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

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

The Court held that the DRC is entitled to sovereign immunity from execution in Hong Kong in respect of the two ICC awards because the underlying transactions are sovereign in nature (not commercial) and the DRC did not validly waive immunity; accordingly the Hong Kong Court lacks jurisdiction to enforce those awards against the DRC and the ex parte enforcement orders must be set aside.

Citation
FG HEMISPHERE ASSOCIATES LLC v. DEMOCRATIC REPUBLIC OF THE CONGO AND OTHERS
Parties
Plaintiff: FG Hemisphere Associates LLC; 1st Defendant: Democratic Republic of the Congo; 2nd Defendant: China Railway Group (Hong Kong) Limited; 3rd Defendant: China Railway Resources Development Limited; 4th Defendant: China Railway Sino-Congo Mining Limited; 5th Defendant: China Railway Group Limited; Intervener: Secretary for Justice
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
12 December 2008
Case Number
HCMP928/2008
Procedural Posture
Enforcement of International Arbitral Awards / Recognition and Enforcement Proceedings / Interlocutory Hearing on Summons to Set Aside Ex Parte Enforcement Order and Jurisdictional Challenge
Outcome
Court declared it has no jurisdiction over the DRC in these proceedings and set aside the leave to enforce the two ICC awards as judgments against the DRC; injunction against the DRC discharged; related service orders set aside; originating summons against DRC dismissed.
Legal Topics
State Immunity From Execution, Restrictive Vs Absolute Immunity, Waiver of Immunity, Service of Process, Forum Non Conveniens, Assignment of Arbitral Awards, Public Policy (maintenance/champerty), Substituted Service, Government Intervention
Source Language
ET
Sovereign Immunity Private International Law Arbitration Enforcement Civil Procedure Public International Law State Immunity From Execution Restrictive Vs Absolute Immunity Waiver of Immunity +6 more

Case Brief

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Parties

FG Hemisphere Associates LLC

Plaintiff

Democratic Republic of the Congo

1st Defendant

China Railway Group (Hong Kong) Limited

2nd Defendant

China Railway Resources Development Limited

3rd Defendant

China Railway Sino-Congo Mining Limited

4th Defendant

China Railway Group Limited

5th Defendant

Secretary for Justice

Intervener

Procedural Posture

Enforcement of International Arbitral Awards / Recognition and Enforcement Proceedings / Interlocutory Hearing on Summons to Set Aside Ex Parte Enforcement Order and Jurisdictional Challenge

Legal Issues

  1. 1 Whether Hong Kong Court has jurisdiction to enforce ICC awards against a foreign state (DRC) given sovereign immunity
  2. 2 Whether the transactions (CA/JVA/SCA/SJVA and Entry Fees) are commercial so as to fall within restrictive immunity exception
  3. 3 Whether DRC waived immunity by submitting to ICC arbitration and by ICC Rules/seat choices

Ratio Decidendi

The Court held that the DRC is entitled to sovereign immunity from execution in Hong Kong in respect of the two ICC awards because the underlying transactions are sovereign in nature (not commercial) and the DRC did not validly waive immunity; accordingly the Hong Kong Court lacks jurisdiction to enforce those awards against the DRC and the ex parte enforcement orders must be set aside.

Court Disposition

Court declared it has no jurisdiction over the DRC in these proceedings and set aside the leave to enforce the two ICC awards as judgments against the DRC; injunction against the DRC discharged; related service orders set aside; originating summons against DRC dismissed.

Orders

  • Declaration that this Court has no jurisdiction over the DRC in these proceedings
  • Discharge of injunction granted by Saw J in paragraph 2 of his Order dated 16 May 2008 as against the DRC