FAQ / Q. What is the restrictive theory of sovereign immunity?

A. Under the U.S. legal system, however, the scope of a foreign state's immunity is determined by judicial, rather than executive, authorities. A party to a lawsuit, including a foreign state or its agency or instrumentality, is required to present defenses such as sovereign immunity directly to the court in which the case is pending. The immunity of a State from the jurisdiction of the courts of another State is an undisputed principle of customary international law. Until the twentieth century, sovereign immunity from the jurisdiction of foreign courts seemed to have no exceptions. However, as governments increasingly engaged in state-trading and various commercial activities, it was urged that the immunity of States engaged in such activities was not required by international law, and that it was undesirable: Immunity deprived private parties that dealt with a state of their judicial remedies, and gave states an unfair advantage in competition with private commercial enterprise. The restrictive principle of immunity spread rapidly after the Second World War. The United States moved to the restrictive theory in the early 1950's, and adopted it by statute in 1976 (the Foreign Sovereign Immunities Act). Under the restrictive theory of sovereign immunity, 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. Under the restrictive theory, a State is immune from any exercise of judicial jurisdiction by another State in respect of claims arising out of governmental activities (de jure imperii); it is not immune from the exercise of such jurisdiction in respect of claims arising out of activities of a kind carried on by private persons (de jure gestionis).