Apex Global Management Ltd v Fi Call Ltd& Ors [2013] EWHC 587 (Ch)

[2013] EWHC 587 (Ch)Case No 10850/2011
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Venue Royal Courts of Justice, Strand, London, WC2A 2LLDate 19/03/2013
Before
MR JUSTICE VOS
Between
Apex Global Management LimitedPetitioner(1) Fi Call LimitedRespondents(2) Global Torch LimitedRespondent(3) HRH Prince Abdulaziz bin Mishal bin Abdulaziz Al SaudRespondent(4) Emad Mahmoud Ahmed Abu-AyshihRespondent(5) HRH Prince Mishal bin Abdulaziz Al SaudRespondent
Between:-
Mr Timothy Otty QC, Mr Mark Warby QC, Ms Emily Neill and Ms Rosa Zaffuto (instructed by Clifford Chance LLP) for 3 rd and 5 th RespondentsMr Robert Howe QC, Mr Daniel Lightman, Ms Shaheed Fatima, and Mr Paul Adams (instructed by HowardKennedyFsi LLP) for Apex Global Management LimitedHearing Hearing dates: 22 nd and 23 rd January 2013, and 5 th March 2013
Judgment

Introduction

[1]Apex Global Management Limited (“Apex” or the “Petitioner”) is a company incorporated in the Seychelles owned and controlled by Mr Faisal Abdel Hafiz Almhairat, a Jordanian businessman (“Mr Almhairat”).[2]Global Torch Limited is a company incorporated in the British Virgin Islands (“Global Torch”). The shares in Global Torch are held as to 50% by HRH Prince Abdulaziz bin Mishal bin Abdulaziz Al Saud, the 3rd Respondent (“Prince Abdulaziz” or the “3rd Respondent”), and as to 25% by Mr Emad Mahmoud Ahmed Abu-Ayshih, the 4th Respondent (“Mr Abu-Ayshih” or the “4th Respondent”), and as to 25% by Mr Yasin Sabha, a Jordanian lawyer.[3]HRH Prince Mishal bin Abdulaziz Al Saud, the 5th Respondent (“Prince Mishal” or the “5th Respondent”), is the father of Prince Abdulaziz and the half-brother of the King of Saudi Arabia, Custodian of the Two Holy Mosques King Abdullah bin Abdulaziz Al Saud (“King Abdullah”). Prince Mishal was born in 1926 as the 14th son of the late King Abdulaziz bin Abdulralunan Al Faisal Al-Saud (“King Abdulaziz”).[4]Apex and Global Torch each hold shares in the 1st Respondent, Fi Call Limited (the “Company”, “Fi Call” or the “1st Respondent”) which was incorporated in England under the Companies Act 2006. Their shareholdings in the Company are the subject of two hotly contested petitions, both presented under section 994 of the Companies Act 2006 in December 2011 (referred to respectively as “Apex’s petition” and “Global Torch’s petition”).[5]Prince Abdulaziz and Prince Mishal (together the “Princes”) and Mr Abu-Ayshih have challenged the jurisdiction of the English court in relation to Apex’s petition. Those challenges have taken a rather tortuous path. There was a three-day hearing in December 2012 before Morgan J in which all that was argued was the Respondents’ application for the proceedings to be held in private. The remaining jurisdiction issues will be determined, if necessary, after I have decided this application. This application raises the deceptively simple question of whether the Princes are entitled to sovereign immunity under section 20(1) of the State Immunity Act 1978 (the “SIA”), bearing in mind the provisions of article 31 of schedule 1 to the Diplomatic Privileges Act 1964 (the “DPA”).[6]Perhaps surprisingly, the final hearings of both Global Torch’s petition and Apex’s petition have been fixed for hearing in January 2014. There is, therefore, an element of urgency, since it will be necessary to know the identity of the Respondents to Apex’s petition in good time to enable the parties to prepare for the final hearings. Moreover, appeals have been threatened by both sides on all issues.[7]It was agreed on all sides that this hearing should be in public, but that no detailed reference should be made in open court to the allegations in Apex’s petition. Moreover I was invited to make, and did make at the start of the hearing, a temporary order restricting access to the court documents under Part 31.22 of the CPR. I did not wish to pre-empt the outcome of Morgan J’s detailed consideration of the privacy application, to which I shall refer later in this judgment.

Chronological background

[8]On 23rd October 2009, the Company was incorporated in England under the Companies Act 2006.[9]On 6th November 2009, the Company, Global Torch, Apex and Mr Almhairat entered into a shareholders’ agreement, which was expressed to be governed by English law and whereby the parties submitted to the non-exclusive jurisdiction of the English court (the “Shareholders’ Agreement”).[10]On 15th July 2010, the Economist magazine published an article indicating that Prince Mishal was a close confidant of King Abdullah, and that at least 5,000 people hold Princely rank in the ruling Al-Saud family in Saudi Arabia.[11]On 2nd December 2011, Global Torch’s petition was issued under section 994 against Apex, Mr Almhairat, and the Company seeking various orders in relation to shares and alleged misappropriations, and an order that Apex, Mr Almhairat or the Company should purchase Global Torch’s shares in the Company at a price to be determined by the court.[12]On 12th December 2011, Apex’s petition was issued under section 994 against the Respondents seeking an order that the 1st to 5th Respondents should be ordered to purchase Apex’s shares in the Company at a fair and proper valuation.[13]On 9th February 2012, Apex issued an application notice seeking the Court’s permission to serve Apex’s petition on each of the 2nd to 5th Respondents outside the jurisdiction on the grounds that the Shareholders’ Agreement and a share sale agreement dated 29th March 2011 were governed by English law and jurisdiction and/or that it was brought under an enactment namely section 994 of the Companies Act 2006 which allowed it to be brought.[14]On 14th February 2012, Mrs Registrar Barber granted Apex permission on paper under CPR Rule 6.36 to serve Apex’s petition out of the jurisdiction on each of the 2nd to 5th Respondents.[15]On 24th February 2012, Mr Registrar Baister made a further order granting Apex permission under CPR Rule 6.36 to serve Apex’s petition outside the jurisdiction on each of the 2nd to 5th Respondents, and giving those Respondents liberty to apply to vary or set aside that permission under CPR Part 23.10.[16]On 15th May 2012, each of the Princes issued application notices (dated in error 15th May 2011) disputing the jurisdiction of the Court on various grounds including that they had “state, sovereign, and/or diplomatic immunity or privilege from jurisdiction of the Courts of the United Kingdom” under section 1 of the SIA and/or by virtue of being a diplomatic agent claimed under the DPA, and under article 31 of schedule 1 (referred to in error as Schedule 2) to the DPA. The application notices also sought orders(a) that the Court had no jurisdiction and/or would not exercise jurisdiction over the Princes,(b) discharging the order granting permission to serve the proceedings outside the jurisdiction on the Princes, and(c) that service of Apex’s Petition was of no effect as against the Princes.[17]On 21st June 2012, the 4th Respondent issued an application notice (dated in error 21st June 2011) seeking an order that the Court had no jurisdiction over the 4th Respondent, and seeking to set aside the permission to serve outside the jurisdiction.[18]On 12th July 2012, Global Torch served its defence to Apex’s petition.[19]On 6th December 2012, the 2nd to 5th Respondents issued applications seeking orders that the hearings then listed for 17th December 2012 should be heard in private.[20]On 23rd November 2012, Ambassador Mohammed bin Nawaf Al Saud, the Ambassador for the Kingdom of Saudi Arabia in London wrote to the Princes’ solicitors in relation to their status (the “Ambassador’s letter”). The precise terms of the letter are set out hereafter in the section on the evidence.[21]Between the 19th and 21st December 2012, Morgan J heard a number of applications concerning the privacy of these proceedings including an application by the 2nd to 5th Respondents pursuant to CPR rules 39.2(3)(a) and/or (g) that the hearings of certain applications in Apex’s petition be in private, save insofar as pure issues of law in relation to questions of sovereign, state and/or diplomatic immunity are raised and so that those issues of law may be heard in public. The applications which were sought to be the subject of a private hearing are:(1) the applications by Prince Abdulaziz and Prince Mishal for a determination that each of them had sovereign, state and diplomatic immunity and/or a determination that the court had no jurisdiction in relation to them in particular because the case against each of them has no reasonable prospect of success;(2) the application by Mr Abu-Ayshih for a determination in relation to him that the court had no jurisdiction in particular because the case against him has no reasonable prospect of success; and(3) the applications of the Apex parties for orders that: (a) Global Torch give particulars of the allegations of fraud, dishonesty, unlawful conduct and commercial impropriety against Mr Almhairat; (b) the two petitions be tried together; and (c) there be preliminary issues in the two petitions.[22]On 22nd and 23rd January 2013, the first two days of argument took place in relation to the applications before me. I adjourned the hearing so that I could seek the assistance of the Secretary of State for Foreign and Commonwealth Affairs (the “Secretary of State”) as to the status of the Princes.[23]On 24th January 2013, I wrote to the Secretary of State seeking his assistance and/or certificate under section 4 of the DPA or in the exercise of his other powers. The details of my letter are set out hereafter.[24]On 12th February 2013, Ms Anna Clunes, the Director of Protocol and Vice-Marshal of the Diplomatic Corps (“Ms Clunes”) at the Foreign and Commonwealth Office (“FCO”) wrote to me in response in terms that are set out later in this judgment (the “FCO’s letter”).[25]On 13th February 2013, Morgan J gave judgment refusing to accede to the applications under CPR rule 39.2 for private court hearings. I gratefully refer to his judgment, which includes much more of the factual background than it has been necessary for me to include.[26]On 5th March 2013, the matter returned to me for further argument following receipt of the FCO’s letter. At that hearing, I permitted the Princes to rely on significant new evidence concerning their status and activities on behalf of King Abdullah.[27]On 8th March 2013, in accordance with the directions I gave on 5th March 2013, Apex filed written submissions dealing with the new evidence filed by the Princes on 5th March 2013.[28]On 11th March 2013, the Princes filed a 7 page reply submission, and on 12th March 2013, the princes filed Ms Santos’s 3rd statement, to which I shall refer further in due course.

Relevant legislation and treaties

[29]Article 31 in section 3 on “Interpretation of Treaties” of the Vienna Convention on the Law of Treaties 1969 provides as follows under the heading “General Rule of interpretation”:- “1. A treaty shall be interpreted in good faith in accordance with the ordinary meaning to be given to the terms of the treaty in their context and in the light of its object and purpose. 2. The context for the purpose of the interpretation of a treaty shall comprise, in addition to the text, including its preamble and annexes: … 3. There shall be taken into account, together with the context: … (b) any subsequent practice in the application of the treaty which establishes the agreement of the parties regarding its interpretation; (c) any relevant rules of international law applicable in the relations between the parties. …”[30]The DPA provides as follows:- “2. - Application of Vienna Convention. (1) Subject to section 3 of this Act, the Articles set out in Schedule 1 to this Act (being Articles of the Vienna Convention on Diplomatic Relations signed in 1961) shall have the force of law in the United Kingdom and shall for that purpose be construed in accordance with the following provisions of this section”. … “4. Evidence. 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”.[31]The Preamble to the Vienna Convention on Diplomatic Relations was not set out in schedule 1 to the DPA, but included the following:- “Realizing that 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, Affirming that the rules of customary international law should continue to govern questions not expressly regulated by the provisions of the present Convention”.[32]Schedule 1 to the DPA provided as follows under the heading “ARTICLES OF VIENNA CONVENTION HAVING THE FORCE OF THE LAW IN THE UNITED KINGDOM”:- “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 purpose 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. 2. Members of the administrative and technical staff of the mission, together with members of their families forming part of their respective households, shall, if they are not nationals of or permanently resident in the receiving State, enjoy the privileges and immunities specified in Articles 29 to 35, except that the immunity from civil and administrative jurisdiction of the receiving State specified in paragraph 1 of Article 31 shall not extend to acts performed outside the course of their duties. They shall also enjoy the privileges specified in Article 36, paragraph 1, in respect of articles imported at the time of first installation”. … “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”.[33]Part 1 of the SIA comprises the first 17 sections under the heading “PROCEEDINGS IN UNITED KINGDOM BY OR AGAINST OTHER STATES”. Section 1 is under the sub-heading “Immunity from jurisdiction” and provides:- “1. – General immunity from jurisdiction.(1) A State is immune from the jurisdiction of the courts of the United Kingdom except as provided in the following provisions of this Part of this Act.(2) A court shall give effect to the immunity conferred by this section even though the State does not appear in the proceedings in question”. (1) A State is immune from the jurisdiction of the courts of the United Kingdom except as provided in the following provisions of this Part of this Act. (2) A court shall give effect to the immunity conferred by this section even though the State does not appear in the proceedings in question”.[34]Section 3 of the SIA under the sub-heading “Exceptions from immunity” provides as follows:- “3. – Commercial transactions and contracts to be performed in the United Kingdom. (1) A State is not immune as respects proceedings relating to- (a) a commercial transaction entered into by the State; or (b) an obligation of the State which by virtue of a contract (whether a commercial transaction or not) falls to be performed wholly or partly in the United Kingdom”. (b) an obligation of the State which by virtue of a contract (whether a commercial transaction or not) falls to be performed wholly or partly in the United Kingdom”.[35]Section 14 of the SIA under the sub-heading “Supplementary provisions” provides as follows:- “14. – States entitled to immunities and privileges. (1) The immunities and privileges conferred by this Part of this Act apply to any foreign or commonwealth State other than the United Kingdom, and references to a State include references to- (a) the sovereign or other head of that State in his public capacity; (b) the government of that State; and (c) any department of that government, but not to any entity … which is distinct from the executive organs of the government of the State and capable of suing or being sued”. (1) The immunities and privileges conferred by this Part of this Act apply to any foreign or commonwealth State other than the United Kingdom, and references to a State include references to- (a) the sovereign or other head of that State in his public capacity; (b) the government of that State; and (c) any department of that government, but not to any entity … which is distinct from the executive organs of the government of the State and capable of suing or being sued”.[36]Part II of the SIA comprises sections 18 and 19 under the heading “JUDGMENTS AGAINST UNITED KINGDOM IN CONVENTION STATES”, and is not relevant to the issues I have to decide.[37]Part III of the SIA comprises the remaining sections 20-23 under the heading “MISCELLANEOUS AND SUPPLEMENTARY”. Sections 20 and 21 of the SIA provide as follows:- “20. – Heads of State.(1) Subject to the provisions of this section and 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. (1) Subject to the provisions of this section and 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. 21. Evidence by certificate. 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 purpose 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; …”.[38]Section 8(3) of the Immigration Act 1971 provides as follows:- “[Subject to subsection (3A) below,] the provisions of this Act relating to those who are not [British citizens] shall not apply to any person so long as he is a member of a mission (within the meaning of the [DPA]), a person who is a member of the family and forms part of the household of such a member, or a person otherwise entitled to the like immunity from jurisdiction as is conferred by that Act on a diplomatic agent”.

The request for assistance and/or for a certificate from the FCO

[39]Shortly after the hearing before me commenced on 22nd January 2013, I asked why the parties had not sought a certificate from the Secretary of State as to the status of the Princes. Section 4 of the DPA provides for such a certificate to be provided, and the procedure of asking for a certificate has been endorsed on numerous previous occasions.[40]In Government of the Republic of Spain v. S.S. “Arantzazu Mendi” [1939] AC 256, Lord Atkin said this at pages 263-4:- “On the question whether the Nationalist Government of Spain was a foreign sovereign State, Bucknill J. took the correct course of directing a letter, dated May 25, 1938, to be written by the Admiralty Registrar to the Secretary of State for Foreign Affairs, asking whether the Nationalist Government of Spain is recognized by His Majesty’s Government as a foreign sovereign State. I pause here to say that not only is this the correct procedure, but that it is the only procedure by which the Court can inform itself of the material fact whether the party sought to be impleaded, or whose property is sought to be affected, is a foreign sovereign State. This, I think, is made clear by the judgments in this House in the Kelantan case. (1) With great respect I do not accept the opinion implied in the speech of Lord Sumner in that case that recourse to His Majesty’s Government is only one way in which the judge can ascertain the relevant fact. The reason is, I think, obvious. Our State cannot speak with two voices on such a matter, the judiciary saying one thing, the executive another. Our Sovereign has to decide whom he will recognize as a fellow sovereign in the family of States; and the relations of the foreign State with ours in the matter of State immunities must flow from that decision alone”.[41]The procedure referred to by Lord Atkin has been recently referred to with approval by the Court of Appeal in The Queen on the Application of HRH Sultan of Pahang v. Secretary of State for the Home Department [2011] EWCA Civ. 616 at paragraphs 14-15 per Maurice Kay LJ, and at paragraphs 27-33 per Moore-Bick LJ. In Khurts Bat v. Federal Court of Germany [2012] 3 WLR 180, Moses LJ in the Divisional Court again referred to Lord Atkin’s speech and said that he saw no reason for distinguishing between the effect of a certificate under section 4 of the DPA and the common law procedure (see paragraphs 33-37). Elizabeth Wilmshurst’s article on “Executive certificates in foreign affairs: the United Kingdom” (1986) I.C.L.Q. 157 helpfully explains the procedure to be adopted in obtaining certificates from the Secretary of State and their effect.[42]Mr Robert Howe Q.C., leading counsel for Apex, complained that the Princes should have applied for a certificate from the Secretary of State long ago, since the burden of proof that they benefited from immunity lay upon them. Nonetheless, he did not actively object to my seeking a certificate, in the event that I thought I should do so. Mr Timothy Otty Q.C., leading counsel for the Princes, also did not object, and accepted that I had power to ask for a certificate. I had no doubt that it was appropriate for me to seek the assistance and/or certificate of the Secretary of State.[43]It would have been most undesirable, even foolhardy, for me to have proceeded to a decision on the immunity of the Princes without knowing, for example, whether Her Majesty’s Government (“HMG”) considered that either or both of the Princes was a member of King Abdullah’s family forming part of his household. The parties were not even agreed as to whether the Princes were or were not subject to UK immigration controls. The question that I have to answer in this case is whether the Princes are entitled to immunity from suit. I formed the view that there were certain factual questions that the Secretary of State might be able to answer that would assist me in deciding that question. Whilst the proper construction of the words “members of [the sovereign’s] family forming part of his household” is a matter of law for the court, the question of whether HMG has historically regarded the Princes as “members of [King Abdullah’s] family forming part of his household” is a question of fact upon which the Court would be bound by the contents of the Secretary of State’s certificate under section 4 of the DPA.[44]Accordingly, I wrote to the Secretary of State on 24th January 2013, largely but not wholly, in the form of a draft prepared by Mr Howe (with input from Mr Otty), asking the following questions:- i) Is Prince Mishal considered by HMG to be a “member of [King Abdullah’s] family forming part of his household”, within the meaning of section 20(1) of the SIA? ii) In either case, please explain the reasons for HMG’s answer. iii) Is Prince Mishal considered by HMG to be exempt from UK immigration controls? iv) If so, is this:- a) because Prince Mishal is considered to be a “member of [King Abdullah’s] family forming part of his household”, within the meaning of section 20(1) of the SIA, and hence exempt from those controls pursuant to section 20(3) of the SIA; or b) for some other reason? v) Is Prince Abdulaziz considered by HMG to be a “member of [King Abdullah’s] family forming part of his household”, within the meaning of section 20(1) of the SIA? vi) In either case, please explain the reasons for HMG’s answer? vii) Is Prince Abdulaziz considered by HMG to be exempt from UK immigration controls? viii) If so, is this:- a) because Prince Abdulaziz is considered to be a “member of [King Abdullah’s] family forming part of his household”, within the meaning of section 20(1) of the SIA, and hence exempt from those controls pursuant to section 20(3) of the SIA; or b) for some other reason?[45]Ms Clunes responded to my letter on behalf of the Secretary of State on 12th February 2013 by writing the FCO’s letter, which included the following answers:- “I note that you have asked for assistance under section 4 of the [DPA] which provides for the Secretary of State to issue a certificate stating any fact relating to the question of whether or not any person is entitled to any privilege or immunity under the Act. This power of certification relates to facts within the particular knowledge of the [FCO], and typically under section 4 would relate to the question of whether or not a person has been notified to the FCO as a diplomat. The FCO is not in a position to certify any relevant fact which would assist the Court in its current enquiry. In spite of our inability to offer assistance under section 4, we shall offer such assistance as we properly can in relation to your specific questions: 1. Is Prince Mishal considered by HMG to be “a member of [King Abdullahs’s] family forming part of his household” within the meaning of section 20(1) of the State Immunity Act 1978? As I have mentioned above there is no relevant fact within the particular knowledge of the FCO which can provide an answer to this question. In our view this is a mixed question of fact and law, and to the extent it may assist the Court I attach an extract from a lecture given by the late Sir Arthur Watts, KCMG, QC in which he considers the protection, privileges and immunities of heads of State and their families (extract from The Legal Position in International Law of heads of States, Heads of Governments and Ministers Foreign Affairs by A. Watts, published in Recueil des cours Collected Courses of the Hague Academy of International Law Vol 247 (1994) pp. 35-81, esp. pp. 75-81). 2. In either case, please explain the reasons for HMG’s answer. Please see explanation given above. 3. Is Prince Mishal considered by HMG to be exempt from UK immigration controls? Prince Mishal was granted a five-year General Visitor visa in 2011 on a diplomatic passport issued by the Kingdom of Saudi Arabia. In view of his position in the Government he was exempted from the usual visa fee and the requirement to provide biometric data. 4. If so, is this:-(a) because Prince Mishal is considered to be a “a member of [King Abdullah’s] family forming part of his household” within the meaning of section 20(1) of the State Immunity Act 1978, and hence exempt from those controls pursuant to section 20(3) of the State Immunity Act 1978; or(b) for some other reason? Please see answer to previous questions. 5. Is Prince Abdulaziz considered by HMG to be “a member of [King Abdullah’s] family forming part of his household” within the meaning of section 20(1) of the State Immunity Act 1978? Please see answer to question 1 above. 6. In either case, please explain the reasons for HMG’s answer. Please see explanation given above. 3. Is Prince Abdulaziz considered by HMG to be exempt from UK immigration controls? Prince Abdulaziz was granted a ten-year General Visitor visa in 2009 on a diplomatic passport issued by the Kingdom of Saudi Arabia. A fee was taken and biometric data was provided. 4. If so, is this:- (a) because Prince Abdulaziz is considered to be a “a member of [King Abdullah’s] family forming part of his household” within the meaning of section 20(1) of the State Immunity Act 1978, and hence exempt from those controls pursuant to section 20(3) of the State Immunity Act 1978; or (b) for some other reason? Please see answer to previous questions”.[46]Sir Arthur Watts KCMG QC’s 1994 lecture, to which Ms Clunes referred in the FCO’s letter was long and detailed (“Sir Arthur’s lecture”). In skeleton arguments filed on 4th March 2013 and in oral argument on 5th March 2013, both parties referred to large tracts from it. I have read the whole of Sir Arthur’s lecture with care. I have set out some parts of it in the Appendix to this judgment to put my decision in context, but I could not possibly reproduce all the parts upon which the parties relied.[47]I heard lengthy submissions from the parties at the resumed hearing on 5th March 2013 as to what I should take from the FCO’s letter and Sir Arthur’s lecture that was enclosed with it. I will return in due course to that question.[48]Before turning to the issues that I have to decide, it is useful to set out some of the provisions of the Basic Law of Governance of Saudi Arabia. Mr Otty for the Princes placed great reliance on the fact that Saudi Arabia is an absolute monarchy and that King Abdullah has wide powers.

The Basic Law of Governance of Saudi Arabia (the “Basic Law”)

[49]Article 5 of the Basic Law provides as follows:-• Monarchy is the system of rule in the Kingdom of Saudi Arabia• Rulers of the country shall be from amongst the sons of the founder King Abdulaziz bin Abdulralunan Al Faisal Al-Saud, and their descendants.• The most upright among them shall receive allegiance according to Almighty God’s Book and His Messenger’s Sunna (Traditions).• The Crown Prince shall devote himself exclusively to his duties as Crown Prince and shall perform any other duties delegated to him by the King.• Upon the death of the King, the Crown Prince shall assume the Royal powers until a pledge of allegiance (bay’a) is given”.[50]Article 44 of the Basic Law provides as follows: “The Authorities of the State consist of: - The Judicial Authority - The Executive Authority - The Regulatory Authority These Authorities will cooperate in the performance of their functions, according to this Law or other laws. The King is the ultimate arbiter for these Authorities”. - The Judicial Authority - The Executive Authority - The Regulatory Authority[51]Article 50 of the Basic Law provides as follows:- “The King or whomsoever he may deputize shall concern himself with the implementation of judicial rulings”.[52]Article 55 provides as follows:- “The King shall rule the nation according to the Sharia. He shall also supervise the implementation of the Sharia, the general policy of the State, and the defense and protection of the country”.[53]Article 56 provides as follows:- “The King is the Prime Minister. Members of the Council of Ministers shall assist him in the performance of his mission according to the provision of this Law and other laws. The Council of Ministers Law shall specify the powers of the Council in respect of internal and external affairs, organization of governmental departments and their coordination. In additions, the Law shall specify the qualifications and the powers of the ministers, ministerial accountability procedures and all matters pertaining to the ministers. The Law of the Council of Ministers and the areas of their authority may be amended according to this law”.[54]Article 65 provides that “[t]he King may delegate some powers of authority to the Crown Prince by Royal Decree”.[55]Article 67 provides that the “Regulatory Authority shall be concerned with the making of laws and regulations which will safeguard all interests, and remove evil from the State’s affairs, according to Sharia. Its powers shall be exercised according to provisions of this Law and the Law of the Council of Ministers and the Law of the Shura Council”.[56]Article 70 provides as follows:- “Laws, international agreements, treaties and concessions shall be approved and amended by Royal Decrees”.

The issues

[57]The issues that I have to decide are twofold:- i) Whether one or both of the Princes are entitled to claim immunity under section 20(1)(b) of the SIA as “members of [King Abdullah’s] family forming part of his household”? ii) If so, whether this proceeding is excluded from that immunity as “an action relating to any … commercial activity exercised by the diplomatic agent in the receiving state outside his official functions” within the meaning of article 31.1 of schedule 1 to the DPA?[58]The second issue was raised first by Apex. Mr Howe’s argument in relation to it was simply that, when the court applied article 31.1 to the circumstances described in section 20(1) of the SIA, a “necessary modification” should be made so as to read article 31.1(c), when applied to sovereigns and families of sovereigns as opposed to diplomatic agents, as if the restrictive territorial words “in the receiving state” were excluded. The modification is said to be necessary because the position of diplomatic agents is different to that of sovereigns and their families. Mr Otty’s response was to contend that Apex’s proposed modification could not be said to be necessary, and would run counter to customary international law as it applied to sovereigns and, furthermore, if any “necessary modification” were required it would be to read article 31.1(c) as if it did not apply any commercial exception at all to sovereigns, their families, and private servants.

The evidence

[59]The state of the evidence when the hearing concluded was, as I remarked to counsel, somewhat unsatisfactory. The Princes declined to make any witness statements or even timeously to provide material for their solicitors and advisers to make statements on their behalves. Instead, the evidence was mostly provided by a Ms Carla Santos, Global Torch’s legal adviser, to Mr Iain Roxborough at Clifford Chance. When I enquired why this was the case, Mr Roxborough filed his 13th statement saying that Ms Santos had told him that “as a matter of royal protocol, senior members of the ruling royal family of the Kingdom of Saudi Arabia such as [the Princes] do not directly involve themselves in proceedings and in particular do not give witness statements”. I am not sure that providing instructions to solicitors would contravene such a protocol, and indeed the very final piece of evidence submitted to me (in the form of the 3rd statement of Ms Santos dated 11th March 2013) said, for the first time, that the Princes had “read this statement and all previous statements I have made and confirmed to me that the contents thereof are accurate and true”. For the most part, however, I have had to make do with second or third hand evidence on the Princes’ behalf.[60]There have also been significant problems with the evidence that has been produced. In broad terms, the evidence as to the Princes’ position in Saudi Arabia is almost entirely within their own knowledge. And it was common ground that the burden of proving that they are entitled to sovereign immunity rested upon them. Yet despite this burden, the Princes seem to have adopted a habit of producing evidence at the very last moment before each hearing (and ultimately after the last hearing). Moreover, the evidence that they have produced has, to put it at its lowest, evolved. In order that this can be seen in context, it is useful for me to set out in chronological order what has been said on the Princes’ behalf about their public position as the case has progressed.[61]Before doing so, I can summarise the best evidence I have been able to divine about the family of King Abdullah:- i) Prince Mishal is the third eldest living brother of King Abdullah. He is said to be 86 years old. ii) Their father, King Abdulaziz, had some 22 wives and many children, of which some 36 were sons. Of those sons, 16 now survive. iii) The present Crown Prince is another, younger, half-brother of Prince Mishal. He is Prince Salman bin Abdulaziz. Two Crown Princes, who were also younger brothers of Prince Mishal, have sadly recently died and the Allegiance Council, chaired by Prince Mishal, has selected their successors. iv) There are some 5,000 members of the Saudi Royal family, many of whom travel on diplomatic passports. v) The Ambassador’s letter (set out in greater detail below) says that Prince Mishal is second in line to the throne by birthright, yet the Allegiance Institution Law of 2006 makes clear that succession is not by birth but by the Allegiance Council choosing from three nominees selected by the King. vi) Prince Mishal is in the group from whom rulers of the Kingdom must be drawn under article 5 of the Basic Law. vii) Each of Prince Mishal and Prince Abdulaziz travels on a diplomatic passport. viii) Prince Abdulaziz has acted for many years as the Inspector General of his father’s many businesses.[62]Mr Roxborough’s first witness statement dated 15th May 2012 included these passages:- “Sovereign and/or Diplomatic Immunity119. I am informed by Mr Abu-Ayshih that the Kingdom of Saudi Arabia is an Absolute Monarchy and that there are a large number of Royal Princes, many of whom discharge executive, legislative and judicial functions on behalf of His Majesty. The line between the Royal Family of Saudi Arabia acting in its capacity as an eminence or agency of the State (the State here is the person of His Majesty) and acting in their private capacity is not clearly defined. Therefore the exercise of discretion by a member of the Royal Family can be the exercise of sovereign authority.120. I am informed by Mr Abu-Ayshih that, all of the Princes in the Royal Family (including the [Princes]) are issued with diplomatic passports. This indicates that they are considered under the law of Saudi Arabia to be part of the State at all times and therefore immune from suit by reason of State immunity”.[63]Mr Hassan A Al Gahtani provided expert evidence for the Princes as to the governance of Saudi Arabia, the Basic Law and sovereign immunity under Saudi law. His first statement dated 26th September 2012 included the following:- “22. Each member of the Royal family is issued with a Diplomatic passport and as such should be treated as both an emanation of the State, which given the nature of the Kingdom is also to be treated as an emanation of the Royal prerogatives enjoyed by His Majesty. I confirm that both [the Princes] and members of the Royal Family have been issued with Diplomatic Passports. 23. Each member of the Royal family, including both the [Princes], is entitled to State and Sovereign Immunity. … 25. [Prince Mishal] is a senior member of the Royal family and second in line to the throne by birthright. HRH Prince Mishal could therefore have been elected Crown Prince in 2007. HRH Prince Mishal has also served in key governmental positions as Minister of Defence and the Governor of Makkha Province. …28. HRH Prince Mishal has appointed HRH Prince Abdulaziz as the Inspector General of all of HRH Prince Mishal’s businesses for the last 25 years. HRH Prince Abdulaziz often represents HRH Prince Mishal on behalf of the Sovereign at various official events with other Heads of State.29. HRH Prince Abdulaziz has followed in his father’s footsteps and is also a leading businessman. Both [the Princes] have devoted themselves extensively to the development of business and businesses in various fields within Saudi Arabia”.[64]On 23rd November 2012, the Ambassador’s letter included the following material:- “I am the head of the Kingdom of Saudi Arabia’s diplomatic mission in the United Kingdom and I am providing the information set out in this letter in this capacity. ... I give this letter in relation to [the Princes]. I confirm that [the Princes] are members of the Royal Family of the Kingdom of Saudi Arabia and members of the household of [King Abdullah]. [The Princes]have been issued with diplomatic passports. In regard to [the Princes] I can confirm the following: Prince Mishal is the brother of King Abdullah and he is the second in line to the throne by birthright [now shown to be inaccurate]. Prince Mishal is accordingly the most senior member of the Royal family. Prince Mishal has held governmental positions as the Minister of Defence and Governor of Makkah Province. Prince Mishal was the senior private advisor to the late [King Fahd bin Abdulaziz bin Abdulrahman Al Saud]. Prince Mishal has also been appointed as the Chairman of the Allegiance Council since 2007. The Allegiance Council was established by King Abdullah in 2006. This Council is central to the governance of the Kingdom of Saudi Arabia as it determines succession to the throne. Prince Mishal has the final authority to appoint not only the Crown Prince on behalf of His Majesty, but also the future King. Prince Mishal regularly attends discussions held between various Heads of States with [King Abdullah] as part of his official entourage. Prince Abdulaziz is the nephew of King Abdullah and son of Prince Mishal. Prince Abdulaziz regularly attends official events with other Heads of State. Prince Abdulaziz has also held a position within a department of the Ministry of Defence. Prince Abdulaziz is the appointed General Supervisor for all of his father’s offices for the past 25 years. Both [the Princes] hold important positions within 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”.

In regard to [the Princes] I can confirm the following:

[65]Mr Roxborough’s 8th witness statement dated 3rd December 2012 included the following:- “44. It is in any event, and as already pointed out, not correct to view [the Princes] as simply members of the Royal family. The [Ambassador’s letter] … confirms that [the Princes] have been issued with diplomatic passports. 45. Mr Al-Gahtani has confirmed that they are also members of the sovereign’s household and they are, as such, entitled to immunity pursuant to s.20 of the State Immunity Act 1978 and pursuant to the constitution of the Kingdom of Saudi Arabia. 46. I am informed by Ms Santos that [the Princes] regularly represent the Kingdom of Saudi Arabia on official matters. By way of example I exhibit reports of several such examples as follows:(a) at page 11 is a copy of a report of Prince Mishal’s visit to the King of Jordan, at which he conveyed the greetings of [King Abdullah] and sought to strengthen relations between the two countries.(b) at page 12 is a report of both [the Princes] receiving the Spanish ambassador in Riyadh;(c) at page 13 is a report of Prince Mishal conveying the congratulations of Saudi Arabia on the re-election of the President of the United Arab Emirates; and(d) at page 14 is a report of Prince Mishal’s visit to Dubai at the invitation of the United Arab Emirates’ Vice President, the Prime Minister and Ruler of Dubai Sheikh Mohammed bin Rashid Al-Maktoum. 47. At pages 15 to 46 are copies of photographs provided to me by Ms Santos of [the Princes] on official visits representing the Kingdom of Saudi Arabia. It is particularly noteworthy that at page 27 Prince Mishal is seated next to the King, with the Crown Prince in turn next to Prince Mishal. Mr Al-Gahtani confirms this demonstrates that Prince Mishal is viewed as almost equal in seniority to the King”.[66]Mr Roxborough’s 11th witness statement dated 16th January 2013 included the following:- “Immigration controls 8. I am informed by Ms Santos that she has spoken to the Princes’ private offices and they have confirmed to her that both [the Princes] travel on diplomatic passports issued by the Kingdom of Saudi Arabia and that they are exempt from United Kingdom Immigration controls when they travel to this country. The procedure that is followed in relation to their travel to this country is that the [FCO] is informed of their Royal Highnesses arrival and departure in UK but they are not required to submit to immigration controls on arrival and departure. The [FCO] is required to advise and keep the Embassy and the Foreign Office in Saudi Arabia informed of both [the Princes] whereabouts while present in UK”.[67]On 12th February 2013, Ms Clunes provided the FCO’s letter. The first sign of any evidence from the Princes to deal with what the FCO had said was Mr Otty’s skeleton argument of the 4th March 2013 which contended that it was “correct as a matter of fact” that the Princes had been granted General Visitor visas for the UK. I was left wondering why that fact had not been made clear in Mr Roxborough’s 11th statement as long ago as 16th January 2013, and why the Princes’ diplomatic passports had not been produced to the Court since they would show whether immigration procedures were followed in relation to their visits to the UK. This mystery was not completely clarified by the flurry of evidence that arrived on the morning of 5th March 2013, barely an hour before the final hearing was due to begin. For the reasons given in a judgment delivered later that morning, I decided, as I have said, to admit the late evidence, despite Apex’s opposition.[68]Mr Roxborough’s 14th witness statement dated 5th March 2013 included a definitive list of the 36 sons of King Abdulaziz, of whom 20 are deceased.[69]A letter dated 2nd March 2013 (said later to be an error for the 5th March 2013) from Mr Khalid Al Mohaisen, Director General of Prince Mishal’s private office (the “Director General”) was addressed to Mr Roxborough, and exhibited to Mr Roxborough’s 15th statement dated 5th March 2013. Mr Roxborough’s 15th statement said, despite the date on the Director General’s letter, that it had been received by him on the morning of 5th March 2013. The Director General’s letter included the following:- “ … I work directly with HRH Prince Mishal and as part of my duties I regularly manage HRH’s diary and travel arrangements. I write this letter to clarify certain responses in regard to the questions raised by the Honourable Judge Vos and to confirm the information and documentation provided to Ms Santos as the legal advisor to [the Princes], including the information provided in her 2nd witness statement, is correct. The Founder determined the line of succession for the future Kings of Saudi Arabia to be from his male descendants, consisting of 36 sons of which 20 are deceased. To date 5 of the Founder’s sons have been appointed as Kings of Saudi Arabia and several of his surviving descendants occupy high governmental positions within Saudi Arabia. As requested I provide the list of the [36] male descendants of the founder … Appointments of successors to the King is determined by consensus amongst the male descendants of the Founder on an informal basis, in private applying certain privileged criteria as determined internally by the Ruling Royal Family. This customary tradition continues and is now codified at Article 16 of the Allegiance Institution Law of 2006. I am able to confirm that [Prince Abdulaziz] is [Prince Mishal’s] elected son to represent his father within the Royal family. Representational Functions of [the Princes]. The Private Office’s policy is not to release any information in regard to [the Princes’] diaries and travel arrangements for security reasons. I am however able to confirm Ms Santos’ description of [the Princes’] representational functions as stated in her 2nd witness statement. To assist the court further in this regard I have already provided all the published articles relating to the following years 2008-2011, in regard to [the Princes] as collected worldwide by the Private Office. This is an arduous process taking several months to complete. The Private Office constructs an annual official publication which is authenticated by the Private Office through an Authentication number containing all published articles in this regard. We have provided such publications for 2008-2011 to the Legal Adviser to [the Princes], Miss Carla Santos. … We are currently still collecting all the published articles which refer to [the Princes] for 2012, but have already in the meantime provided the initial documents we have at present. I understand that the court has also received such information. Protocol in regard to Witness Statements The Ambassador has already confirmed that [the Princes] are members of the Ruling Royal family and that [the Princes] form part of the Al Saud Family and are members of King Abdullah’s household. I confirm that the Royal protocol established in regard to such members of the Ruling Royal family is not to participate in or provide any witness statements themselves in relation to any dispute or litigation irrespective of the jurisdiction”.

Protocol in regard to Witness Statements

[70]Ms Santos’s 2nd statement was also served on the morning of the hearing on 5th March 2013. She gave her address as that of Global Torch in the British Virgin Islands. When quizzed, Mr Otty told me that she lived in Richmond, near London. I asked for her statement to be re-made with her real address. She said the following:- “Protocol and Precedent on providing Statements 6. Evidence has previously been provided to the court from the Royal Embassy of the Kingdom of Saudi Arabia confirming that both [the Princes] are members of the ruling Royal Family of the Kingdom of Saudi Arabia and that [the Princes] form part of the household of the Sovereign. I have spoken with the Director General who has confirmed to me that as a matter of Royal protocol, members of the ruling royal family such as [the Princes] do not themselves make witness statements in relation to disputes or litigation in which they may have some involvement. Witness statements 7. I give this statement to clarify paragraph 8 of Mr Roxborough’s eleventh statement which dealt with the immigration treatment of [the Princes] when they travel to the United Kingdom. The paragraph read: [see above] 8. The Director General and the [Princes] have each reviewed the FCO Letter which was received after the previous statement was made and the Director General has confirmed to me that the position in relation to the immigration controls to which [the Princes] are subject is that when either [of the Princes] lands in the United Kingdom, his passport is given to a representative of the Embassy of the Kingdom of Saudi Arabia who provides it to the UK Border Agency (the “UKBA”) for entrance into the UK. The Saudi Embassy representative then returns the passport to His Royal Highness at the premises, such as a hotel, where he is staying at while in the UK. As such, [the Princes] do not pass through immigration control but travel directly to such premises. As a courtesy the Royal Embassy of Saudi Arabia informs the [FCO] when senior members of the Royal Family arrive in the UK. 9. I have spoken directly to the [Princes] in relation to this point, and to the Director General. All three have confirmed that they consider that paragraph 8 of Mr Roxborough’s eleventh statement is correct. Representational Functions 10. Evidence is already before the court from both Mr Al-Gathani and The Royal Embassy of the Kingdom of Saudi Arabia confirming that both [the Princes] undertake various representational functions on behalf of the Kingdom of Saudi Arabia. The Director General has confirmed to me that Prince Mishal undertakes duties on behalf of or to assist the King of Saudi Arabia on a full time basis and are divided between his governmental position as Chairman of the Allegiance Council and further duties undertaken on behalf of or to assist the King. Typical examples of such representational functions undertaken monthly each year include: inaugurations of various projects in Saudi Arabia, receiving various delegations, public speaking, attendance at Middle Eastern Conventions and Forums on behalf of Saudi Arabia, state visits to various countries either accompanying the King or in his own representational capacity. At pages 1 to 17 is a table summarising the evidence previously exhibited in relation to these functions [the schedule of “Official Engagements”]. 11. The Director General confirms to me that the King also regularly invites HRH Prince Mishal to accompany and attend state meetings and often seeks HRH Prince Mishal’s input in his decisions, following advice received from the various Consultative Councils appointed to advise the King on state matters which define governmental policies. On average HRH Prince Mishal attends approximately 30 official events each year and his remaining schedule is either spent in the company of the King attending various meetings and discussions in regard to the policies and interests of the Kingdom of Saudi Arabia or complying with his duties and attending various governmental discussions as Chairman of the Allegiance Council HRH Prince Mishal has represented the Kingdom of Saudi Arabia and received various Heads of State, Monarchs and various delegations from numerous countries since 1953, a period of sixty years. 12. HRH Prince Abdulaziz also represents the Kingdom of Saudi Arabia and undertakes various representational functions on behalf of his father at least once a month and that he regularly accompanies his father on state visits or other events” (emphasis added). Witness statements [see above]

Representational Functions

[71]Apex’s reply submissions served on 8th March 2013, after the hearing had concluded pursuant to the permission I had given, made a further detailed attack on the Princes’ updated schedule of their “Official Engagements”, and upon the evidence of Ms Santos.[72]Finally, on 11th and 12th March 2013, the Princes filed a final skeleton argument seeking to rebut the attacks on the schedule of the Princes’ “Official Engagements”, and the 3rd statement of Ms Santos. This statement corrected her address, and said for the first time, as I have already mentioned, that the Princes had read and approved her statements.[73]I have already alluded to the Princes’ reliance on the increasing volumes of material they had adduced as to their public engagements alongside and on behalf of King Abdullah. The parties’ interpretation of that evidence is diametrically opposed. I was not, however, assisted by the piecemeal way in which this evidence was put forward, nor by the fact that the Princes mixed up evidence of Prince Mishal’s discharge of truly official functions on behalf of the King with evidence of activities that could, anyway on one interpretation, not be described as official duties. Ultimately, as I have said, the Princes produced a schedule showing numerous events attended by them. This schedule was then the subject of detailed attack and counter-attack. The competing positions concerned whether events that looked like travel, sporting, business or medical appointments were evidence of official engagements rather than private engagements. It was very difficult to resolve the argument about what events were truly official and what were not, and ultimately in the light of Ms Santos’s own evidence, I did not need to do so. I have not thought it necessary or appropriate to refer to the details of the schedule of “Official Engagements” in detail in this judgment.[74]It is clear, however, from the schedule of “Official Engagements” and the comments on it that Prince Mishal does sometimes discharge official state functions for King Abdullah. It seems that he attends in an average year about 30 of these functions – that is Ms Santos’s own approximation. Prince Abdulaziz does far less of this kind of work, but probably himself attends in some capacity some 5-10 state functions each year.[75]What is more controversial, however, is whether, as was ultimately said in Ms Santos’s 2nd statement set out above, Prince Mishal really“undertakes duties on behalf of or to assist [King Abdullah] on a full time basis”.[76]Finally, amongst the other evidence produced was section 1 of chapter 14 of the UK Immigration Directorate’s Instructions, which made clear that, for immigration purposes, HMG regarded members of households for the purposes of both sovereigns and diplomats as spouses, dependent offspring and dependent relatives. It is common ground that the Instructions are internal guidance to be used by UK Border Agency staff when handling applications. They contain 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. … 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”.[77]Before turning to deal with the issues that arise on the applications before me, I should deal with three of the more important cases that have been relied upon by the parties.

Trendtex Trading Corporation v. Central Bank of Nigeria

[78]In Trendtex Trading Corporation v. Central Bank of Nigeria [1977] 1 Q.B. 529, the Court of Appeal decided by a majority (Lord Denning MR and Shaw LJ, Stephenson LJ dissenting on this point) before the enactment of the SIA that international law recognised no immunity from suit for a foreign government department in respect of ordinary commercial transactions as distinct from acts of a governmental nature, and that the doctrine of stare decisis did not apply where principles of international law were concerned.

Aziz v. Aziz

[79]In Aziz v. Aziz and others (Sultan of Brunei intervening) [2008] 2 All ER 501, the Court of Appeal had to consider the nature of the immunity granted to a head of state under section 20 of the SIA. The immunity in question was that provided for in article 29 of the Vienna Convention which provides that “[t]he person of a diplomatic agent shall be inviolable. He shall not be liable to any form of arrest or detention. The receiving State shall treat him with due respect and shall take all appropriate steps to prevent any attack on his person, freedom or dignity”. Lawrence Collins LJ (with whom Sir Anthony Clarke MR and Sedley LJ agreed) decided that the protection afforded by article 29 was available to a head of State in his personal capacity, and that the immunity was functional in the sense 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” (paragraphs 55-61).

The Pinochet case

[80]In Regina v. Bow Street Metropolitan Stipendiary Magistrate ex parte Pinochet Ugarte (No. 3) [2000] 1 A.C. 147 (the “Pinochet case”), it was held in broad terms by the House of Lords (Lord Goff dissenting) that the former head of State had immunity from the UK’s criminal jurisdiction for acts done in his official capacity as head of State pursuant to section 20 of the SIA when read with article 39(2) of schedule 1 to the DPA, but that after the International Convention against Torture and other Cruel, Inhuman or Degrading Treatment or Punishment 1984 came into effect (by 1988) by ratification by each of Chile, Spain and the UK, it could not have been intended that ex-heads of State would have immunity in respect of official acts of torture.[81]The House of Lords wrestled with the proper application of the last words of article 39(2) of the Vienna Convention to the effect that “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”, and the question of whether “necessary modifications” were necessary to that article under section 20(1) of the SIA to produce the result that the head of State had personal immunity in relation to acts done anywhere as part of his official functions when head of State. Lord Browne-Wilkinson started from the proposition that it was a basic principle of international law that the immunity enjoyed by a head of State in power was a complete immunity extending to all criminal and civil proceedings, said to be granted ratione personae (pages 201G-202A). He thought that, at common law, a former head of State enjoyed immunity ratione materiae on ceasing to be head of State, but lost his immunity rationae personae (page 202F). In relation to the application of section 20(1) and article 39(2) , Lord Browne-Wilkinson said this at page 203B-F: “The correct way in which to apply article 39(2) of the Vienna Convention to a former head of state is baffling. To what "functions" is one to have regard? When do they cease since the former head of state almost certainly never arrives in this country let alone leaves it? Is a former head of state's immunity limited to the exercise of the functions of a member of the mission, or is that again something which is subject to "necessary modification?" It is hard to resist the suspicion that something has gone wrong. A search was done on the parliamentary history of the section. From this it emerged that the original section 20(1)(a) read "a sovereign or other head of state who is in the United Kingdom at the invitation or with the consent of the Government of the United Kingdom." On that basis the section would have been intelligible. However it was changed by a government amendment the mover of which said that the clause as introduced "leaves an unsatisfactory doubt about the position of heads of state who are not in the United Kingdom;" he said that the amendment was to ensure that heads of state would be treated like heads of diplomatic missions "irrespective of presence in the United Kingdom." The parliamentary history, therefore, discloses no clear indication of what was intended. However, in my judgment it does not matter unduly since Parliament cannot have intended to give heads of state and former heads of state greater rights than they already enjoyed under international law. Accordingly, "the necessary modifications" which need to be made will produce the result that a former head of state has immunity in relation to acts done as part of his official functions when head of state. Accordingly, in my judgment, Senator Pinochet as former head of state enjoys immunity ratione materiae in relation to acts done by him as head of state as part of his official functions as head of state”.[82]Lord Goff also found difficulty with article 39 at pages 209H-210C, but resolved it as follows:- “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 case of a head of state, there can be no question of tying article 39(1) or (2) to the territory of the receiving state, as was suggested on behalf of the appellants. Once that is realised, there seems to be no reason why the immunity of a head of state under the Act should not be construed as far as possible to accord with his immunity at customary international law, which provides the background against which this statute is set: see Alcom Ltd. v. Republic of Colombia[1984] A.C. 580, 597G, per Lord Diplock. The effect is that a head of state will, under the statute as at international law, enjoy state immunity ratione personae so long as he is in office, and after he ceases to hold office will enjoy the concomitant immunity ratione materiae "in respect of acts performed [by him] in the exercise of his functions [as head of state]," the critical question being "whether the conduct was engaged in under colour of or in ostensible exercise of the head of state's public authority:
" see Sir Arthur Watts Q.C., "
The Legal Position in International Law of Heads of States, Heads of Governments and Foreign Ministers," (1994-III) 247 Recueil des cours, at p. 56. In this context, the contrast is drawn between governmental acts, which are functions of the head of state, and private acts, which are not”.[83]Lord Hope also held that section 20(1) of the SIA gave effect to customary international law as to the immunity of heads of State, and held that no “necessary modifications” were necessary to article 39(2) for the immunity to be extended to acts done by the head of State outside the receiving State (pages 240H-241F). Lord Hutton seems, however, to have thought that “necessary modifications” were necessary to achieve the same effect (pages 250F-251A)[84]Lord Phillips alluded to the restriction on personal immunity excluding commercial transactions at page 285E-F as follows:- “An acting head of state enjoyed by reason of his status absolute immunity from all legal process. This had its origin in the times when the head of state truly personified the state. It mirrored the absolute immunity from civil process in respect of civil proceedings and reflected the fact that an action against a head of state in respect of his public acts was, in effect, an action against the state itself. There were, however, other reasons for the immunity. It would have been contrary to the dignity of a head of state that he should be subjected to judicial process and this would have been likely to interfere with the exercise of his duties as a head of state. Accordingly the immunity applied to both criminal and civil proceedings and, in so far as civil proceedings were concerned, to transactions entered into by the head of state in his private as well as his public capacity. When the immunity of the state in respect of civil proceedings was restricted to exclude commercial transactions, the immunity of the head of state in respect of transactions entered into on behalf of the state in his public capacity was similarly restricted, although the remainder of his immunity remained: see sections 14(1)(a) and 20(5) of the Act of 1978”.[85]Their Lordships in the Pinochet case said that the SIA was intended to reflect the existing customary international law or the existing common law (see Lord Browne-Wilkinson at page 203E-F (in the passage above), Lord Goff at page 210B-C, Lord Hutton at pages 249D and 251A, Lord Saville at page 265H, Lord Millett at pages 268G-269A, and Lord Phillips at page 279H).

The parties’ arguments on Issue 1

[86]The Princes’ central contention is that they are to be regarded as “members of [King Abdullah’s] family forming part of his household” within the meaning of section 20(1)(b) of the SIA. Mr Otty submits that it will be a question of fact and degree in each case as to whether the test is satisfied, but a person “forming part of his household” is not confined to those who live with the sovereign. It is, he submitted, 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”. This formulation was originally taken from footnote 2 on page 1040 of Oppenheim’s International Law, 9th edition, 1988, volume 1, edited by Sir Robert Jennings QC and Sir Arthur Watts KCMG QC.[87]Since considerable reliance was originally placed upon this footnote in Oppenheim, I shall set out both the paragraph and the footnote in question in full. The paragraph is as follows:- “453 The families of Heads of States abroad Where a Head of State on a visit to another state is accompanied by members of his family, they too will in large measure enjoy treatment similar to that accorded the Head of State himself. Thus their home state can require certain ceremonial honours to be rendered and request special protection for their person and dignity. Except so far as they may be regarded as part of the Head of State’s retinue, their exemption from the authority and jurisdiction of the state which they are visiting, and inviolability of residence (if separate from that of the Head of State) are more questionable, except in the case of the Head of State’s spouse; but again the comparison with the position of the family of a diplomatic agent² suggests their entitlement thereto where they form part of the Head of State’s household. The position would seem to be similar when a member of the Head of State’s family is sued in another state, even if not on a visit there. It is, in any case, probably necessary to take special account of the position of those members of a Head of State’s family who have a separate constitutional role of their own (for example, as heir apparent to the throne), or who are in their own right engaged on activities on behalf of their state, whose entitlement to privileges and immunities in their own right is probably to be acknowledged. Members of a Head of State’s family who accompany him are within the scope of the Convention on the Prevention and Punishment of Crimes against Internationally Protected Persons, including Diplomatic Agents, 1973”. Footnote 2 is as follows:- “See #513. But note the view of the ILC’s Special Rapporteur on Jurisdictional Immunities of States and their Property that the privileges and immunities of members of families of Heads of States are granted on the basis of international comity rather than in accordance with established rules of international law: ILC Rep (41st Session, 1989), paras 446, 450. In the UK, the State Immunity Act 1978, s 20(1), applies to ‘members of [a Head of State’s] family forming part of his household’ the provisions of the Diplomatic Privileges Act 1964 (giving effect to the Vienna Convention on Diplomatic Relations) as that Act applies to members of the family of a head of a diplomatic mission forming part of his household. The application of the 1964 Act is ‘subject to any necessary modifications’. Neither ‘family’ nor ‘household’ is defined in either Act, and their application to particular cases would depend on the facts (see 513). It is possible that, particularly in the context of the household, differences between the position of Heads of State and heads of diplomatic missions would lead to different conclusions, eg in relation to adult members of the immediate Royal family who live separately from the monarch but who continue to share with and assist in the exercise of certain Royal constitutional and representational functions, and can be regarded as forming part of the ‘Royal household’ in the wider, constitutional sense”.

Footnote 2 is as follows:-

[88]Once Ms Clunes had alerted the parties to the contents of Sir Arthur’s lecture, Mr Otty placed reliance on its contents as (not surprisingly) confirming what Sir Arthur had said in Oppenheim.[89]In support of this central argument, Mr Otty submitted that, although no decided cases have considered the meaning of “household” for the purposes of either section 20 of the SIA or the DPA in relation to sovereigns, the case of In Re Dix deceased [2004] 1 WLR 1399 brought under the Inheritance (Provision for Family and Dependents) Act 1975 did address the meaning of the word “household”. At paragraphs 23 and 24 of Ward LJ’s judgment in the Court of Appeal (with which Mummery and Rix LJJ agreed), he approved a definition of “household” in Santos v. Santos [1972] Fam. 247 as meaning “people held together by a particular kind of tie, even if temporarily separated”, and said “[t]hus they will be in the same household if they are tied by their relationship. The tie of that relationship may be made manifest by various elements, not simply their living under the same roof, but the public and private acknowledgement of their mutual society, and the mutual protection and support that binds them together …”.[90]Mr Otty placed great reliance, as I have said, on the fact that Saudi Arabia is governed by an absolute, rather than a constitutional, monarchy, with full executive powers in relation to domestic and foreign affairs. He relied on the terms of the Basic Law, which I have already set out above. Thus, argued Mr Otty, the wider the scope of the sovereign’s functions, the broader the scope of the definition of “household”.[91]The Princes also placed emphasis on a Parliamentary written answer on 29th April 1980 concerning 100 members of the Saudi Royal family having been permitted to enter and settle in the UK. The Minister there confirmed that:
“Heads of State and members of their family who form part of their household are entitled under section 20(3) of the [SIA] to the exemption from immigration control conferred by section 8(3) of the Immigration Act 1971”
. It was suggested that the other evidence of state practice before the court, mostly relied upon by Apex, referred to diplomats rather than the families of the head of State (e.g. Recommendation No. R(87) 2 of the Committee of Ministers of the Council of Europe, defining a member of the family as a spouse or minor child).[92]Mr Otty relied on the evidence he had adduced to the effect that the Princes (like other members of the Saudi Royal family) travelled on diplomatic passports. This aspect of the matter has now been clarified by the FCO’s letter. The Princes submitted that it could be inferred from the fact that the FCO enclosed a copy of Sir Arthur’s lecture, and referred to the specific passages of it referring to his understanding of the meaning of a sovereign’s household, that the FCO agreed with Sir Arthur’s views. Moreover, the Princes submitted that whilst the existence of the Princes’ General Visitor visas identified by the FCO’s letter necessarily implied that the holders were indeed subject to immigration controls, they did not accept that the fact that they had such visas determined the question of whether or not they were entitled to be exempt from immigration controls. Mr Otty pointed also to the fact that the FCO’s letter referred to Prince Mishal’s position in the Saudi Government and to the fact that he had not been required either to pay a visa fee or to provide biometric data. Moreover, Mr Otty adopted a comment that I made in argument to the effect that the FCO’s letter ought probably to be construed as meaning that HMG had not actually considered whether or not the Princes were “members of [King Abdullahs’s] family forming part of his household”, so could not answer the specific question that I had asked.[93]Apex’s response to these arguments was straightforward. It submitted that the FCO’s letter made it perfectly clear that HMG did not regard the Princes as either exempt from immigration controls or, consequently, as members of King Abdullah’s family forming part of his household. Sir Arthur’s lecture was merely flying an academic kite, and the meaning of “household” was to be taken from the consistent practice of the UK and many other states, which regarded only dependent relatives in that light.[94]Mr Otty’s last submission was that, if Prince Mishal, but not Prince Abdulaziz, was otherwise to be regarded as part of King Abdullah’s household, Prince Abdulaziz is to be regarded as acting entirely as Prince Mishal’s agent, since that is what is alleged against him in Apex’s petition. Mr Otty points to the case of Twycross v. Dreyfus (1877) V Ch D 605 per James LJ at pages 618-9 for the proposition that if the principal has immunity, the agent cannot be sued either. That case concerned the Peruvian state.[95]This issue raises two separate questions: first, what is the proper construction of the words “members of his family forming part of his household” in section 20(1)(b) of the SIA, and secondly, whether either or both of the Princes fall within that proper meaning.

(b) of the SIA

[96]In 1988, in the footnote to Oppenheim set out above, Sir Arthur floated the idea that it was “possible that, particularly in the context of the household, differences between the position of Heads of State and heads of diplomatic missions would lead to different conclusions” so that, for example “adult members of the immediate Royal family who live separately from the monarch but who continue to share with and assist in the exercise of certain Royal constitutional and representational functions”could be regarded as “forming part of the ‘Royal household’ in the wider, constitutional sense”.[97]By 1994, Sir Arthur had firmed up this idea, and went so far as to say that a sovereign’s “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”. It will be observed that neither in the footnote nor the lecture did Sir Arthur say definitively that he thought this was the position.[98]It is true also that the formulation of section 20(1) itself allows for “necessary modifications” in applying the immunities contained in the DPA and the Vienna Convention to sovereigns and other heads of State. This aspect may be of greater significance in relation to Issue 2, but is also important here, because it may be used to explain why “a member of a diplomatic agent’s family forming part of his household” might be construed more narrowly than “a member of a sovereign’s family forming part of his household”.[99]Moreover, Sir Arthur’s argument makes some sense for the reasons Mr Otty gave. 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. I should also take into account that HMG obviously regard Sir Arthur’s lecture and the views he expressed in it as important, or it would not have included a copy with the FCO’s letter, directing me to the relevant passages.[100]On the other hand, of course, Mr Howe has been able to point to the authoritative Immigration Directorate’s Instructions, which make it perfectly clear that, for those purposes at least, HMG do not regard an adult sibling of a sovereign or head of State as a member of his household, even if he or she does undertake official duties. Mr Howe relied also on similar approaches adopted in other parts of Europe and beyond.[101]Ultimately, however, neither the Instructions nor Sir Arthur’s views are determinative. The proper construction of section 20(1)(b) is a matter of pure law. In my judgment, the words of section 20(1) of the SIA must be construed on normal principles of statutory construction. The words “members of his family forming part of his household” must be given their normal meaning in the context in which they appear. It is important, I think, that they are used in section 20(1)(b) to refer to members of a sovereign’s or head of State’s household, not the household of a diplomatic agent. But, as Re Dix reminds us, a household refers to people held together by a particular kind of tie, even if they are temporarily separated. The words of the statute, to which one has always to return, make it clear that section 20(1) is focussing on the family and domestic affairs. It refers to private servants also. A private servant is defined in article 1 of schedule 1 to the DPA as a “person who is in the domestic service of a member of the mission and who is not an employee of the sending state”, which indicates that the section as a whole is about family and domesticity. Thus, the place in which the sovereign lives cannot be completely ignored. Of course, temporary absence from the home would not prevent someone who would normally be regarded as part of a sovereign’s household from being such, but an adult sibling with his own family and dependents and, more importantly his own household, would not, as it seems to me, normally at least, be regarded also as a member of the sovereign’s household.[102]I also bear in mind that one would not normally expect a prince, who has an entirely separate household of his own, to be regarded as part of the same household as his brother, particularly when they are both elderly and have many children and wives of their own.[103]I was referred to the case of Kilroy v. Windsor 1978 U.S. Dist. LEXIS 20419; (1990) 81 ILR605-606, from which it was clear that the US Department of State regarded HRH Prince Charles at that time as a member of HM The Queen’s household. Its opinion was as follows:- “The Prince of Wales is the eldest son of the Queen of the United Kingdom of Great Britain and Northern Ireland. He is heir apparent to the throne. Thus, he is a member of the sovereign’s immediate family and household. The pendency of this action has become a matter of concern in United States relations with the Government of the United Kingdom. On the occasion that gave rise to this litigation, the Prince was fulfilling his official functions on an official visit to the United States which was on behalf of his country and designed to promote good relations between the United States and the United Kingdom. The Department of State regards the visit of Prince Charles as a special diplomatic mission and considers the Prince to have been an official diplomatic envoy while present in the United States on that special mission. (See Chong Boon Kim v Kim Yong Shik and David Kim, Civil No 12565, Cir. Ct., 1st Cir., Hawaii, 1963, cited in 58 Am. J. Int’l. L. 186 (1964) [above].) In light of these considerations, the Department recognizes and allows the immunity of the Prince of Wales from the jurisdiction of the United States District Court in this action”.[104]Though the Court in Kilroy did not base its decision on the fact that Prince Charles was a member of the Queen’s household, the decision is nonetheless instructive (see also Lady Fox on the Law of State Immunity 2nd edition at pages 686 and 691-3).[105]It is important to remember that the purpose of the head of State’s immunity is functional: as Lawrence Collins LJ said in Aziz:
“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”
. Likewise the personal immunity of a sovereign’s family must be functional in the same sense. It cannot extend to everyone who assists the sovereign, or to everyone who carries out Royal, constitutional or representational functions – that would make a mockery of the immunity, and would apply to thousands of people, not only in Saudi Arabia, but in many other countries too. The question is where the line is to be drawn.[106]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.[107]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. Are the Princes members of King Abdullah’s family forming part of his household?[108]I turn now to deal with the second question under issue 1 which is whether the Princes or either of them have established as a matter of fact that they fall within the definition in section 20(1)(b) as I have explained it.[109]It is important, as explained in the Arantzazu Mendi that the courts and HMG speak with one voice. I need therefore first to understand the correct import of the FCO’s letter. As it seems to me, two things are clear from it: first that the Princes are subject to immigration controls in the UK in that they have General Visitor visas; and secondly that HMG has never considered whether or not the Princes or either of them are members of King Abdullah’s family forming part of his household under section 20(1)(b) of the SIA. In the circumstances, the fact that the Princes have not been granted exemption or claimed to be entitled to exemption from immigration controls under section 20(3) of the SIA does not indicate one way or the other whether they are entitled to sovereign immunity under section 20(1)(b). They might or might not be. The matter seems never to have been formally considered by HMG.[110]It is, however, important to note from the FCO’s letter that Prince Mishal alone had been exempted from the usual visa fee and the requirement to provide biometric data “[i]n view of his position in the Government [of Saudi Arabia]”.[111]Considering the FCO’s letter as a whole, however, it seems to me that I am entitled, indeed required, to make my own decision on the point I have to decide, taking into account what the FCO has told me. In doing so, I will not be departing from any view taken by HMG in the circumstances of this case.[112]I should mention also in this connection that I cannot accept the evidence in Ms Santos’s 2nd and 3rd statements purporting to confirm the accuracy of paragraph 8 of Mr Roxborough’s 11th statement. It is obviously incorrect to say that the Princes are not subject to immigration controls. They give their passports to the UK Border Agency when they arrive here, as would any other VIP. The fact that they do not queue up with other visitors at passport control is nothing to the point. Their passports are inspected (and may well be stamped) by the UK Border Agency, and they enter the UK by virtue of their General Visitor visas as the FCO has, in effect, indicated. Had they wanted to show the absence of any such processing, the Princes could easily have produced copies of their passports, but they have declined to do so, despite my raising the matter.[113]None of this, however, much matters, because as it seems to me, I have to apply the test that I have sought to explain above. The real question is as to whether the Princes undertake the kind of duties for King Abdullah as would entitle them to sovereign immunity as members of his family forming part of his household, notwithstanding that they do not live together with King Abdullah.[114]It is very clear, in my opinion, that Prince Abdulaziz has come nowhere near establishing that he is in such a position. Prince Abdulaziz attends occasional official functions as do numerous members of King Abdullah’s family. But he has no official position in the King’s Government. He is one of numerous nephews and nieces of the King who assist in occasional official duties. He travels on a diplomatic passport as do many of the King’s numerous relatives. He does not live in the same household as the King, nor is there any evidence that he advises the King on any regular or consistent basis.[115]Prince Abdulaziz is an active businessman working as his father’s Inspector General; he certainly does not engage in official Government business on behalf of King Abdullah on a full time or even a consistent basis. The materials he has put forward, looked at in a fair and balanced way, simply show that he has an occasional role in meeting or receiving official guests or undertaking other peripheral duties connected with the Saudi State. He is not exercising Royal or constitutional or representational functions on a consistent basis on behalf of the King. In the circumstances I have described, Prince Abdulaziz has failed to satisfy the test that I have set out for establishing whether a member of a sovereign’s family is properly to be regarded as forming part of his household.[116]It is equally plain from what I have already said that Prince Mishal occupies a more important position in King Abdullah’s Government than his son, Prince Abdulaziz. It is, however, to be remembered that, even on his own case, Prince Mishal too has substantial business interests. Indeed it is those interests that Prince Abdulaziz looks after. Prince Mishal is now 86 years old, and is not, by all accounts, in perfect health.[117]As I have already mentioned, Prince Mishal’s evidence as to the importance of his role in King Abdullah’s Government has developed. In the first statement on the subject, Mr Roxborough simply said that “there are a large number of Royal Princes, many of whom discharge executive, legislative and judicial functions on behalf of His Majesty”, and that “all of the Princes in the Royal Family (including the [Princes]) are issued with diplomatic passports. This indicates that they are considered under the law of Saudi Arabia to be part of the State at all times and therefore immune from suit by reason of State immunity”.[118]By 3rd December 2012, Mr Roxborough was saying that he was “informed by Ms Santos that [the Princes] regularly represent the Kingdom of Saudi Arabia on official matters”. By this time, he had started to produce press reports of the Princes’ public activities.[119]But, in my judgment, on 5th March 2013, Prince Mishal’s story changed significantly, when Ms Santos said in her 2nd statement that the Director General had confirmed that “Prince Mishal undertakes duties on behalf of or to assist the King of Saudi Arabia on a full time basis and are divided between his governmental position as Chairman of the Allegiance Council and further duties undertaken on behalf of or to assist the King”, and that “the King also regularly invites HRH Prince Mishal to accompany and attend state meetings and often seeks HRH Prince Mishal’s input in his decisions, following advice received from the various Consultative Councils appointed to advise the King on state matters which define governmental policies”, and that “[o]n average HRH Prince Mishal attends approximately 30 official events each year and his remaining schedule is either spent in the company of the King attending various meetings and discussions in regard to the policies and interests of the Kingdom of Saudi Arabia or complying with his duties and attending various governmental discussions as Chairman of the Allegiance Council HRH Prince Mishal has represented the Kingdom of Saudi Arabia and received various Heads of State, Monarchs and various delegations from numerous countries since 1953, a period of sixty years”.[120]What was being said in these passages that was entirely new was, of course, that Prince Mishal worked full time undertaking duties on behalf of or assisting the King. I am conscious that this evidence has not been cross-examined, but I simply cannot accept it at face value. It is flatly inconsistent with the way Prince Mishal originally put his case.[121]It seems to me that the corroborated evidence simply establishes that Prince Mishal attends on average about 30 official functions per annum (though he does so intermittently and sometimes with long gaps between engagements), and that he is Chairman of the Allegiance Council, which has an important but infrequent constitutional role. Prince Mishal is no doubt one of many advisers to King Abdullah as the absolute monarch, but he is not either heir to the throne or a regent or a person broadly exercising the sovereign’s functions in a full time capacity on his behalf.[122]I have taken particular note of the Basic Law which makes clear that those that can officially exercise power in Saudi Arabia alongside or on behalf of the King include the Crown Prince (article 65), the Council of Ministers, the Regulatory Authority and the Shura Council. Prince Mishal is not the Crown Prince, nor is he a Minister or a member of the Regulatory Authority or the Shura Council.[123]I have taken full account of the contents of the Director General’s letter and of the Ambassador’s letter, but none of these demonstrate the special position that Prince Mishal would need to occupy in the Kingdom of Saudi Arabia for him to be properly regarded as a member of the King’s family forming part of his household, despite the fact that Prince Mishal lives apart from the King and is one of very many adult family members that participate in the Saudi Government alongside and on behalf of the King.[124]Nor do I believe that immunity ratione personae would have been granted to Prince Mishal under the pre-existing law before the SIA. Immunity was granted to protect the Sovereign’s person. Immunity was allowed to members of his family so as to enable the King to discharge his sovereign functions without being troubled by criminal and civil proceedings. Such immunity could not extend to Prince Mishal, who is one of many family advisers, who sometimes represents King Abdullah at official functions or in receiving or visiting foreign monarchs or dignitaries. Prince Mishal’s only official position is as Chairman of the Allegiance Council, which is, as I have said, an intermittent role aimed at choosing the Crown Prince. It is noteworthy that, under the Basic Law, the Crown Prince is enjoined to devote himself exclusively to his duties as Crown Prince. Prince Mishal is, on the evidence, in a quite different and more remote position.[125]I am conscious also of Mr Otty’s argument that Prince Mishal occupies a high status and is often seated next to the King, sometimes even closer than the Crown Prince. But status is not the test. Only a family member exercising the functions of the sovereign can be regarded as forming part of the household.[126]In my judgment, Prince Mishal would have to have been considerably more instrumental in performing the King’s sovereign duties, if Prince Mishal were properly to be regarded as a member of King Abdullah’s family forming part of his household. There was nothing in the evidence before me that showed a sufficiently close connection between Prince Mishal and the ‘household’ of the King.[127]In the circumstances and on the evidence placed before me, I have reached the clear conclusion that neither Prince Mishal nor Prince Abdulaziz can be said to fall within section 20(1)(b) of the SIA as “members of [King Abduallah’s] family forming part of his household”.[128]The agency point argued by Mr Otty cannot, in these circumstances, change the position for Prince Abdulaziz, since Prince Mishal has no immunity. But even if Prince Mishal had established immunity, it seems to me that the point was wrong because Apex’s Petition does not allege a general agency against Prince Abdulaziz. It simply alleges that he acted as Prince Mishal’s agent in certain respects. That would not be enough even if the dicta in Twycross were applicable here, as to which I would prefer to say nothing.

The parties’ arguments on Issue 2

[129]As I have said, Apex contends that a “necessary modification” should be made so as to read article 31.1(c) of schedule 1 to the DPA, when applied to sovereigns and families of sovereigns as opposed to diplomatic agents, as if the restrictive territorial words “in the receiving State” were excluded. The Princes say that the modification contended for by Apex is not “necessary” and would be inconsistent with customary international law, and that ina nay event, article 31.1(c) should be read as providing no commercial exception for sovereigns, or their families and private servants.[130]Apex argues that diplomatic agents covered by the DPA generally operate in the UK, and would, therefore, expect not to be vexed in their diplomatic duties by being sued in the UK, except in respect of any commercial activity they might undertake in the UK outside their official functions. Diplomatic agents would expect, however, to be immune from suit in respect of commercial activities outside the UK, whilst they were in the UK on their mission.[131]The position with sovereigns and their families is quite different. They would not generally be expected to be in the UK at all, or at least only for brief visits. So far as sovereigns acting in their public capacity are concerned, sections 3(1)(a) and 14(1)(a) of the SIA exclude all commercial transactions from the broad immunity granted by section 1 of the SIA. Therefore, the argument runs, it would be illogical and inappropriate to exclude only commercial activities undertaken in the UK from the narrower personal immunity, for acts otherwise than in a public capacity, covered by section 20(1) of the SIA. Mr Howe sought to support his argument as to the necessary modification by reference to copious extracts from their Lordships’ speeches in the Pinochet case, some of which I have set out above. The argument highlights the pitfalls of the tool employed by the draftsman of section 20 in providing the same personal immunity for sovereigns and their families and servants as are provided for diplomatic agents and their families and servants. In truth, argues Mr Howe, the position of sovereigns is significantly different from the position of diplomatic agents serving a foreign mission in the UK.[132]Mr Otty submits that there is a clear distinction to be drawn between immunity of the sovereign ratione personae and the immunity of the State or State entities. He says that Trendtex was no authority for the erosion of the personal immunity of the sovereign and that a series of authorities, including the Pinochet case, Aziz, and Mighell v. Sultan of Jahore [1894] 1 QB 149 per Lord Esher MR at page 159, and Lady Fox’s text on State Immunity (supra) have emphasised the continuing importance of the immunity ratione personae. Thus, he submits, the pre-existing absolute personal immunity of the sovereign must be taken to have continued, bearing in mind the dicta referred to above in the Pinochet case to the effect that the SIA was intended to reflect the existing customary international law.[133]Mr Otty then points to Bank of Credit and Commerce International (Overseas) Ltd (in liquidation) v. Price Waterhouse (Abu Dhabi third party) [1997] 4 All ER 108, where Laddie J set aside third party proceedings against HH Sheikh Zayed, the ruler of Abu Dhabi and President of the UAE, on the grounds that the DPA provided him with immunity from claims brought against him in his private capacity. Laddie J said expressly at page 111j that:
“[i]n particular, the provisions of the 1964 Act would give him immunity from suit where the diplomatic agent, or in this case head of state, is carrying on a professional or commercial activity in the receiving state, that means in England”
. There was no suggestion in that case that Sheikh Zayed was carrying on any commercial activity in England, and counsel did not argue that the effect of the words “subject to … any necessary modifications” in section 20(1) of the SIA allowed the court to hold that the words “in the receiving State” in article 31.1(c) needed to be removed when it was applied to a head of State.[134]Ultimately, Mr Otty submits that Mr Howe’s argument on “necessary modifications” is flawed because:(i) it does not take account of the absolute nature of the common law personal immunity of the serving sovereign in relation to non-public functions;(ii) it misreads article 39 of schedule 1 to the DPA as having contained a territorial restriction when it did not;(iii) it misunderstands the dicta in Pinochet; and(iv) it fails to ensure that the sovereign is not in a worse position than the diplomatic agent.[135]As I have decided issue 1, issue 2 no longer requires resolution. It raises a point of some difficulty and importance. But I feel that, in case I am wrong on the first point, I need to decide it too. It has been fully argued before me.[136]The exercise required is, again, one of statutory (and, on this point, treaty) construction, against the background of the existing law. The legislation was clearly intended to reflect an exception to the immunity of the sovereign for commercial activities; the simple question is the breadth of that exception. I bear closely in mind that if any “modification” is to be made to the application of article 31 to sovereigns, their families and personal servants, it must be a “necessary” one, and not one that is just desirable.[137]I have already set out some of the passages on which the parties relied from the Pinochet case. They did not deal with article 31.1(c) at all. Commercial activity was not involved in the Pinochet case.[138]As it seems to me, the submissions made by both Mr Howe and Mr Otty can only gain general support from the Pinochet case. They both raise free-standing points that have not previously been argued. It is, however, right to point out that something has indeed gone rather wrong with the drafting of section 20(1), as Lord Browne-Wilkinson said in the Pinochet case in the context of article 39(2) of the Vienna Convention, and as Lord Hope said in that context too; it would not be right to confine the immunity to acts done in the receiving State (even though that did not, Lord Hope thought, need to be achieved by using the “necessary modifications” provision).[139]In my judgment, applying the immunity granted to diplomats undertaking their mission in the UK to sovereigns and their families and personal servants outside the UK does not work. The situations of the two classes of person are entirely different. Thus, first principles are engaged. Plainly, sovereigns and their families originally had wide personal immunity under the common law and under customary international law. Trendtex demonstrates at least that there was a respectable argument just before the enactment of the SIA that customary international law had changed by that time so as to prevent sovereign States and their emanations claiming immunity for their commercial activities. Trendtex did not however deal with the personal immunity of the sovereign, nor of course with the personal immunity of a sovereign’s family members. That exercise now requires, in my judgment, that section 20(1) of the SIA and article 31 of the Vienna Convention be properly construed.[140]The first point arises from the comparison between the immunity and its exceptions under sections 1, 3 and 14 of the SIA in respect of sovereigns acting in their public capacity, and the immunity under section 20(1) of the SIA and article 31 of schedule 1 to the DPA in respect of sovereigns acting in their private capacity. The exception will be the same, of course, for sovereigns and for their families and private servants covered by sections 20(1)(a) to (c). There is no territorial restriction to the commercial exception under section 3. It is, therefore, hard to imagine any reason for such a territorial restriction under section 20(1) of the SIA. Mr Otty complains that that would make the protection afforded to diplomatic agents wider than that afforded to sovereigns. That may be so, but diplomatic agents have temporary protection to enable them to carry out their mission un-vexed by litigation during their stay in the UK, but only during that stay. Sovereigns, and particularly absolute monarchs, would, if Mr Otty were right, have absolute immunity for any professional or commercial activity worldwide. That seems to me to be unlikely to have been Parliament’s intention, in the light particularly of the prevailing thinking exemplified in the majority judgments in Trendtex. It would, in my judgment, be remarkable if Parliament could have intended no limitation, vis-a-vis commercial acts, on the personal immunity of the sovereign, his family and private servants. One of the big changes introduced by the SIA, even if it was a codification of existing principles, was the commercial exception – an exception of that kind was expressly applied both to states and sovereigns exercising public functions and to sovereigns acting in their private capacities. The complete abrogation of the uncertain extent of the exception to personal immunity as it existed at the time in 1978 seems a most improbable Parliamentary intention. Thus, I cannot accept Mr Otty’s submissions as to the modification to exclude the commercial exception altogether being a necessary one.[141]It seems to me that the term “necessary modifications” in section 20(1) of the SIA does, however, allow the section to be read as if the territorial limitation in article 31.1(c) were absent when it is applied, inaptly I am afraid, to sovereigns, their families and private servants. The decision in Trendtex was hot news in 1978 when the SIA was debated in Parliament. It would have made no sense to confine the commercial exception that was being applied to limit the immunity of foreign sovereigns to acts done in the UK, when foreign sovereigns, their families and servants would not be expected to be in the UK for anything other than occasional visits. The wind of customary international law was blowing towards the removal of immunity for States and State entities in relation to commercial activities (reflected in Trendtex and then in section 3(1)(a) of the SIA), and towards the removal of private immunity for commercial activities for sovereigns, their families and servants. In my judgment, the modification to remove the territorial restriction on the exception in article 31.1(c) is indeed necessary.[142]Moreover, none of Mr Otty’s 4 points is conclusive:- i) As can be seen from some passages in Sir Arthur’s lecture, the absolute nature of the common law and customary international law personal immunity of the serving sovereign in relation to non-public functions was at least in doubt in 1978. Sir Arthur did not directly discuss the applicability of the territorial limitation to the commercial exception in article 31.1(c) to sovereigns, their families and public servants. Moreover, whilst it seems likely that the SIA was intended – in broad terms at least - to reflect the pre-existing legal position, the situation with regard to commercial activities was unclear and in a process of development internationally in 1978. ii) It is not right to say that Mr Howe’s argument misreads article 39 as having contained a territorial restriction when it did not. Article 39 relates to diplomatic agents and refers in article39.1 to “the moment he enters the territory of the receiving State”, and in article39.2 to the privileges ceasing “when he leaves the country”. So, whilst there is no express territorial restriction in article 39, there is an implicit reference to a territorial limitation, which the majority of their Lordships in the Pinochet case thought inappropriate in relation to a head of State. Either way, the argument in the Pinochet case was different, and the decision cannot be directly applicable to what I have to decide in relation to the meaning of article 31.1(c). iii) I can only repeat what I have said above in relation to the Pinochet case; it is instructive, but certainly not determinative. iv) The argument that making the modification to article 31.1(c) would give diplomatic agents broader protection than their sovereigns is not compelling for the reasons I have given. Diplomatic agents are in the UK for their diplomatic work. That is why they have personal immunity there, except for the three exceptions including commercial activities. Sovereigns, their families and personal servants are not in the UK, so the exception makes no sense if limited to activities in the UK. The draftsman of section 20(1) must have been conscious that his legislative tool of allowing “necessary modifications” might lead to some anomalies. This one is unlikely to be of great effect, since diplomatic agents in post are unlikely to be sued whilst they are in post in the UK in respect of foreign commercial activities. If they are and they claim immunity, they will lose it when their tour of duty ends. The modification is, as I have said, a necessary one, because the application of article 31.1(c) to sovereigns, their families and personal servants makes no sense without it.[143]In my judgment, therefore, if the Princes had personal immunity from suit under section 20(1)(b) of the SIA, such immunity would not extend to any commercial activity exercised by them outside their official functions anywhere in the world.

Conclusions

[144]For the reasons I have sought to give, on the proper construction of section 20(1)(b) of the SIA, whilst an adult member of a sovereign’s or head of State’s family exercising Royal or presidential, constitutional and representational functions could 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, such a situation will be rare, and would be likely to be restricted to the case of a regent, heir to the throne or a person broadly exercising the sovereign’s or head of State’s functions in a full time capacity on his behalf.[145]On the facts of this case, neither Prince Mishal nor Prince Abdulaziz have established that they can properly be regarded as members of King Abdullah’s family forming part of his household, within the proper meaning of section 20(1)(b) of the SIA.[146]Secondly, even if that were wrong, in my judgment, section 20(1) of the SIA and article 31.1(c) of schedule 1 to the DPA must be construed, in the case of a sovereign or other head of State and members of his family forming part of his household and his private servants, as excluding immunity in the case of any action undertaken anywhere relating to any professional or commercial activity exercised by him outside his official functions. This involves making a “necessary modification” to article 31.1(c) in applying it to sovereigns, their families and servants. The Princes would, therefore, have no immunity to these proceedings, relating to their alleged commercial activities, even if they were otherwise entitled to immunity as members of King Abdullah’s family forming part of his household.[147]For these reasons, I will dismiss the Princes’ applications claiming sovereign immunity from the claims made in Apex’s petition.[148]I will hear counsel on all ancillary matters including the date upon which the remaining jurisdictional matters should be determined.

Cited in 6 later judgments