The Royal Embassy of Saudi Arabia v Costantine

The Supreme Court considered the scope of State immunity under the State Immunity Act 1978 (particularly sections 1, 4 and 16 as amended by the State Immunity Act 1978 (Remedial) Order (SI 2023/112)) in relation to employment claims brought by a member of administrative and technical staff of a diplomatic mission. The court held that domestic courts, including appellate courts, have an obligation under section 1(2) of the State Immunity Act 1978 to consider of their own motion whether a defendant is entitled to State immunity even where the State does not appear.

The Employment Tribunal had found that the respondent’s duties were ancillary and supportive and did not involve the exercise of sovereign authority; applying the test from Benkharbouche v Embassy of the Republic of Sudan [2017] UKSC 62 and the Remedial Order, the Supreme Court concluded that those factual findings were open to the Tribunal and that immunity did not apply. The Court of Appeal was in error in dismissing the appeal for non-appearance without first addressing the section 1(2) duty, but had it addressed the point it would have reached the same conclusion and the appeal was dismissed.

This is an appeal from a Court of Appeal order dismissing an appeal for non-appearance. The respondent, a former employee of the Royal Embassy of Saudi Arabia (Cultural Bureau) in the United Kingdom, brought complaints to the Employment Tribunal for direct discrimination and harassment on grounds of religious belief under the Equality Act 2010. The Embassy pleaded State immunity under the State Immunity Act 1978. The Employment Tribunal rejected the claim of immunity, finding the respondent’s work to be administrative and ancillary rather than governmental. The Embassy’s appeals to the Employment Appeal Tribunal and the Court of Appeal were unsuccessful; the Court of Appeal dismissed the appeal for non-appearance. Permission to appeal to the Supreme Court was granted.

(i) Nature of the claim/application: employment discrimination and harassment claims under the Equality Act 2010 (sections 10, 13 and 26 and Part 5), originally alongside claims under the Employment Rights Act 1996 (withdrawn).

(ii) Issues framed by the court:

• whether an appellate court is under a duty under section 1(2) of the State Immunity Act 1978 to consider of its own motion whether State immunity applies where the State does not appear;
• whether the Employment Tribunal applied the correct test for State immunity to the respondent’s employment as administrative staff of a diplomatic mission; and
• the impact of the State Immunity Act 1978 (Remedial) Order (SI 2023/112) (the Remedial Order) and the Supreme Court’s decision in Benkharbouche on the applicable test.

(iii) Reasoning and decision: the Supreme Court held that section 1(2) imposes a duty to give effect to State immunity even when the State does not appear, and that duty extends to appellate courts. The Court of Appeal should therefore have considered the immunity point of its own motion before dismissing the appeal for non-appearance; it erred in failing to do so. On the substantive question, the court applied the approach in Benkharbouche and the Remedial Order: the relevant test is whether the contract or the conduct complained of was entered into or carried out in the exercise of sovereign authority, with the focus on the functions performed by the employee and the proximity of those functions to the governmental functions of the mission. The Employment Tribunal’s detailed factual findings that the respondent’s duties were essentially administrative and ancillary (data entry, routine secretarial tasks, arranging student matters) were not challenged and supported the conclusion that the employment and the conduct were not sovereign acts. The second head (that the State engaged in sovereign conduct in the matters complained of) also failed for lack of evidence that the conduct implicated sovereign interests (for example state security or recruitment policy). The appeal was dismissed because immunity did not apply on the facts.

Appeal dismissed. The Court of Appeal erred in dismissing the appeal for non-appearance without addressing its duty under section 1(2) of the State Immunity Act 1978 to consider State immunity of its own motion, but on the merits the Employment Tribunal correctly applied the Benkharbouche test (as reflected in the Remedial Order) and its factual findings that the respondent’s duties were ancillary and not exercises of sovereign authority meant that immunity did not apply.

The claim began in the Employment Tribunal (preliminary hearing on immunity and later liability hearing). The Embassy appealed to the Employment Appeal Tribunal (EAT) but the appeal was rejected on a sift under the EAT Rules. Permission to appeal to the Court of Appeal was granted (Bean LJ); the Court of Appeal heard the appeal and dismissed it for non-appearance on 13 March 2024 ([2024] EWCA Civ 332). Permission to appeal to the Supreme Court was granted on 1 July 2024 and the Supreme Court handed down judgment on 6 March 2025 ([2025] UKSC 9).