Shoe on other foot as US claims sovereign immunity in foreign court for firing Malaysian embassy worker

The U.S. Embassy in KL commemorates flight MH17 in 2014.
(Embassy photo, public domain, via Flickr)

Malaysian courts have been wrestling with the big bear of foreign sovereign immunity in an ursa minor case arising from the dismissal of a security guard from the U.S. Embassy in Kuala Lumpur.

As a torts and comparative law teacher, I'm interested in how courts manage foreign sovereign immunity. But most of the cases I read are about foreign-state respondents in U.S. courts. I suppose the inverse, the United States as respondent in a foreign court, happens often. But it doesn't often make my newsfeed.

Well, this story did. The shoe is on the other foot with the United States seeking to evade the hearing of an employment grievance in Malaysian courts.

Consistently with international norms, in the United States, the Foreign Sovereign Immunities Act (FSIA) (on this blog) generally codifies sovereign immunity for foreign states in U.S. courts. But an exception pertains for "commercial activity." 

The commercial exception, also consistent with international norms, only makes sense. When a foreign country is acting like any other commercial actor, say, buying toilet paper for the mission restroom, it should not be able to claim sovereign immunity to override its obligation to pay for the toilet paper (contract), nor to escape liability for its fraud in the transaction (tort). Sovereign immunity is rather reserved for when a state acts as a state, doing things only states can do, such as signing treaties and, however unfortunately, waging war—usually.

The exception is easier understood in the abstract than in application. In a case bouncing around the Second Circuit, and reaching the U.S. Supreme Court in 2018 on a related but different question, Chinese vitamin makers claim immunity from U.S. antitrust law. The respondent makers say that they are agents of the Chinese state insofar as they are compelled by Chinese economic regulations to fix prices. U.S. competitors see the cut-rate pricing as none other than anti-competitive commercial activity. The question arises under trade treaty, but the problem is analogous to the FSIA distinction.

Also regarding China, the commercial activity exception was one of the ways that state lawsuits against the People's Republic over the coronavirus pandemic tried to thread the needle on sovereign immunity. In the lawsuit filed in 2020 by the State of Missouri against the PRC filed in 2020, the Missouri Attorney General characterized the Chinese lab in Wuhan as a commercial healthcare enterprise. The district court disagreed in July, and the AG is appealing.

In the Malaysian case, according to the allegations, the U.S. Embassy gave no reason when it terminated a security guard in 2008 after about a decade's service. The security guard probably would not be owed any explanation under U.S. law. But the Malaysian Industrial Relations Act is not so permissive, authorizing complaints to the labor authority upon dismissal "without just cause or excuse."

The opinion of the Malaysian Court of Appeal in the case hints at some bad blood in the workplace and a bad taste left in the mouth of the dismissed guard: "He said he had been victimised by another staff named Rama who had tried to tarnish his good record as he had raised the matter of unreasonable management of the security post.... He said he could not believe that the US Embassy that is recognised the world over as the champion of human rights could have done this to a security guard like him."

Inexplicably, "a long languishing silence lasting some 10 years" followed the administrative complaint, the Court of Appeal observed. "Nobody involved and interested in this case heard anything from anyone. It is always difficult to interpret silence. That silence was broken with a letter from the DGIR [labor authority] calling for a conciliation meeting [in] September 2018.... There was no settlement reached.

"Unbeknown to the workman, the Embassy had [in] March 2019 sent a representation to the DGIR arguing that sovereign immunity applied and that the matter should not be referred at all to the Industrial Court." The United States thereafter succeeded in having the case removed to the Malaysian high court, a general-jurisdiction trial court.

The high court dismissed the case on grounds of U.S. foreign sovereign immunity. The Court of Appeal reversed, holding that the case should not have been removed. The Court of Appeal remanded to the Industrial Court, a specialized labor court, to take evidence on the immunity question. The Malaysian Federal Court recently affirmed the remand, lawyers of Gan Partnership in Kuala Lumpur have reported (Lexology subscription).

Like the FSIA, Malaysian law on foreign sovereign immunity distinguishes commercial activity, jure gestionis, from state action, jure imperii. The dismissed guard argues that his was a simple employment contract, so the United States was acting in a commercial capacity and is not entitled to sovereign immunity. The United States argues that the security of its embassy is a diplomatic matter entitled to the exercise of sovereign discretion.

The case in the Court of Appeal was Letchimanan v. United States (May 18, 2021). Gan Khong Aik and Lee (Ashley) Sze Ching reported the Federal Court affirmance to the International Law Section of the American Bar Association for Lexology on August 30 (subscription). Khong Aik and Sze Ching wrote about the Court of Appeal decision, United States v. Menteri Sumber Manusia (Minister of Human Resources) Malaysia, in July 2021 (Lexology subscription), and with Foo Yuen Wah, they wrote about the high court decision in August 2020 (Lexology subscription).

'Now NATO might join Ukraine,' experts opine

In Washington, D.C., the International Law Section of the American Bar Association receives a message from Ukraine. Attorney Michael Burke is at the lectern; Ambassador William B. Taylor is at the table. Photo by RJ Peltz-Steele CC BY-NC-SA 4.0 with no claim to depicted video.

The war in Ukraine is not only about Ukraine, and Ukraine will prevail if the West expands military support.

Those were the top takeaways from experts at a panel of the American Bar Association International Law Section (ABA ILS) in Washington, D.C., today, April 28.

The panel at the Capital Hilton comprised William B. Taylor, U.S. ambassador to Ukraine from 2006 to 2009 and now vice president for Russia and Europe at the NGO U.S. Institute of Peace; Vladyslav Rashkovan, a board member of the International Monetary Fund and former governor of the Ukraine Central Bank; attorney Michael E. Burke of Arnall Golden Gregory, moderator; and, by pre-recorded message, an attorney in the Kyiv area.  The panelists spoke in their personal capacities, not as representatives of their organizations.

'This war is not new'

I withhold the name of the Kyiv attorney for security; he is a member of the ABA ILS.  As a man under age 60, he cannot leave Ukraine and sent his regrets with the message, recorded on Orthodox Easter, April 24.

Clad in a hoodie and standing before a nondescript wooded background, the Kyiv attorney described persistent air-raid sirens, especially at night, with rockets anticipated to strike "civil" targets all over Ukraine. He described the mentality of the resistance with knowledge that Ukrainian civilians have been killed, tortured, and raped by Russian soldiers.

"This war is not new for us," the attorney said. "It has been around for hundreds of years," hostilities boiling over only most recently in 2014 and 2022.

I was reminded of speaking to a Krakovian friend, a lawyer and long-ago student of mine, in March, earlier in the invasion. Like many Poles, he was planning to host Ukrainian refugees in Warsaw, where he lives now.  

"It's the Russians again," he said matter-of-factly.

The Kyiv attorney emphasized a recurring theme we hear from Ukrainian officials and commentators, that the war is not only about Ukraine. Rather, "Ukraine is just the first obstacle in the way of Russia," he said. If Russia is not stopped in Ukraine, "European kids and families will keep dying in their homes."

The attorney urged lawyers from around the world to reach out to their political leaders to emphasize the importance of supporting Ukraine, especially militarily.

"Please do your best to support Ukrainians," he concluded. "And keep praying for Ukraine and the brave Ukrainian army."

Ukraine will win, if ...

If western military aid to Ukraine persists and expands, Ambassador Taylor predicted, Ukraine will win the war.  Presently, he explained, Russia is "probing" eastern Ukraine for weakness and softening defenses with air and long-range artillery strikes, while "preparing for a big offensive."

Rashkovan echoed the characterization of conflict with Russia as enduring for "centuries." The February 24, 2022, invasion was "a shock, but not a surprise," he said.

Russia has coveted Ukraine since the 20-aughts, Rashkovan said. To Russia's frustration, every attempt to draw Ukraine closer had the effect of pushing it away.

According to Rashkovan, surprises did follow the invasion of Ukraine, but they were for Russian President Vladimir Putin and for the West.

Putin "believ[ed] his own propaganda," Rashkovan said, citing a recent piece in The Economist by Ian Bremmer. Putin thought "Ukrainians would be waiting with flowers."

Another surprise to Putin was that Ukrainian resistance proved to be sustainable, Rashkovan said.  In contrast, the Russian army proved "not so modern," "not prepared for 21st-century war," "not ready to fight in the streets, against drones and [civic] groups.  They are fighting [with] a strategy of the [19]80s."

Putin also miscalculated by giving a speech in February declaring interest only in the Ukrainian coast, immediately before Russia bombed targets nationwide, Rashkovan said.  The duplicity created "outrageous anger" and "unity" in Ukrainians and in the world, rather than the fear that Putin intended.

Surprises resulted for the West, as well, Rashkovan said. The West "finally understood" that conflict in eastern Ukraine, simmering since the 2014 invasion of Crimea, was about more than the Donbas region and more than just Ukraine.

"I don't want to say for Europe," because Europeans remained reluctant to give up business with Russia, Rashkovan said.  But now it has become clear that Putin stands against the western liberalism of the last half century and norms that it has generated: "globalization, humanism, ... multiculturalism, tolerance, and democracy."

"Ukraine is now on the front line of this fight," Rashkovan said. "Let's be frank.  Until recently, the West was not ready to fight for Ukraine. And Putin showed that he is ready to fight."

The defense of Ukraine should be instructive to the West, Taylor and Rashkovan both said, resulting in the joke, "Now NATO might join Ukraine."

But the joke is "not crazy," Taylor said.  Ukrainians "are showing how to fight, how to win this war."  Upon a Ukrainian victory, he opined, the West should guarantee Ukrainian security against future invasion, whether through NATO or another agreement binding in international law.

Stop saying 'off ramp'

I was pleased to hear a harder line from Ambassador Taylor than I hear from the U.S. leaders that Taylor no longer represents.  Evidently, I am not the only person tired of hearing commentators chatter about the need for an "off ramp" for Putin, a compromise, or my word, "appeasement."

"I am not interested in an off ramp," Taylor said. "Putin caused this problem" by invading a peaceful neighbor that posed no threat and made no provocation.

An "off ramp suggests that we should find something to help him save face," Taylor explained. "No, no.  He needs to find a way out."  When Putin realizes he is losing the so-called "second phase" of the war, if Western military aid does expand, Putin "will look for an off ramp, something to convince the Russian people that it was worth all this.  Good luck with that."

Taylor said he is not worried about Russian aggression against other countries, such as Moldova, as long as Ukraine prevails. Without control of the Ukrainian coast, Taylor opined, Putin "doesn't have the manpower ... to go all the way across the south."

And Russia will not use the nuclear option, Taylor said. "I don't think Putin is suicidal," nor "crazy." "[W]e have to be ready," he said, but "Washington sees no indication of an operational step toward that."

However, if western military aid is not expanded, and Russia does gain control of Ukraine, "then that would be a threat," Taylor said. Besides Moldova, Russian aggression would threaten Georgia, the Balkans, and, ultimately, NATO allies.

"This is not the last war in Europe" if Russia prevails, Rashkovan agreed. "Who knows about Sweden and Finland," countries that recently signaled their intentions to join NATO, "now under critic[ism] from Russia. Who knows about Poland."

Zelensky stars

Both Taylor and Rashkovan praised the leadership of President Volodymyr Zelensky as key in the defense of Ukraine.

Taylor was in Kyiv just three weeks before the invasion, he said, and he met with political opposition leaders, who were characteristically critical of Zelensky.  Upon the invasion of February 24, "that changed....  Zelensky has motivated and inspired leaders, parliaments, nations around the world."  Now, in the context of the war, opposition leaders line up "nearly 100%" in support of the president, Taylor said.

Famously an actor and comedian before entering politics, Zelensky was a sort of Stephen Colbert of Ukrainian "late night" fame.  (Colbert has "run" for the U.S. Presidency more than once, since 2008, in mixed satirical and activist capacities.)  A pledge to eradicate corruption saw Zelensky to a stunning 73% electoral victory in 2019.  When war broke out, Taylor said, it was Zelensky himself who gathered and energized the Ukrainian leadership.

"He understands the Ukrainian people because of his entertainment background," Taylor said. His audience is the electorate.  "It's that connection with the leader and the people that gives him the strength, the moral strength."

China watches and learns

Taylor commented also on the perspective of China.  Just before the invasion, at the Olympics, Beijing broadcast its allyship with Moscow. China has been conspicuously non-committal since.  It has not joined western efforts to arm Ukraine, but has refrained from speaking favorably of the invasion and has not moved to undermine western sanctions. In fact, Taylor said, many Chinese firms are respecting the sanctions.

China's strategy is pragmatic.  Before the invasion, China was the biggest foreign investor in Ukraine, Taylor explained. And Chinese economic planners have their eyes on the European market, "which dwarfs the size of the economy in Russia."

Moreover, the Chinese are studying Russia's exploits relative to the matter of Taiwan.  "President Xi is watching very carefully the response of the United States and NATO, putting sanctions on a central bank," Taylor said. "That probably opened some eyes in China: 'Can they do it to us?'"

And China is watching the military engagement on the ground, too, Taylor said. China might be wondering whether, like Russia, its army is not as strong as Beijing has calculated, and whether Taiwanese resistance to a takeover might be stronger than anticipated.

Lawyers and sanctions help

Both Taylor and Rashkovan told the ABA ILS audience that lawyers are important in the Ukraine conflict, now and in the future.  Lawyers play a role now in documenting and calculating infrastructure losses in Ukraine, Rashkovan said. Data are being fed to the World Bank in anticipation of a reparations bill that might someday issue to Russia.

Meanwhile, Rashkovan said, lawyers should be helping Ukrainian people and businesses to design "legal class action[s]" against Russian defendants.  "I don't know the practicalities," he said, "but we should deliberate this further."

Taylor said that American lawyers can support the investigation of war crimes notwithstanding U.S. non-ratification of the Rome Statute that created the International Criminal Court.  Lawyers can help, too, to strengthen sanctions, which must be made "more targeted and smarter," Rashkovan said.

To evade sanctions, "Russia will start looking for the back doors," Rashkovan said. Russia still imports western food through eastern European and central Asian allies; Rashkovan joked about "Belarusian parmesan," before Belarus, too, came under sanctions.

According to the Crimean play book, he said, Russians will take over businesses from fast food, such as McDonald's, to car manufacture and aerospace, "knowing the techniques" to keep them running. But Rashkovan predicted that "the capacity of Russia to produce something serious, high tech, will diminish substantially."

Acknowledging that not everyone sees sanctions against Russia as necessarily enduring as long as Putin's presidency, Taylor suggested that sanctions will outlast the war, "[b]ecause when they [Russia] lose, they will be back.

"They will not give up," Taylor said, at least not as long as Putin remains on his "almost mystical mission, his commitment to dominate Ukraine."

U.S. State Department dabbles in gamer diplomacy

Flickr by Casey Fiesler, CC BY 2.0

The U.S. State Department announced in April that it will sponsor 10-week virtual student exchange programs to connect teens from the United States, Bahrain, Israel, and the UAE to collaborate in developing "social impact video games."  "Game Exchange" is part of a State Department grant award to Games for Change, a Woodside, N.Y.-based nonprofit that, by its own description, "empowers game creators and social innovators to drive real-world impact through games and immersive media."  Game Exchange aims to reach 3,000 middle and high school students over two years by pairing classrooms across borders.  I am a believer in "sports diplomacy" by the State Department and in the related work of organizations such as Soccer Without Borders, so I guess I should get behind this STEM equivalent.  Read more at Games for Change or at The Washington Post (bafflingly not pay-walled at last check).  Hat tip to Jennifer Batista at IP Media Law and Updates from New York City-based Frankfurt Kurnit Klein & Selz.

Poor development choices may bolster quality-of-life disparity on Tanzania's Msasani Peninsula

 Coco Beach, Msasani Peninsula, Dar es Salaam, Tanzania. All photos RJ Peltz-Steele CC BY-SA 4.0.

The short length of Coco Beach is the touristic gem of Tanzania's largest city, Dar es Salaam, which, for all its rugged charms, is not rich with touristic gems. Coco Beach sits on the eastern, Indian Ocean, coast of the ritzy Msasani Peninsula, just a few kilometers northwest of the CBD.

Msasani says a lot about wealth stratification in Africa. The worsening wealth gap is an issue that vexes me in the United States. But we've got nothing on many an African country. Where subsistence living is the norm, and social safety nets are nearly non-existent, the disparity between haves and have-nots gets closer at each end to all and nothing. And as on Msasani, the extremes are often abruptly juxtaposed. The peninsula is home to subsistence fishermen, and the polluted beaches of the slipway, in the west, and the luxury condominiums of posh Oyster Bay, in the east.

Luxury condo building on the road from Oyster Bay to Sea Cliff Village

I walked the peninsula from west to east and saw, in the span of just a few kilometers, ramshackle wood dwellings on potholed dirt trails without plumbing, in the west and center, and gated condo complexes with marble-esque, statued facades, in the east. While the former teemed with human life, the latter were eerily vacant, deserted of all but the occasional maintenance worker. I assume the condos are mostly second-home getaways and vacation rentals for the well-to-do in high season and on weekends. (I was reminded of the dark-windowed high rises that loom over Central Park West, New York.)

Qatar's is the most modest of the beachfront embassies.

At that, the most striking residences of the eastern Msasani are not luxury homes, but foreign embassies, including those of Qatar, Brazil, Canada, Ireland, the UAE, and Saudi Arabia. (The U.S. embassy and others are in Oyster Bay, but in the interior.) They line the main coastal road that runs between Oyster Bay and Coco Beach, which runs on northward to swank Sea Cliff Village and the Yacht Club.

Present service structures on Coco Beach, astride road construction.

At present, it isn't easy to cross this road, because a massive construction project runs all along the length of Coco Beach. I had hoped that this construction would improve the beach for touristic use that might fuel economic development to benefit the peninsula's have-nots. What passes for services on the beachfront now are wood shacks of dubious hygiene, selling drinks and snacks that might prove hazardous to foreign GI tracts. One municipal toilet building has seen better days and is now inaccessible anyway because of the construction. Alas, no, a local on the beach informed me: The purpose of the construction is to convert the shoulderless, two-lane, asphalt coast road into a four-lane highway, because, he said, the embassies want better and more secure access.

Nearly completed end of beachfront highway entering the CBD.

Many an American city can today tell tales of costly woe for having built transportation and utility infrastructure along prime waterfront property. It's bad enough that embassies, with their high, secure walls, occupy this land on the peninsula to begin with. Their inefficient use of prime real estate, distant from the administrative offices of the CBD, and in the company of Tanzania's "one percent" and cloistered ex-pats, sounds an awakward echo of colonial elitism.  To boot, now, the embassies and luxury homes will soon be served by a four-lane road that will further limit public access from the peninsula to the already underdeveloped beachfront.

Tanzania in 1974 moved its capital de jure to central Dodoma, in an effort to broaden economic opportunity in the country beyond Dar es Salaam. Nevertheless, concentration of development in Dar is still a problem that plagues the country. A businessman in the northeastern town of Arusha told me there's mounting resentment there about rural taxes paying for big-city infrastructure. (Boston says hello, western Massachusetts.) Maybe foreign nations can help Tanzania take a step forward by transferring their embassies from walled beachfront luxury to central locations with better access to government, whether Dar or Dodoma, on condition that appropriate public development of the Msasani Peninsula be left in their wake.  After all, foreign diplomatic posting is supposed to be a hardship, and it's compensated accordingly.

The new highway runs in front of the historic Ocean Road Hospital, where a street sign bears a familiar name.