Ordinance VI of 1981 · 10 pages
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THE STATE IMMUNITY ORDINANCE, 1981
CONTENTS
1. Short title, extent and commencement.
2. Interpretation.
IMMUNITY FROM JURISDICTION
3. General immunity from jurisdiction
EXCEPTIONS FROM IMMUNITY
4. Submission to jurisdiction.
5. Commercial transactions and contracts to be performed in Pakistan.
6. Contracts of employment.
7. Ownership, possession and use of property.
8. Patents, trade marks, etc.
9. Membership of bodies corporate, etc.
10. Arbitrations.
11. Ships used for commercial purposes.
12. Value added tax, customs-duties, etc.
PROCEDURE
13. Service of process and judgment in default of appearance.
14. Other procedural privileges.
SUPPLEMENTARY PROVISIONS
15. States entitled to immunities and privileges.
16. Restriction and extension of immunities and privileges.
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17. Savings, etc.
18. Proof as to certain matters.
19. Repeal.
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THE STATE IMMUNITY ORDINANCE, 1981
ORDINANCE VI OF 1981
[11th March, 1981]
An Ordinance to amend and consolidate the law relating to the immunity of States from the
jurisdiction of Courts.
WHEREAS it is expedient to amend and consolidate the law relating to the immunity of
States from the jurisdiction of Courts;
AND WHEREAS the President is satisfied that circumstances exist which render it
necessary to take immediate action;
NOW, THEREFORE, in pursuance of the Proclamation of the fifth day of July, 1977, read
with the Laws (Continuance in Force) Order, 1977 (C. M. L. A. Order No. 1 of 1977), and in
exercise of all powers enabling him in that behalf, the President is pleased to make and promulgate
the following Ordinance :___
1. Short title, extent and commencement.⸻(1) This Ordinance may be called the State
Immunity Ordinance, 1981.
(2) It extends to the whole of Pakistan.
(3) It shall come into force at once.
2. Interpretation.___ In this Ordinance, “Court” includes any tribunal or body exercising
judicial functions.
IMMUNITY FROM JURISDICTION
3. General immunity from jurisdiction.___ (1) A State is immune from the jurisdiction of
the Courts of Pakistan except as hereinafter provided.
(2) A Court shall give effect to the immunity conferred by sub-section (1) even if the State
does not appear in the proceedings in question.
EXCEPTIONS FROM IMMUNITY
4. Submission to jurisdiction.___(1) A State is not immune as respects proceedings in
respect of which it has submitted to jurisdiction.
(2) A State may submit to jurisdiction after the dispute giving rise to the proceedings has
arisen or by a prior agreement; but a provision in any agreement that it is to be governed by the law
of Pakistan shall not be deemed to be a submission.
Explanation.___ In this sub-section and in sub-section (3) of section 14, “agreement” includes
a treaty, convention or other international agreement.
(3) A State shall be deemed to have submitted ___
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(a) if it has instituted the proceedings; or
(b) subject to sub-section (4) it has intervened or taken any step in the
proceedings.
(4) Clause (b) of sub-section (3) does not apply—
(a) to intervention or any step taken for the purpose only of-
(i) claiming immunity; or
(ii) asserting an interest in property in circumstances such that the State
would have been entitled to immunity if the proceedings had been
brought against it; or
(b) to any step taken by the State in ignorance of the facts entitling it to immunity
if those facts could not reasonably have been ascertained and immunity is
claimed as soon as reasonably practicable.
(5) A submission in respect of any proceedings extends to any appears but not to any counter
claim unless it arises out of the same legal relationship or facts as the claim.
(6) The head of a State’s diplomatic mission in Pakistan, or the person for the time being
performing his functions, shall be deemed to have authority to submit on behalf of the State in
respect of any proceedings; and any person who has entered into a contract on behalf of and with the
authority of a State shall be deemed to have authority to submit on its behalf in respect of pro-
ceedings arising out of the contract.
5. Commercial transactions and contracts to be performed in Pakistan.___ (1) A State is
not immune as respects proceedings relating to___
(a) a commercial transaction entered into by the State; or
(b) an obligation of the State which by virtue of a contract, which may or may not
be a commercial transaction, falls to be performed wholly or partly in
Pakistan.
(2) Sub-section (1) does not apply to a contract of employment between a State and an
individual or if the parties to the dispute are States or have otherwise agreed in writing; and clause
(b) of that subsection does not apply if the contract, not being a commercial transaction, was made in
the territory of the State concerned and the obligation in question is governed by its administrative
law.
(3) In this section “commercial transaction” means___
(a) any contract for the supply of goods or services;
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(b) any loan or other transaction for the provision of finance and any guarantee or
indemnity in respect of any such transaction or of any other financial
obligation; and
(c) any other transaction or activity, whether of a commercial, industrial financial,
professional or other similar character, into which a State enters or in which it
engages otherwise than in the exercise of its sovereign authority.
6. Contracts of employment.___(1) A State is not immune as respects proceedings relating to
a contract of employment between a State and an individual where the contract was made, or the
work is to be wholly or partly performed in Pakistan;
Explanation.___ In this subsection, “proceedings relating to a contract of employment”
includes proceedings between the parties to such a contract in respect of any statutory rights or
duties to which they are entitled or subject as employer or employee.
(2) Subject to sub-sections (3) and (4), sub-section (1) does not apply if___
(a) at the time when the proceedings are brought the individual is a national of the
State concerned; or
(b) at the time when the contract was made the individual was neither a citizen of
Pakistan nor habitually resident in Pakistan; or
(c) the parties to the contract have otherwise agreed in writing.
(3) Where the work is for an office, agency or establishment maintained by the State in
Pakistan for commercial purposes, clauses (a) and (b) of sub-section (2) do not exclude the
application of sub-section (1) unless the individual was, at the time when the contract was made,
habitually resident in that State.
(4) Clause (c) of sub-section (2) does not exclude the application of sub-section (1) where the
law of Pakistan requires the proceedings to be brought before a Court in Pakistan.
7. Ownership, possession and use of property.___(1) A State is not immune as respects
proceedings relating to___
(a) any interest of the State in, or its possession or use of, immovable property in
Pakistan; or
(b) any obligation of the State arising out of its interest in, or its possession or use
of, any such property.
(2) A State is not immune as respects proceedings relating to any interest of the State in
movable or immovable property, being an interest arising by way of succession, gift or bona
vacantia.
(3) The fact that a State has or claims an interest in any property shall not preclude any Court
from exercising in respect of such property any Jurisdiction relating to the estates of deceased
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persons or persons of unsound mind or to insolvency, the winding up of companies or the
administration of trusts.
(4) A Court may entertain proceedings against a person other than a State notwithstanding
that the proceedings relate to property___
(a) which is in the possession of a State; or
(b) in which a State claims an interest, if the State would not have been immune
had the proceedings been brought against it or, in a case referred to in clause
(b), if the claim is neither admitted nor supported by prima facie evidence.
8. Patents, trade marks, etc. A State is not immune as respects proceedings relating to___
(a) any patent, trade mark, design or plant breeders’ rights belonging to State
which are registered or protected in Pakistan or for which the state has applied
in Pakistan;
(b) an alleged infringement by the State in Pakistan of any patent, trade mark,
design, plant breeders’ rights or copyrights ; or
(c) the right to use a trade or business name in Pakistan.
9. Membership of bodies corporate, etc.___(1) A State is not immune as respects
proceedings relating to its membership of a body corporate, an unincorporated body or a partnership
which___
(a) has members other than States; and
(b) is incorporated or constituted under the law of Pakistan or is controlled from,
or has its principal place of business in, Pakistan, being proceedings arising
between the State and the body or its other members or, as the case may be,
between the State and the other partners.
(2) Sub-section (1) does not apply if provision to the contrary has been made by an
agreement in writing between the parties to the dispute or by the constitution or other instrument
establishing or regulating the body or partnership in question.
10. Arbitrations.___(1) Where a State has agreed in writing to submit a dispute which has
arisen, or may arise, to arbitration, the State is not immune as respects proceedings in the courts of
Pakistan which relate to the arbitration.
(2) Sub-section (1) has effect subject to the provisions of the arbitration agreement and does
not apply to an arbitration agreement between States.
11. Ships used for commercial purposes.___ (1) The succeeding provisions of this section
apply to___
(a) Admiralty proceedings; and
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(b) proceedings on any claim which could be made the subject of Admiralty
proceedings.
(2) A State is not immune as respects___
(a) an action in rem against a ship belonging to it; or
(b) an action in personam for enforcing a claim in connection with such a ship;
if, at the time when the cause of action arose, the ship was in use or intended
for use for commercial purposes.
(3) Where an action in rem is brought against a ship belonging to a State for enforcing a
claim in connection with another ship belonging to that State, clause (a) of sub-section (2) does not
apply as respects the first-mentioned ship unless, at the time when the cause of action relating to the
other ship arose, both ships were in use or intended for use for commercial purposes.
(4) A State is not immune as respects,___
(a) an action in rem against a cargo belonging to that State if both the cargo and
the ship carrying it were, at the time when the cause of action arose, in use or
intended for use for commercial purposes; .or
(b) an action in personam for enforcing a claim in connection with such a cargo if
the ship carrying it was then in use or intended for use as aforesaid.
(5) in the foregoing provisions references to a ship or cargo belonging to a State include
references to a ship or cargo in its possession or control or in which it claims an interest; and, subject
to sub-section (4), sub-section (2) applies to property other than a ship as it applies to a ship.
(6) Sections 5 and 6 do not apply to proceedings of the nature mentioned in sub-section
(1) if the State in question is a party to the Brussels Convention and the claim relates to the operation
of a ship owned or operated by that State, the carriage of cargo or passengers on any such ship or the
carriage of cargo owned by that State on any other ship.
Explanation.___ In this section, “Brussels Convention” means the International Convention
for the Unification of Certain Rules Concerning the Immunity of State-owned Ships signed in
Brussels on the tenth day of April 1926, and “ship” includes hovercraft.
12. Value added tax, customs-duties, etc. A State is not immune as respects proceedings
relating to its liability for___
(a) value added tax, any duty of customs or excise or any agricultural levy; or
(b) rates in respect of premises occupied by it for commercial purposes.
PROCEDURE
13. Service of process and judgment in default of appearance.___ (1) Any notice or other
document required to be served for instituting proceedings against a State shall be served by being
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transmitted through the Ministry of Foreign Affairs or Pakistan to the Ministry of Foreign Affairs of
the State and service shall be deemed to have been effected when the notice or document is received
at the latter Ministry.
(2) Any proceedings in Court shall not commence earlier than two months after the date on
which the notice or document is received as aforesaid.
(3) A State which appears in proceedings cannot thereafter object that sub-section (1) has not
been complied with as respects those proceedings.
(4) No judgment in default of appearance shall be given against a State except on proof that
sub-section (1) has been complied with and that the time for the commencement of proceedings
specified in sub-section (2) has elapsed.
(5) A copy of any judgment given against a State in default of' appearance shall be
transmitted through the Ministry of Foreign Affairs of Pakistan to the Ministry of Foreign Affairs of
the State and the time for applying to have the judgment set aside shall begin to run two months after
the date on which the copy of the judgment is received at the latter Ministry.
(6) Sub-section (1) does not prevent the service of a notice or other document in any manner
to which the State agreed and sub-sections (2) and (4) do dot apply where service is effected in any
such manner.
(7) The preceding provisions of this section shall not be construed as applying to proceedings
against the State by way of a counter-claim or to an action in rem.
14. Other procedural privileges.___(1) No penalty by way of committal to prison or fine
shall be imposed in respect of any failure or refusal by or on behalf of a State to disclose or produce
any document or information for the purposes of proceedings to which it is a party.
(2) Subject to sub-sections (3) and (4), ___
(a) relief shall not be given against a State by way of injunction or order for
specific performance or for the recovery of land or other property; and
(b) the property of a State, not being property which is for the time being in use or
intended for use for commercial purposes, shall not be subject to any process
for the enforcement of a judgment or arbitration award or, in an action in rem,
for its arrest, detention or sale.
(3) Sub-section (2) does not prevent the giving of any relief or the issue of any process with
the written consent of the State concerned ; and any such consent, which may be contained in a prior
agreement, may be expressed so as to apply to a limited extent or generally:
Provided that a provision merely submitting to the jurisdiction of the courts shall not be
deemed to be a consent for the purposes of this sub-section.
(4) The head of a State’s diplomatic mission in Pakistan, or the person for the time being
performing his functions, shall be deemed to have authority to give on behalf of the State any such
consent as is mentioned in sub-section (3) and, for the purposes of clause (b) of sub-section (2), his
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certificate that any property is not in use or intended for use by or on behalf of the State for
commercial purposes shall be accepted as sufficient evidence of that fact unless the contrary is
proved.
SUPPLEMENTARY PROVISIONS
15. States entitled to immunities and privileges.___(1) The immunities and privileges
conferred by this Act apply to any foreign State; and references to State include references to___
(a) the sovereign or other head of that State in his public capacity;
(b) the government of that State; and
(c) any department of that government, but not to any entity, hereinafter referred
to as a “separate entity”, which is distinct from the executive organs of the
government of the State and capable of suing or being sued.
(2) A separate entity is immune from the jurisdiction of the courts of Pakistan if, and only
if___
(a) the proceedings relate to anything done by it in the exercise of sovereign
authority; and
(b) the circumstances are such that a State would have been so immune.
(3) If a separate entity, not being a State’s central bank or other monetary authority, submits
to the jurisdiction in respect of proceedings in the case of which it is entitled to immunity by virtue
of sub-section (2) of this section, the provisions of sub-sections (1) to (3) of section 14 shall apply to
it in respect of those proceedings as if reference to a State were references to that entity.
(4) Property of a State’s central bank or other monetary authority shall not be regarded for
the purposes of sub-section (3) of section 14 as in use or intended for use for commercial purposes;
and where any such bank or authority is a separate entity sub-sections (1) and (2) of that section shall
apply to it as if references to a State were references to the bank or authority.
(5) Section 13 applies to proceedings against the constituent territories of a Federal State; and
the Federal Government may, by notification in the official Gazette, provide for the other provisions
of this Ordinance to apply by to any such constituent territory specified in the notification as they
apply to a State.
(6) Where the provisions of this Ordinance do not apply to a constituent territory by virtue of
a notification under sub-section (5), the provisions of sub-sections (2) and (3) shall apply to it as if it
were a separate entity.
16. Restriction and extension of immunities and privileges.___(1) If it appears to the
Federal Government that the immunities and privileges conferred by this Ordinance in relation to
any State___
(a) exceed those accorded by the law of that State in relation to Pakistan; or
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(b) are less than those required by any treaty, conventional or other international
agreement to which that State and Pakistan are parties, the Federal
Government may, by notification in the official Gazette, provide for
restricting or, as the case may be, extending those immunities and privileges
to such extent as it may deem fit.
17. Savings, etc.___(1) This Ordinance does not affect any immunity or privilege conferred
by the Diplomatic and Consular Privileges Act, 1972 (1X of 1972); and—
(a) section 6 does not apply to proceedings concerning the employment of the
members of a mission within the meaning of the Convention set out in the
First Schedule to the said Act of 1972 or of the members of a consular post
within the meaning of the Convention set out in the Second Schedule to that
Act;
(b) sub-section (1) of section 7 does not apply to proceedings concerning a State’s
title to, or its possession of, property used for the purposes of a diplomatic
mission.
(2) This Ordinance does not apply to___
(a) proceedings relating to anything done by or in relation to the armed forces of a
State while present in Pakistan;
(b) criminal proceedings; or
(c) proceedings relating to taxation other than those mentioned in section 12.
18. Proof as to certain matters.___A certificate under the hand of a Secretary to the
Government of Pakistan shall be conclusive evidence on any question___
(a) whether any country is a State for the purposes of this Ordinance, whether any
territory is a constituent territory of a Federal State for those purposes or as to
the person or persons to be regarded for those purposes as the head or
Government of a State; or
(b) whether, and if so when, a document has been served or received as
mentioned in sub-section (1) or sub-section (5) of section 13.
19. Repeal.___ Sections 86 and 87 of the Code of Civil Procedure, 1908. (Act V of 1908) are
hereby repealed.
__________
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Source: Pakistan Code, Ministry of Law and Justice (pakistancode.gov.pk). Text on this page is reproduced verbatim from the official PDF and is provided for reference only. For the authoritative version, always consult the source document or a current reported edition.
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