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India – Bombay High Court denies Sovereign Immunity To Qatar Airways And Holds That It May Be Sued Pursuant To Commercial Contracts.

4 September, 2013

 

Legal News & Analysis – Asia Pacific – India – Dispute Resolution

 

The Bombay High Court in the case of Qatar Airways v Shapoorji Pallonji1 refused to afford sovereign immunity to a foreign state-owned corporation carrying on commercial operations within India. 

The dispute related to a claim brought by an Indian party for recovery of sums allegedly payable to them for carrying on interior decoration works in one of the offices of Qatar Airways. Qatar Airways (which is fully owned and controlled by the State of Qatar and its ruling family) contended that being a state-owned airline, it enjoyed sovereign immunity and therefore could not be sued in the Indian courts without the Central Government’s consent pursuant to section 86 of the Indian Code of Civil Procedure 1908.

Rejecting this contention, the Bombay High Court emphasised that Qatar Airways was a separate juristic entity from the State of Qatar. The Court noted that Qatar Airways was engaged in purely commercial activities and as such was not entitled to seek protection under the garb of sovereign immunity. This decision (and other recent decisions by various courts in India – including the Supreme Court in Ethiopian Airlines v Ganesh Narain2 ) marks a trend towards restricting the scope of sovereign immunity claims in India. 


1 2013 (2) TMI 340.

2 AIR 2011 SC 3495.

 

herbert smith Freehills

 

For further information, please contact:

 

Nicholas Peacock, Partner, Herbert Smith Freehills

nicholas.peacock@herbertsmith.com

 

Alastair HendersonPartner, Herbert Smith Freehills

alastair.henderson@hsf.com

 

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