambassador is to apply?”

[69]Lord Denning’s rhetorical question is particularly apt in the context of the Saudi ambassador’s letter. Referring to the Princes, he said:

“I confirm that Their Royal Highnesses are members of the Royal Family of the Kingdom of Saudi Arabia and members of the household of the Custodian of the Two Holy Mosques King Abdullah bin Abdul Aziz al Saud (“King Abdullah”). Their Royal Highnesses have been issued with diplomatic passports.”

The letter then continues with other information about the Princes, concerned with Prince Mishal’s seniority within the Royal family, his involvement in official duties and the close relationship of both the Princes with the King. The letter concluded:

“Both of Their Royal Highnesses hold important positions with the Royal family, not only as members of the household of King Abdullah, but by reason of their close relationship with King Abdullah, Prince Mishal’s particular seniority within the Royal family and their involvement in official duties.”

[70]That letter was deployed in evidence without disclosure of the letter (if any) requesting it or other explanation to the ambassador as to the nature of the enquiry in respect of which the letter was sought. It says nothing expressly about the meaning which the ambassador attributed to the concept of “members of the household”. On a fair reading, it appears that the ambassador made the unspoken assumption that any member of the royal family issued with a diplomatic passport could properly be regarded as a member of the King’s household. Other evidence suggested that there were several thousand living male members of the Al Saud family using the style Prince and that a diplomatic passport would, upon request, be issued to any of them. Plainly, the ambassador was using a test (or an understanding of the meaning of household) far removed from that which it is the court’s duty to apply in the absence of a Secretary of State’s certificate under section 4 of the SIA.

[71]It follows that the appellants’ legal argument about the binding nature of the Saudi ambassador’s letter must be firmly rejected. It was not suggested that the judge did not take it into account when reaching his factual conclusions about the position of the Princes within the Saudi royal family, and their relationship with King Abdullah.

[72]Apart from that, the challenges to the judge’s factual findings, which were deployed at length on this appeal, amounted to saying that he should not have rejected as incredible a very late assertion in a witness statement made on the first day of the hearing by a person resident in England, with no particular personal knowledge, that Prince Mishal was engaged “full-time” on royal and constitutional duties in Saudi Arabia. As I have already said, resolution of that issue is, upon my view as to the interpretation of household, not one upon which this court need embark. But in fairness to the judge I would say only that I was wholly unimpressed by the attempted challenge to his findings of fact, which I consider to have been unimpeachable in all respects.

Conclusion

[73]It is for the reasons given above that I concurred in dismissing this appeal.

[74]I agree.

[75]I also agree.