Legal Resources Foundation Limited v Norwegian Ministry of Foreign Affairs (APPEAL NO.118/2018) [2019] ZMCA 347 (27 June 2019)

IN THE COURT OF APPEAL FOR ZAMBIA APPEAL NO.118/2018 HOLDEN AT LUSAKA ( Civil Jurisd iction) BETWEEN: LEGAL RESOURCES FOUNDATION LIMITED , APPELLANT AND NORWEGIAN MINISTRY OF FOREIGN AFFAIRS RESPONDENT Coram: Chisanga J. P, Makungu, Kondolo, JJA On the 16th day of October, 2018 and .. ?. ]~ ~ day of June, 2019. For the Appellant: Mr. K. Chenda and L. Mwamba - Messrs Simeza Sangwa Legal Practitioners. For the Respondent: Mr. S. Bwalya - Solly Patel Hannir & Lawrence ✓ JUDGMENT MAK. UNGU, JA delivered the Judgment of th e court. Cases referred to: 1. Thai Tapiola Services Limited v. Government of Pakistan, Ministry of Food and Agriculture, Directorate of Agricultural Supplies Imports and Shopping Wing (1975) 3 ALL ER 961 2. Rahimtoola v. Nizam of Hyderabad and Another (1958) AC 379 3. Congresso Del Partido (1982) 2 ALL ER 1064 4. Attorney General v. Roy Clarke (2008) ZR 38 5. Eugine Linyulu Jsalambo v. Barbra Ekvall (2016) eKLR 6. Talaso Lepalat v. The Embassy of the Fed eral Republic of Germany and 2 others (2 015) eKLR ,. 7. Thai- Europe Tapioca Services Limited v. Government of Pakistan, Ministry of Food and Agriculture, Directorate of Agricultural Supplies Imports and Shipping Wing (1975) 3 ALL ER 961 8. Baccus S. R. L v. Servicio Nacional Del Trigo (1956) 3 ALL ER 715 9. Lewanika and Others v. Chiluba (1998) ZR 79 10. Rawdan v. Rawdan (1972) 3 ALL ER 977 11. Kuwait Airways Corporation v. Iraq Airways Company and another (1995) 3 ALL ER 694 Legislation referred to: 1. The Diplomatic Immunities and Privileges Act, Chapter 20 of the Laws of Zambia. 2. The High Court Act, Chapter 27 of the Laws of Zambia 3. The Court of Appeal Rules, Statutory Instrument No. 65 of 2016 4. British Acts Extension Act Chapter 10 of the Laws of Zambia 5. The English Law (Extent of Application) Act Chapter 11 of the Laws of Zambia Other authorities referred to: 1. Bryan A. Gamer, Black's Law Dictionary, (2009) 9th Edition 2. Fox. Hand Webb. P., The Law of State Immunity, 3rd Ed (Oxford University Press: Oxford) 2013. 3. Halsbury's Laws of England, 4th Edition. 4. Hardy. M. J. L., Modem Diplomatic Law. 1968. Manchester University Press. 5. Sen. B., A Diplomat's Handbook of International Law and Practice, (Springer Netherlands) 1965. 6. Principles of Public International Law, Ian Bromnlie, 4th Edition, Claredon Press: Oxford 1990 7. Draft Articles on Diplomatic intercourse and Immunities. 8. Modem Diplomatic Law Press) Manchester University 1968 Hardy M. J. L 9. The Law of State Immunity Fox. H.and Webb. P. 3rd Edition (Oxford University Press: Oxford) 2013 -J2- ,. f. This appeal arises from a decision of the High Court dated 11 th October, 2017. The matter was commenced sometime in October, 2014. The defendant, now respondent sought to set aside process on grounds that the service of process effected at the Royal Norwegian Embassy was irregular as it breached the inviolability of the diplomatic mission. On 5th December, 2014 the learned Deputy Registrar made a ruling dismissing the respondent's preliminary objection. The appellant appealed to the Judge in chambers who heard the appeal and delivered the ruling on 11 th October, 2018. The learned Judge determined that there is a lacuna in our laws with respect to service of court process to special persons such as diplomatic missions and foreign states. She therefore referred to Section 12 (1) of the State Immunity Act 1978. She referred to Article 22 of the United Nations Convention on Jurisdictional Immunities of States and Their Property which provides for service of court process on special persons. On the basis of the said laws, she found that the service of process on the respondent was done in breach of the inviolability of the diplomatic mission. The learned Judge's opinion was that the issuance of any court process was not under the scope of communications envisaged in the contract -J3- '- between the parties. She upheld the appeal and set aside the originating process for irregularity. It is this decision that has led to the appeal before us. There are four grounds of appeal couched as follows: l. The court below en-ed in law by holding that service of process on the Royal Norwegian Embassy was done in breach of the inviolability of diplomatic mission. 2. The court below en-ed in law by relying on section 12 (l) of the United Kingdom States Immunity Act, 1978. 3. The court below erred in law by holding that Article 22 of the United Nations Convention on Jurisdiction Immunities of States and Their Property applies to Zambia even though the same has not been ratified by Zambia. 4. The court below misdirected itself in law when it held that the contract between the appellant and the respondent was out of the realm of matters upon which foreign states can be sued. The respective advocates for the parties filed written heads of argument in support of their positions. At the hearing of the appeal, counsel for the appellant, Mr. Mwamba relied on the said heads of argument wherein grounds 3 and 4 were argued together as stated below: -J4- The lower court's conclusion that the issuance of court process was not under the scope of communication envisioned in the contract between the parties was premised on the holding that the contract was out of the realm of matters for which foreign states can be sued. He referred to the case of Thai Europe Tapiola Services Limited v. Government of Pakistan, Ministry of Food and Agriculture, Directorate of Agricultural supplies Imports and Shipping Wing l1J where Lord Denning MR held as follows: "The general principle is undoubtedly that, except by consent, the courts of this country will not issue their process so as to entertain a claim against the foreign service for debt and damages." Mr. Mwamba's interpretation of the above holding is that court process cannot be issued against a foreign state unless that state consents. He submitted that there was a contract between the parties wherein the respondent undertook to provide financial support to the appellant's programme for legal services to the indigent. Therefore, there was need to determine whether the respondent consented to being sued. If the answer is in the affirmative, it is immaterial whether or not the contract was a commercial transaction. Reference was made to clause 10.4 of the agreement between the parties, which reads: -JS- "If any dispute arises relating to the implementation or interpretation of this contract, the parties shall consult with a view to reaching a solution. Any disputes that cannot be solved amicably shall be referred to the competent Zambian Court and settled in accordance with the Zambian law. The court venue shall be Lusaka High Court." In light of the foregoing, counsel submitted that the parties had agreed to have any dispute arising from the said agreement dealt with by the High Court in Lusaka. The respondent waived its immunity and availed itself to being sued in the Zambian Court. The contract was not out of the realm of disputes for which foreign states can be sued. He further argued that even if the position were to the contrary, the argument that the contract falls in the category where foreign states can be sued would stand. In this regard, he refers to Article 30 of the Vienna Convention which provides as follows: "A diplomatic agent shall enjoy immunity from the criminal jurisdiction of the receiving state. He shall also enjoy immunity from its civil and administrative jurisdiction except in the case of: d. an action relating to any professional or commercial activity exercised by the diplomatic agent in the receiving state outside his official functions." -J6- On the basis of Article 30 above, counsel was of the view that diplomatic immunity does not extend to an action relating to a commercial activity entered into by a diplomatic agent outside his official functions. To fortify this, he referred to the case of Rahimtoola v. Nizam of Hyderabad and another (2 ) where Lord Denning held as fallows: "But if the dispute concerns for instance, the commercial transactions of a foreign government (whether carried by its own departments or agencies or by setting up separate legal entities}, and it arises properly within the territorial jurisdiction of our courts, there is no ground for granting immunity." Counsel also relied on the case of Congresso Del Partido f3Jwhere Lord Wilberforce stated at page 1070 as follows: "It is necessary to startfrom theftrstprinciple. The basis on which one state is considered to be immune from the territorial jurisdiction of the courts of another state is that of 'par in parem.' which effectively means that sovereign or governmental acts of one state are not matters on which the courts of other state will adjudicate. The relevant exception, or limitation which has been engrafted on the principle of immunity of states, under restrictive theory, arises from the willingness of states to -J7- enter into commercial or other private law transactions with individuals. It appears to have two main foundations: (a) It is necessary in the interest of Justice for individuals having such transactions with states to allow them to bring such transactions before the courts. {b) To require a state to answer a claim based on such transactions does not involve a challenge to or inquiry into any act of sovereignty or governmental act of the state. It is, accepted that it poses, neither a threat to the dignity of that state nor any interference with its sovereign actions." Counsel argued that immunity of foreign states does not extend to commercial transactions entered into by the foreign state with private parties. That even though the lower court appreciated this limit on immunity of foreign states by relying on Article 10 of the United Nations Convention on Jurisdiction Immunities of the States and Their Property, there was a misdirection in determining what amounts to commercial activity. According to learned counsel, a perusal of page 15 of the Judgment shows that the court was of the view that the contract was for a grant and not a commercial activity. The said portion of the Judgment reads in part as follows: -JS- "It is not in dispute that the plaintiff approached the defendant for financial help which the defendant undertook to provide in form of a grant ... " Black's Law Dictionary defines commercial activity as fallows: "An exemption from the rule of sovereign immunity, permitting a claim against a foreign state to be adjudicated in the courts of another state if the claim arises from private acts undertaken by the foreign state, as opposed to the state public acts." Counsel further referred to Principles of Public International Law, where the learned authors state the following on restrictive immunity of diplomatic agents: "In any event the courts and government of a number of states apply the principle of restrictive immunity and therefore it is necessary to examine the modalities of its application. The method most commonly referred to is the distinction between acts Jure imperil (acts of sovereign authority) and acts Jure gestionis (acts of a private law character), and the merits of this distinction must be examined. The basic criterion appears to be whether the key transaction was accompanied on the basis of a private law relationship, such as a contract. Another form of this approach is to state that the act is Jure questionis, and therefore not immune, if the transaction can be made by an individual." -J9- Counsel further submitted that the definition of commercial activity depends on whether the transaction is private or public. If the same is public, then immunity applies and where it is private, it is said to be a commercial transaction. Counsel took the position that the contract between the parties was a private activity making it a commercial activity. In the same vein, it was pointed out that the same authors have posited that loans and financing agreements are among some of the agreements that fall within the realm of private transactions or commercial activities as follows: "The Legal system of the forum state is competent in respect of proceedings concerning legal disputes arising from relationships of a private law character to which a foreign state or (its agent) is a party: the class relationship referred to includes (but is not confined to) the following legal categories of commercial contracts; contracts for the supply of services, loans and financing agreements; guarantees or indemnities in respect of financial obligations, ownership, possession, use of property ... " In arguing this point, the direction counsel took was that in this case, the agreement was for the financing of the appellant's legal services to the indigent, which without any shred of doubt falls within the categories of transactions termed commercial activities. -JlO- Further that, the parties contemplated that personal service was to be effected on the other party. According to counsel, suggesting otherwise would render clause 10.4 of the contract redundant as one would sue but hold onto the documents because they cannot effect service. Therefore, counsel referred us to Order 10 of the High Court rules which provides that service of process is good if it is left at the premises of the defendant. That the service of process in this case was not irregular as it was in compliance with Order 10 of the High Court Rules. The appellant's counsel submitted further that the lower court should not have relied on Article 10 of the United Nations Convention on Jurisdictional Immunities as the same has not been ratified and domesticated by the Zambian laws. To fortify this argument, counsel relied on the case of Attorney General v. Roy Clarke l4J wherein the Supreme Court held as follows: "In applying and controlling Zambian statutes, courts of law can take into account international instruments to which Zambia is a signatory. However, these instruments are only of persuasive value, unless they are domesticated in the laws." -Jll- In light of the foregoing, it was submitted that the lower court did not refer to any specific provision under Article 10 of the United Nations Convention on Jurisdiction Immunities of the States and their Property. There was no analysis of the said provision by the Court. If it had done so, it would have come to the conclusion that the contract between the appellant and the respondent was a commercial contract. Counsel also stated that Sub Articles 2 (a) and (b) of the said Article 10 states that where there is a commercial transaction or where the parties consent, immunity does not apply. In arguing ground 1, Mr. Mwamba referred us to Section 8 of the Diplomatic and Privileges Act which states as follows: "8. (1) The President may by order direct that this section shall apply to any State specified in the order, being a State with which a treaty or other international agreement applicable to Zambia is in force provi.ding for matters for which provision is made by this section. (2) Subject to the provi.sions of subsection (4), a consular office of a State to which this section applies shall not be entered by a police officer or other person acting in the execution of any wan-ant or other legal process or in the exercise of a power of entry under any written law, except with the consent of the consular officer or of his nominee -J12- or, if that consent is withheld or cannot be obtained, with the consent of the Minister: ... " Mr. Mwamba stated that Article 22 of the Vienna Convention which is domesticated in Zambia provides as follows: "1. The premises of the mission shall be inviolable. The agents of the receiving state may not enter them, except with the consent of the head of the mission.,, According to learned counsel, the reading of the two sections shows that the principle of inviolability of the diplomatic mission is only applicable between the receiving state and the foreign state and not to private citizens of a receiving state such as the appellant. It was argued further that both Section 8 of the Diplomatic Immunities and Privileges Act and Article 22 of the Vienna Convention subject the inviolability of the mission to the consent of the state. Thus, the foreign state may waive the inviolability principle. The respondent consented to service of process, thereby waiving "the inviolability of mission" principle. Counsel referred us to clause 1.1 of the Agreement between the appellant and the respondent which reads in part that "all communication to the Ministry of Foreign Affairs (MFA) in regard to the contract shall be -J13- directed to the Norwegian Embassy in Lusaka." He stated that the said term of the contract was complied with by the appellant. In arguing ground 2, the appellant's counsel submitted that the lower court should not have relied on the United Kingdom States Immunity Act of 1978 as the same was not on the list of statutes applicable to Zambia according to the schedule of the British Acts (Extension) Act. That the said Act is also not applicable under the English Law (Extent of Application) Act as it was enacted after 1911. There is no law in Zambia that permits the courts in Zambia to resort to the substantive laws of England where there is a lacuna. Section 10 of the High Court Act only vests the Courts with jurisdiction as regards procedure and practice and not substantive laws. Counsel's stance was that the lower Court erred when it relied on the substantive law of England. This error was also seen when the Court relied on the case of Kuwait Airways Corp v. Iraq Airways Co and another which case was interpreting the provision of the law which is not applicable to Zambia. He argued that the reliance by the Court on such laws led to the wrong conclusion that the service was in violation of the inviolability principle. He reiterated that the respondent cannot plead immunity as it entered into a commercial transaction -Jl4- thereby subjecting itself to the rules of the High Court. There was consent on the part of the respondent regarding service of court process. He therefore urged us to allow the appeal and send the matter back for hearing before another Judge of the High Court. In countering the arguments put forward on behalf of the appellant, learned counsel for the respondent, Mr. Bwalya equally relied on the heads of argument filed herein on 23rd August, 2018. The order of his arguments was as set by the appellant's counsel, except that ground 3 was argued independent of ground 4. In response to ground 4, Mr. Bwalya submitted that the Appellant has advanced two arguments on the lower Court's finding that the contract between the parties fell outside the realm of matters upon which foreign states can be sued and these were as follows: i. That the Respondent contractually consented to or waived its immunity to be sued by the Appellant; and alternatively; ii. That the contract between the Appellant and the Respondent perfectly fall within the realm of contracts for whichforeign states (the Respondent) can be sued. -J15- Counsel submitted on the appellant's second argument first as he was of the view that if the answer was favourable to the respondent, the first argument would be rendered irrelevant. Mr. Bwalya submitted that Article 31 of the Vienna Convention on Diplomatic Relations ("The Vienna Convention"), which is domesticated and forms part of the First Schedule to the Diplomatic Immunities and Privileges Act, Chapter 20 of the Laws of Zambia ("the DIP Act") immunizes foreign states from civil suits save for suits relating to, among other things commercial activities. Counsel was of the view that there was a misapprehension of the expression "commercial activities" on the part of the appellant when it submitted that what makes an activity or a transaction commercial is its private nature, i.e. if it is was made with or by an individual. The appellant was further pushing the edge of the envelope by submitting that "the fact that the parties subjected themselves to the jurisdiction of the Zambian Courts in the event of a dispute is a clear indication that it is a commercial transaction." According to Mr. Bwalya, these arguments were bereft of merit. He submitted that the lower Court did not misapprehend the meaning -J16- of a commercial transaction or activity. As the 'expression commercial activity' was defined on page 14 of the Ruling as follows: "An activity, such as operating a business, conducted to make a profit." Counsel stated that the foregoing definition was given credence by the Court of Kenya in the case of Eugine Linyulu Isalambo v. Darbro Ekvall <5 ) in relation to which Judge Nzioki wa Makau held: "From the above, it is clear that commercial activity as expressed in the Vienna Convention does not apply to activities incidental to daily life but rather to commercial activities engaged in for personal profits outside official duties." Counsel submitted further that, the Kenyan Courts have explained the meaning of commercial activity as envisaged under Article 31 of the Vienna Convention and in this regard Judge Lenaola concluded in the Kenyan case of Talaso Lepalat v. The Embassy of The Federal Republic of Germany and 2 Others 161 that: "In order to determine whether a transaction is commercial, it is therefore necessary to consider its nature and not its purpose." -J17- On the basis of the above definition, counsel submitted that the interaction of or the contract between the appellant and the respondent was not undertaken to cause the respondent any form of profit. In addition, a consideration of the nature of the contract confirms that the said contract is not, for all intents and purposes, one that could reasonably be said to relate to a commercial activity. He urged us to look into the contents of the said contract appearing on pages 31 to 37 of the record of appeal. To support his argument, learned counsel, Mr. Bwalya, invited us to portions of the contract which read as follows: "Legal Resources Foundation (LRF) has in letter dated 9th August, 2009 requested the Norwegian Ministry of Foreign Affairs (MFA) for financial support to Legal Resources Foundation Strategic Plan 2010-2011, MFA has decided to comply with the request, and the two parties agree as follows ... The Contract sets forth the terms and procedures for MFA's assistance to the Programme as outlined in the Agreed Programme Summary in Annex I ••• The Goal of the Programme is to attain social justice, an informed public human rights and a sustainable human rights culture in Zambia. Upon completion of the Programme, any unutilizedfunds, including accrued interests, shall be returned to MFA, -J18- unless the parties have agreed in writing upon the utilization of such funds." According to counsel, the reading of the whole contract with emphasis on, among the reproduced portion of the contract, shows that the contract does not relate to a commercial activity as envisaged in article 31 of the Vienna Convention, upon which a civil suit can be sustained against the respondent. Additionally, the said contract outlines only obligations of the appellant and not of the respondent. It only brings out what the respondent may do as "Contributions." It was his argument that the respondent was merely offering gratuitous financial assistance to the appellant pursuant to and in fulfillment of its functions under the Vienna Convention in article 3 of merely promoting friendly relations between the sending State and the receiving State, and developing their economic, cultural and scientific relations. He went on to state that the contract between the appellant and the respondent did not relate to a commercial transaction or activity for which the respondent can be sued. Therefore, the lower court was right to have held that the said contract falls outside the -J19- realm of contracts for which the respondent can be sued. He therefore, answered the first question negatively. In addressing this issue whether the respondent continually consented to or waived its immunity to be sued by the appellant, counsel began by restating what was contained in paragraph 9 to 15 of the appellant's Heads of Argument. We shall not belabor to regurgitate the same as it is duly noted in the earlier part of this Judgment. He argued that the respondent did not waive its immunity to be sued simply because it consented to or submitted to the jurisdiction of Zambian Courts. To fortify this argument, he referred us to the learned authors ofHalsbury's Laws of England, 4 th Edition at page 798, particularly paragraph 1555 where it is posited thus: "A foreign sovereign state may waive its immunity and submit to the jurisdiction of the English courts. This may be done, for example, by entering an unconditional appearance to the action begun against it, with full knowledge of its right to immunity and with proper authority from the competent organs of the state. To be effective, waiver must take place at the time at which the court is asked to exercise furisdiction; it cannot be inferred from a previous contract to submit to the court's furisdiction, or from an agreement to submit to -J20- arbitration, nor from an application to set aside an arbitration award. Costs awarded cannot be recovered by execution, and even if the state has submitted to the jurisdiction it does not thereby waive the right to remove its property from the jurisdiction." (As underlined by counsel for emphasis only). Mr. Bwalya went on to submit that the foregoing perfectly comports with the English Court's pronouncement in the case of Thai-Europe v. Government of Pakistan, Ministry of Food and Agriculture, Directorate of Agricultural Supplies Imports and Shipping Wing f7J in which Lawton LJ endorsed a previous court's decision on the point at page 967 as follows: "A sovereign independent state does not by entering into a trading contract with aforeigner lose its immunity from process in England courts as regards matters arising out of the contract and that a sovereign independent state by making a submission to arbitration in this country does not lose its immunity from being impleaded in the courts of this country. Nothing could be clearer." Relying on the above, counsel was of the view that a foreign state cannot waive its immunity from being sued by submitting to the jurisdiction of the court of a receiving state. He contended that the -J21- appellant misunderstood Lord Denning's expression "except by consent" in the Thai-Europe case. He went on to state that the respondent did not enter unconditional appearance to the action instituted against it by the appellant. Even if it did, the appellant would still have had to prove that the appearance was entered with full knowledge of the respondent's right to immunity and with proper authority from a representative of the respondent. This position was affirmed by the majority in the case of Baccus S. R. L. v Servicio Nacional Del Tri.go. ,s, Therefore, the answer to the second question is also in the negative and ground 4 is devoid of merit, he submitted. With respect to ground three, Mr. Bwalya referred us to pages 21 and 22 of the Record of Appeal wherein the lower court found as follows: "It is significant to note that Article 22 of the United Nations Convention on Jurisdictional Immunities of States and Their Property provides for service of Court Process. The said Article 22 provides as follows; ... In circumstance (sic) where we have a lacuna in our laws we look up to other jurisdiction for guidance. In light of the law discussed above, certainly the service of Court process on the Royal -J22- Norwegian Embassy in the manner it was done was in breach of the inviolability of the diplomatic mission." Counsel submitted that the appellants have referred to Article 22 of the United Nations Convention on Jurisdiction Immunities of States and Their Property in their arguments. The lower court referred to both Articles 10 and 22 of the said Convention. Article 22 deals with service of court process on foreign states while Article 10 provides for instances in which State immunity cannot be invoked. He therefore urged us to deem ground 3 as abandoned. Counsel went on to state that if ground 3 is not deemed to have been abandoned, then his brief response thereto would be as follows: The lower court's reference to Article 22 was a mere indication that it may look to the provisions of other laws for guidance where there is a lacuna in our laws. The Court did not expressly or impliedly hold that Article 22 applies to Zambia, like the appellant asserts. The statement of the Court cannot be said to be a "holding" which is defined by Black's Law Dictionary as: ''to adjudge or decide as a matter of law (as opposed to fact) ... to direct and bring about officially". He submitted therefore that the appellant has -J23- not demonstrated how the lower Court relied on the said Article[s] "as though they have a force of law in Zambia." According to Mr. Bwalya, proceeding to consider ground 3 which purports to attack the lower Court's pronouncement on Article 22, when the arguments thereunder relate to Article 10, would amount to considering a "new'' ground of appeal skillfully "sneaked in" without leave of court contrary to the provisions of Order X Rule 9(3) of The Court of Appeal Rules, 2016. He finally urged us to dismiss ground three for lack of merit. In countering ground 1 counsel submitted that the appellant has suggested that the principle of inviolability of diplomatic mission only applies to states and not private citizens and that the appellant did not breach the inviolability of the respondent by serving the court process upon it. This argument is based on the combined interpretation of section 8 of the DIP Act and Article 22 of the Vienna Convention. The appellant has not attempted to provide any independent authority to augment its arguments in support of ground 1. He reiterated his contention made before the lower court that service of court process on a diplomatic mission is repugnant to -J24- the principle of inviolability accorded under Article 22 of the Vienna Convention and generally under international customary practices. He further submitted that the Draft Articles on Diplomatic Intercourse and Immunities with Commentaries of the International Law Commission provides the following in relation to Article 22 of the UN Convention vis-a-vis the principle of inviolability: "A special application of this principle is the rule that no writ may be served within the premises of the mission, and that no summons to appear before a court may be served in the premises by a process server. Even if the process servers do not enter the premises but carry out their duty at the door, such an act would constitute an infringement of the respect due to the mission. The service of such documents should be effected in some other way." In addition, Michael James Langely Hardy in his book Modem Diplomatic Law stated on page 45 as follows: "The mere service of process has traditionally been regarded as in itself an affront to the dignity and respect due to the mission, and therefore forbidden even where the writ was served without crossing the threshold-as where the process server lay in wait at the door ... the -J25- International Law Commission decided in its commentary at least not to forbid the possible use of means which did not involve physical violation of the premises. At the Vienna Conference, however, an amendment introduced by Japan, designed to obtain a definite ruling one way or the other, was withdrawn 'on the understanding that it was the unanimous interpretation of the Committee that no writ could be served, even by post within the premises of a diplomatic mission'. On the basis the sole channel for the service of process is through the ministry for foreign affairs." Mr. Bwalya went on to state that similarly, Hazel Fox and Philippa Webb have commented on the sanctity enjoyed by premises of diplomatic missions in relation to service of court process in the book entitled The Law of State Immunity in the following terms: "The presence of a foreign state's diplomatic mission within the forum territory cannot qualify as legal presence within the jurisdiction for purposes of service of process or submission to proceedings. Service of process is an exercise of sovereignty, and to perform such an act in relation to diplomatic mission is contrary to Article 22 of the Vienna Convention on Diplomatic Relations." According to counsel, it is clear that service of court process on premises of a diplomatic mission constitutes an infringement accorded to states by the principle of inviolability. The appellant's -J26- argument that the principle does not apply to private citizens, if accepted, would result into an absurdity as it would defeat the rationale for which the principle was promulgated. Counsel's response to the argument that the respondent consented to service of process being affected on its premises and thereby waived its right to contest the principle of inviolability was that the expression 'All communication' in the agreement between the parties cannot reasonably be interpreted to cover service of court process. The said interpretation is not in line with the rules of construction. Even assuming it was, it cannot be taken to amount to waiver. Waiver of immunity to be sued, cannot be inferred from a foreign state's participation in the execution of a contract in respect of which, as established above, it enjoys immunity from suit. We were on this basis urged to dismiss ground 1 for lack of merit. Mr. Bwalya responded to the second ground of appeal by emphasizing his arguments under ground one, especially what the learned authors of Modern Diplomatic Law state in paragraph 22. 7, that the sole channel for the service of process is -J27- through the ministry for foreign affairs. That this perfectly comports with the decision in the Kuwait < 12J Case. Mr. Bwalya disputed the appellant's indirect argument that service of court process on the respondent was justified under Order 10 of the High Court Rules. He relied on the learned authors of The Law of State Immunity referred to above. He stated further that Order 10 of the High Court Rules adequately provides litigants with an avenue to adopt for purposes of effecting service of court process on parties situated outside the jurisdiction. The appellant completely misunderstood the law on the mode of service on diplomatic missions. A reading of the relevant portion of the passages that resulted into ground two will show that the lower court was merely drawing guidance from the international provisions that it relied upon and was merely soliciting for inspiration on a procedural point of law when it found itself at crossroads. Even concluding that the lower court did, in fact, rely on the UK Act, it is not true, as argued on behalf of the appellant, that alone prompted the lower court to hold that the service of process [on the Respondent] was in violation of the inviolability principle. The lower Court ref erred to other provisions of the law including the provisions of our Diplomatic and Privileges Act. He -J28- submitted that the second ground of appeal lacks merit and urged us to dismiss it also. In conclusion, Mr. Bwalya submitted that the appeal presents a perfect opportunity for this Honourable Court to make an authoritative pronouncement on the propriety of effecting service of process on premises of diplomatic missions in our jurisdiction. This would in essence serve as a representation of the attitude that our jurisdiction has towards international relations. He therefore urged us to dismiss the entire appeal with costs. In his oral submissions, Mr. Bwalya referred us to the case of Lewanika and Others v. Chiluba rioJ wherein the Supreme Court held that the English Family Law Reform Act of 1969 applies to our jurisdiction and that Section 9 of the High Court Act facilitates the application of Acts that are passed in England. Therefore, the lower court was on firm ground when it relied on the Act of England. In reply, Mr. Mwamba submitted that there is no legal basis for restricting the definition of a commercial activity as one conducted to make a profit. Counsel was of the view that foreign missions enter into agreements for the supply of goods by private citizens or -J29- provision of certain services such as cleaning. It would be absurd to state that such agreements are not commercial in nature. He maintained that a commercial activity depends on whether or not the transaction is public or private. He placed reliance on the case of Talaso Lepalat l6 ) wherein it was held that: "In order to determine whether a transaction is commercial, it is necessary to consider its nature and not its purpose." That this position defeats the respondent's arguments because in effect, the respondent is stating that the transaction should be determined on its purpose vis profit making. This confusion emanates from the fact that the transaction relates to a grant from the respondent to the appellant. Further that, although it was a grant, it was embodied in a contract imposing contractual obligations on both parties giving either party the right to sue. With respect to consent on the part of the respondent to being sued, Mr. Mwamba argued that the issue was not whether or not the respondent waived its immunity as argued by the appellant but that of consent. The authorities cited by the respondent cannot help because they are inapplicable to this court. -J30- He went on to state that ground 3 has not been abandoned. The gist of the appellant's argument under ground three is not whether the lower court relied on Article 10 or 22 but that the United Nations Convention on Jurisdictional Immunities is not applicable to Zambia. Mr. Mwamba submitted further that the respondent has cited various authorities defining the inviolability principle but has not shown how the definition assails the appellant's argument that it is not applicable to private individuals. Assuming it was applicable to individuals, the respondent did under clause 1.1 appoint the embassy as its agent and that all communication was to be made through the embassy. The appellant was therefore within its right to serve the process on the mission. Assuming that the service of process on the mission is restricted, it would only make the process irregular and not the entire action as irregularity does not nullify an action. He augmented his arguments orally by submitting that Section 10 of the High Court Act states when law and practice observed in England can be resorted. The Lewanika case cited by counsel for the respondent was decided in 1998 prior to the 2011 amendment -J31- of the High Court Act. Therefore, the Court erred to rely on an Act of Parliament from the UK which has not been imported by either Chapter 10 or 11 of the Laws of Zambia. We have carefully considered the record of appeal as well as the written and oral submissions made on behalf of both parties. We shall deal with the grounds of appeal in the order that the appellant's advocate addressed them. With respect to the fourth ground, we note that in deciding whether the contract between the parties was outside the realm of matters upon which foreign states can be sued, the lower court on page 15 of the ruling appealed against looked at Article 31 (1) (c) of the Vienna Convention on Diplomatic Relations which undisputedly applies to Zambia as the Diplomatic Immunities and Privileges Act gives effect to it. Article 31 (1) (c) provides: "1. A diplomatic agent shall enjoy immunity from the Criminal jurisdiction of the Receiving State. He shall also enjoy immunity from its civil and administrative jurisdiction, except in the case of; -J32- c. an action relating to any professional or commercial activity exercised by the diplomatic agent in the receiving state outside his official functions.,, (Underlined for emphasis only) The lower court also considered the definition of the term commercial activity under Black's Law Dictionary 9 th edition at page 38: "An activity, such as operating a business, conducted to make a profit." (Underlined for emphasis) The case of Thai- Europe Tapica Service Limited was also taken into account by the lower court with regard to Lord Denning's pronouncements in relation to state immunity as follows: "A foreign Government which enters into an ordinary commercial transaction with a trader must honour its obligations like other traders and if it Jails to do so, it should be subjected to the same laws and answerable to the same tribunals as they are." The lower court also considered Article 10 of the United Nations Convention on Jurisdictional Immunities of States and Their Property. -J33- We have found it imperative in considering the fourth ground of appeal to comment on the laws relied upon by the lower court; Firstly, Article 31 (1) (c) of the Diplomatic Immunities and Privileges Act pertains to a "diplomatic agent." Blacks Law Dictionary at page 76 defines diplomatic agent as, "A National Representative in one of four categories: (l)Ambassadors, (2) envoys and Minister plenipotentiary (3) Ministers resident accredited to the sovereign, or (4) Charges d' affaires accredited to the Minister of foreign affairs." According to Article 1 of the Vienna Convention, a "diplomatic agent" is the head of the mission or a member of the diplomatic staff of the mission." The respondent herein: The Norwegian Ministry of Foreign Affairs cannot reasonably be described as a "diplomatic agent." Our understanding is that a diplomatic agent is an individual falling in the categories stated in the two definitions given above and not a Ministry or a State. The lower court therefore misdirected itself by relying on Article 31 (1) (c) of the Vienna Convention on Diplomatic Relations as that Section is inapplicable to the matter. -J34- The Europe Tapica Services Limited case is indeed applicable to this case as it relates to state immunity and the respondent herein represents the Norwegian Government "a foreign government." The question therefore is whether the respondent entered into an ordinary commercial transaction with the appellant in order for it to be subjected to the same laws and answerable to the same tribunals as the appellant. It is clear that the contract between the parties was for financial assistance to be rendered to the appellant by the respondent in form of a grant. Black's Law Dictionary at page 325 defines Commercial activity as: "(1). Relating to, or involving the buying and selling of goods mercantile < commercial advertising> (2) Resulting or occurring from commercial or exchange < commercial gains>. (3) Employed in trade engaged in commerce< commercial traders> (4) Manufactured for the markets: put up for trade < commercial products -J35- (5) Relating to, or involving the ability of a trade of a product or business to make a profit<commercial potential> e. t.c." As for commercial activity, the same Dictionary says "see Activity.(1)" Our understanding is that this means commercial activity relates to or involves the buying and selling of goods, mercantile as stated under (1) in the definition of commercial. Taking into account the above definitions of commercial activity and the case of Talaso Lepalat l6 ) on the nature of the transaction between the parties, our position is that the transaction was not commercial. Clause 2 of the contract confirms this, as it clearly provides: "2.1 MFA shall, subject to parliamentary appropriation, make available a financial grant not exceeding NOK 6,000,000 (Norwegian Kroner six million) (the grant to be used exclusively to finance the programme during the planned period 2010- 2011 2.2 Upon completion of the programme, any unutilised funds, including accrued interests, shall be returned to MFA, unless the parties have agreed in writing upon the utilisation of such.funds." As rightly pointed out by the appellant's counsel "commercial activity exception" according to Black's Law Dictionary is " An -J36- exemption from the rule of sovereign immunity permitting a claim against a foreign state to be adjudicated in the courts of another state if the claim arises from private acts undertaken by the foreign state, as opposed to the state's public acts. See restrictive principle of sovereign immunity, jure Gestionis, jure imperil." Counsel for the respondent has referred us to the principles of public international law on the restrictive principle of sovereign immunity as propounded by the authors of the principles of Public International Law (supra). The Kenyan cases of Eugine Lingulu lsalambo v. Darbro Ekvall ,s, and Talaso Lepalat v. Embassy of the Federal Republic of Germany and 2 others '6 , are not binding on us but merely persuasive. However, we accept the position in the Talaso Lepalat case that: "In order to determine whether a transaction is commercial, it is necessary to consider its nature and not its purpose." The Eugine Lingulu lsalambo case relates to immunities of state agents and is therefore inapplicable. -J37- We accept the modalities of the principle of restrictive immunity as elucidated by the authors of the principles of Public International Law supra which are used by among others, governments of numerous states. The principles are useful in resolving the issue of state immunity. The method commonly referred to is the distinction between acts jure imperil (acts of sovereign authority) and actsjure gestonis (acts of private character). The basic criteria appears to be whether the key transaction was based on a private law relationship, such as contract. Another form of this approach is to state that the act is jure gestonis and therefore, not immune, if the transaction can be made by an individual. In the present case, our examination of the contract between the parties leads us to the conclusion that it concerns acts jure gestonis. Therefore, the courts of this country are competent in respect of proceedings concerning legal disputes arising from that contract as they pertain to private law. Furthermore, the contract does not relate to acts of sovereign authority (jure imperi.ij. The case of Rahimtola v. Nizam of Hyderabad and another ,2 , involved commercial activity of a diplomatic agent. Our view is that it is inapplicable to this case -J38- ·- because we are dealing with foreign sovereign state immunity and not the immunity of a diplomatic agent. The case of Congresso Del Partido applies as we totally accept the ratio decidendi and adopt it. We shall not repeat the holding quoted on page 8 of this judgment as it is lengthy. Suffice to say that to require the respondent herein to answer a claim based on such a transaction does not involve a challenge to or inquiry into any act of sovereignty or government act of the state. It poses neither a threat to the dignity of Norway nor any interference with its sovereign actions. We also accept that according to clause 10 .14 of the agreement between the parties dated 10th March 2010, the parties agreed that all disputes arising from the implementation or interpretation of the contract that could not be resolved amicably, be settled in accordance with the Zambian law. The respondent's counsel has argued that the respondent did not waive its immunity to be subjected to the Zambian courts because according to Halsbury's laws of England 4th edition at page 798 paragraph 1555: -J39- "To be effective waiver must take place at the time at which the court is asked to exercise jurisdiction; it cannot be inferred from a previous contract to submit to the courts jurisdiction, or from an agreement to submit to arbitration." This position was buttressed in the case of Thai Europe (7 ) although the issue in that case was of a sovereign independent State entering into a trading contract with a foreigner. In the present case, the respondent's grievance as can be seen from the affidavit in support of summons to set aside originating process for irregularity on pages 26 - 27 of the record of appeal was that the writ of summons and statement of claim were served on the Royal Norwegian Embassy without permission from the Norwegian diplomatic mission or that of any diplomat to enter the premises and perform the purported service. Further that the Norwegian diplomatic mission is inviolable and that the plaintiff ought to have applied to serve court process out of jurisdiction. We are therefore of the considered view that the respondent raised no issue of waiver of state immunity to submit to the jurisdiction of the Zambian courts. It only raised issues of defective commencement of action and service of process. The issue of waiver of state immunity was brought in by the lower court when -J40- dealing with the question whether issuance of court process was under the scope of communication envisaged in the contract. On the facts of this particular case, Clause 10.4 of the contract between the parties' amounts to waiver by the respondent of its immunity from being sued in Zambia. There is no copy of the memorandum of appearance on record, but we can safely assume that it was a conditional memorandum of appearance which enabled the respondent to quickly apply to set aside process for alleged irregularity. Although a conditional memorandum of appearance was entered, it did not entail that there was no waiver of immunity to be sued as the respondent's grievances were that no leave to issue writ for service out of the jurisdiction was obtained and that the process was served at the Royal Norwegian Embassy which is inviolable. The view we take is that this case falls under the exception to the rule of sovereign immunity and commercial activity therefore the appellant is permitted in international law to sue the respondent. The case of Thai Tapiola Services Limited (l) relates to issuance of court process as to entertain a claim against the Foreign Service -J41- for debt or damages. Foreign Service is defined under Black's Law Dictionary as: "1. United States Foreign Service 2. Forensic Service 3. Hist. A feudal service performed by a tenant outside the fee." The view we take is that the respondent herein is not a foreign service and therefore the case of Thai Tapiola Services Limited (l) is inapplicable to the facts of this case. Ground 4 therefore has merit. It is clear from pages 21 - 24 of the record, which are pages 12 and 15 of the ruling respectively, that the lower court referred to Articles 10 and 22 of the United Nations Convention on Jurisdictional Immunities of States and Their Property and on pages RlS and R16 the court clearly acknowledged that Zambia has not ratified the said convention. We must state that the essence of the third ground of appeal as we understand it is that the court erred in law and fact by referring to a Convention which does not apply to Zambia as it is unclear whether Zambia has signed that Convention. -J42- In paragraphs 36 - 40 of the appellants heads of argument, the appellant advanced contentions in relation to the third ground of appeal. We therefore find the respondent's assertion that no arguments were advanced in support of ground 3 to be baseless. There is no premise upon which we could deem ground 3 as abandoned even though the lower court also referred to Article 10 of the said Convention which Article was not mentioned in ground 3 as it appears in the memorandum of appeal. There is no evidence that Zambia is a signatory to the United States Convention on Jurisdiction Immunities of States and Their Property. We therefore take it that the lower court erred when it referred to that Convention because according to the case of the Attorney General v. Roy Clarke, l4 ) courts in this country can take into account international instruments to which Zambia is a signatory. Such instruments are merely of persuasive value, unless they are domesticated in the laws of Zambia. We are of the view that the lower court did not rely on the said United States Convention on Jurisdiction Immunities of States and Their Property as though it has the force of law in Zambia. The lower court did not hold that the Convention applies -J43- to Zambia. For the foregoing reasons, ground 3 partially succeeds in that there was no justification for referring to that Convention. On ground one, we shall firstly consider Article 22 Sub Articles 1 and 2 of the Vienna Convention which provide as follows: "1. The premises of the mission shall be inviolable. The agents of the receiving state may not enter them, except with the consent of the head of the mission." "2. The receiving state is under a special duty to take all appropriate steps to protect the premises of the mission against any intrusion or damages and to prevent any disturbance of the peace of the mission or impairment of its dignity." "3. The Premises of the mission, their furnishings and other property thereon and the means of transport of the mission shall be immune from search, requisition, attachment or execution." It is clear from the above provisions that the premises of a mission such as the Royal Norwegian Embassy in Zambia is inviolable. We cannot accept Mr. Mwarnba's submission that the principle of inviolability of diplomatic mission is only applicable between the receiving state and the foreign state and not to private citizens of the receiving state. That is because the subject provisions relate -J44- to the state and "any other person" as shown under Section 8 Sub Section (2) of the Diplomatic and Privileges Act quoted herein on page J 11 and the first part of Article 22 of the Vienna Convention: "The premises of the mission shall be inviolable." This sentence is general and it applies to the state as well as private citizens. It is also clear that legal process may be served on a consular office with the consent of the consular officer or his nominee, or if that consent is withheld or cannot be obtained, with the consent of the Minister where sections 8 (1) and (2) are applicable. We therefore accept Mr. Mwamba's submission that the inviolability of the mission can be waived. The question is, how can the inviolability of a mission be waived? The appellant has argued that by endorsing Clause 1.1 of the agreement between the parties which says in part that: "All communication to MFA in regard to this Contract shall ... be directed to the Norwegian Embassy in Lusaka," the respondent waived the inviolability of the Royal Norwegian Embassy. According to the appellant's counsel "all communication" includes court process." -J45- ·- On this issue, we place reliance on the Draft Articles on Diplomatic Intercourse and Immunities with Commentaries of the International Law Commission supra cited by the respondent's counsel. As regards the principle of inviolability vis a vis Article 22 of the Vienna Convention, it is clear that service of a writ of summons on a mission is prohibited as it constitutes an infringement of the respect due to the mission. We also accept the statement by Micheal James Langely Hardly in his Book Diplomatic Law referred to by the respondent's counsel, that service of process has traditionally been regarded as in itself an affront to the dignity and respect due to the mission, and therefore forbidden. We accordingly hold that the sole channel for the service of process is through the Ministry of Foreign Affairs under the circumstances of the case. We are also fortified by the authors of the Law of State Immunity that: "The presence of a foreign state's diplomatic mission within the forum territory cannot qualify as legal presence within the jurisdiction for purposes of service of process or submission to proceedings. Service of process is an exercise of sovereignty and to perform such an act in relation to diplomatic mission is contrary to Article 22 of the Vienna Convention on Diplomatic Relations." -J46- The expression "All communication in regard to the contract shall be directed to the Norwegian Embassy in Lusaka" under Clause 1.1 of the subject contract, cannot reasonably be interpreted to cover service of court process as seen from the international laws on inviolability of foreign missions cited by the respondent's counsel. The service of the writ of summons on the premises of the Norwegian Embassy was therefore unacceptable as it was in breach of the inviolability of the Embassy or diplomatic mission. Although the Royal Norwegian Embassy premises formed part of the territory of the receiving state (Zambia), it was improper to serve the court process at the embassy because Order 10 rule 3 of the High Court Act does not relate to service on foreign states or special persons but to the requirement of leave to issue process for service outside jurisdiction. Service on foreign states and diplomats is governed by International law. The case of Radwan v. Radwan f11J clarified the issue of inviolability of diplomatic premises as follows: "Although diplomatic premises were inviolable by the agents of the receiving state, they nevertheless formed part of the territory of that state. -J47- '- " ... But there are two popular myths about diplomats and their immunities which we must clear away: one is that an embassy is foreign territory, and the other is that a diplomat can incur no legal liabilities in the country in which he is servi.ng. The first is a confusion between territory or property and Jurisdiction over it, and it is important to clarify it for it has sometimes arisen over ships and aircraft. The building occugied by a foreign embassy and the land on which it stands are part of the territory of what we call the receiving state: it is therefore under the iurisdiction of that state. But the members of the mission and their activities in the embassy are primarily under the control and Jurisdiction of the sending state. International law avoids conflict between these Jurisdictions by laying down rules to cover the whole field of diplomatic relations. These rules have been embodied in the Vienna Convention 1961, which may be taken as reflecting existing law and practice. This Convention, and that on Consular Relations drawn up in 1963, are among the first steps-we shall meet others on the law of the sea in the successful codification of international law. The gremises of a mission are inviolable, and the local authorities may enter them only with the consent of the head of the mission. But this does not make the gremises foreign territory or take them out of the reach of the local law for many gu,poses: for example, a commercial transaction in an embassy may be governed by the local law." (underlined by the court for emphasis only) -J48- With regard to the second ground of appeal, we totally accept the submission made on behalf of the appellant. The State Immunity Act 1978 is not mentioned in the schedules annexed to the British Acts (Extension) Act and the English law (extension of application Act which schedules indicate the laws applicable to Zambia. We therefore hold the view that the court below erred by relying on the States Immunity Act 1978 as reliance on it was unjustified. The lower court also erred to rely on the case of Kutwait Airways Corporation v. Iraq Airways Company and Others, which interpreted the said Act. For the foregoing reasons, the 2nd ground of appeal has merit and it is upheld. All things considered, the appeal succeeds on grounds 2 and 4 and partially succeeds on ground 3. Ground 1 fails. It is on record that the Royal Norwegian Embassy is no longer operational in Zambia. It is also a notorious fact that the embassy was closed a few months ago. -J49- Commencing court action is one thing, service of court process is another in international law. In this case, service of process was irregular and rightly rejected. On the issuance of court process for service out of jurisdiction, Order 10 Rule 16 of the High Court Act provides in part: "An application for leave to issue for service out of the jurisdiction a writ of summons, originating summons, or originating notice of motion may be made ex- parte to the court or a Judge on deposit of the writ, summons or notice with the registrar together with an affidavit in support of such application." In the present case, the appellant ought to have sought leave to issue the writ for service out of jurisdiction. Lack of such leave renders the writ irregular. It is therefore our resolve that the originating process was improperly issued and we uphold the lower court's decision to set it aside albeit for a different reason. -JSO- ' Under the circumstances, it is only practical that the appellant goes back to the drawing board. We order that each party shall bear its own costs . ................ ~ ........... . F. M. CHISANGA JUDGE PRESIDENT COURT OF APPEAL ........... ~ ..... C. K. MAKUNGU ······················ ..••••....•...• M. M. KONDOLO, SC COURT OF APPEAL JUDGE COURT OF APPEAL JUDGE -JSl-