Also known as acta jure gestionis, the private, merchant-like, commercial acts of the government of a state.
Often distinguished from jure imperii, the public or government acts of a state.
In Re Labour Code, Justice Laforest of the Supreme Court of Canada wrote:
"Historically, nation states enjoyed an absolute immunity from adjudication by foreign courts. Under international law, it was accepted that sovereign states should not be embarrassed by subjection to the control of a foreign judiciary. Over time, however, as governments increasingly entered into the commercial arena, the doctrine of absolute immunity was viewed as an unfair shield for commercial traders operating under the umbrella of state ownership or control. The common law responded by developing a new theory of restrictive immunity. Under this approach, courts extended immunity only to acts jure imperii, and not to acts jure gestionis."
Thus, an essential concept in law as acts characterized as jure imperii are usually exempt from assessment or damages awarded by a court of law of another state; whereas acts construed as jure gestionis do not benefit from such an immunity.
The United States asserts that a distinction must be made between acts jure imperii and acts jure gestionis in determining whether any of the exceptions to immunity under the foreign state immunity statute (State Immunity Act) apply. Immunity depends on the nature of the conduct underlying the claim.
In Saudi Arabia v Nelson, Justice Souter of the United States Supreme Court wrote:
"Under the restrictive, as opposed to the absolute, theory of foreign sovereign immunity, a state is immune from the jurisdiction of foreign courts as to its sovereign or public acts (jure imperii), but not as to those that are private or commercial in character (jure gestionis).... (A) state engages in commercial activity under the restrictive theory where it exercises only those powers that can also be exercised by private citizens, as distinct from those powers peculiar to sovereigns. Put differently, a foreign state engages in commercial activity for purposes of the restrictive theory only where it acts in the manner of a private player within the market.
"Under international law, a state or state instrumentality is immune from the jurisdiction of the courts of another state, except with respect to claims arising out of activities of the kind that may be carried on by private persons."
In McKeel, Justice Sneed of the United States Court of Appeals wrote (at footnote #6):
"The doctrine of sovereign immunity has been explained as an implied waiver by the domestic state of its exercise of territorial jurisdiction in regard to a foreign sovereign."
In Price & Frey v Libya, the facts behind the Plaintiff's litigation against the government of Libya were as follows:
"Price and Frey allege that, following their arrest (in March of 1980), they were denied bail and kept in a political prison for 105 days pending the outcome of their trial. In their complaint, plaintiffs assert that they endured deplorable conditions while incarcerated, including urine-soaked mattresses, a cramped cell with substandard plumbing that they were forced to share with seven other inmates, a lack of medical care, and inadequate food. The complaint also asserts that the plaintiffs were kicked, clubbed and beaten by prison guards, and interrogated and subjected to physical, mental and verbal abuse. The complaint contends that this incarceration was "for the purpose of demonstrating Defendant's support of the government of Iran which held hostages in the U.S. Embassy in Tehran, Iran. Ultimately, plaintiffs were tried and acquitted of the crimes with which they had been charged. After the verdict was announced, however, the Libyan government retained their passports for another 60 days while the prosecution pursued an appeal, which is permitted under the Libyan Code of Criminal Procedure. When this appeal was eventually rejected, plaintiffs were permitted to leave Libya."
Justice Harry Edwards of the United States Court of Appeals described American law on the point of immunity of foreign states as a:
"... restrictive theory of sovereign immunity, under which immunity is generally limited to a foreign state's public or governmental acts (jure imperii) but withheld from its private or commercial acts (jure gestionis)."
The Court went on, remarking that the immunity applied "no matter how allegedly egregious a foreign state's conduct" and then gave these examples, all taken from the law books, of the application of the jure imperii immunity:
- A claim arising from the detention and torture of an American citizen in Saudi Arabia was not based upon a commercial activity carried on in the United States;
- Libya retained its sovereign immunity for the bombing of Pam Am 103 over Lockerbie, Scotland;
- Plaintiff could not recover for slave labor performed at Nazi concentration camps, because Germany's conduct was not commercial activity causing a direct effect in the United States and did not constitute an implied waiver of sovereign immunity; and
- Argentina was immune from liability for acts of torture committed by the ruling junta.
In England, circa 1983, Justice Wilberforce wrote of the difficulties in relying on the jure gestionis, jure imperii distinction, in I Congreso del Partido, as follows:
"If a trader is always a trader, a state remains a state and is capable at any time of acts of sovereignty. The question arises, therefore, what is the position where the act upon which the claim is founded is quite outside the commercial, or private law, activity in which the state has engaged, and has the character of an act done jure imperii. The restrictive theory does not and could not deny capability of a state to resort to sovereign or governmental action: it merely asserts that acts done within the trading or commercial activity are not immune. The inquiry still has to be made whether they were within or outside that activity.
"(I)n considering, under the restrictive theory whether state immunity should be granted or not, the court must consider the whole context in which the claim against the state is made, with a view to deciding whether the relevant act(s) upon which the claim is based, should, in that context, be considered as fairly within an area of activity, trading or commercial, or otherwise of a private law character, in which the state has chosen to engage, or whether the relevant act(s) should be considered as having been done outside that area, and within the sphere of governmental or sovereign activity."