Court Rules Foreign State can be Sued Over Unpaid Rent for Ambassador’s Residence

A landmark ruling in the Mayor’s and City of London Court has clarified that foreign states are not automatically immune from legal claims in England relating to commercial property, even when the property is used for diplomatic purposes – following support from our commercial litigation team.

Yesterday (3 February 2026), HHJ Parfitt dismissed the State of Romania’s challenge to the court’s jurisdiction in a case brought by private Greek Cypriot landlord Christopher Christodoulou over unpaid rent and property dilapidations at his London property at 18 Hyde Park Street, W2.

The property had been leased to Romania and used as the residence of the Romanian Ambassador and his family from 2008 to mid-2018. Mr Christodoulou’s claim relates to unpaid rent from July 2018 to April 2019 and damages for property dilapidations totalling just under £120,000.

The case tested the scope of sovereign immunity under the State Immunity Act 1978. Romania argued it could not be sued because the property served as the ambassador’s residence and was therefore connected to its diplomatic mission.

The court rejected this argument, finding that claims arising from the failure to pay rent or maintain property fall within exceptions to immunity where obligations are to be performed in the UK or relate to the use of immovable property in this jurisdiction.

HHJ Parfitt also clarified that diplomatic protections for mission premises do not extend to claims relating to rent or property maintenance, even if the property was used for diplomatic purposes.

The judgment also addressed complex procedural issues, confirming that service on a foreign state does not need to follow diplomatic channels for every pre-claim application and dismissing Romania’s attempt to set aside permission and extension orders. Mr Christodoulou was represented by David Vaughan, international dispute resolution partner, and Katherine Richards, dispute resolution solicitor, who instructed Professor Philippa Webb and Sophie Ryan of Twenty Essex.

David said: “This decision sends a clear message – foreign states cannot rely on immunity to avoid their commercial obligations in England. The court has clarified the law in a way that provides certainty for anyone entering into contracts with diplomatic or state entities. While the case now moves to a full trial, the judgment is a significant step in ensuring that contractual rights can be enforced against even the most challenging defendants.”

The case will now proceed to a full trial on the merits, providing important precedent for individuals and businesses entering into agreements with foreign states or diplomatic entities.