Foreign States Immunities Act 1985

The Act primarily affects three classes of actor.

First, foreign States themselves, defined in s 3(1) as independent sovereign states or separate self-governing territories outside Australia. By operation of s 3(3), the term includes provinces, the head of state in public capacity, and executive departments or organs, but excludes separate entities. A foreign State enjoys the general immunity in s 9, the execution immunity in s 30, and the procedural protections in Part III.

Second, separate entities of foreign States. These are agencies or instrumentalities that are not departments or organs of the executive government (s 3(1)). Section 22 applies most of Part II to them, with the important qualification that the inter-state agreement exception in s 11(2)(a)(i) and the membership exception in s 16(1)(a) do not apply. Part IV execution rules apply to a separate entity only if it is a central bank or monetary authority, or if it would have been immune but for a submission under s 10 (s 35). Service, judgment and set-aside rules in Part III apply to them with minor modifications (ss 26A, 27, 28).

Third, private litigants, Australian governments and courts. Any person or entity wishing to sue a foreign State or its agency in an Australian court must comply with the service rules in ss 23–25 and satisfy the court that an exception to immunity applies before default or final judgment can be entered. Courts are required to refuse ex parte judgments against foreign States (s 26A), to set aside inconsistent process (s 38), and to refrain from imposing fines or committal for non-compliance with orders or discovery (ss 34, 39). The Minister for Foreign Affairs and the head of a foreign State’s diplomatic mission in Australia exercise important certification and waiver powers (ss 40, 41, 10(11), 31(5)). The Act binds the Commonwealth and the States (s 5) and applies to all Australian courts, including tribunals exercising judicial or quasi-judicial functions (s 3(1) definition of “court”, s 8).

The Act therefore simultaneously constrains Australian courts, protects foreign sovereigns, and gives Australian plaintiffs and commercial counterparties a predictable route to relief where the State has descended into the marketplace or caused harm within Australian territory.

The Act creates few positive duties but confers and denies important rights.

Foreign States have the right to immunity from jurisdiction (s 9) and from execution (s 30) except where the Act expressly removes it. They have the right to insist on diplomatic service (s 24), to two months’ grace before default judgment enforcement (s 28), and to have any inconsistent judgment or process set aside (s 38). A foreign State may submit to jurisdiction (s 10) or waive execution immunity (s 31) and may do so with limitations. Heads of State enjoy extended diplomatic privileges in their private capacity (s 36). Certificates issued under ss 40 and 41 are powerful evidentiary tools.

Separate entities enjoy similar but narrower rights. They may rely on the commercial-transaction exception only where the proceeding is not solely between foreign States or the Commonwealth and foreign States (s 22 read with s 11(2)(a)(i)). Central banks receive the full execution immunity regime (s 35(1)).

Plaintiffs have the right to bring proceedings in the exceptions listed in Part II, to serve by agreement or diplomatic channel, and to enforce judgments against commercial property (s 32), immovable property or gifted property where a s 14 right has been established (s 33), or property linked to state terrorism (s 33A). They are entitled to interim and final relief provided it is not inconsistent with remaining immunity (s 29(1)), but cannot obtain orders for specific performance of employment contracts (s 29(2)).

Courts have a duty to refuse jurisdiction where immunity has not been displaced, to refuse ex parte or default judgments unless the statutory preconditions are met (ss 26A, 27), to refrain from fining or committing a foreign State for non-compliance (ss 34, 39), and to set aside inconsistent process (s 38). They must treat Ministerial certificates as conclusive (s 40(5)) and diplomatic-use certificates as prima facie evidence (s 41).

The Act therefore reallocates rights away from an assumed absolute immunity toward a structured, exception-based regime while imposing procedural discipline on all participants.

The Act is notable for what it prohibits rather than what it punishes. Sections 34 and 39 expressly forbid the imposition of fines or committal for a foreign State’s failure to comply with court orders or to give discovery. This reflects the sovereign-equality principle: a foreign State cannot be coerced by contempt sanctions.

Enforcement against a foreign State therefore occurs only through the civil mechanisms in Part IV. Once a judgment has been obtained in a non-immune proceeding, execution may be had against commercial property (s 32), against property the subject of a s 14 judgment (s 33), or against any property where the underlying proceeding concerns state terrorism (s 33A). Admiralty arrest, detention or sale of commercial ships and cargo is permitted in defined circumstances (s 32(2)). Diplomatic property and military property remain absolutely protected unless an express waiver designating the specific property has been given (s 31(4)).

Default judgments and registration orders cannot be enforced until two months after diplomatic service of the sealed judgment (s 28(1)), although a court may shorten this period on terms (s 28(6)). The two-month period also applies to the time for applying to set the judgment aside (s 28(5)).

Because contempt sanctions are unavailable, the practical enforcement leverage against a recalcitrant foreign State is limited to attachment of commercial assets located in Australia. This explains the detailed definitions of “commercial property”, “diplomatic property” and “military property” in s 3(1) and the rebuttable presumption in s 32(3)(b) that vacant property is commercial.

The Act is expressly not a complete code. Section 6 preserves immunities conferred by the Consular Privileges and Immunities Act 1972, the Defence (Visiting Forces) Act 1963, the Diplomatic Privileges and Immunities Act 1967 and any other Act. Section 36 extends the Diplomatic Privileges and Immunities Act 1967 (with modifications) to heads of foreign States and their spouses in their personal capacity, while preserving taxation laws and the operation of the present Act in public-capacity matters.

The definition of “foreign award” in s 3(1) picks up Parts II and IV of the International Arbitration Act 1974, so that enforcement of arbitral awards against foreign States is governed by both statutes. “Foreign judgment” is defined by reference to Part 2 of the Foreign Judgments Act 1991; registration of such judgments is subject to the immunity and procedural constraints in the present Act (ss 26A, 27, 28).

Section 13A removes immunity “in so far as the proceeding concerns state terrorism”, importing the definitions of “state terrorist act”, “state sponsor of terrorism” and membership from the Criminal Code. This creates a direct interface between criminal-law concepts and civil jurisdiction.

Section 42 authorises regulations to modify the Act’s immunities to match reciprocal treatment or treaty obligations. Section 42A permits regulations to exclude or modify the operation of the personal-injury exception (s 13) where a foreign State is providing emergency assistance in Australia. These regulation-making powers therefore allow executive adjustment of the statutory balance.

The Act binds the Crown in all capacities (s 5) and applies to courts exercising judicial or like functions (s 8). It does not affect prosecutions (definition of “proceeding” in s 3(1)) and contains transitional rules excluding pre-commencement transactions from most of Part II (s 7).

The most significant recent changes were the insertion of ss 13A and 33A by the Foreign States Immunities Amendment (State Terrorism) Act 2023 and the addition of s 42A by the Foreign States Immunities Amendment (Emergency Management) Act 2023.

Section 13A provides that a foreign State is not immune in a proceeding in so far as it concerns “state terrorism”. Section 33A removes the execution immunity in s 30 for judgments, orders and awards arising from such proceedings and for Admiralty arrest of related property. These amendments were enacted to ensure that victims of state-sponsored terrorism could pursue civil remedies in Australian courts without the barrier of sovereign immunity. The definitions in s 3(1) deliberately tie the exception to the Criminal Code, ensuring consistency between Australia’s counter-terrorism criminal law and civil accountability.

Section 42A empowers the Governor-General to make regulations excluding or modifying the s 13 personal-injury exception where a foreign State is providing emergency or disaster assistance to Australian governments. The provision reflects lessons from international disaster-relief operations in which foreign states or their agencies expressed concern that ordinary tort liability might deter rapid deployment of assistance. The note to s 42A makes clear that s 22 already extends the operation of s 13 (and therefore the potential modification) to separate entities.

These amendments illustrate the Act’s ongoing adaptation: the terrorism exceptions enlarge the categories of conduct that override immunity, while the emergency-management power allows calibrated re-extension of immunity to serve contemporary foreign-policy and humanitarian objectives.

Because the statute is relatively recent and contains self-contained procedural safeguards, reported litigation has largely turned on the scope of the exceptions rather than constitutional validity. Disputes frequently centre on whether a transaction is “commercial” within s 11(3), whether employment falls inside or outside the exceptions in s 12(3)–(6), and whether property is “commercial property” for execution purposes under s 32.

Certificates under s 40 (status of a foreign State) and s 41 (use of property) have been challenged on natural-justice or Wednesbury grounds, but the conclusive nature of a s 40 certificate has generally been respected. The interaction between the Act and the International Arbitration Act 1974 has produced controversy in enforcement of awards, particularly where a foreign State argues that an arbitration clause does not constitute a submission under s 10 or that the supervisory jurisdiction in s 17(1) is limited.

The introduction of the state-terrorism exceptions has raised questions about retrospectivity, the proper characterisation of “proceeding concerns state terrorism”, and potential conflicts with executive determinations of foreign policy. Section 42 regulation-making power has also been scrutinised for its capacity to alter rights in pending proceedings. No court has yet struck down regulations made under s 42 or s 42A, but the breadth of the power remains a live doctrinal issue.

Most practitioners assume that once a foreign State loses on jurisdiction it loses on execution. That is incorrect. The execution immunity in s 30 is separate and survives unless one of the narrow Part IV exceptions is satisfied. A plaintiff who obtains a commercial-transaction judgment under s 11 may still be unable to execute against embassy bank accounts or military spares because they constitute diplomatic or military property.

Another common error is believing that a foreign State’s entry into an arbitration agreement automatically waives both jurisdictional and execution immunity. Section 17 removes jurisdictional immunity for supervisory and enforcement proceedings only “subject to any inconsistent provision in the agreement”. Execution immunity is waived only by an express agreement under s 31 that satisfies the designation requirement for diplomatic or military assets.

The two-month enforcement moratorium in s 28(1) is often overlooked. Even after a default judgment has been regularly entered, no steps to enforce against the foreign State may be taken until two months after diplomatic service of the sealed judgment. Courts have no general discretion to abridge that period except on a formal application under s 28(6).

Section 41 certificates are only prima facie evidence, yet many litigants treat them as conclusive. A well-advised plaintiff will adduce independent evidence of use where the diplomatic head certifies that property is diplomatic or military. Conversely, a foreign State that fails to obtain or tender such a certificate may find the s 32(3)(b) presumption that vacant property is commercial difficult to rebut.

Finally, the definition of “separate entity” in s 3(1) excludes bodies corporate established under Australian law. A state-owned Australian company is therefore not entitled to any of the immunities conferred by the Act, a point sometimes missed in structuring sovereign investment vehicles.

Compliance for Australian litigants begins with thorough due diligence on whether any exception to s 9 immunity applies. Counsel should plead the specific exception or exceptions relied upon and prepare evidence addressing the statutory language—e.g., that a contract is for the supply of goods or services (s 11(3)(a)), that injury occurred in Australia (s 13), or that the claim “concerns state terrorism” within the Criminal Code definitions.

Service must be effected strictly in accordance with s 23 (agreement) or s 24 (diplomatic channel). The statutory declaration, request in Form 1, and certified translations are mandatory. Failure at this stage renders subsequent default judgment a nullity.

When seeking default or summary judgment, practitioners must adduce positive evidence that the foreign State is not immune and that service and time requirements have been met (ss 26A, 27). Affidavits addressing each element of the chosen exception are essential.

For enforcement, identify assets that are “commercial property” within s 32(3). Obtain and serve a sealed copy of the judgment through the diplomatic channel under s 28 and observe the two-month waiting period. If the asset is a ship or cargo, confirm its commercial use at the relevant times (s 18 and s 32(2)).

Foreign States and their separate entities should maintain accurate records of the commercial or sovereign use of assets in Australia. A timely s 41 certificate from the head of mission can shift the evidentiary burden. When entering contracts, sovereign immunity and execution waivers should be drafted with precision, expressly addressing whether the waiver extends to diplomatic or military property and any limitations under s 10(3) or s 31(2).

Legal teams should monitor regulations made under ss 42 and 42A; these can alter the applicable immunity regime with retrospective effect on pending proceedings. In arbitration clauses, consider whether the clause is intended to constitute a submission under s 10 and whether it carves out execution immunity.

Finally, all parties should keep the Ministerial certificate power in s 40 in mind. A certificate that a country “is” or “was” a foreign State is conclusive; early requests to the Minister for Foreign Affairs can remove a threshold controversy.