Apex Global Management Ltd v Fi Call Ltd & Ors

The court determined two questions: whether HRH Prince Mishal and HRH Prince Abdulaziz were "members of [King Abdullah's] family forming part of his household" for the purpose of section 20(1)(b) of the State Immunity Act 1978, and if so whether article 31.1(c) of Schedule 1 to the Diplomatic Privileges Act 1964 (giving a commercial exception) should be read so as to exclude commercial activities outside the receiving State. The judge held that neither Prince established the factual threshold required by section 20(1)(b); an adult royal living in his own household and undertaking occasional representational duties did not, on the evidence, qualify. Separately, the court held that if a sovereign or family member did enjoy immunity under section 20(1), a "necessary modification" to article 31.1(c) would be required so that the commercial exception applied to commercial activities wherever they occurred; accordingly commercial activities outside official functions would not be immune.

The petitioner Apex brought a section 994 Companies Act 2006 petition against several respondents including two Saudi princes. The Princes applied to the court claiming sovereign/state/diplomatic immunity under the State Immunity Act 1978 (section 20(1)) read with the Diplomatic Privileges Act 1964 (Schedule 1, article 31). The hearing concerned jurisdictional threshold issues arising before the substantive petitions (final hearings listed for January 2014).

Procedural posture: First instance hearing in the Chancery Division; the judge followed the established practice of seeking the Foreign and Commonwealth Office's assistance and received an FCO letter explaining that it could not certify household status but supplied factual material (visa types, Sir Arthur Watts lecture).

Issues for decision:

• Whether either Prince was a member of King Abdullah's family "forming part of his household" within the meaning of s.20(1)(b) SIA.
• If so, whether article 31.1(c) (the diplomatic commercial exception) should be read so as not to be territorially restricted to acts "in the receiving State" when applied to heads of State and their families, ie whether commercial acts outside the receiving State are excluded from immunity.

Key reasoning: The court construed "household" by reference to ordinary meaning and authority (including In Re Dix and Santos). A household denotes a particular tie; temporary absence from the sovereign's home does not necessarily defeat household status but an adult family member with a separate household and mainly private commercial activities is unlikely to qualify. The evidence before the court did not establish that Prince Abdulaziz performed full‑time sovereign functions; he carried out occasional representational duties and business activities. Prince Mishal performed more official functions (c.30 events per year and chairmanship of the Allegiance Council) but his role did not amount to exercising the sovereign's functions in a full‑time, in‑house capacity. Consequently neither prince met the s.20(1)(b) test.

On the second issue, the court concluded that a "necessary modification" to article 31.1(c) is required when applying it to heads of State and their families so that the commercial exception is not confined to acts "in the receiving State". That reading is necessary for the statutory scheme to be coherent with the commercial exception found elsewhere in the State Immunity Act 1978. Therefore, even had either Prince qualified under s.20(1)(b), immunity would not extend to commercial activity outside official functions.

The Princes' applications claiming sovereign immunity are dismissed. The court found that neither Prince Mishal nor Prince Abdulaziz established that they were "members of [King Abdullah's] family forming part of his household" for the purposes of section 20(1)(b) of the State Immunity Act 1978. The court further held that, if such immunity were established, article 31.1(c) (Diplomatic Privileges Act 1964, Schedule 1) must be read with a "necessary modification" so that the commercial exception applies to commercial activities wherever they occur; accordingly commercial activities outside official functions would not attract immunity.