Basel Hashwah & Ors v Qatar National Bank (QPSC)

The State Immunity Act 1978 is a complete code governing state immunity in England and Wales, construed against customary international law. State-sponsored terrorist financing, when pleaded as authorised or acquiesced in by a head of state, is inherently governmental conduct and attracts immunity unless an applicable statutory or customary-law exception is established.

Security Council Resolution 1373 does not, without domestic implementing legislation, remove immunity from civil claims against a foreign state or its agents. Nor does Article 6 of the European Convention on Human Rights require access to an English court where international law requires immunity. The commercial-transactions exception concerns claims arising from the transaction itself, not independent tortious claims connected with its performance.

The claimants alleged that the defendants, entities and individuals associated with Qatar, participated in or facilitated terrorist financing involving the Al-Nusra Front in Syria. Their primary case alleged that the conduct occurred with the authority or acquiescence of the Emir of Qatar. They alternatively sought to plead that certain defendants acted in personal or private capacities without state authorisation.

The first, second, eleventh and seventeenth defendants applied under CPR rr 11(1) and 11(6) for declarations that the court lacked jurisdiction on state-immunity grounds and for the setting aside of the Claim Form and service. The claimants also sought permission to amend. The central issues were whether the pleaded conduct was governmental, whether Resolution 1373, Article 6 of the ECHR or the commercial-transactions exception displaced immunity, and whether the proposed alternative case could proceed.

1. The defendants’ jurisdiction applications succeeded in relation to the claimants’ primary case. The pleaded case was that the alleged terrorist-financing arrangement occurred with the direct or indirect authority or acquiescence of the Emir of Qatar or an authorised person. On that case, the conduct was governmental and sovereign in character.

2. The State Immunity Act 1978 is the complete code and sole source of English state-immunity law, construed against customary international law. Section 1 protects acts jure imperii. The protection extends to state servants and agents sued for conduct undertaken in the discharge, or purported discharge, of their duties. Illegality, lack of authorisation under domestic law or alleged unconstitutionality does not itself remove immunity.

3. The court followed the reasoning in Heiser v Islamic Republic of Iran and another, treating state-sponsored terrorism as inherently governmental because, by definition, it is conduct attributable to a state. The factual differences relied upon by the claimants did not alter that conclusion.

4. Resolution 1373 did not create a domestic civil-jurisdiction exception. Under the United Nations Act 1946, implementation of Security Council measures in domestic law is for Parliament and Orders in Council. The relevant Orders did not modify the State Immunity Act 1978. Nor was there evidence of a widespread, representative and consistent customary international-law rule removing immunity for civil claims concerning state-sponsored terrorism.

5. The Article 6 challenge failed. Where international law requires the forum state to grant immunity, denial of access to a court is justified. Since immunity applied on the pleaded primary case, neither reading down nor a declaration of incompatibility arose.

6. The commercial-transactions exception in section 3 did not apply. The claim had to relate to the commercial transaction itself. It did not extend to independent tortious claims arising in the course of performing, or loosely connected with, a transaction.

7. Permission to amend was refused in its proposed form. The alternative case required a trial and determination of the primary case in order to establish the absence of state authorisation, but the court was precluded from hearing the primary case by section 1(1). The court therefore made no determination on whether a genuinely private-capacity claim might otherwise be immune.