Pasini v United Mexican States

The High Court of Australia considered an application by Mr Pasini for leave to appeal against a judgment of the Federal Court of Australia. Mr Pasini sought to sue the United Mexican States in Australia for alleged breaches of contract and tortious conduct. The United Mexican States sought to have the proceedings permanently stayed on the grounds of sovereign immunity.

The central legal issue before the High Court was whether the United Mexican States was entitled to sovereign immunity from suit in Australian courts in relation to the alleged commercial and tortious conduct. This required the Court to consider the scope of the restrictive theory of sovereign immunity, which distinguishes between acts of a sovereign nature and acts of a commercial nature.

The High Court, by majority, granted leave to appeal and allowed the appeal, setting aside the orders of the Federal Court. The majority held that the restrictive theory of sovereign immunity applied in Australia. They found that the alleged conduct of the United Mexican States, relating to commercial transactions and alleged tortious acts arising from those transactions, did not fall within the category of acts performed in the exercise of sovereign authority. Therefore, the United Mexican States was not entitled to immunity from suit in relation to these claims.

The High Court ordered that the proceedings in the Federal Court be remitted for further hearing and determination, with the stay of proceedings lifted.