THE ROYAL EMBASSY OF SAUDI ARABIA (CULTURAL BUREAU) v COSTANTINE [2025] UKSC 9
SUMMARY
The Supreme Court has recently handed down judgment in The Royal Embassy of Saudi Arabia (Cultural Bureau) (Appellant) v Costantine (Respondent) [2025] UKSC 9, providing authoritative guidance on:
FACTUAL AND PROCEDURAL BACKGROUND
The Respondent, Ms Costantine, was an employee of the Royal Embassy of Saudi Arabia (“the Embassy”) from 18 January 2010 until her dismissal on 17 January 2018. Ms Costantine brought, amongst other claims, claims for direct discrimination on grounds of religious belief and harassment related to religious belief contrary to the Equality Act 2010. The Embassy pleaded State immunity pursuant to the State Immunity Act (“SIA”), 1978.
The Employment Tribunal (“ET”) concluded that Ms Costantine’s employment was not an exercise of sovereign authority in that, throughout her employment, her job functions were ancillary and supportive administrative functions. What was important was the practical reality of Ms Costantine’s daily functions (see issues 2 and 3 below). Since Ms Costantine’s employment was not an exercise of sovereign authority, State immunity did not apply.
The Embassy appealed to the Employment Appeal Tribunal (“EAT”), which rejected the Embassy’s appeal on the sift and again after a hearing under Rule 3(10) of the EAT Rules 1993 (SI 1993/2854) (as amended).
The Embassy sought permission to appeal from the Court of Appeal, which was granted. The Embassy filed a skeleton argument but did not attend the hearing, after its solicitors ceased to act due to non-payment of fees and it could not find alternative representation. The Court of Appeal dismissed the Embassy’s appeal for intentional non-appearance. The Embassy
re-instructed its solicitors and applied to the Court of Appeal for permission to appeal to the Supreme Court, which was refused.
The Embassy subsequently applied directly to the Supreme Court for permission to appeal, which was granted in respect of the following issues [§35]:
THE SUPREME COURT’S DECISION
Issue 1: “Was the Court of Appeal under a duty to consider whether State immunity applied in circumstances where the Appellant did not attend the appeal? If so, did it comply with that duty?”
State immunity is a general rule of customary international law established by the practice of States [§36]. If a court exercises jurisdiction over a foreign State which is entitled to immunity, that is a breach of international law [§38].
s1(2) SIA 1978 imposes a positive duty on courts to give effect to State immunity of their own motion, even when the State does not appear in the proceedings (“the s1(2) duty”). It is an obligation of inquiry. In determining whether a defendant is entitled to State immunity under the SIA 1978, the court must inform itself of the circumstances of the case, including the defendant’s status and the nature of the proceedings. [§42]
Similar obligations appear in Article 15 European Convention on State Immunity 1972 (to which the UK is a party) and Article 6 United Nations Convention on Jurisdictional Immunities of States and their Property 2004 (which the UK has signed but not yet ratified). The Supreme Court was also referred to a number of decisions of foreign courts which applied legislation to similar effect. [§41]
Lord Lloyd-Jones (with whom Lord Briggs, Lord Hamblen, Lord Leggatt and Lord Burnett agree) found that the s1(2) duty applies to any tribunal or body exercising judicial functions, including appellate courts, for three reasons:
Further, the duty in s1(2) to give effect to State immunity is capable of overriding procedural breaches by the State. [§47]
As the Court of Appeal knew that State immunity was an issue, it had a positive duty under s1(2) to consider whether to give effect to State immunity, even though the Embassy had failed to attend the hearing. In dismissing the appeal without deciding whether the Embassy was immune, the Court of Appeal failed to apply its s1(2) duty. [§§50-52]
Issues 2 and 3: “Did the ET apply the correct test for the application of State immunity to the facts of this case” and “What is the impact of the Remedial Order on the applicable test”?
Benkharbouche v Embassy of the Republic of Sudan [2017] UKSC 62 [§54-62]
In Benkharbouche, the Supreme Court had found that State immunity was limited to acts by a State in the exercise of sovereign authority, as opposed to acts of a private law character.
Lord Sumption addressed employment cases specifically and explained that in employment cases the categorisation would turn on the nature of the parties’ relationship and the functions the employee performed. The Vienna Convention on Diplomatic Relations divides staff of a diplomatic mission into three categories: (i) diplomatic agents, i.e. the head of mission and the diplomatic staff; (ii) administrative and technical staff; and (iii) staff in the domestic service of the mission.
Benkharbouche concluded that the employment of purely domestic staff of a diplomatic mission was not a sovereign act but an act of a private law character. Consequently, s4(2)(b) and s16(1)(a) SIA 1978, which extended immunity beyond these limits, were incompatible with the Human Rights Act 1998 and disapplied for inconsistency with the EU Charter, in so far as they applied to claims derived from EU law.
On 2 February 2023, the Secretary of State passed a Remedial Order, amending the SIA 1978, to reflect the decision of the Supreme Court in Benkharbouche. It came into force on 23 February 2023 and applies to proceedings with causes of action arising on or after 18 October 2017. Some of Ms Constantine’s claims were likely to have accrued before this change in the law and some after. Nevertheless, the parties agreed that Ms Costantine remained entitled to rely on the EU Charter. The Supreme Court proceeded on that basis. Therefore, the case fell to be decided by the application of the Benkharbouche principles and the rules stated in the Remedial Order, which are to the same effect [§§63-69].
Application
While Benkharbouche concerned the employment of domestic staff of a diplomatic mission, Ms Costantine was a member of the administrative staff of the mission. Therefore, in order to determine whether the employment of technical and administrative staff of a diplomatic mission was a sovereign activity requiring immunity in international law, s16(1)(aa) SIA 1978 (as amended) and the principles stated in Benkharbouche applied. [§70]
First, it is necessary to consider whether the State entered into the contract of employment in the exercise of sovereign authority. This requires an examination of the nature of the relationship between the parties to the contract of employment and the functions which the employee is employed to perform. If the employee’s role is sufficiently closely connected to governmental or sovereign functions, their employment will be an exercise of sovereign authority, albeit the role is also ancillary and supportive.
Ms Costantine’s functions were not sufficiently closely connected to the Embassy’s governmental functions. During the period of her employment, she undertook three roles. First, as a Post Room Clerk. This was in essence a data entry role, which did not involve consideration or analysis of documents. Although she had access to wide-ranging confidential information, she was unaware of and did not use that access. Second, as a Secretary to the Head of the Cultural Affairs Department, Dr Nassir, undertaking administrative functions. She did not have access to Dr Nassir’s diary and performed only basic secretarial tasks. Third, again as a Post Room Clerk, undertaking little work until the conclusion of her employment.
The Supreme Court held, relying on these findings of fact, that the ET had not made an error of law. It had comprehensively analysed the proximity of Ms Costantine’s duties to the Embassy’s governmental functions and was entitled to conclude that these duties were not sufficiently close [§§72-74].
Second, even if the contract of employment itself was not entered into in the exercise of sovereign authority, immunity may be required because the State engaged in the conduct complained of in the exercise of sovereign authority. Examples include dismissal for reasons of State security or challenges to the State’s recruitment policy. A claim for reinstatement would also be defeated by immunity as it would be an intrusion into the internal affairs of the mission to require reinstatement [§§57-58].
The Embassy contended that the Ms Costantine’s complaints concerned and would require investigation into sovereign decisions, including why she was not given any further work in her third role as a Post Room Clerk and the reasons for terminating her employment. The Supreme Court found that there had been no suggestion that the Ms Costantine’s dismissal was connected with sovereign matters, and she was not seeking reinstatement [§§75-76].
The appeal was dismissed under both heads.
COMMENT
The Supreme Court has made absolutely clear that where State immunity is in issue, courts (including appellate divisions) and tribunals must comply with their s1(2) duty, whether the State appears in the proceedings or not.
In addition, the s1(2) duty is of such importance that it “must be capable of overriding procedural rules” [§47]. To this end, the Supreme Court (applying its own s1(2) duty), permitted the Embassy to raise a new argument on appeal, which had not been raised below [§75].
It is notable that even if a State breaches procedural rules, this is not an obstacle to a State immunity argument. There is no general limitation of the s1(2) duty, even if there have been serious, prolonged procedural defaults by a State. [§49]
However, there may be exceptional circumstances where a State has been given every opportunity to put before the court its case and evidence on State immunity (which would have allowed that issue to be further considered) and has chosen not to do so. In such a case there may be no continuing obligation under s1(2) to consider whether there was an entitlement to immunity (e.g., Zhongshan Fucheng Industrial Investment Co Ltd v Federal Republic of Nigeria [2022] EWHC 3286 (Comm)). [§49]
PRACTICAL TAKEAWAYS
Littleton’s Mohinderpal Sethi KC, Joel Wallace and Bláthnaid Breslin appeared on behalf of the Appellant, instructed by Reynolds Porter Chamberlain LLP.
Mia Chaudhuri-Julyan and Bianca Balmelli
March 2025
