Mukoro v European Bank For Reconstruction & Development & Anor [1994] UKEAT 813_92_2303

EAT

Mukoro v European Bank For Reconstruction & Development & Anor

[1994] UKEAT 813_92_2303 · 1994-03-23

MR JUSTICE MUMMERY (PRESIDENT) Introduction The issue of law in this appeal is whether an international organisation and its employees are entitled to immunity from proceedings brought against them in an Industrial Tribunal under the Race Relations Act 1976. If the immunity is established, it would extend, unless waived in a particular case, to complaints against similar international organisations under the Employment Law of Great Britain, including complaints of unfair dismissal and sex discrimination.

The organisation in question in the European Bank for Reconstruction and Development ("the European Bank"), the first Respondent. An employee of the European Bank, Mr J Landriault, is the second Respondent. The proceedings are brought by Mr Mukoro who alleges unlawful discrimination on the grounds of race when the European Bank, through Mr Landriault acting on its behalf, rejected his application for employment.

At a preliminary hearing of the Industrial Tribunal held at London (South) on 2nd September 1992, the Respondents argued that the Tribunal had no jurisdiction to consider the complaint, because they were immune from such proceedings under English law. For reasons notified to the parties on 14th September 1992, the Industrial Tribunal unanimously upheld the claim to immunity and dismissed Mr Mukoro's complaint. Mr Mukoro appeals against that decision.

So far as is known, this is the first time that the question of immunity of an international organisation has been raised before the Employment Appeal Tribunal. The merits of the complaint have not been investigated by the Industrial Tribunal and never will be if the claim to immunity is upheld.

The Facts

The sequence of relevant events is as follows:-

(1) On 21st May 1990 Mr Mukoro wrote to the Overseas Development Administration regarding the proposed setting up of the European Bank. According to the CV enclosed with his letter Mr Mukoro was 47 years old. He received his secondary education in Nigeria. He worked in banks and other institutions providing financial services, first in Lagos from 1960 to 1965 and since 1969 in London. At that time he was unemployed. In his letter he asked for his interest as a prospective candidate for a position in the Bank to be registered and transmitted to the representative office when it came into existence.

(2) On 29th May 1990 an agreement was made between over 40 sovereign States and international institutions, including the European Community and the European Investment Bank, establishing the European Bank. The preamble to the agreement stated that the contracting parties were

"committed to the fundamental principles of multi-party democracy, the rule of law, respect for human rights and market economics"

and that they welcomed

"the intent of Central and Eastern European countries to further the practical implementation of multi-party democracy, strengthening democratic institutions, the rule of law and respect for human rights and their willingness to implement reforms in order to evolve towards market oriented economies".

In Article 1 of the Agreement it was stated that the purpose of the Bank was

"to foster the transition towards open market oriented economies and to promote private and entrepreneurial initiative in the Central and Eastern European countries committed to and applying the principles of multi-party democracy, pluralism and market economies.

The Agreement did not enter into force at that time.

(3) On 10th October 1990 Mr Mukoro wrote to the European Bank enclosing a copy of his CV and his earlier letter. He said that he was prepared to work in any capacity in the Foreign Department, the Securities Department or the Domestic Department. He offered to provide references.

(4) On 31st October 1990 an Order in Council was made (SI.1990/2142) under the International Organisations Act 1968 ("the 1968 Act"), conferring immunity on individual employees of the European Bank, but not conferring any general immunity on the European Bank itself.

(5) On 7th January 1991 Mr Landriault of the Personnel Department of the European Bank wrote to Mr Mukoro thanking him for his interest in joining the European Bank. He was informed that recruitment activities were under way and that his candidacy would be given every consideration along with the many others received.

(6) On 20th March 1991 a second Order in Council was made (SI.1991/757) revoking the 1990 Order in Council and conferring immunity from suit and legal process in general terms on the European Bank and its employees.

(7) On 28th March 1991 the Agreement establishing the European Bank entered into force.

(8) On 15th April 1991 two important events occurred:

(a) A Headquarters Agreement was made between the Government of the United Kingdom and the European Bank. The Agreement establishing the European Bank had provided that its principal office should be located in London. The purpose of the Headquarters Agreement was to define the status, privileges and immunities in the United Kingdom of the European Bank and persons connected with it. The Headquarters Agreement entered into force on the same day as it was made.

(b) The 1991 Order in Council came into force.

(9) On 22nd April 1991 Mr Mukoro wrote to Mr Landriault about his letter of 7th January. He enclosed copies of his two previous letters and enquired whether his candidacy for a position was still under review. He referred to telephone calls that he had made. He made further telephone calls to the European Bank in the first two weeks of May.

(10) On 17th May and again on 24th May 1991 the European Bank wrote to Mr Mukoro informing him that his application had been reviewed and that it was unable to offer him a position that would fully recognise his skills and experience.

(11) On 29th July 1991 Mr Mukoro sent statements to the Commission for Racial Equality regarding his complaints against the European Bank and Mr Landriault.

(12) On 13th August 1991 Mr Mukoro presented a complaint of racial discrimination against the European Bank and Mr Landriault.

(13) On 9th October 1991 Notice of Appearance was given on behalf of the European Bank and Mr Landriault claiming immunity from legal process, disputing the jurisdiction of the Industrial Tribunal to determine Mr Mukoro's complaint and requesting a preliminary hearing.

The Statutory Provisions

The conflicting contentions turn mainly on the interpretation of the relevant statutory provisions. They are contained in the 1968 Act and in the 1991 Order in Council.

(1) The 1968 Act

The 1968 Act makes provision as to privileges, immunities and facilities to be accorded in respect of certain international organisations and in respect of persons connected with those organisations and other persons.

The relevant provisions of the 1968 Act, as amended, are as follows:

"1(1) This section shall apply to any organisation declared by Order in Council to be an organisation of which - (a) the United Kingdom, or Her Majesty's Government in the United Kingdom, and (b) any other sovereign power or the Government of any other sovereign power

are members.

(2) Subject to subsection (6) of this section, Her Majesty may by Order in Council made under this subsection specify an organisation to which this section applies and make any one or more of the following provisions in respect of the organisation so specified (in the following provisions of this section referred to as "the organisation"), that is to say -(a) ...

(b) provide that the organisation shall, to such extent as may be specified in the Order, have the privileges and immunities set out in Part I of Schedule 1 to this Act;

(c) confer the privileges and immunities set out in Part II of Schedule 1 to this Act, to such extent as may be specified in the Order, on persons of any such class as is mentioned in the next following subsection;

(d) confer the privileges and immunities set out in Part III of Schedule 1 to this Act, to such extent as may be specified in the Order, on such classes of officers and servants of the organisation (not being classes mentioned in the next following subsection) as may be so specified."

The immunities specified in Part I, Part II and Part III of Schedule 1 include "immunity from suit and legal process".

Section 1 subsection (6) of the 1968 Act provides -

"Any Order in Council made under subsection (2) ... of this section shall be so framed as to secure - (a) that privileges and immunities conferred by the Order are not greater in extent than those which, at the time when the Order takes effect, are required to be conferred in accordance with any agreement to which the United Kingdom or Her Majesty's Government in the United Kingdom is then a party (whether made with any other sovereign power or Government or made with one or more organisations such as are mentioned in subsection (1) of this section), and ..."

Reference was also made to S.5 which concerns privileges, immunities and facilities in respect of international, judicial and other proceedings. The only part relevant for the purposes of this appeal is subsection (1) which provides -

"Her Majesty may by Order in Council confer on any class of persons to whom this section applies such privileges, immunities and facilities as in the opinion of Her Majesty in Council are or will be required for giving effect - (a) to any agreement to which, at the time when the Order takes effect, the United Kingdom or Her Majesty's Government in the United Kingdom is or will be a party, or

..."

(2) The 1991 Order

"1(1) This Order ... shall come into force on the date on which the Headquarters Agreement between the Government of Great Britain and Northern Ireland and the European Bank for Reconstruction and Development enters into force. ..."

Article 5(1) provides that -

"Except to the extent that the Board of Directors of the Bank shall have waived immunity, the Bank shall have immunity from suit and legal process"

in respect of the various matters specified.

Article 5(2) provides that -

"Without prejudice to paragraph (1), the Bank shall, within the scope of its Official Activities, have immunity from suit and legal process, except that the immunity of the Bank shall not apply - (a) to the extent that the Bank shall have expressly waived any such immunity in any particular case or in any written document;

..."

and in respect to various other matters specified in the following five sub-paragraphs.

It is provided in the interpretation Article 2 that in the 1991 Order

"(k) "Official Activities of the Bank" includes all activities undertaken pursuant to the Agreement establishing the Bank, and all activities appropriate to fulfil its purpose and functions under Articles 1 and 2 of that Agreement, or undertaken in exercise of its powers under Article 20 of that Agreement including its administrative activities;"

Article 10 of the Agreement establishing the European Bank confers general powers on the Bank to do various things including -

"(7) Exercise such other powers and adopt such rules and regulations as may be necessary or appropriate in furtherance of its purpose and functions, consistent with the provisions of this Agreement."

Article 13 of the 1991 Order provides that -

"A person connected with the Bank shall enjoy immunity from suit and legal process in respect of acts performed by him in his official capacity".

On this appeal it was accepted on behalf of Mr Mukoro that, if the European Bank is entitled to immunity from suit and legal process, then Mr Landriault also enjoys such immunity as a person connected with the Bank. On behalf of Mr Landriault it was denied that he was the person who took the decision not to employ Mr Mukoro. That is not a matter which has been investigated by the Industrial Tribunal or on this appeal.

Claim to Immunity - General Comments

A claim to immunity from suit and legal process must be carefully scrutinised since, if established, the European Bank and its employees are exempt from the jurisdiction of the Industrial Tribunal in respect of complaints under the Race Relations Act, the Sex Discrimination Act and the Employment Protection legislation. Those with complaints under the legislation are disabled from having those complaints investigated by the Industrial Tribunal and from obtaining any remedy from the Industrial Tribunal. The existence of internal grievance procedures may provide some remedy for those employed by the international organisation. A person such as Mr Mukoro, who has not succeeded in becoming an employee of the organisation would have no such remedy.

As immunity from suit and legal process conferred on foreign States, diplomats, international organisations and their officers may produce severe disabilities for individuals in respect of fundamental rights, it can only be justified by an overriding public policy or interest. In the case of an international organisation, such as the European Bank, immunity from suit and legal process may be justified on the ground that it is necessary for the fulfilment of the purposes of the Bank, for the preservation of its independence and neutrality from control by or interference from the host state and for the effective and uninterrupted exercise of its multi-national functions through its representatives. Those considerations, as well as the severity of the disability suffered by a potentially aggrieved individual, must be borne in mind in the interpretation of the relevant provisions of the 1968 Act and of the 1991 Order.

Submissions of Mr Mukoro

At the Industrial Tribunal and in the Notice of Appeal dated 22nd October 1992 two points were taken by Mr Mukoro which were not pursued on this appeal. The first was that, in view of the provisions of Article 7 of the EC Treaty, the 1991 Order was not capable of excluding his complaint of discrimination. Article 7, which prohibits discrimination "on grounds of nationality", is of no assistance to Mr Mukoro who enjoys dual nationality, Nigerian and British. He does not complain of discrimination on the ground of his British nationality and, as a Nigerian national, he is not within the scope of the "application of this Treaty", as required by Article 7, as it concerned only with discrimination involving member States.

The second point not pursued on this appeal was that the 1991 Order did not confer immunity in respect of discriminatory acts which preceded the coming into force of the 1991 Order on 15th April 1991. The date of the alleged Act of discrimination is irrelevant, since the immunity conferred is "from suit and legal process" and therefore prevents the Industrial Tribunal from exercising jurisdiction over the European Bank and its officers in respect of any complaint which falls within the terms of the 1991 Order, irrespective of the date on which the act giving rise to the complaint was committed.

The submissions made by Mr Scott, on behalf of Mr Mukoro, concerned two different points, one as to the scope of the 1991 Order, the other as to its validity.

(1) The Official Activities point

Mr Scott submitted that, properly interpreted, the immunity conferred by the 1991 Order did not extend to legal proceedings alleging racial discrimination in the selection of staff for the European Bank. The immunity conferred by Article 5(2) is confined to acts of the Bank which fall within the scope of its "Official Activities". They include "all activities undertaken pursuant to the Agreement establishing the Bank, and all activities appropriate to fulfil its purpose and functions under Articles 1 and 2 of that Agreement". An unlawful act of racial discrimination does not fall within the scope of the acts which enjoy immunity because that would be inconsistent with the fundamental principles to which the member States agreed they were committed in establishing the European Bank. Those who established the European Bank stated that they were committed to the fundamental principles of "the rule of law" and "respect for human rights". It is not consistent with those fundamental principles for the European Bank to enjoy immunity from investigation into the alleged commission of an unlawful act of racial discrimination.

(2) The ultra vires point

Mr Scott's second submission was that the 1991 Order was made in terms exceeding the powers conferred by the 1968 Act. The argument went as follows. The 1991 Order was made under S.1(2) of the 1968 Act. It is provided by S.1(6) of the Act that an Order in Council made under that subsection

"shall be so framed as to secure - (a) that the .... immunities conferred by the Order are not greater in extent than those which, at the time when the Order takes effect, are required to be conferred in accordance with any agreement to which the United Kingdom ... is then a party ."

The 1991 Order was made on 20th March 1991 and came into force on 15th April 1991. Mr Scott emphasised the fact that the reference to an Agreement which the United Kingdom "is then a party " is in the present tense, unlike, for example, S.5(1) of the 1968 Act which refers to an Agreement to which the United Kingdom "is or will be a party ". The importance which Mr Scott places on the tenses is that the 1991 Order was made on 20th March 1991. At that date the only relevant agreement under which the immunities were "required to be conferred" was the agreement made on 29th May 1990 establishing the European Bank. The immunities required to be conferred under that Agreement are contained in Articles 46 to 51. They do not include any general immunity for the European Bank, as distinct from immunity given to individual officers and employees under Article 51. The immunity granted to the Bank in Article 5(2) of the 1991 Order is wider than was required to be conferred under the 1990 Agreement. It confers on the Bank immunity from suit and legal process in respect of acts "within the scope of its official activities", with the exceptions stated, none of which apply to the present case. In those circumstances the immunity went wider than permitted by the terms of S.1(6) of the 1968 Act. Full immunity for the European Bank was not agreed until 15th April 1991 when the Headquarters Agreement was made and came into force. The Headquarters agreement was in contemplation, but had not in fact been made at the time when the 1991 Order was made. The wide immunities provided for in the Headquarters Agreement could not, therefore, be lawfully granted within the provisions of S.1(6)(a) of the 1968 Act. That section should not be construed so as to permit the granting of immunities by Order in Council pursuant to agreements which have not been made at the time when the Order in Council is made.

Conclusions

In our judgment, Mr Scott's arguments are not a correct interpretation or application of the provisions of the 1968 Act and the 1991 Order. The Industrial Tribunal did not err in law in its conclusion that it had no jurisdiction to entertain Mr Mukoro's complaint by reason of the immunity from suit conferred by Articles 5 and 13 of the 1991 Order. We conclude that the Industrial Tribunal had no option but to dismiss the complaint for want of jurisdiction. The reasons for our conclusion are as follows:

(1) The European Bank and its employees were granted immunity from suit and legal process for acts done "within the scope of its official activities".

(2) "Official activities" include all activities undertaken pursuant to the Agreement establishing the European Bank "including its administrative activities". The selection of staff for employment by the European Bank is an administrative activity undertaken pursuant to the Agreement and appropriate to fulfil the Bank's purpose and functions. The relevant activity is the selection of staff for employment. Mr Mukoro's complaint is about the alleged unlawfulness of the manner in which the activity of selecting staff for employment was carried out. In our view, it is not correct to argue that the relevant activity is that of unlawful discrimination and that that was not an official activity. The correct question to pose under the 1991 Order and the Headquarters Agreement is whether the selection of staff for employment was within the "official activities" of the Bank? To pose the question in the form "is unlawful racial discrimination within the official activities" of the Bank, confuses on the one hand, the activity of selecting staff for employment with, on the other hand, the mode of performance of the activities and the consequences of performance. If Mr Scott's interpretation of the 1991 Order in Council were correct, the immunity from suit and legal process conferred by Article 5(2) would be meaningless. It would only apply where, after an Industrial Tribunal had exercised jurisdiction and conducted an investigation into the complaint, it concluded that no unlawful act had been committed by the Bank, in which case it would be unnecessary to confer or claim any immunity. The purpose of conferring immunity is to protect the relevant organisation from having legal proceedings brought against it for alleged wrongs, whether those wrongs have actually been committed by the organisation or not.

(3) The 1991 Order was not made in excess of the powers conferred by the 1968 Act. The fallacy in Mr Scott's argument is that it misconstrues S.1(6) of the 1968 Act and ignores the express provision in Article 1(1) of the 1991 Order. The reference in S.1(6)(a) of the 1968 Act to "any agreement to which the United Kingdom ... is then a party" is to the position "at the time when the Order takes effect ", not, as Mr Scott contends, to the time at which the Order in Council is made . It is provided by Article 1(1) of the 1991 Order that it "shall come into force on the date on which the Headquarters Agreement ... enters into force". The Headquarters Agreement, which provided for the full form of immunity from suit and legal process to be conferred on the European Bank, entered into force on 15th April 1991. That was also the time when the 1991 Order took effect. The United Kingdom was "then a party" to the Headquarters Agreement which required the privileges and immunities to be conferred to the extent to which they are conferred by that Order. The provisions of S.1(6)(a) of the 1968 Act are satisfied and the 1991 Order was validly made.

For those reasons this appeal is dismissed.