Say the ratio out loud before you open Reasoning — recalling it unprompted is exactly what the exam pays for.
Why it matters
It is the case that moved English law from absolute to restrictive immunity, and it supplies the distinction every answer on this head turns on: governmental acts against commercial acts. It is an honestly short chapter, because what the course establishes is the rule and not the narrative.
Facts
This course cites the case for the restrictive doctrine and does not set out its facts. The defendant named in the title is a central bank, which is itself the point of the development: a State body engaged in ordinary commerce.
Held
Immunity is restricted, and is confined to acts done in a governmental capacity as against acts done in a commercial capacity.
Reasoning
Step one — identify the reason for the immunity. It exists because a court should not sit in judgment on the exercise of sovereign authority by another State.
Step two — test the reason against the facts of modern State activity. A State that trades, charters ships, buys cement or borrows money is not exercising sovereign authority; it is doing what any merchant does.
Step three — confine the immunity to its reason. Where the reason does not apply, the immunity should not. The classification therefore attaches to the nature of the act, not to the status of the actor.
Exam use
It opens: Discuss sovereign immunity in private international law — after The Christina for the older absolute rule, and before the statute.
Give the statutory sequel for England: the State Immunity Act 1978 withholds immunity where the State submits, and for commercial acts, contracts made or performed in England, employment contracts in England, and torts arising in England. That list is the restrictive theory reduced to heads.
Give the Indian position separately, because it is different in kind. In India the question is governed entirely by statutes — s. 86 of the Code of Civil Procedure, the United Nations (Privileges and Immunities) Act, 1947 and the Diplomatic Relations (Vienna Convention) Act, 1972 — and the controlling mechanism is not a judicial classification but the requirement of the Central Government's consent under s. 86(1). Add that immunity may be waived, and that waiver may be presumed from conduct, as in Kenya Airways v. Jinibai B. Keshwala, while waiver in one suit is not waiver in another.
It does not decide the Indian question at all, and an answer that applies the commercial-act test to an Indian suit without mentioning s. 86 has missed the statutory scheme.