Sovereign Immunity

• Author: International Law Group

In May 1999, a German court issued a warrant for the arrest of Karlheinz Schreiber, a citizen and resident of Canada, for tax evasion and other crimes. Invoking the Extradition Treaty between Canada and Germany, Can. T.S. 1979, No. 18, Germany then asked the Canadian government to provisionally arrest Schreiber as a first step in extraditing him for prosecution in Germany. Canada did so and after he had spent eight days in jail, a court released him on bail.

Six months later, Schreiber filed a million-dollar suit against Germany in the Ontario Superior Court of Justice, asking for personal injury damages caused by his arrest and detention in Canada. The complaint alleged breaches of duties of care, abuse of public office, bad faith and breach of the plaintiff's rights under the Canadian Charter of Rights and Freedoms. Germany responded by moving to dismiss the action based on its claim of sovereign immunity under the Canadian State Immunity Act of 1985.

The trial court granted the motion and the Ontario Court of Appeal unanimously dismissed plaintiff's appeal. Plaintiff next appealed to the Supreme Court of Canada and the United States was allowed to intervene. The highest Court dismisses the appeal.

Preliminarily, the Court notes that, in general, states have absorbed the principle of sovereign immunity into their internal legal system in two ways. The first is to hold that domestic courts do not exercise jurisdiction in suits brought against foreign states. Secondly, states have provided foreign nations with a privilege based on comity to appear as plaintiffs in their domestic courts.

Although a number of exceptions have emerged over the years, the basic principle of sovereign immunity endures as a significant part of the international legal order. Enactment of the State Immunity Act of 1985, for the most part, received the international law of sovereign immunity into the Canadian legal order.

Pursuant to Section 4 of the Act, a foreign state loses its general immunity if it has filed the proceedings in question. That is not this case. While Germany did bring the extradition proceeding, it did not file the present tort action in which it has claimed immunity from suit. It would breach accepted notions of comity and mutual respect between nations to rule that a state which has asked Canada to extradite a fugitive for prosecution abroad, has thereby forfeited its sovereign immunity in a civil action against it linked to the extradition...