DEMOCRATIC REPUBLIC OF THE CONGO AND OTHERS v. FG HEMISPHERE ASSOCIATES LLC

FACV Nos 5, 6 & 7 of 2010

IN THE COURT OF FINAL APPEAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

FINAL APPEAL NOS 5, 6 & 7 OF 2010 (CIVIL)

(ON APPEAL FROM CACV NO S 373 OF 2008 AND 43 OF 2009)

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J U D G M E N T

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Mr Justice Chan PJ, Mr Justice Ribeiro PJ and Sir Anthony Mason NPJ:

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 immunity.[2]  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 CPG – in the present case, foreign affairs – or 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;

(2)   if so, whether, on the true interpretation of Articles 13(1) and 19, the HKSAR, including the courts of the HKSAR:

(a)  is bound to apply or give effect to the rule or policy on state immunity determined by the CPG under Article 13(1); or

(b) 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:

As to question (1):  that on the true interpretation of Article 13(1), the CPG has the power to determine the rules or policies of the PRC on state immunity to be given effect uniformly in the territory of the People’s Republic of China (“PRC”).

As to question (2):  that on the true interpretation of Articles 13(1) and 19, the courts of the HKSAR must apply and give effect to the rules or policies on state immunity determined by the CPG and must not depart from such rules or policies nor adopt a rule that is inconsistent with the same.

As to question (3):  that the words “acts of state such as defence and foreign affairs” in Article 19(3) of the Basic Law include the determination by the CPG as to rules or policies on state immunity.

As to question (4):  (i) that according to Articles 8 and 160 of the Basic Law, the laws previously in force in Hong Kong shall be maintained except for any that contravene the Basic Law; (ii) that according to paragraph 4 of the Decision of the SCNPC dated 23 February 1997 made pursuant to Article 160, laws previously in force which have been adopted as the laws of the HKSAR shall be applied as from 1 July 1997 subject to such modifications, adaptations, limitations or exceptions as are necessary to bring them into conformity with the status of Hong Kong after resumption of by the PRC of the exercise of sovereignty over Hong Kong, and to bring them into conformity with the relevant provisions of the Basic Law; (iii) that accordingly, the laws previously in force in Hong Kong relating to the rules on state immunity may continue to be applied after 1 July 1997 only in accordance with the aforesaid requirements; (iv) that in consequence, the laws previously in force concerning the rules on state immunity as adopted in the HKSAR must be applied as from 1 July 1997 subject to such modifications, adaptations, limitations or exceptions as are necessary to make them consistent with the rules or policies on state immunity that the CPG has determined. 

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.

Mr Justice Bokhary PJ and Mr Justice Mortimer NPJ:

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 appeals must be allowed and the orders proposed in the majority’s final judgment must be made.