FAO v. INPDAI

The dispute arose from a contract concluded between FAO and INPDAI for the rental of INPDAI’s property located in Rome, where the Organization is based. INPDAI instituted a legal process against FAO before the Tribunal of Rome, claiming a remodulation of the lease due to INPDAI. The respondent organization brought the case before the Supreme Court, demanding a declaration of the lack of jurisdiction of national tribunals in the legal suit initiated by the Institute against it, given the immunity granted to FAO.

The Court affirmed that FAO has international legal personality and, as a subject of international law acting in the performance of its institutional activities, it is immune from national jurisdictions of its member States, including the host State. In particular, the Court outlined that the regime of jurisdictional immunity of international organizations rests on the international law rules governing State immunity. In other words, the immunities of international organizations have a customary legal basis.

In determining the scope of FAO’s immunity, thus, the Court relied, by analogy, on the legal regime of State immunity. In this regard, the Court reminded that, in its case-law, it has adopted the restrictive doctrine of State immunity, limiting the scope of immunity to acta jure imperii. Accordingly, the immunity exclusively shields the activities carried out in the exercise of sovereign powers. As stressed by the Court, this restrictive approach is consistent with the principle par in parem non habet judicium.

The Court observed that immunities aim to prevent external interference in the institutional functions and objectives of international organizations. The exercise of national jurisdiction over disputes involving private law activities does not cause undue interference in the internal affairs of international organizations.

In the instant case, the Court applied the restrictive approach, finding that the conclusion of a lease contract qualifies as a commercial activity performed by an international entity in a private law capacity, and, as such, it does not fall into the scope of immunity. The Court rejected FAO’s argument that the conclusion of the contract, which provided rent for the premises where its offices were located, served to pursue its institutional functions and objectives. According to the Court, while the internal organization of offices is strictly connected to the exercise of institutional powers, logistical activities concerning the allocation and practical functioning of offices do not express institutional powers or the pursuit of the institutional objectives.

The Court also underlined that the contract clauses, such as those mentioning FAO immunity and the compromissory clause, do not affect this conclusion. These private law provisions do not modify the existence and the scope of FAO’s immunity, and they cannot be read as implying a complete exclusion of Italian tribunals’ jurisdiction.