State immunity is also known as sovereign immunity, reflecting its origins in the sanctity of kingship. State immunity may be pleaded by a foreign state when a person wishes to make it a party to legal proceedings in the court of another state, usually as the defendant. If successful, the plea prevents the court from exercising jurisdiction over the state, provided of course that it has jurisdiction in the particular case. The dispute can then be disposed of only by the courts of the foreign state itself, by an international court or tribunal or by diplomatic settlement. Originally, state immunity was absolute, and remained so into modern times even though states were then carrying out many commercial transactions abroad. It was not until the second half of the twentieth century that a restrictive approach – removing immunity for commercial matters – came to be generally accepted.

State immunity is a doctrine of customary international law. But unlike the law of state responsibility, which has been developed almost entirely by international courts and tribunals, state immunity is much more the product of judgments of domestic courts. Their approaches to state immunity reflect differences between their legal, political and economic systems.