A former chief executive’s whistleblowing and unfair dismissal claims against the Kuwait Investment Authority cannot proceed before an Employment Tribunal after the Employment Appeal Tribunal upheld the Authority’s defence of state immunity.
What did the EAT decide?
In Al-Ateeqi v Kuwait Investment Authority [2026] EAT 169, handed down on 5 November 2026, the Employment Appeal Tribunal (EAT), presided over by Mr Justice Coppel, dismissed the claimant’s appeal against an Employment Tribunal decision dated 16 July 2024.
The underlying claims alleged detriment for making protected disclosures under section 47B of the Employment Rights Act 1996 and unfair dismissal under sections 94 and 103A. The KIA had argued that it was immune from the Employment Tribunal’s jurisdiction under the State Immunity Act 1978.
The EAT upheld the finding that the KIA, although a separate entity distinct from the executive organs of the Kuwaiti Government, satisfied both conditions for immunity under section 14(2) of the 1978 Act. The proceedings related to acts done in the exercise of sovereign authority, and the circumstances were such that the State of Kuwait would itself have been immune.
The KIA’s cross-appeal was also dismissed. The EAT nevertheless considered its principal alternative arguments and expressed additional, non-essential views on the sovereign character of the Authority’s investment functions.
What was the background to the employment claim?
Mr Al-Ateeqi was employed by the KIA under a contract dated 5 April 2018 and took up the role of chief executive officer of the Kuwait Investment Office (KIO) in London from 4 May 2018. The KIO is the KIA’s London office and manages part of the State of Kuwait’s Future Generations Fund.
The KIA was established under Kuwaiti Law No. 47 of 1982 to manage the State’s reserve funds. Its responsibilities include the General Reserve Fund, which operates as the Government’s treasury account, and the Future Generations Fund, intended to preserve wealth for future generations.
Although neither Mr Al-Ateeqi’s employment contract nor the board resolution appointing him expressly referred to diplomatic status, the EAT noted that Kuwaiti secondees from the KIA to the KIO had diplomatic status as an established practice. As CEO, Mr Al-Ateeqi was recognised as a Financial Attaché at the Kuwaiti Embassy in London.
He appeared on the London Diplomatic List, held a diplomatic passport and identity card, and was certified by the UK Government as a member of the diplomatic staff of the Kuwaiti Embassy. His duties included representing the KIO, coordinating its activities with the KIA, overseeing investment policy and acting as a formal channel of communication. He also had interactions with the Kuwaiti Embassy, other diplomatic missions and the Foreign, Commonwealth and Development Office.
On 21 July 2022, the KIA’s Chairman issued a resolution terminating his employment with immediate effect. His diplomatic status was subsequently revoked, and the Chairman asked the Kuwaiti Deputy Minister for Foreign Affairs to arrange cancellation of his diplomatic passport.
Why did diplomatic status matter?
The central question under section 14(2)(a) was whether the proceedings related to something done by the KIA in the exercise of sovereign authority. Mr Al-Ateeqi argued that the KIA had simply employed him as the CEO of an investment office, an act that a private investment bank or fund-management business could also perform.
The EAT rejected that distinction on the facts. It agreed with the Employment Tribunal that the claimant’s role as CEO and his diplomatic position were functionally indistinguishable. His diplomatic appointment followed the established practice attached to the CEO role, and his diplomatic status ended when he was dismissed from that position.
The EAT considered that the KIA had appointed him to a post to which diplomatic status attached, as recognised by both the Kuwaiti and UK Governments. The appointment and dismissal therefore could not be treated as ordinary private-sector employment decisions divorced from the diplomatic functions of the role.
“His diplomatic role and his role as President and CEO of the KIO were one and the same.”
Employment Tribunal reasoning, as set out in the EAT judgment
The EAT also considered the relationship between the KIO and the Kuwaiti diplomatic mission. The office operated from diplomatic premises, many of its staff were diplomats, and the claimant performed functions for and on behalf of the Embassy. The EAT concluded that the KIO was not a private employer in the usual sense, even though it did not need to determine conclusively whether it formed part of the diplomatic mission.
How did the State Immunity Act apply?
Section 14(1) of the State Immunity Act 1978 distinguishes a State from a “separate entity” that is distinct from the State’s executive organs and capable of suing or being sued. There was no appeal against the Employment Tribunal’s finding that the KIA was such a separate entity.
Under section 14(2), a separate entity is immune from the jurisdiction of UK courts only where two requirements are met:
- Section 14(2)(a): the proceedings relate to something done by the entity in the exercise of sovereign authority; and
- Section 14(2)(b): the circumstances are such that the State would itself have been immune.
The EAT held that the first requirement was met because the proceedings concerned the employment, treatment and dismissal of the senior individual responsible for the KIO’s London operations, whose role carried diplomatic status. The second requirement was met because, if the State of Kuwait had been the employer, the claimant would have been employed under the contract as a diplomatic agent for the purposes of section 16(1)(a).
Section 4(1) of the Act generally removes state immunity in certain UK employment proceedings. However, section 16(1)(a) provides that the employment exception does not apply to proceedings relating to a contract under which an individual is or was employed as a diplomatic agent or consular officer.
The claimant’s contract did not expressly state that he would become a diplomat. The EAT nevertheless held that the phrase “under the contract” should not be interpreted so narrowly as to require an express contractual provision. Diplomatic status followed as a matter of established practice, was within the contemplation of the parties and arose effectively automatically from his appointment as CEO.
Accordingly, the EAT dismissed Ground 2 and upheld the KIA’s immunity from the Employment Tribunal’s jurisdiction.
What did the EAT say about sovereign wealth fund activities?
Although it was not necessary to decide the point to dispose of the appeal, the EAT considered the KIA’s alternative argument that its management of Kuwait’s sovereign wealth funds was itself an exercise of sovereign authority.
The Employment Tribunal had reasoned that investment management was an activity private actors could undertake. Mr Justice Coppel expressed a different provisional view. He considered that the KIA’s statutory responsibility for managing State reserves and the Future Generations Fund, for the benefit of Kuwait and future generations, could give those activities a sovereign character.
The judgment referred to authorities concerning central banks, state reserves and sovereign funds. It observed that commercial transactions may, depending on their context and purpose, form part of the exercise of sovereign authority. The fact that private-sector fund managers also undertake investment transactions did not necessarily mean that all such activities by a state entity were private-law acts.
The EAT considered that the KIA’s principal role was to manage State funds under authority conferred by Kuwaiti law. The relatively small proportion of KIO assets managed for two organisations outside the State of Kuwait did not, in the judge’s view, justify treating the office as maintained for commercial purposes.
These observations were obiter: the appeal had already been dismissed on the basis of the claimant’s diplomatic status and the operation of section 16(1)(a).
What are the implications for employment disputes?
The decision illustrates the importance of examining the substance and context of a role when state immunity is raised in an employment dispute. The EAT did not treat the claimant’s job title or the wording of his employment contract as conclusive. It considered the established arrangements surrounding the appointment, the diplomatic status attached to the post and the functions performed.
For employers and employees connected with foreign states, the judgment highlights the potential significance of diplomatic accreditation and the relationship between an employment position and governmental functions. A role that appears to involve financial or administrative work may still be closely connected to the exercise of sovereign authority when viewed in its full institutional context.
For practitioners, the statutory analysis requires careful separation of the two limbs of section 14(2). It is not enough for a separate entity to show that it performs functions connected with a State: the proceedings must relate to something done in the exercise of sovereign authority, and the State itself must also have been immune in the relevant circumstances.
The EAT’s additional discussion of sovereign wealth fund management may be relevant in future cases, but it should be treated with care because those conclusions were not necessary to the outcome of this appeal.
Frequently asked questions
What was the outcome in Al-Ateeqi v Kuwait Investment Authority?
The Employment Appeal Tribunal dismissed Mr Al-Ateeqi’s appeal and upheld the finding that the Kuwait Investment Authority was immune from the Employment Tribunal’s jurisdiction.
Why was the Kuwait Investment Authority entitled to state immunity?
The EAT held that the proceedings related to the exercise of sovereign authority and that Kuwait would itself have been immune because the claimant’s employment was under a contract as a diplomatic agent.
Was the claimant’s diplomatic status expressly included in his employment contract?
No. The contract did not expressly confer diplomatic status. The EAT found that diplomatic status attached to the CEO role as an established practice and followed effectively automatically from the appointment.
What employment claims had Mr Al-Ateeqi brought?
He claimed detriment for making protected disclosures under section 47B of the Employment Rights Act 1996 and unfair dismissal under sections 94 and 103A.
Did the EAT decide that all sovereign wealth fund investment activity is sovereign?
No definitive general ruling was required. The EAT expressed the view that the KIA’s management of Kuwait’s sovereign wealth funds could constitute sovereign activity, but those observations were obiter.
Which legislation governed the immunity question?
The principal legislation was the State Immunity Act 1978, particularly sections 4, 14 and 16.