Kumar Lama is accused of torturing two men when he was in charge of a barracks in Nepal at the height of the Himalayan nation's decade-long conflict between Maoist rebels and government forces.
Appearing at the Old Bailey in London, England's central criminal court, Lama's lawyer said the colonel's current work as a military observer for the United Nations in South Sudan meant he should enjoy immunity from prosecution in Britain.
"He is a UN expert and is entitled to immunity," defence barrister James Lewis said, adding that prosecutors agreed that the alleged offences, if proven, were carried out "in an official capacity" and thus, Lama should possibly also enjoy immunity on this basis.
The 46-year-old colonel was arrested in England from his East Sussex home in January, sparking a diplomatic row between Britain and Nepal, which had condemned the move to prosecute him there.
Lama faces trial in Britain under a law that allows prosecution of alleged war criminals.
His barrister told the court that Nepalese Prime Minister, Khilraj Regmi, had written to his British counterpart David Cameron to protest that under international law Britain should have given Nepal the opportunity to extradite Lama.
But British prosecutors argue that Lama cannot be granted immunity if accused of torture, which they say is an international crime.
Lama has already been convicted in Nepal of one of the two charges he faces in Britain, and was punished with a ban on being promoted for a year, the court heard.
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