Kuwait Airways corporation v Iraqi Airways Co [1995] 1WLR 1147 House of Lords

After invasion of Kuwait by Iraq in 1990, Iraqi government ordered the defendants to transport the plaintiffs aircrafts to Iraq, subsequently the ownership of the aircrafts was transferred to the defendants IAC. A key issue was whether the defendants were entitled to immunity under S.14.2 State immunity Act 1978 as a ‘separate entity’ exercising sovereign authority. The court held that the defendants IAC were not immune in respect of all actions after the transfer of ownership as such actions were not done in ‘the exercise of sovereign authority’ but as ‘owner’ Resolution Lord Goff: whether IAC is entitled to claim immunity under Act 1978. The central question is whether the acts performed by IAC were performed in the exercise of sovereign authority, which here means acta juri imperii.

In considering whether the acts done by a separate entity are or are not acts done by it in the exercise of sovereign authority under the 1978 Act, it would in my opinion, be appropriate to have regard to the English authorities relating to the distinction between acta juri imperii and acta juri gestionis as adopted from public international law, including the statement of principle by Lord Wilberforce in the I Congreso del Partido, and by Diplock in Alcom Ltd v Republica of Colombia It is apparent for Lord Wilberforce’s statement of principle that the ultimate test of what constitutes an act jure imperii is whether the act in question is on its own character a government of act, as opposed to an act which any private citizen can perform. In the case of acts done by a separate entity, it is not enough that the entity should have acted on the directions of the state, because such an act did not posses character of a governmental act. But where an act done by a separate entity of the state in the direction of a state does not posses a character of a governmental act, the entity will not be entitled to state immunity