Points of law

The Supreme Court points out that immunity can be invoked only in disputes relating to sovereign acts as such, but not in disputes concerning matters of a commercial nature; and furthermore the Court establishes criteria for such a categorisation finding that the practical solution is to make an assessment in each particular case of the circumstances that support one position or the other.

Summary of the case

The Local Authority of Västerås had given flight-technician education to Icelandic students according to a contract between the Local Authority and the Icelandic Ministry of Education and Culture. In the contract a reference was made to a Nordic agreement on common education. After having given the education, the Local Authority sued the Republic of Iceland claiming that Iceland had to defray costs for the students according to the above mentioned contract. The Republic of Iceland claimed immunity.

The Västerås District Court found that the contract between the parties had a public-law character, which indicated that the dispute concerned a public act. Therefore, Iceland enjoyed immunity. The Svea Court of Appeal affirmed the ruling of the District Court whereupon the Local Authority appealed to the Supreme Court.

Initially, the Supreme Court pointed out that it is a general principle of international law that an independent state cannot be compelled to appear as a party before a court of another state, or be subject to a compulsory action by the authorities of that state. The Court also noted that this immunity has long been recognised in Swedish law although it has also been presumed that there may be cases in which immunity could be denied. According to the Court immunity can only be invoked in disputes relating to sovereign acts as such, but not in disputes concerning matters of a commercial or private-law nature. Furthermore, the Court commented that in establishing criteria for such a categorisation of states' acts it is disputed whether the criteria should be the form and nature of the act or the purpose of the state with the act. The Court found that it would be difficult to formulate a distinction that is applicable in all circumstances and that it in this regard was equally difficult to speak of an established practice of states. The Court concluded that the practical solution was to make an assessment in each particular case of the circumstances that support one position or the other.

In the case before it, the Supreme Court noted that the contract between the parties concerned a subject that is typically of a public-law nature, and that it had also been regulated by an intergovernmental agreement mentioned in the contract. Therefore, the Court established that Iceland's act of concluding a contract with the Local Authority had to be considered as a sovereign act that gave Iceland the right to invoke immunity.

Finally, the Court found that Iceland had not waived its immunity in spite of the contract's choice-of-law clause, which selected Swedish law. The Court was of the view that the clause did not constitute an unequivocal declaration of willingness on behalf of Iceland to subject itself to the jurisdiction of the Swedish courts with respect to disputes under the contract. The Supreme Court left the appeal without assent.

Sources

- Nytt Juridiskt Arkiv 1987, Avd I, Case No. 1999:112
- Mahmoudi Said, “Local Authority of Västerås v. Republic of Iceland”, American Journal of International Law, 2001, Vol. 95 No. 1, pp. 192-197

Additional information (explanations, notes, etc.)

- Supreme Court decision 21 December 1972 (Nytt Juridiskt Arkiv 1972, Avd. I, Case No. 1972c434)
- Labour Court decision 16 November 2001 (Arbetsdomstolens domar 2001, Case No. AD 2001 Nr. 96)