DRC v FG Hemisphere Associates (No 2) [Final Judgment]
| Judge | Mortimer,Sir Anthony Mason,Chan,Ribeiro,Bokhary |
| Date | 08 September 2011 |
| Docket Number | (Final Appeal Nos 5, 6 and 7 of 2010 (Civil)) |
| Court | Court of Final Appeal (Hong Kong) |
Final Judgment
Hong Kong Special Administrative Region of the People's Republic of China, Court of Final Appeal
(Bokhary, Chan and Ribeiro, Permanent Judges; Mortimer and Sir Anthony Mason, Non-Permanent Judges)
(Final Appeal Nos 5, 6 and 7 of 2010 (Civil))
State immunity Jurisdictional immunity Absolute and restrictive doctrines of immunity Customary international law Law applicable in Hong Kong Effect of the resumption of sovereignty by China United Kingdom legislation on State immunity ceasing to have effect in Hong Kong Common law applicable prior to resumption of sovereignty Adherence by China to the absolute doctrine of immunity United Nations Convention on the Jurisdictional Immunities of States, 2004 China signing but not ratifying Convention Whether act of signing Convention altering China's position regarding absolute doctrine Whether restrictive doctrine of immunity part of the law of the Hong Kong Special Administrative Region
States Autonomous regions Hong Kong Special Administrative Region (HKSAR) Resumption of sovereignty by China International status of HKSAR HKSAR not a separate sovereign Application of international law in HKSAR Whether possible for HKSAR to apply doctrine of State immunity different from that adhered to by China Responsibility of China for acts of HKSAR Hong Kong Basic Law Responsibility of central government for foreign affairs State immunity falling within scope of foreign affairs
Relationship of international law and municipal law Customary international law State immunity Relationship between customary international law and common law China adhering to absolute immunity doctrine Whether HKSAR entitled to apply restrictive doctrine Role of courts and executive Independence of the judiciary The law of the Hong Kong Special Administrative Region of the People's Republic of China
Summary:1The facts:The respondent company, FG Hemisphere Associates LLC (FG), a United States company, acquired the benefit of arbitration awards made in France and Switzerland in April 2003 against the first appellant, the Democratic Republic of the Congo (DRC). FG sought to enforce the awards in Hong Kong and obtained injunctions against the second to fifth appellants, China Railway Group (Hong Kong) Limited, China Railway Resources Development Limited, China Railway Sino-Congo Mining Limited (the CR subsidiaries) and China Railway Group Limited (the CR parent), preventing them from transferring assets allegedly due to the DRC. The DRC maintained that it was entitled to State immunity, contending that the doctrine of restrictive immunity was not part of the law of the Hong Kong Special Administrative Region (HKSAR) and that, in any event, the relevant acts on which the proceedings were ultimately based were acts performed jure imperii.
On 8 June 2011, the Final Court of Appeal of the HKSAR adopted a provisional judgment (147 ILR 376) determining that the DRC was entitled to immunity but referring to the Standing Committee of the National People's Congress (SCNPC) a request for interpretation of the relevant provisions of the HKSAR Basic Law.2
On 26 August 2011, the SCNPC adopted an interpretation of the relevant provisions of the Basic Law (the Interpretation). The Interpretation3 concluded that:
(1) Article 13 of the Basic Law provided that the Central People's Government (the CPG) of the People's Republic of China (the PRC) had responsibility for the conduct of foreign affairs relating to the HKSAR. Since rules and policies on State immunity fell within the realm of foreign affairs, the CPG had the power, under Article 89 of the PRC Constitution, to determine the rules and policies on State immunity to be given effect throughout the PRC (pp. 6923 and 7023).
(2) According to Article 19 of the Basic Law, the HKSAR courts were required to apply and give effect to the rules and policies on State immunity determined by the CPG and had no authority to depart from them (pp. 6934 and 703).
(3) The determination by the CPG of the rules and policies on State immunity was an act of State in the field of foreign relations for the purposes of Article 19(3) of the Basic Law (pp. 6945 and 7034).
(4) The laws in force in the HKSAR relating to State immunity prior to the resumption of sovereignty by the PRC had to be applied subject to such modifications, adaptations, limitations or exceptions as were necessary to make them consistent with the rules or policies on State immunity determined by the CPG (pp. 695 and 7045).
Held (unanimously):The appeals had to be decided in accordance with the Interpretation and the Provisional Judgment was accordingly made final.
The following is the text of the judgments delivered in the Court of Final Appeal:
1. On 8 June 2011,1 the Court held by a majority that the Hong Kong Special Administrative Region (HKSAR) cannot as a matter of legal and constitutional principle, adhere to a doctrine of state immunity which differs from that adopted by the Central People's Government (CPG) and that the doctrine of state immunity practised in the HKSAR, is accordingly a doctrine of absolute immunity2. It similarly held that such immunity had not been waived by the Democratic Republic of the Congo.3
2. As therein explained, the judgment was necessarily provisional.4 This is because Article 158 of the Basic Law provides that in adjudicating cases where there is a need to interpret the provisions of the Basic Law which concern affairs which are the responsibility of the CPGin the present case, foreign affairsor which concern the relationship between the Central Authorities and the Region, and if such interpretation will affect the judgment in question, the Court, before issuing a final judgment which is not appealable, must seek an interpretation of the relevant Basic Law provisions from the Standing Committee of the National People's Congress (SCNPC).
3. As the present case fell within the provisions of Article 158 the provisional judgment was issued with Orders provisionally made.5 The following four questions were referred to the SCNPC, namely:
(1) whether on the true interpretation of Article 13(1), the CPG has the power to determine the rule or policy of the PRC on state immunity;
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(2) if so, whether, on the true interpretation of Articles 13(1) and 19, the HKSAR, including the courts of the HKSAR:
(1) is bound to apply or give effect to the rule or policy on state immunity determined by the CPG under Article 13(1); or
(2) on the other hand, is at liberty to depart from the rule or policy on state immunity determined by the CPG under Article 13(1) and to adopt a different rule;
(3) whether the determination by the CPG as to the rule or policy on state immunity falls within acts of state such as defence and foreign affairs in the first sentence of Article 19(3) of the Basic Law; and
(4) whether, upon the establishment of the HKSAR, the effect of Article 13(1), Article 19 and the status of Hong Kong as a Special Administrative Region of the PRC upon the common law on state immunity previously in force in Hong Kong (that is, before 1 July 1997), to the extent that such common law was inconsistent with the rule or policy on state immunity as determined by the CPG pursuant to Article 13(1), was to require such common law to be applied subject to such modifications, adaptations, limitations or exceptions as were necessary to ensure that such common law is consistent with the rule or policy on state immunity as determined by the CPG, in accordance with Articles 8 and 160 of the Basic Law and the Decision of the Standing Committee of the National People's Congress dated 23 February 1997 made pursuant to Article 160.
4. On 24 August 2011, Mr Li Fei, Deputy Director of the Legislative Affairs Commission of the SCNPC, presented a Draft Interpretation accompanied by Explanations to the SCNPC. The Draft and the Explanations are in the terms set out in Annex 1 to this Judgment.
5. On 26 August 2011, upon the motion of the Council of Chairmen that the abovementioned Draft be examined by the SCNPC pursuant to this Court's request, the SCNPC issued the interpretation in the terms set out in Annex 2 to this Judgment (the Interpretation).
6. Article 158 of the Basic Law provides that when the SCNPC makes an interpretation of the provisions concerned, the courts of the Region, in applying those provisions, shall follow that interpretation. As this Court acknowledged in Lau Kong Yung v. Director of Immigration,6 such an interpretation is binding on all the courts of the HKSAR.
7. The effect of the Interpretation is to answer the four questions referred by the Court as follows:
8. The provisional judgment of the majority is consistent with the Interpretation. We accordingly declare the judgment final and make the Orders set out in paragraph 415(a) to (e) inclusive as final Orders of the Court.
9. We give the parties leave to lodge written submissions as to costs within 14 days from the date of this judgment and any submissions in reply within 14 days thereafter.
10. We direct that this appeal be restored to the list for the handing down of this judgment.
11. Seeing the question of whether the state immunity available in the courts of Hong Kong is restrictive or absolute as a question of common law, we did not consider it necessary to seek an interpretation from the Standing Committee. Moreover, we held that in the present case immunity would have been waived even if it had been absolute. For those reasons, we have already delivered judgments, which we did not make provisional. Now that the Standing Committee has given an interpretation, we recognize that these appeals must be decided in conformity with that interpretation and the majority's view of the issue of waiver.
12. Accordingly, we accept that these...
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