Journey Beyond Borders: Restriction of Immunity from Jurisdiction

The Jurisdictional Immunities of Foreign States Bill 2023 (“the Bill”), was tabled for the first reading in parliament on or around 29.11.2023.

The Bill is aimed to regulate and oversee immunity granted to foreign states.

Broadly, Clause 5 of the Bill provides immunity to a foreign State, head of State, and head of Government in their official capacity. Nevertheless, the immunity is subjected to restrictions, provided in Clauses 8 to 16 of the Bill. The following is a brief overview of these restrictions of immunity.

Commercial Transaction

Generally, as mentioned last week, Clause 8 of the Bill provides that the foreign State shall not enjoy immunity in the proceedings arising out of commercial transactions between a foreign State and any person in Malaysia (except where parties agree to the said immunity or where the transactions are between foreign States). Similarly, the head of State and the head of Government is not immune from the court proceedings arising out of commercial transactions carried out in his personal capacity.

Contract of Employment

Clause 9(1) of the Bill provides that a foreign State shall not be immune from the jurisdiction of the court in proceedings relating to the contract of employment between the foreign State and an individual for any work performed or to be performed in Malaysia. Similarly, Clause 9(3) of the Bill provides that the head of State and the head of Government shall not be immune from the jurisdiction of the court in any proceedings relating to a contract of employment.  Nevertheless, there are some exceptions to this restriction of immunity as set out in Clause 9(2) of the Bill, such as, among others, where the employee was recruited to perform functions relating to the governmental authority of the foreign State or if the employee is a diplomatic agent and the like, etc.

Personal Injury Claims

Clause 10 of the Bill provides that a foreign State, the head of State, and the head of Government shall not be immune from the jurisdiction of the court for proceedings concerning the death or personal injury as well as damage to property.

Determination of Right of Property

Clause 11 of the Bill specifies that a foreign State shall not be immune from the court’s jurisdiction to determine the right, interest or obligation of the foreign State

1. in immovable properties in Malaysia;
2. in immovable or movable property properties arising out of succession, gift, or bona vacantia; or
3. the administration of trust property, the estate of a bankrupt, or the property of a company if it is wound up.

Intellectual Property

Clause 12 of the Bill provides that a foreign State shall not be immune from the jurisdiction of the court in the proceedings relating to;

1. the determination of the right of a foreign State in a patent, industrial design, trade name or business name, trademark, copyright, geographical indication, layout-design of integrated circuits or any other form of intellectual or industrial property; or
2. an infringement of the foreign State over the intellectual property of a third person that is protected, registered, or granted in Malaysia.

Participation in Companies

Clause 13(1) of the Bill excludes the immunity of the foreign State from participating in a company provided that

1. the company has participants other than the foreign State or international organisations; and
2. is incorporated under the law of Malaysia, or having its registered address or principal place of business in Malaysia.

However, this immunity shall not be affected if the foreign State and the parties in dispute have agreed not to be subject subjected to the jurisdiction of the court or instrument establishing or regulating the company specifies (specifics?) so, as provided under Clause 13(2) of the Bill.

Ships owned or operated by foreign State

Clause 14(1) of the Bill provides that a foreign State shall not be immune from the jurisdiction of the Court in any proceedings relating to

1. the operation of the ship owned or operated by the foreign State; and
2. the carriage of cargo on board or operated by the foreign State.

This only applies to the ship used other than for government non-commercial purposes.

However, Clause 14(3) of the Bill further specifies that the immunity shall not be affected for the ship or cargo that is:

1. a warship or naval auxiliaries for government non-commercial services;
2. a ship owned or operated by a foreign State only for government non-commercial service; or
3. cargos intended for exclusive use of government non-commercial purposes.

Recovery of Tax

Clause 15 of the Bill provides that the head of State and head of Government shall not be immune from the jurisdiction of the court in proceedings relating to the recovery of tax, which includes any compulsory charge, duty, excise, cess, dues or other impost imposed under any written law.

Agreement on Arbitration

Clause 16 of the Bill provides that if there is an agreement entered between the foreign leaders and any person to submit to arbitration in Malaysia for any dispute relating to commercial transaction(s), the foreign leaders shall not be immune from the court proceedings relating to

1. the validity, interpretation, or application of the arbitration agreement;
2. the arbitration procedure; or
3. the confirmation or the setting aside of the award.

Conclusion

In summary, the Jurisdictional Immunities of Foreign States Bill, 2023, represents a crucial legislative endeavour in Malaysia. The bill meticulously navigates the delicate balance between recognizing the immunity granted to foreign States, heads of State, and heads of Government and imposing necessary restrictions to ensure accountability. Key clauses, such as those addressing commercial transactions, employment contracts, personal injury claims, property rights, intellectual property disputes, participation in companies, maritime operations, tax recovery, and arbitration agreements, showcase a comprehensive approach to diverse legal scenarios. The Bill's nuanced provisions and exceptions signify a thoughtful consideration of the complexities involved, promoting accountability while acknowledging the importance of diplomatic relations and international cooperation. As the legislation progresses, it stands as a noteworthy step toward fostering transparency, fairness, and responsible conduct in Malaysia's legal landscape concerning foreign States, heads of State, and heads of Government.