HEADNOTES:

1. A rule of public international law whereby domestic jurisdiction for actions against a foreign State in relation to its non-sovereign activity is ruled out is not an integral part of Federal law.

2. a) The criterion for distinguishing between sovereign and non-sovereign State activity is the nature of the State's action.

b) Classification as sovereign or non-sovereign State activity is in principle to be done according to national law.

Order of the Second Senate of 30 April 1963 -- 2 BvM 1/62 --
in the proceedings for consideration of the question whether a rule of public international law ruling out action against a foreign State before the courts of the Federal Republic of Germany in relation to its private-law activity in Germany is an integral part of Federal law - submission by Cologne Regional Court, 11th Civil Division, of 13 February 1962 (11 T 18/62).

DECISION:

A rule of public international law ruling out domestic jurisdiction for suits against a foreign State in relation to its non-sovereign activity is not an integral part of Federal law.

EXTRACT FROM GROUNDS:

A.-I.

1. The firm of ... in Cologne filed a suit with the Cologne District Court in November 1961 against the Iranian Empire. The firm asked for payment of 292.76 DM plus interest for repair work done on the heating installation of the Iranian Embassy building in Köln-M... by order of the Ambassador.

The Cologne District Court declined in a ruling of 19 January 1962 to set a date for oral proceedings and to serve the bill of complaint, because the Iranian Empire as a sovereign State was by a general rule of public international law exempt from German jurisdiction. The plaintiff firm lodged a complaint against this ruling.

2. The Cologne Regional Court decided on 13 February 1962 to obtain a decision from the Federal Constitutional Court pursuant to Article 100 (2) Basic Law on "whether according to generally recognized rules of public international law the plaintiff can sue the defendant State of Iran before a court of the Federal Republic"... (arguments).

II.

1. On behalf of the Federal Government, the Federal Minister of Justice stated:
a) A general rule of public international law whereby foreign States were simply exempted from domestic jurisdiction ought no longer to be findable....
b) The official activity of the Embassy was of a sovereign nature. Since repair work on the Embassy building or its installations was necessary for the regular carrying out of Embassy business, conclusion of a contract about such work was manifestly connected with the sovereign action of the sending State irrespective of whether a contract to this effect would for other German law be classifiable as a matter of private law.
c) Besides the principle of immunity of States, in the present case also the special problem of the immunity of diplomatic missions was of importance. Diplomatic missions ought not to be hampered in carrying out their tasks. Allowing actions for payment of the present nature could in some circumstances have such a hampering as a consequence, for instance where such were many in number or the Embassy were to see itself as compelled in the legal dispute to bring forward matters that concerned its internal operations or allow inspections in the Embassy building.

2. The plaintiff in the initial case and the Imperial Iranian Embassy in Cologne were given an opportunity to make statements.

...

B.

The submission is admissible...(more detailed explanation).

C.

A general rule of public international law whereby domestic jurisdiction in actions against a foreign State in relation to its non-sovereign activity is ruled out does not exist.

I.

1. Rules of international law exempting foreign States from domestic jurisdiction are general rules of international law where they are recognized by far the larger number of States - not necessarily also by the Federal Republic of Germany (BVerfGE 15, 25 [B4 under II]).

The general rules of international law on the immunity of States can belong only to customary international law. There are no treaty rules that have met with general recognition. Nor are there generally recognized principles of law which, in supplementation of customary law, might be decisive for the extent of the immunity of States.

2. In the time up to the First World War, the manifestly predominant practice of States was to grant foreign States immunity unrestrictedly, and thus to exempt them from domestic jurisdiction is respect of both their sovereign and their non-sovereign activity. Since then, however, the immunity of States has been "involved in a process of shrinkage" (Dahm, Festschrift für Arthur Nikisch, 1958, p.153 ff.) and its history has "become a history of a fight over the number, nature and extent of the exceptions" (Ernst J.Cohn, in: Strupp/Schlochauer, Wörterbuch des Völkerrechts [=Strupp/Schlochauer, Wörterbuch], vol. 1, p.662). The increase of governmental activity in the economic sphere, in particular the extension of trade by States, made it seem appropriate to exclude acta iure gestionis from the immunity of States. It was regarded as necessary to grant the individual legal protection through courts not only vis-à-vis his own State but also vis-à-vis foreign States to a greater extent than before. Primarily for these reasons, developments over the last decades have led to the position that today it is no longer possible to show a usage adopted over a long time by the vast majority of States in awareness of their legal obligations whereby foreign States are exempted from domestic jurisdiction in respect of actions connected with their non-sovereign activities too.

The usage adopted by States is, since the question is one of the exercise of jurisdiction, to be determined mainly from the practice of their courts. Further, the practice of States in other respects, attempts to codify the internal law in question and the doctrine of recognized authors is to be adduced (BVerfGE 15, 25 [35 before b]).

3. It does not result from the practice of courts that according to general international law foreign States continue to be entitled unrestrictedly to immunity from domestic jurisdiction.

a) Germany belonged until 1945 among the States whose courts granted immunity unrestrictedly, even against private-law claims.

In its fundamental decision of 12 December 1905 (RGZ 62, 165) the Reichsgericht allowed the foreign State unrestricted immunity. It upheld this view in the Ice King Case (Judgment of 10 December 1921, RGZ 103, 274) and others (Decision of 1 July 1921, RGZ 102, 304; Decision of 13 October 1925, RGZ 11, 375) and did not until 1945 give it up.

The case law of the Prussian Court of Justice on the decision of jurisdictional conflict was likewise based on the view that foreign States were not subject to domestic jurisdiction even in private-law matters (Decision in re von Hellfeld of 25 June 1910, JöR vol.V [1911] p.252; Decision of 27 June 1925, JW 1926 p.402).

After the Second World War, German courts decided that jurisdiction over a foreign State did exist where this State came into consideration not as a bearer of sovereignty but as a subject of private rights and duties (Oberlandesgericht Hamm, NJW/RzW 1951 p.258; Landgericht Berlin, NJW/RzW 1953 p.368; Landesarbeitsgericht München, Arbeitsrechtliche Praxis 1951 no.114; Landgericht Kiel, JZ 1954 p.117). The Hanseatic Regional Appeal Court of Hamburg (MDR 1953 p.109) and the Regional Appeal Court of Schleswig (Jahrbuch für internationales Recht [=JIR] vol. 7 [1957] p.400) denied jurisdiction over foreign countries for claims arising out of private-law relationships on the ground that in the cases brought before them there had been a connection with the sovereign functions of the foreign State.

The Federal High Court, in its decision of 7 June 1955 (BGHZ 18, 1 [9]), left open the question whether the principle that a foreign State was as a rule exempt from domestic jurisdiction even in purely private legal disputes was still applicable in times "where States are increasingly moving towards involvement in economic life, without this involvement still being in recognizable connection with their sovereign functions".

Accordingly, German case law for the period after 1945 is not uniform. However, a tendency towards restricting immunity of States can be noted.

b) The courts of a sizeable number of States guarantee foreign States immunity only for acts iure imperii, but not for acts iure gestionis.

This distinction was first taken as a basis for decisions, towards the end of the 19th century, by Italian and Belgian courts.

aa) In Italy in 1886 the Court of Cassation in Florence distinguished between the State as bearer of sovereign power (ente politico) and the State as subject of private law (ente civile); it granted the foreign State exemption from domestic jurisdiction only in respect of the exercise of sovereign power (Decision of 25 July 1886, cf. Harvard Law School, Research in International Law, Supplement to the American Journal of International Law [AJIL] vol.26 [1932] p.62 f. [=Harvard Law School]). The Court of Cassation in Rome kept to this distinction and in consistent case law granted foreign States immunity only for sovereign activity. A decision of the Court of Cassation of 12 May 1947 (Annual Digest and Reports of Public International Law Cases [=AD] 1948 p.141 [144]) states that the principle "par in parem non habet jurisdictionem" was countered by the principle "princeps in alterius territorio privatus" insofar as private-law relationships and those concerning property were concerned. A decision of 13 May 1957 (International Law Reports [=ILR] 1957 p.214 [215]) stresses that the immunity of foreign States from domestic jurisdiction could be attributed to a custom respected by all States belonging to the international community. Originally this custom had covered all activities of the foreign State; it had however gradually become restricted to sovereign acts. This tendency in the case law of many countries was connected with the multifarious activities of the State, which had widely penetrated into areas formerly reserved to private persons. In its Decision of 8 June 1957 (ILR 1957 p.209 [210 f.]), finally, the Court of Cassation states that foreign States are by a generally recognized rule of public international law within the meaning of Article 10 of the Italian Constitution exempt from domestic jurisdiction in all matters alien to the domestic legal order or where they have acted as a subject of international law or as a bearer of sovereign power within their area. Where however the foreign State was acting without regard to its sovereign authority and operating at the level of the private citizen, the exercise of jurisdiction ought not to be denied.

The distinction between sovereign and non-sovereign activity is the basis for the following further decisions of the Court of Cassation in which Italian jurisdiction was (a) affirmed or (b) denied:

(a) Court of Cassation of Rome, Decision of 1 July/12 October 1983 in re Fisola, reported in Gmür, Gerichtsbarkeit über fremde Staaten, 1948, p. 143 ff.;
Court of Cassation, Decision of 1925, reported in Lauterpacht, The Problem of Jurisdictional Immunities of Foreign States, in: The British Year Book of International Law, vol. XXVIII (1951) p.251 (=Lauterpacht, British Year Book);
Court of Cassation, Decision of 13 March 1926, Harvard Law School p.626 ff., and Eleanor Wyllys Allen, The Position of Foreign States before National Courts, 1933 (=Allen), p.243;
Court of Cassation, Decision of 1928, Lauterpacht, British Year Book p. 251;
Court of Cassation, Decision of 14 August 1953, ILR 1955 p.235;
Court of Cassation, Decision of 24 May 1956, ILR 1956 p.203;
(b) Court of Cassation, Decision of 12 May 1947, AD 1948 p.141;
Court of Cassation, Decision of 17 October 1955, ILR 1956 p.201;
Court of Cassation, Decision of 17 October 1956, ILR 1957 p.211.
bb) in Belgium the Court of Appeal in Ghent declared in a decision as early as 14 March 1879 that the sale of guano by the Peruvian Government was a commercial transaction and subject to the jurisdiction of the commercial courts (Harvard Law School p.612 f. and Allen p.195 f.).

By Decision of 11 June 1903 the Court of Cassation affirmed jurisdiction for an action by a railway company against the Dutch State. Immunity of foreign States from domestic jurisdiction came into consideration only where their sovereignty was affected. This was the case only with acts of political life (acte de la vie politique). Where however the State, having regard to the needs of the community, did not confine itself to its political role but acquired and possessed goods, concluded contracts, became a creditor and debtor or even engaged in commerce, it was acting not in the area of public power but as a civil or private person. If in this capacity it became involved in a dispute, the foreign State was like any other foreigner subject to Belgian jurisdiction (Clunet vol.31 [1904] p.417).

Cf. further:
Tribunal civil Charleroi, Decision of 8 April 1927 (Harvard Law School p.614 f., and Allen p.210 Note 9):
Jurisdiction over the French State was affirmed in an action by a Belgian company arising out of the supply of goods for the reconstruction of war-devastated districts in France; the French State had not exercised public power in concluding the contracts but had acted as a private person and was therefore subject to civil jurisdiction.

Tribunal civil Antwerp, Decision of 10 October 1934 (AD 1938-1940 p.249):
Here too a distinction was drawn between sovereign and non-sovereign acts. The court denied its jurisdiction in a suit brought against the Canadian Immigration Office in Antwerp for breach of an employment contract. The Canadian Government had in employing the plaintiff acted as a sovereign State and not as a subject of private law (so also Leopoldville Court of Appeal, Decision of 29 May 1956, ILR 1956 p.209).

The Tribunal civil in Brussels on 30 April 1951 (Clunet vol.79 (1952) p.244) even regarded execution for the company Socobelge against the Greek State as admissible in Belgium, though on the view prevailing in Belgium execution against the Belgian State is inadmissible (cf. also Carabiber, Clunet vol. 79 [1952] p.472, and AJIL vol.47 [1953] p.509 Note 3).

cc) The Swiss Federal Court, in its Decision of 13 March 1918 in re Dreyfuss (BGE vol. 44 I p.49) affirmed jurisdiction over foreign States for legal relationships of a private-law nature, and denied the doctrine of absolute immunity for States, referring to the Italian and Belgian case law (likewise Decision of 28 March 1930, BGE vol.56 I p.237). In a Decision of 6 June 1956 (BGE vol.82 I p.75), the Court summarized its view to the effect that a foreign State could appeal unrestrictedly to immunity of States where the legal relationship at dispute had been entered into by it in exercise of its sovereign powers. Where by contrast the dispute concerned a legal relationship under private law, legal action against the foreign State could be taken before Swiss courts and it could be subjected to measures of execution in Switzerland, insofar as the legal relationship had a connection with Swiss territory, that is, insofar as it had been established in Switzerland or was to be implemented there, or at least a place of performance had been established in Switzerland.

The Court kept to this view in its Decision of 10 February 1960 (BGE vol. 86 I p.23 and Clunet vol.88 [1961] p.458). In demarcating between acts iure imperii and iure gestionis, the judge should focus not on the purpose of the act but on its nature, and investigate whether it was based on public power (puissance publique) or was similar to what any private person could do. The Court in this case affirmed its jurisdiction and rejected a constitutional complaint from the United Arab Republic against attachment orders relating to bank deposits of that Republic, issued in connection with demands under a contract whereby a house in Vienna belonging to the representation there of the Kingdom of Egypt (the legal predecessor of the United Arab Republic) had been let.

In 1928 the Swiss Executive National Council stated to the committee of experts on continuing codification of international law set up by the League of Nations that an international arrangement restricting immunity of States was desirable. The main difficulty was the demarcation between acts iure gestionis and iure imperii. Were immunity to be recognized only for actions that were genuine expressions of sovereignty then in making the demarcation one should focus not on the purpose of the act but on its intrinsic nature (nature intrinsèque). Only an act that could not be undertaken by a private person should enjoy full immunity (League of Nations Document A. 15. 1928 V., p.88; see also Lauterpacht, British Year Book p.258 Note 5).

dd) The Austrian Supreme Court stood for the doctrine of only limited immunity of States in the period from 1907 to around 1926.

References in Decision of 10 May 1950 in re Dralle, Entscheidungen des österreichischen Obersten Gerichtshofs in Zivil - und Justizverwaltungssachen (=SZ) vol. XXIII p.304.

In a decision of 5 January 1920 (SZ vol.II p. 3), the Court affirmed Austrian jurisdiction over Turkey in an action for payment for construction work on the Turkish Embassy building in Vienna. For claims under private law that did not affect the sovereignty of the defendant State in any way the foreign State must also be subject to the courts of the State in which the transaction was located. Reference to extraterritoriality of legations was out of place, since its aim was to rule out anything that might impede the envoy in carrying out his mission, "while this aspect does not come into consideration here".

Since the Dralle case (Decision of 10 May 1950, SZ vol.XXIII p.304) the Court has again been following the restrictive theory of immunity of States. Adducing many decisions and statements of theory of international law, it considered whether "there emerges from the legal practice of courts of civilized States a unitary view, since this is the only way to determine whether today the principle that foreign States cannot be sued before the courts of a domestic State even in cases of claims under private law still counts as a norm of public international law" (loc.cit.p.310). The Court came to the conclusion that "it can no longer be said today that so-called acta gestionis are by recognized international law excluded from domestic jurisdiction", and speaks of a freeing of acta gestionis for the jurisdiction of individual States (loc.cit. p.322). The substance of the decision was summarized in the following pronouncement:

"Foreign States are according to international law exempted from the jurisdiction of domestic States only insofar as acts are involved that they have carried out in exercise of the sovereign power they possess."

This pronouncement was entered as "Judgment 28 new" in the Register of Judgments.

In a Decision of 10 February 1961 (Juristische Blätter 1962 p.43) the Court, taking the decision in re Dralle as a basis, considered only whether "the plaintiff is making a claim on the defendant State on the basis of a relationship in private law or of its sphere of sovereignty". To distinguish whether the act was one of private law or of sovereignty, it was the act taken by the organs of the State that was to be assessed, not, for instance, its motive or its purpose. Whether an act was of one kind or another was to be deduced from the nature of the legal proceeding, "that is, from the intrinsic internal essence of the action taken or of the legal relationship that arose from it". For instance, purchase of a property by a foreign State from a private person was an act in private law even where the property was to be used to set up a military strongpoint. Were an architect from a foreign State to be commissioned to set up a building within the country on that property, this was a construction contract in private law even where the building was intended to accommodate the embassy of the foreign State. Claims for damage to a vehicle caused by the driver of a vehicle of the United States Embassy in Vienna on an official journey with the Embassy car were, the Court decided, of a private-law nature. In keeping and operating vehicles and participating in public road traffic, the foreign State was appearing in areas where the citizen too operated: the two faced each other on an equal footing; there could be no notion of subordination or superiority.

ee) The case law of the French courts for the First World War essentially followed the theory of absolute immunity (Lauterpacht, British Year Book, p.260). After 1918 it turned with increasing clarity towards the restrictive theory, which entered particularly into the case law of the Court of Cassation.

Cf. the following Decisions of the Court of Cassation:
Decision of 19 February 1929, Lauterpacht, British Year Book p.261; Allen p.171 f.;
Decision of 15 December 1936 in re Schaljapin, AD 1935 - 1937 p.225 = Sirey 1937, 1, Part 1, p.104;
Decision of 5 February 1946, AD 1946 p.78 = Sirey 1947, Part 1, p.140.
In a Decision of 19 December 1961 (Revue Général de Droit International Public [=RGDIP] vol.66 [1962] p.654) the Court of Cassation upheld a decision of the Paris Court of Appeal (ILR 1955 p.224) = Clunet vol.84 [1957] p.408) which had granted the State of Vietnam immunity in an action for fulfilment of a contract having as its object the supply of cigarettes to Vietnamese forces. In the Court of Cassation's view the conclusion of the contract was exercise of fonctions étatiques de gestion publique, with the consequence of immunity. In a decison of the same date, the Court of Cassation (RGDIP vol.66 [1962] p.654) overturned a decision by the Paris Court of Appeal (ILR 1957 p.204 = Clunet vol.84 [1957] p.392) granting immunity to the Turkish State, on which a claim had been made by a bank arising out of surety it had given for a loan to the city of Constantinople. The Court of Appeal had not gone into the circumstances that had induced it to assess the surety as an acte de puissance publique.

In his note on these two decisions (RGDIP vol.66 [1962] p.655 f.) Charles Rousseau, referring to the fact that the case law particularly of lower courts was not unitary, summarized the Court of Cassation's view as follow: Immunity of foreign States was not absolute, but applied only to actes de puissance publique. For actions taken by a State in the same circumstances as a private person (actes jure gestionis) immunity did not operate. For the distinction, it was not only the form and content of the action and the fact that it was a legal transaction under private law that were decisive, but also its purpose. Where the State was meeting the needs of a public service (satisfaire les besoins d'un service public), it enjoyed immunity, whatever legal pathway it might choose (on the French case law see also Dahm, Völkerrecht, vol.1 p.233 Note 10).

ff) The Greek courts after 1928 granted foreign States immunity only in relation to sovereign acts.

In a Decision of 1928 (Lauterpacht, British Year Book p.256), the Athens Court of Appeal assumed jurisdiction over the Soviet Union and upheld the distraint of assets of the Soviet government. The Supreme Court confirmed this decision the same year (Allen p.292). The Athens Court of Appeal, moreover, in a Decision of 1949 (AD 1949 p.291) affirmed Greek jurisdiction in an action against the Romanian State for surrender of premises occupied by the Romanian ambassador on the basis of a rental contract in Athens. In the grounds for decision the Court took the view that immunity of States was restricted to matters carried out by a State as a sovereign political power, but that it instead did not enter in in respect of matters arising out of acts, such as the administration of property, that did not in any way affect its sovereignty.

gg) The mixed courts existing in Egypt until 1949 exercised jurisdiction over foreign States in relation to actions iure gestionis for wellnigh half a century (cf. Lauterpacht, British Year Book p.255). The Mixed Court of Appeal, in its Decision of 22 June 1930 (Harvard Law School p.616 f. and Allen p.289 Note 53), stated, in accord with the constant case law of the Mixed Courts, which was in line with those of the Italian and Belgian courts, that immunity was granted only for actes de souveraineté, but not for actes de gestion where the foreign State had acted in a private-law context (see also Alexandria Commercial Court, Decision of 29 March 1943, AD 1943-1945 p.103).

The Civil Court in Alexandria, by decision of 12 May 1951 (ILR 1951 p.225), denied immunity to the Republic of Yugoslavia. Disputes arising out of actions undertaken by a foreign State on the same terms as a private individual were subject to the jurisdiction of national courts. Case law and doctrine had restricted immunity to disputes arising out of actions which by their nature could be carried out only by States, were regarded as acts of public authority and served the public interest.

hh) The Supreme Court of appeal of Jordan, in a decision of 28 July 1958 (ILR 26 [1958-II] p.190) affirmed its jurisdiction over the French government in an action for payment of rent. The courts of many countries had decided that the immunity of foreign States was restricted to their official functions.

c) In other States the case law is not unambiguous.

aa) The case law of the Dutch courts is not unitary. However, a number of decisions take it that foreign States enjoy immunity only restrictedly.

See the Decisions adduced by Lauterpacht, British Year Book p.263 f., in particular:
Decision of the Rotterdam District Court of 25 September 1916 in re de Booij, where a judgment by default was given against the German Reich because of measures by German troops in connection with acts of war in Belgium, cf. Allen p.110 ff;
Amsterdam District Court, Decision of 14 July 1921, cf. also Allen p.142 f.;
Decision of the Council for the Restoration of Legal Rights, Division for Judicial Settlement, of 2 June 1947, AD 1947 p.77.

Other decisions, however, tend to assumed unrestricted immunity of States.

Amsterdam Court of Appeal:
Decision of 30 April 1942, AD, Supplementary Volume 1919-1942 p.140;
Decision of 3 December 1942, AD, Supplementary Volume 1919-1942 p.142;
Decision of the President of The Hague District Court of 27 May 1958, confirmed by the Court of Appeal of The Hague, ILR vol.26 (1958 - II) p.181.

bb) A decision of the Swedish Supreme Court of 19 March 1942 (AD 1941-1942 p.240) refers to the principle of absolute immunity, but also mentions the restrictions that this principle had met with "in various parts of the world to varying extents" for private-law activity of the State.

The Court of Appeal in Svea, by decision of 14 November 1949 (AD 1949 p.141), had granted the People's Republic of Bulgaria immunity. The plaintiff, a Swede, had undertaken the construction and fitting out of the Bulgarian Pavilion for an exhibition in Stockholm and called in the action for further remuneration - following receipt of the originally agreed payment for work done.

One judge of the Court of Appeal gave a dissenting opinion. The contract concluded by the parties was subject to private law. While the principle of immunity was recognized in Sweden, there was a tendency to depart from it where relationships under private law were at issue. The Court of first instance had affirmed Swedish jurisdiction in this case because the legal dispute did not concern a government action of a public nature.

The Swedish government had in 1927 already pointed out to the expert committee on continuing codification of international law set up by the League of Nations the tendency of Swedish courts (of first instance) to restrict the immunity of foreign States in commercial transactions. The extended immunity granted foreign States in many countries was leading to increasingly less satisfactory results the more States extended their activity to the area of industry, commerce and trade (League of Nations Document A.15. 1928.V. p.84 f.).

cc) Lauterpacht (British Year Book p.265 f.) points out that only a few decisions and statements from the Latin American States have become known. According to what is known, these States should be counted among those where in granting immunity the distinction is drawn between acts iure imperii and iure gestionis.

d) Case law in the States listed below continues to grant unrestricted immunity.

aa) This is true in particular of English courts.

House of Lords:
Decision of 3 March 1938 in re Cristina, AD 1938-1940 p.250; on this case see also Steinberger in: Strupp/Schlochauer, Wörterbuch, vol. 1 p.302;
Decision of 25 February 1952 in re Dollfus Mieg, ILR 1952 p.163 (167);
Decision of 7 November 1957 in re Nizam of Hyderabad, ILR 1957 p.175 (178) = Arch VR vol.7 (1958/59) p.339.

But even in England doubts have been expressed as to whether foreign States enjoy immunity in all cases.

See the obiter dicta in the judgment in re Cristina, AD 1938-1940 p.259 ff.;
obiter dictum in the Decision of the Judicial Committee of the Privy Council of 22 April 1952 in re Sultan of Johore, ILR 1952 p.182 (190 f.)) and Steinberger, in: Strupp/Schlochauer, Wörterbuch, vol. 3 p.422;
Lord Denning in re Nizam of Hyderabad, ILR 1957 p.200 = ArchVR vol. 7 (1958/59) p.351.

See also the Order in Council of 1950 whereby jurisdiction of the Supreme Court of Hong Kong in a particular case was not to be ruled out; cf. ILR 1952 p.85 and Lalive, L'immunité de juridiction des Etats et des organisations internationales, in: Recueil des Cours vol. 84 (1953 III) p.205 (228 ff.);
see also the statements of the former legal adviser to the Foreign Office, Beckett, in Annuaire de l'Institut de Droit International (=Annuaire) 1952 vol. I p.54.

The case law of Commonwealth States in general follows English practice (Lauterpacht, British Year Book p.272, with references in Note 7). Recently, however, the restrictive theory of immunity of States has been supported in Canada too (see the Decision of a judge of the Exchequer Court of Canada,, Nova Scotia Admiralty District, of 25 April 1961, AJIL vol.56 [1962] p.558 f., and the Decision of the Supreme Court of Canada of 11 June 1962, AJIL vol.57 [1963] p.440).

bb) Like the English courts, courts of the United States of America, since the Supreme Court decision in re Schoners Exchange of 1812
Curtis, Reports of Decisions in the Supreme Court of the United States, vol.II, 5th ed. 1870, p.478 = Cranch, Reports of the Supreme Court of the United States, vol.7 p.116,
grant foreign States immunity unrestrictedly (cf. e.g. the Supreme Court ruling of 7 June 1926 in re The Pesaro [271 US 562] and that of 5 January 1945 in re Mexico v. Hoffman [324 US 30], in which immunity was denied in relation to a commercial vessel which, while it was the property of the Mexican government, was not in its possession). There are however certain difficulties in adducing the case law of courts of the United States of America in establishing general public international law. Their decisions not infrequently take laws of States as to the "immunity" of that State as the criterion for the immunity of foreign States (cf. Alexy, Der Einfluss der Exekutive und innerstaatlicher Rechtsgrundsätze auf die amerikanische Rechtsprechung zur Immunität fremder Staaten, Zaö-RVR vol.22 [1962] p.661 [670 ff.], with references ). Further, the American courts tend to grant a foreign State immunity only when the Executive has proposed this and thus to decide on the granting of immunity not on the basis of their own legal considerations but on that of the Executive's decision, in particular that of the State Department (cf. Alexy op.cit. p.676 ff.).

Accordingly, particular importance attaches to the State Department letter of 19 May 1952 to the Attorney General (Department of State Bulletin vol.26 [1952] p.984 = JIR vol.7 [1957] p.403, known as the "Tate letter"); in it the State Department stated that it would in future in its proposals regarding the granting of immunity follow the doctrine of restricted immunity of States.

On the State Department's practice see the note of 26 September 1956 to the Ambassador of the Republic of China (JIR vol.7 [1957] p.402 f.) in which an application for the granting of immunity for an act iure gestionis was rejected;
but cf. also the State Department's opinions in the case of the Cuban cargo vessel Bahia de Nipe of 19 and 20 August 1961 (AJIL vol.56 [1957] p.526 ff.) which would appear not to be in harmony with the letter of 19 May 1952.

A State Department statement regarding the activity of associations of employees of American diplomatic missions of 15 September 1961 (AJIL vol. 56 [1962] p.533) again takes the restrictive theory of immunity of States as a basis.

Despite the importance that should attach to the State Department letter of 19 May 1952 even for the case law of courts (on this cf. the Supreme Court Decision of 7 March 1955 in re National City Bank of New York v. Republic of China, 348 US 356, 360 f.), it cannot however so far be stated that the courts of the United States of America have abandoned the doctrine of unrestricted immunity of States.

cc) The Supreme Court of the Philippines exercises jurisdiction over foreign States only where these States have agreed to it.

Decision of 17 August 1949, ILR 1951 p.228; ibid., the dissenting opinion of one judge: in contracts under private law foreign States are subject to domestic jurisdiction;
Decision of 26 April 1954, ILR 1954 p.103.

dd) The Japanese courts follow the theory of unrestricted immunity of States.

Cf. Tokyo Regional Court, Decision of 23 December 1955, ILR 1956, p.210;
Tokyo Regional Court, Decision of 14 February 1956, ILR 1956 p.265;
Tokyo Regional Court, Decision of 16 March 1957, ILR 1957 p.226.

However, a Japanese government delegation spoke at the Third Session of the Advisory Legal Committee of Asian and African States (Colombo 1960) in favour of restriction of immunity of States to certain acts (cf. 5 b below).

ee) Decisions of courts of States of Eastern Europe that have become known today support the doctrine of unrestricted immunity of States.

Russian and Romanian courts have however earlier taken decisions based on the view that foreign States are not due immunity for acts iure gestionis.

See the decisions of the Civil Appeals Section of the Superior Division in St.Petersburg of 1893 and 1909, Zeitschrift für Ostrecht 1927 p.288 ff., and p.291 in the note by von Büchler on the 1893 decision;
Decision of the Ilfov Commercial Court (on behalf of the Bucharest Commercial Court) of 18 October 1920, Harvard Law School p.631 (reported by Clunet vol. 50 [1923] p.663 under the date of 18 October 1921, cf. Allen p.291 Note 56); this Court distinguished as regards immunity between whether the State had undertaken acts iure imperii or iure privato: in the second case it did not differ from a private person and was subject to domestic jurisdiction; the criterion for differentiating between sovereign acts and acts in private law came from the nature, not the purpose, of the State activity.

The Polish Supreme Court grants foreign States unrestricted immunity, but has since 1937 been considering whether reciprocity is granted.

Cf.
Decision of 2 March 1926, Zeitschrift für Ostrecht 1927 p.275;
Decision of 31 August 1957, AD 1935-1937 p.239 (in the two following decisions cited under the date of 31 July 1937);
Decision of 14 December 1948, ILR 1957 p.223;
Decision of 26 March 1958, ILR vol.26 (1958 - II) p.178.

The Czechoslovak courts too follow the doctrine of unrestricted State immunity.

Cf. Decision of the Supreme Court of 23 December 1919, Allen p.276 f. and Harvard Law School p.531 f.;
Decisions of the Supreme Court 12 and 19 October 1920, Zeitschrift für Ostrecht 1927 p.252 and p.254;
Decision of the Supreme Court of 16 January 1923, Zeitschrift für Ostrecht 1927 p.255;
Decision of the Prague County Court of 16 December 1955, ILR 1955, p.242.
Finally, a decision of the Supreme Court of the People's Republic of Croatia of 30 August 1956 (ILR 1956 p.431) has become known, which is based on the view that according to customary international law a foreign State is not subject to domestic jurisdiction without its consent.

The review of the case law has shown the following.

The courts of a considerable number of States, particularly the courts of Italy, Belgium, Switzerland, Austria, France, Greece, Egypt and Jordan, unambiguously grant foreign States immunity only for sovereign acts. As regards the case law in other States, it is doubtful whether the courts continue to follow the doctrine of unrestricted State immunity. In Germany a tendency towards restriction of immunity of States can be noted. By contrast the courts particularly of England and the United States of America, but similarly also those of Japan and the Philippines and the Eastern European States, hold to the position that foreign States are due immunity both for sovereign and for non-sovereign activity. Particularly in the United States of America and England, however, a tendency to depart from unrestricted immunity of States is discernible.

In view of this objective position, it cannot be deduced from the practice of States that the granting of unrestricted immunity can still today be regarded as a usage practised by far the larger number of States today in awareness of their legal obligations.

4. The numerous bilateral and multilateral international treaties, regulating questions of immunity of States in general or for particular objects (e.g. for commercial vessels of States), confirm even on a cautious evaluation that according to general international law States can still claim immunity only for acts iure imperii and no longer for acts iure gestionis.

a) On retrospective consideration, the provisions of the Paris Suburban Treaties of 1919 and 1920, according to which governments of conquered States are not due any "privileges and immunities of sovereignty" for the event of their involvement in international commerce, emerge as the starting point for a development leading with increasing clarity from unrestricted to restricted immunity of States.

Cf. Article 281 of the Treaty of Versailles, and the corresponding provisions in the Treaties of Saint Germain, Neuilly, Trianon and Sèvres; on this see also Diena, League of Nations Document A.15.1928.V.p.56 = AJIL vol.22 (1928) Special Supplement, January 1928, p.131.

b) The Brussels Agreement on the unitary establishment of rules on the immunity of public vessels of 10 April 1926, ratified by many States (RGBl. 1927 II p.483; additional protocol of 24 May 1934, RGBl. 1936 II p.303) provides for far-reaching equality of status for public vessels with private vessels. The same is true of the 1958 Conventions of the Geneva Conference on the law of the sea - which have not yet entered into force.

See Article 9 of the Convention on the High Seas, ArchVR vol.7 (1958/59) p.313 ff., and Article 21 of the Convention on the Coastal Sea and the Adjoining Zone, Arch VR loc.cit. p.306 ff., and on this Münch in: Strupp/Schlochauer, Wörterbuch, vol. 3 p.238, and Geck, ibid., p.334; Menzel, Die Immunität der Staatsschiffe, 1961, p.25 f.

It would be erroneous to regard the provisions of the Brussels Agreement of 1926 and those of the Conventions of 1958 as exceptions to the rule of absolute immunity agreed by treaty and thus as a confirmation of that rule. The regulations in the 1926 and 1958 Agreements on public commercial vessels agree with the doctrine of limited immunity of States. Geck (loc.cit. p.336) has rightly pointed out that the exemption for public vessels in the narrower sense from domestic jurisdiction and subjection of public commercial vessels to such jurisdiction more or less corresponds to the distinction between acts iure imperii and acts iure gestionis. The Agreements on public commercial vessels of 1926 and 1958 can be assessed as reflecting the widespread conviction that States are henceforth due immunity only for their sovereign acts.

c) Article XVIII (2) of the Treaty on Friendship, Commerce and Navigation of 29 October 1954 between the Federal Republic of Germany and the United States of America (BGBl. 1956 II p.487) is again to be taken as based on the distinction between sovereign and non-sovereign acts; this provision would except acts iure gestionis from immunity (on this cf. Schwenk, JZ 1957 p.197 [203], but also Setser, Proceedings of the American Society of International Law, 55th Annual Meeting, 1961 p.89 [98 ff.]).

If by contrast the agreement between the Federal Republic of Germany and the United States of America of 4 April 1955 on off-shore procurements (BGBl. 1956 II p.2079) grants the United States of America immunity for so-called off-shore procurement treaties, the decisive factor here should be taken as being that the procurements involved are for the American Forces, which because of their affinity with the tasks of these Forces are, irrespective of the private-law nature of procurement treaties, exceptionally equated by the agreement with acts iure imperii (on similar agreements of the United States of America with other States see: Schwenk, NJW 1954, 1956 [1957]).

d) Special attention should be paid to the treaties concluded by the Union of Soviet Socialist Republics with the German Reich, the Federal Republic of Germany and other States. In these treaties the Soviet Union has for commercial transactions subjected itself to domestic jurisdiction, including execution.

Cf.
Article XIII of the Provisional Agreement between the German Reich and the Russian Socialist Federative Soviet Republic on extension of the area of activity of the delegations of both sides to care of prisoners of war of 6 May 1921 (RGBi. I p.929)
and on this and similar agreements of Russia with other States, Diena, League of Nations Document A.15. 1928.V. p.54 ff. = AJIL 22 (1928) Special Supplement, January 1928, p.128 ff.;
Articles 7 and 9 (2) of the Economic Agreement attached as Annex II to the German-Russian Treaty of 12 October 1925 (RGBl. 1926 II p.1),
and on this and similar agreements Dahm, Völkerrecht, vol.1 p.234 f. and Note 17,
Annex to the Agreement on General Questions of Trade and Navigation between the Federal Republic of Germany and the Union of Socialist Soviet Republics of 25 April 1958 (BGBl. 59 II p.221), extended by the protocol of 31 December 1960 (BGBl. 1961 II p.1085),
and Grossart, Das deutsch-sowjetische Handels- und Schiffahrtsabkommen, JZ 1959 p.233 (237 f.),
Uschakov, Vereinheitlichung des internationalen Privatrechts im Ostblock durch Staatsverträge, Osteuropa-Recht vol.7 (1961) p.161 (163 ff.).

It is not appropriate to see these treaty provisions as exceptional provisions and thus as a confirmation of the rule of absolute immunity of States. These agreements should instead be assessed as arrangements that take due account of the fact of Russian State commerce and as an expression of endeavours to adapt international law to the changed realities of international relationships.

e) By contrast with the view of the Federal Minister for Justice, it is not possible to draw conclusions from Article 31 (1) (a) of the Vienna Convention on diplomatic relations of 1961 as to the extent of immunity of States. This provision subjects foreign diplomats, who by the Convention in principle enjoy immunity, to domestic jurisdiction in actions in rem relating to a private property located within a country; this is however not to apply where the property is possessed in the interest of the sending State for purposes of diplomatic representation. Article 31 (1) (a) of the Vienna Convention regulates the personal immunity of diplomats. This immunity, however, differs in extent from immunity of States; in general, it reaches further. In principle, accordingly, conclusions cannot be drawn from the extent of diplomatic immunity to that of immunity of States.

Cf. Austrian Supreme Court, judgment of 19 January 1962, Juristische Blätter 1962 p.271; also the Decision of the Polish Supreme Court of 14 December 1948, ILR 1957 p.223 (224 f.); Tribunale di Roma, Decision of 24 March 1953, ILR 1955 p.533 (535); Italian Court of Cassation, Decision of 21 September 1948, AD 1948 p.133 (135); Lalive, loc.cit. p.253; Riezler, Internationales Zivilprozessrecht und prozessuales Fremdenrecht, 1949, p.400 f.; Gmür, Gerichtsbarkeit über fremde Staaten, 1948, p.66 ff.;
also, Supreme Court of the People's Republic of Croatia, judgement of 30 August 1956, ILR 1956 p.431 (432).

5. a) The codification endeavours of the League of Nations and the United Nations offer no support for the hypothesis that according to the general rules of public international law foreign States enjoy unrestricted immunity from domestic jurisdiction. Instead, they confirm that States can now claim immunity only for sovereign activity.

The efforts of the committee of experts for continuing codification of international law, set up by the League of Nations General Assembly, show that even in 1926 there no longer existed a general legal conviction that States were allowed immunity even for their private-law activities.

Cf. second report of the Committee to the Council of the League of Nations of 27 June 1928, League of Nations Document A.15.1928.V. (partly reported in AJIL vol.22 [1928] Special Supplement, January 1928, p.117 ff.).

In a report on the work of a sub-committee of 1926 (League of Nations Document loc.cit. p.49 ff.=AJIL loc.cit. p.118 ff.), Matsuda has pointed out that on the general view States are due immunity for their sovereign acts. Otherwise, opinions are split. Many authors ascribe States absolute immunity, that is, immunity without regard to the nature of the activity. Others wish to recognize only an immunity of States restricted to sovereign acts, thus denying States immunity for acts iure gestionis. With regard to the extension of State activity into the area of the economy, it could be regarded as just for certain acts of States to be treated like those of private persons. It is however difficult to delimit these actions in a way that could serve as a basis for a treaty arrangement.

In his observations on this report, Diena (League of Nations Document loc.cit. p.54 ff. = AJIL loc.cit. p.128 ff.), referring to the provisions of the Paris Suburban Treaties and of the Brussels Agreement of 1926 and also to the practice of Italian and Belgian courts, stressed that the codification of the law of immunity of States was not only desirable but even attainable - by contrast with the skeptical assessment of the question by Matsuda. It was certainly hard to delimit sovereign acts from private-law activity of States. But difficulties of this nature were frequently to be met with in international law; they could not lead to the abandonment of the distinction.

The preliminary work of the United Nations International Law Commission on codification of the law of diplomatic privileges and immunities and of the law of consular relationships would seem to have taken as a basis that States are now due immunity only for sovereign acts.

Cf. on restricted immunity of States in relation to legation premises the Federal Constitutional Court ruling of 30 October 1962 - 2 BvM 1/60 - p.20 ff. 2; cf. also no.2 of the Commission's commentary on Article 43 of its draft regulation on consular relationships, in Yearbook of International Law 1961 vol. II p.117.

b) The Advisory Legal Committee of Asian and African States discussed the immunity of States at its first and second sessions (New Delhi 1957 and Cairo 1958) and finally at its third session in Colombo (1960), when delegations from the governments of Burma, Ceylon, India, Indonesia, Iraq, Japan, Pakistan and the United Arab Republic, as well as a representative of the Iranian government in the capacity of observer, took part. The Committee's final report on the question of State immunity recommends that immunity not be granted for commercial activity or private activity of States. This recommendation was consented to by all delegations except Indonesia's (Asian-African Legal Consultative Committee, Third Session, Colombo, 20 January to 4 February 1960, ed. Secretariat of the Committee, New Delhi, no date, p.58 [66 ff.]; see also Herndl, Juristische Blätter, 1962, p.15 [19].

6) Three highly regarded non-official institutions have unambiguously supported the restrictive theory of State immunity.

a) The draft from the Harvard Law School Study Group on regulation of jurisdiction over foreign States of 1932 advocates the doctrine of restricted State immunity and stresses that it is, despite certain difficulties, time to establish the distinction between acts iure imperii and iure gestionis by treaty (cf. Article 11 of the draft and the relevant materials and discussions, Harvard Law School p.451 [597, 606].

b) The International Law Association discussed the question of State immunity at its 45th Session in Lucerne in 1952 and adopted the resolution "...que l"Etat étranger ne devrait pas être couvert par l'immunité de jurisdiction à l'occasion des actes de nature privée entrepris par lui". The preamble to the resolution stresses that the extension of State activity had induced courts of various countries to limit the principle of immunity by distinguishing between actes de puissance publique and actes de gestion privée. The principle of State immunity was in course of becoming obsolete ("...est en voie de tomber en désuétude...") in cases where States engaged in commercial transactions or other transactions of private law (International Law Association, report of the Forty-Fifth Conference 1952,p.VI f.).

The rapporteur, Carabiber, stated in his closing speech (loc.cit. p.231) that the proposals formulated by the Italian members Sperduti (loc.cit.p.221) and Giannini (loc.cit p.229), having regard to Italian case law (immunity for sovereign activity of States, no immunity for private law activity) were generally recognized legal principles and an integral part of ordinary international law.

c) The Institut de Droit International, at its sessions in Siena in 1952 and in Aix-en-Provence in 1954, dealt with State immunity. The resolution adopted on 30 April 1954 in Aix-en-Provence takes the restrictive theory of State immunity as a basis.

Articles 1 and 3 of the resolution are as follows:
Article 1
Les tribunaux d'un Etat ne peuvent connaître des litiges ayant trait à des actes de puissance publique accomplis par un Etat étranger, ou par une personne morale relevant d'un Etat étranger.

Article 3
Les tribunaux d'un Etat peuvent connaître des actions contre un Etat étranger et les personnes morales visées à l'article premier, toutes les fois que le litige a trait à un acte qui n'est pas de puissance publique. La question de savoir si un acte n'est pas de puissance publique relève de la lex fori.
(Annuaire 1954 vol. II p.293).
7. Doctrine on international law cannot be adduced in support of the view that foreign States are due unrestricted immunity. The Austrian Supreme Court, in its Decision of 10 May 1950 (SZ vol. XXIII p.304 [322]) rightly stated that to that extent there could be no idea of a communis opinio doctorum.
Modern international legal doctrine largely, though not overwhelmingly, supports the restrictive theory of State immunity.

Thus esp.
Dahm, loc.cit. p.235 f., and Völkerrechtliche Grenzen der inländischen Gerichtsbarkeit gegenüber ausländischen Staaten, in: Festschrift für Arthur Nikisch, 1928, p.153 (163 ff.); Verdross, Völkerrecht, 4th ed., 1959, p.169 f.; Gamillscheg, Internationales Arbeitsrecht, 1959, p.401 ff.; Riezler, loc.cit. p.396; Schnitzer, Handbuch des Internationalen Privatrechts, 4th ed., vol II, 1958, p.833 ff.; C.Rousseau, RGDIP vol.66 (1962) p.655, and Weiss, Recueil des Cours, vol. 1 (1923) p.521 ff.

In view of the non-uniform practice of States, however, the view is also presented that customary international law contains no rule at all as regards State immunity.
Cf. e.g. Lalive loc.cit. p.251 f.; Cavaré, Le Droit International Public Positif, vol. II, 1951, p.439; Gmür, Zur Frage der gerichtlichen Immunität fremder Staaten und Staatsunternehmungen, in: Schweizerisches Jahrbuch für internationales Recht, vol. VII (1950) p.9 (74 f.).

Both groups of authors are at any rate agreed that unrestricted State immunity is to be rejected.

Lauterpacht is of the opinion that customary international law applies only in the case where uniform practice has unambiguously developed, as for instance for the immunity of diplomats and heads of State and in relation to vessels of war. In other cases, pending comprehensive international regulation, the granting of State immunity must be regarded as reserved for the law of the country (Oppenheim/Lauterpacht, International Law, vol.1, 8th ed., 1955, para. 115, p.274, and British Year Book p.220 [236 ff.]). Similarly, E.J.Cohn (loc.cit. p.662), while he grants the principle of State immunity the character of international law as such, believes the details of its form must today be taken as being left to national law.

The absolute immunity of States is affirmed in the literature of the Communist countries. Notably, the position of the absolute theory is taken by the work issued in 1957 by the Academy of Sciences of the Soviet Union, "International law"
(German translation in Schultz: vol.43 of the Veröffentlichungen des Instituts für internationales Recht an der Universität Kiel, 1960). Molodtsov there (p.215) claims immunity even for State commercial vessels, Shurshalov takes the view (p.319) that "bourgeois jurists invented the theory of the ,trading State'" in order to justify interferences with the rights and privileges of the Soviet Union's commercial representation. For Polish law, Lasok (Polish Private International Law, in: Studies in Polish Law [=Law in Eastern Europe, no.6, 1962] p.121 [132]) states that the doctrine of immunity of States covers all activity of States and knows no exceptions.

Otherwise the view that States are due immunity even for their non-sovereign activity is scarcely now advocated in international legal doctrine (cf. Lalive loc.cit. p.222 Note 2).

Summarizing, an assessment of the case law, some treaty arrangements, efforts at codification and international legal doctrine show that unrestricted State immunity can no longer be regarded as a rule of customary international law. The Austrian Supreme Court should be agreed with when it states in its decision of 10 May 1950 (SZ vol.XXIII p.304 [322]) that "...it can today no longer be said that on recognized international law the so-called acta gestionis are excepted from domestic jurisdiction".

II.

1. Even if according to general international law foreign States are not exempt from domestic jurisdiction for acts iure gestionis, they are nevertheless, on a general legal conviction reflected in the practice of States, the draft codifications and doctrine of international law, due immunity for activities which are of a sovereign nature.

The fact that it is hard to distinguish sovereign from non-sovereign acts of State is no reason to abandon the distinction. International law is familiar with similar difficulties elsewhere too. And for the question whether a particular act of State abroad is permissible without the consent of the State concerned, it is relevant whether this action is of a sovereign or a non-sovereign nature (cf. Dahm, Völkerrecht, vol.1 p.250 ff.).

2. The distinction between sovereign and non-sovereign acts of State cannot be drawn according to the purpose of the State's action, nor whether the action is recognizably connected with sovereign functions of the State. For ultimately the State's activity will if not entirely then at least in by far the greater part serve sovereign purposes and functions and be in some still recognizable connection with them. Nor can it depend on whether the State has acted commercially. Commercial activity of States does not differ in essence from other non-sovereign activity of States.

The criterion for distinguishing between acts iure imperii and iure gestionis can instead only be the nature of the State's action or the legal relationship that has arisen, but not the motive or purpose of the State's act. It therefore depends on whether the foreign State has acted in exercise of the sovereign power inherent in it, that is in public law, or as a private person, that in private law.

Thus or similar are: the case law of the courts of Italy, Belgium, Switzerland, Austria and Egypt;
the codification endeavours of the International Law Association and Institut de Droit International;
and also:
Dahm, Völkerrecht, vol.1 p.235 f., and also Festschrift für Arthur Nikisch, p. 163 ff.; Verdross, loc.cit. p.169 f.; Riezler, loc.cit. p.400; Herndl, loc.cit. p.20 ff.; Schnitzer, loc.cit. p.835 f.; Weiss, loc.cit. p.346.

3. The qualification of State action as sovereign or non-sovereign will in principle have to be effected according to national law, since international law does not, at any rate as a rule, contain criteria for this demarcation (on recourse to national law cf. Herndl, loc.cit. p.20 f. with references). The general rule of public international law that foreign States enjoy immunity from domestic jurisdiction for their sovereign action does not become devoid of substance and lose its character as a legal norm because it is national law that is decisive for the demarcation between acts iure imperii and iure gestionis. Instead, its more detailed content results from the national law applicable in the given case. Nor is it unusual for norms of international law to refer to national law.
Cf. Guggenheim, in: Strupp/Schlochauer, Wörterbuch, vol.3 p.651 (658 ff.); Scheuba-Lischka, in: Strupp/Schlochauer, Wörterbuch, vol. 3 p.586.

Thus, for instance, certain rights and duties of States are according to customary international law and international treaty law dependent on the nationality of a person. But acquisition and loss of nationality are as a matter of principle determined by national law.

Finally, it cannot be a decisive point that reference to national law theoretically gives the national legislator the possibility of influencing the scope of the rule of international law by suitably shaping national law. The demarcation between sovereign and non-sovereign State activity by national law primarily serves other purposes than the definition of the extent of the immunity of foreign States. Abusive shaping of law by the national legislator could, moreover, be opposed through the legal principle, recognized in international law, of loyalty and good faith.

4. It must be admitted that it hampers the application of general international law and acts against the desirable unity in law for the demarcation of sovereign from non-sovereign acts to be decided according to the nature of the State activity, but the classification thereof to be decided by national law. This drawback is however mitigated by the fact that the classification in national law of a State action as an act iure gestionis is subject to bounds set by international law. National law may not be adduced for the distinction from sovereign and non-sovereign activity of a foreign State only on the criterion that those actions of States may not be excluded from the sovereign area and therefore from unity which are in the overwhelmingly accepted view of States part of the area of State power in the narrower and proper sense. Part of this generally recognized area of sovereign activity will be the exercise of foreign and military power, legislation, the exercise of police power and the administration of justice (cf. Dahm, Völkerrecht, vol.1 p.235 f., and Festschrift für Arthur Nikisch, p.166 f.).

Exceptionally, it may also be required in international law that an activity of a foreign State be classified as an act iure imperii, as being attributable to the core area of State power, even though by national law it were to be regarded as an action in private law and not in public law.

5. The submitting court has accordingly rightly considered whether conclusion of the repair contract is to be regarded as a non-sovereign activity of the foreign State, and correctly answered this question in the affirmative. It is evident that the conclusion of a such a contract does not fall within the core area of State power. It is not, as against the view of the Federal Minister for Justice, relevant whether conclusion of the contract was necessary for the orderly conduct of embassy business and therefore recognizably connected with the sovereign activity of the sending State. Whether a State is due immunity does not depend on the purpose of the activity that the State is pursuing by it. The demarcation of sovereign activity according to the nature of the act and its classification in national law may not yet have secured the comprehensive recognition indispensable for a general rule of public international law; it is however so widespread that any granting of immunity beyond that can no longer be regarded as required by general international law.

The "special issue of the immunity of diplomatic missions" is of no significance in the present case. The exercise of German jurisdiction would not encroach on diplomatic privileges and immunities.

Judges: Wagner, Dr. Schunck, Dr. Klaas, Dr. Leibholz, Dr. Rupp, Dr. Geiger, Dr. Federer, Dr. Kutscher

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