The UK Supreme Court has handed down judgment in The Royal Embassy of Saudi Arabia v Costantine [2025] UKSC 9. For the first time, the Supreme Court has provided binding guidance on (i) the duty on all courts and tribunals to determine the issue of state immunity of their own motion, (ii) the correct test for determining state immunity to employment claims brought by a foreign state’s administrative employees, and (iii) the effect of the State Immunity Act 1978 (Remedial) Order (SI 2023/112).
The Kingdom of Saudia Arabia succeeded in establishing that section 1(2) of the State Immunity Act 1978 imposes a duty on all courts (including all appellate courts) to inquire and determine whether state immunity applies of their own initiative, even if the state does not appear in the proceedings. This duty ensures that a domestic court does not wrongly exercise jurisdiction over a foreign state in breach of international law.
The Supreme Court also clarified how the test in Benkharbouche v Embassy of the Republic of Sudan [2017] UKSC 62, [2019] AC 777, should be applied when determining whether a state is immune from claims brought by administrative and technical employees of a foreign mission. It is necessary to determine: first, whether the state entered into the contract of employment in the exercise of sovereign authority; and secondly, whether the state engaged in the conduct complained of in the exercise of sovereign authority. In particular, the Supreme Court confirmed that the employee’s role and the governmental functions must be identified in order to determine whether the employee was “sufficiently closely connected” to the governmental functions.
Finally, the Supreme Court held that the State Immunity Act 1978 (Remedial) Order (SI 2023/112) amended the State Immunity Act 1978, s 16 so as to codify the Benkharbouche test and to apply that test to all claims in which the cause of action arises on or after 18 October 2017.
Mohinderpal Sethi KC, Joel Wallace and Bláthnaid Breslin appeared on behalf of the Kingdom of Saudi Arabia, instructed by Reynolds Porter Chamberlain LLP.
Mohinderpal Sethi K.C. specialises in domestic, international and offshore business protection, employment, partnership and sport litigation and arbitration. He is a Top-Ranked Silk in Chambers (UK and Global) and Legal 500 (UK, EMEA and Caribbean). For two years in a row he was the Senior Counsel of the Year (International Employment Lawyer Awards 2023 and 2024). He is also the Employment Silk of the Year (Legal 500 Bar Awards 2023) and Civil Lawyer of the Year (Asian Legal Awards 2022). He is the immediate past Chair of the UK’s Employment Law Bar Association and is currently Co-Head of the Middle East Group.
Joel Wallace is ranked in both sports and employment law. He acts across the full range of both disciplines, including arbitration, commercial and contract disputes, business protection, misconduct, doping, whistleblowing, and discrimination. These cases frequently receive press attention. His clients include football clubs, regulators, agents, stock brokerages, consultancy firms and educational institutions.
Bláthnaid Breslin specialises in commercial law and employment cases that raise issues of diplomatic and state immunity and business protection. Bláthnaid also appeared before the Supreme Court in Basfar v Wong [2023] AC 33 (led by Mohinderpal Sethi KC and Sophia Berry) a leading case on diplomatic immunity.
