International Organizations Before National Courts Part 6 pot

ing and interpreting services as acta iure gestionis on the part of the

tribunal and thus found that Dutch courts had jurisdiction over a dispute

relating to such employment contracts.140

Without expressly calling it a customary international law rule, the

Malaysian case Bank Bumiputra Malaysia Bhd v. International Tin Council and

another141 restricted the jurisdictional immunity of an international or￾ganization according to the restrictive immunity standard valid for

states. The Malaysian plaintiff bank was one of the Tin Council’s unpaid

creditors. It claimed that the ITC had deposited tin warrants issued by

the second defendant as security. In the Malaysian proceedings the

plaintiff not only sought to recover the outstanding loan but also asked

for a declaration that it was entitled to the tin covered by the warrants,

which was in the possession of the second defendant who refused to

hand it over to plaintiff. The court did not allow the first claim because

it considered the extrajurisdictional service of the writ in London to be

an abuse of the process of the court. It did, however, admit the second

claim relating to the tin and specifically denied the ITC’s claim to im￾munity. At the outset, the Malaysian court held that the ITC did not

enjoy immunity from suit in Malaysia because the applicable treaties

granted such immunity only in respect of the English courts. It added,

however, that since the ITC entered into a commercial transaction it

could not claim sovereign immunity in any event. In relying on the

‘modern rule’ as embodied in the English Trendtex case, a leading deci￾sion on state immunity, the court apparently thought that the ITC was

to be treated as a ‘foreign sovereign’.142

In some of the Italian cases involving NATO, a restrictive immunity

standard is applied. A typical case is Branno v. Ministry of War,

143 where a

140 The appellate court in Iran–US Claims Tribunal v. AS, District Court of The Hague, 9 July

1984, reversed the decision, without, however, disputing the lower court’s equating of

states and international organizations as far as the proper standard of immunity was

concerned. Rather, it chose to qualify the translating and interpreting services provided

by the plaintiff as falling ‘within the category of acta jure imperii, since these services are

essential for the Tribunal to duly perform its tasks’. (1985) 16 Netherlands Yearbook of

International Law 472. The Dutch Supreme Court in AS v. Iran–United States Claims Tribunal,

Supreme Court, 20 December 1985, adopted a ‘functional’ standard according to which

an ‘international organization is in principle not subject to the jurisdiction of the courts

of the host State in respect of all disputes which are immediately connected with the

performance of the tasks entrusted to the organization in question’. (1987) 18 Netherlands

Yearbook of International Law 360. 141 Malaysian High Court, 13 January 1987. 142 (1989) 80 ILR 24. 143 Corte di Cassazione, 14 June 1954.

196 descriptive analysis

contract for the provision of canteen facilities by a private individual to

the staff of NATO headquarters offices was qualified as a iure gestionis

activity on the part of the international organization for which it en￾joyed no immunity from suit. The Italian Corte di Cassazione did not

discuss any treaty-based immunity. Rather, it relied on the customary

principle that the NATO ‘member States cannot exercise judicial func￾tions with regard to any public activity of the North Atlantic Treaty

Organization connected with its organization or with regard to acts

performed on the basis of its sovereignty [sic!]’144 concluding that ‘its

private law activities were subject to the jurisdiction of the Italian

courts’.145 In Sanita` and Ferraro v. Command Allied Land Forces Southern

Europe,

146 a lawsuit brought against NATO headquarters in Italy by two

employees working as telephone operators, the Italian court denied

immunity on the ground that the plaintiffs were ‘local civilian labour’

whose work contracts were governed by Italian law and came under

Italian jurisdiction in case of a dispute. It specifically approved the

sovereign immunity standard of restrictive immunity by equalizing

states to international organizations (referred to as international law

bodies):

In accordance with the principle of what is called restricted immunity, which

prevails in the countries of continental Europe and is followed by Italian case law,

an international law body is immune from the jurisdiction of the host State only

if it has acted within the scope of its particular sphere of sovereign activity and

not if it has acted on a footing of equality in the exercise of its private law

capacity.147

The IOIA: incorporating a FSIA standard of restrictive immunity?

A number of US cases decided on the basis of the International Organiz￾ations Immunities Act 1945 (IOIA) had to address the issue of whether the

immunity standard provided therein, according to which international

organizations ‘shall enjoy the same immunity from suit and every form

of judicial process as is enjoyed by foreign governments’, should be

regarded as a restrictive one.

It is undisputed – at least since the US Supreme Court’s decision in the

Alfred Dunhill case148 and the enactment of the Foreign Sovereign Immuni￾ties Act 1976 (FSIA) – that the immunity accorded to foreign states in US

144 (1955) 22 ILR 757. 145 Ibid., 756. 146 Pretore di Verona, 17 May 1975. 147 (1977) 3 Italian Yearbook of International Law 332. 148 Alfred Dunhill of London v. Republic of Cuba, 425 US 682 (1976).

strategies of judicial involvement 197

courts is a restrictive one.149 However, in the 1940s when the IOIA was

enacted, US courts still adhered to a standard of absolute immunity for

foreign sovereign states. This fact has given rise to the argument that –

although the plain wording of the IOIA’s grant of immunity, as read

today, seems to accord restrictive immunity to international organiz￾ations – the standard of immunity of international organizations is

determined by a reference to the then prevailing absolute immunity

standard. The ensuing discussion has led to a substantial confusion both

in judicial opinion and scholarly literature as to whether the IOIA stan￾dard of immunity for international organizations was affected by the

change of sovereign immunity or not. The court in Boimah v. United Nations

General Assembly150 clearly spelled out the issue:

It is unclear whether the [IOIA], by granting to international organizations im￾munity co-extensive with that of foreign governments, confers the absolute

immunity foreign governments enjoyed at the time of the Act’s passage, or the

somewhat restrictive immunity provided for in the [FSIA].151

The opinion among jurists is split. Those advocating an identical stan￾dard – having the advantage of being able to rely on the clear language –

contend that the ‘overriding Congressional intent which springs from a

reading of the immunity provisions of the [IOIA] is that international

organizations and foreign sovereigns shall be treated the same’152 and

149 The doctrine of sovereign immunity under international law was recognized early by US

domestic courts. Since international law forms part of the law of the land, US courts

could directly apply its rules. In a long tradition of cases dating back to The Schooner

Exchange v. McFadden, 11 US (7 Cranch) 116 (1812), US courts granted immunity to foreign

sovereign states. The absolute immunity from suit granted for decades came under

attack in the 1940s when courts began to question its appropriateness. Since the courts

generally deferred to the executive’s opinion whether to grant immunity or not, the

State Department’s ‘Tate Letter’ of 1952, (1952) 26 Department of State Bulletin 984, was of

considerable influence on US immunity practice. Therein the State Department adopted

the restrictive immunity theory indicating that private acts of foreign sovereigns should

no longer receive immunity. In the famous Alfred Dunhill case, the US Supreme Court

confirmed this attitude by declaring that sovereign immunity would no longer be

extended to commercial acts of foreign states. Thereby it clearly followed the general

practice of other Western states with regard to the extent of sovereign immunity. This

practice, and in particular this restrictive immunity standard, was codified by the

enactment of the FSIA in 1976. 150 US District Court EDNY, 24 July 1987. 151 664 F. Supp. 69 at 71 (EDNY 1987). 152 Thomas J. O’Toole, ‘Sovereign Immunity Redivivus: Suits Against International Organiz￾ations’ (1980) 4 Suffolk Transnational Law Journal 1–16 at 11ff. Significantly, the US Govern￾ment in its brief as amicus curiae in the Broadbent case also argued for an analogy to state

immunity.

198 descriptive analysis

that the IOIA standard ‘should be read to incorporate foreign govern￾mental immunity as it stands when suit is brought and not just as it was

in 1945’.153 Most commentators, however, rely on an absolute immunity

standard. One important argument is that ‘as a matter of law, the passage

of the FSIA has had no effect on the IOIA’154 which thus continues to

accord absolute immunity. It was also emphasized that – at least as far as

the UN is concerned – the absolute immunity clause of the General

Convention, which entered into law in the US after the US accession in

1970, in any event superseded the domestic Act’s questionable extent of

immunity.155

It is frequently asserted that US courts managed to avoid the issue of

the correct scope of immunity at all by holding that even under a

restrictive standard taken from the FSIA international organizations

would enjoy immunity.156 Indeed, most of the cases that went to court

concerned employment issues which the judges were ready to qualify as

internal administrative matters entailing immunity from suit. The clas￾sic example is the Broadbent case brought against the Organization of

American States (OAS). In Marvin R. Broadbent et al. v. OAS et al.,157 seven

former employees of the OAS claimed damages for breach of employment

contracts. Their employment had been terminated as a consequence of a

reduction in staffing by the OAS. An appeal before the OAS Administra￾tive Tribunal had already failed before the proceedings were instituted in

national court. The circuit court held that ‘[the] relationship of an inter￾national organization with its internal administrative staff is noncom￾mercial, and, absent waiver, activities defining or arising out of that

relationship may not be the basis of an action against the organiz￾ation’.158 The district court had not followed such an avoidance strategy

153 Frederic L. Kirgis, Teacher’s Manual to International Organizations in Their Legal Setting (2nd

edn, St Paul, MN, 1993), 7. 154 Kathleen Cully, ‘Jurisdictional Immunities of Intergovernmental Organizations’ (1982)

91 Yale Law Journal 1167–95 at 1179. Oparil recites, inter alia, a failed amendment Bill to

the IOIA introduced at the passing of the FSIA which would have expressly reduced the

immunity standard for international organizations along the lines of the FSIA as a

strong indication of the continuing absolute immunity standard for international

organizations. Richard J. Oparil, ‘Immunity of International Organizations in United

States Courts: Absolute or Restrictive?’ (1991) 24 Vanderbilt Journal of Transnational Law

689–710 at 707. 155 Kirgis, Teacher’s Manual, 7. 156 E.g., Restatement (Third) of the Law, The Foreign Relations Law of the United States (ed. American

Law Institute, St Paul, MN, 1987), § 467, Reporters’ Note 4. 157 US District Court DC, 25 January 1978, 28 March 1978; US Court of Appeals DC Cir., 8

January 1980. 158 628 F. 2d 27 at 35 (DC Cir. 1980).

strategies of judicial involvement 199

but rather squarely addressed the issue, and had its problems with it. It

first decided that the ‘express language . . . and the statutory purposes

underlying the [IOIA] bring international organizations within the terms

of the [FSIA] and that . . . this Court has jurisdiction over the parties and

controversy involved in the case’.159 The same court, however, later recon￾sidered its decision and then thought that international organizations

‘stand in a different position with respect to the issue of immunity than

sovereign nations’ which ‘persuaded’ the court that international organ￾izations are immune from every form of legal process. It noted that the

FSIA ‘makes no mention of international organizations’ and that

‘[n]othing in the [IOIA] provides for jurisdiction in the district courts over

civil actions against international organizations’.160 Accordingly, it dis￾missed the action.

A number of other decisions also avoided the issue of the scope of IOIA

immunity by deciding the cases brought on the basis of restrictive im￾munity. In Morgan v. IBRD,

161 a tort action against the World Bank for

libel, slander, infliction of emotional distress and false imprisonment

which was dismissed for immunity reasons, the District of Columbia

district court thought that the applicability of a relative sovereign im￾munity standard under the IOIA was an ‘issue not resolved in this Cir￾cuit’. Nevertheless the court analyzed the complaint in eventu also under

an FSIA standard and concluded that the plaintiff’s claims arose ‘directly

from the World Bank’s employment practices, which do not constitute

‘‘commercial activity’’ within the meaning of the statute’.162 It further

considered the Bank’s acts to be immune under an FSIA standard exemp￾ting libel and slander as well as ‘discretionary functions’ from the tort

exception to sovereign immunity.163 In Tuck v. Pan American Health Organiz￾ation,

164 the court held that it need not decide the notoriously open issue

of whether IOIA read in the light of the FSIA granted absolute or merely

restrictive immunity. It determined that even under the restrictive stan￾dard it enjoyed immunity since the action forming the basis of Tuck’s

complaint, i.e. PAHO’s supervision of its employees, fell outside the

159 481 F. Supp. 907 at 908 (DDC 1978). 160 Ibid. 161 US District Court DC, 13 September 1990. 162 752 F. Supp. 492 at 494 (DDC 1990). 163 Cf. FSIA, § 1605 (a)(5). 164 US District Court DC, 17 November 1980, US Court of Appeals DC Cir., 13 November 1981.

The Staff Association of the Pan American Health Organization, integrated since 1949

into the regional office of the WHO, had hired Ronald Tuck, a US lawyer, for the

provision of legal services. Tuck filed suit against PAHO and its director for interference

with his contract of services. The Court of Appeals dismissed the claim on the ground

that both defendants enjoyed immunity from suit.

200 descriptive analysis